Churn has always been a reality for every business, and in this day and age of instant gratification and apparently infinite choice, client retention has become even more important for the success of a business.
The bottom line is that it is 50% easier to sell to an existing customer than to nurture and convert a new one. Bear in mind however, even if a customer has lapsed, that they have already engaged with your brand. A relationship already exists between you, it is just that for whatever reason, the conversation has lapsed.
All is not lost!
Don’t ignore the fact that you’ve already done the groundwork with this customer. What you need to understand now is what it is that caused the relationship to wane, to address those issues, and to remind the customer of what it was that attracted them to your brand in the first place.
Of course, we are talking about a transactional relationship here, but basic principles of human psychology still apply. Relationships will always wax and wane, especially commercial ones, but unless you have done something truly dreadful, there is a very good chance that if you get the tone of your approach right, you can win that wavering customer back.
All successful win-back strategies need you to do the groundwork
Personalisation is the key – put your data to work.
Prevention is always better than a cure, so your first step is to isolate the specific window in time that the customer is beginning to lapse. This will vary by its very nature from product to product – a shopper for Christmas decorations will naturally have longer periods of inactivity than a shopper for cosmetics or perishables.
When it is that this specific lapse occurs with a individual customer can be gleaned by analysing a broad variety of factors, such as a drop in opening rates, a change in browsing habits and frequency, lower clickthroughs, and regular purchases of a particular product tailing off or ceasing.
With this information at hand, you will be able to reengage with the customer, and do so on a very individual level – remember personalisation, this is a one-on-one conversation. You will be able to make your case for why they should become active again and/or encourage them to share why it is that their interest in your products or services has waned.
The first of these – activity – will always the most desirable outcome. However, the latter is also of huge value, both with this specific customer in mind – you can use this information to adjust your offering to them, winning them back – and with making improvements to your overall marketing strategy in general.
There is an important caveat to bear in mind here. Of course, wherever possible it makes commercial sense to retain customers, but you must also learn when to end the conversation, and to do so gracefully. We all want to know why someone has lost interest in our brand, but whatever we do, we must not come over as hounding them for this information.
Some people you simply cannot win back.
We are all individuals, acknowledge this…
The main challenge of winning back customers comes in the guise of addressing the reality that no two customers are identical. And nor will their reasons for lapsing be the same. It could be that they found a better deal somewhere else, their present need for your product or service has dropped, they have experienced a technical issue either with your product or your webshop, your service level has disappointed them, or any combination of these and a myriad of other issues.
Your win-back strategy needs to reflect this diversity. Executed well, it can be not only be a cost-effective way to grow your business, but also be an excellent method of turning your lapsed customer into an engaged and vocal advocate for your brand.
1. Data, data, data…
You are the Steward of your own data, make it work for you by understanding when the greatest percentage of your customers are likely to drop off, and use this information as a trigger to deliver a compelling and engaging message at exactly the right time to counter this lapse.
Your win-back strategy can (and quite rightly should) involve a variety of channels including email, push notifications from any apps or other services you provide, and your other digital channels. But studies have shown that email is vastly more effective than other push notifications finding that users will go back to their email inbox far more frequently than they will to their push notification history.
2. “What is the problem, and how can we help?”
Take the time to understand why a customer has lapsed and give some thought to encouraging a customer to fill in a questionnaire that dives into these issues.
A good example of this comes from Basecamp, the project-management software company, who, with an elegantly simple approach in its final send-out to a lapsed customer covers off three crucial elements in one message:
- Customer research – finding out what it is that they could do better
- Restating their value proposition – a gentle reminder of what they offer
- A simple CTA encouraging the user to visit their account one more time
This last one is particularly effective, as it gives the brand the option to continue the win-back conversation on their own digital real estate. A factor that can play very well with reengaging a lapsed customer as it gives them a chance to demonstrate once again the excellence of their product.
Figure 1: Basecamp Win-back Campaign Final Email
3. Remind the customer of the benefits you offer
A customer may have lapsed not because a problem with your services, but because their focus has been elsewhere. Alternatively, they may be scouting out other comparable services. In either case you can demonstrate the value that you have delivered to them over the lifetime of your relationship. Remind them gently and subtly how they may have benefitted from your product, especially if it is a longer-term relationship and quantify the duration of that relationship too.
Figure 2: Unbounce Win-back Email Example
The example above from Unbounce, whilst taken from a shorter business relationship in terms of duration, is a good example of nudging the customer to reengage with the brand. Referencing the duration of the relationship, it also acknowledges the importance of the customer to the brand, and the vital part they play in helping make the brand’s offering even better. Once again, it drives the user onto brand digital real estate to continue the win-back conversation.
4. “We’re missing you” v. “You’re missing out”
We’ve all been told by one brand or other that they are “missing” us. It’s not a bad technique to use, per se, but it’s a bit “old-hat” and frankly rather over-used.
Flip the coin. Instead of putting the spotlight on your needs as a brand, put the focus on their needs as a person. Acknowledge their needs as customer, and how you specifically answer them.
To do so, dig into the mindset of your customer and analyse why have they lapsed (remember: data, data, data…)? Consider then how your product or service helps them, and what benefit they get from you of which they may have lost sight. Then reframe what it is that you have to do as a brand to win them back. Essentially, make the effort to understand your customer’s journey and where they are making decisions such as whether to buy from you again.
Having done so then gives you the opportunity to restate the value or exclusivity of the information, services, or deals you provide, as the following examples from Dollar Shave Club and Boden demonstrate elegantly:
Figure 3: Dollar Shave Club Win-back Email
Taking a slightly different tack with the following example, the American home improvement retailer Lowe’s chooses to update customers on what they might have missed while they weren’t engaging with the brand.
The icing on the cake here being that they do so in a gently humorous way that reflects the very nature of their business of offering home improvement products.
It’s worth sounding a small note of caution with this example: Whilst design heavy emails can be very appealing, it is worthwhile ensuring that their overall layout does not detract from the CTA – too busy a format could actually end up being counter-productive.
As with all things, seeking balance and a willingness to exercise a degree of trial and error will be a factor in how successful your win-back campaign ends up being.
5: Reward their loyalty… (even if it has been a bit patchy lately)
Your data will show you exactly how engaged a lapsed customer has been in the past, despite the fact that they may have been less engaged of late, so show them some appreciation.
A birthday message with a genuinely valuable and relevant exclusive offer is a good place to start, as is a mail congratulating them on something like the anniversary of their first purchase, coupled with a promotion that recognises their purchase history. Yes, they’ve lapsed, but they were a regular customer – it can’t hurt to reward this previous loyalty.
Don’t forget that it is six times more expensive to acquire a new customer than to retain and reinvigorate an old one, so it’s very much worth making the investment of offering existing customers that little bit more.
This birthday greeting from Cusp by Neiman Marcus, the US luxury department store, is an example of how to grab the customer’s attention with a colourful email – whilst simultaneously engaging them with a promotion that recognises their big day.
6. Hard cash v Percentage
Speaking of promotions, it is worthwhile taking a moment to look at which offers work best as part of a win-back strategy.
Marketing Land conducted a study of offers included in win-back campaigns and found that those that offered money off instead of percentage discounts tended to perform better.
The main takeaway of this aspect of the research being that money off deals performed two times better than those that offered a percentage discount. The irony of this being that in reality a percentage discount may end up being higher in value than a hard-cash amount, but as the saying goes, money talks. Think about letting it do the talking for you in your win-back strategy.
7. “It’s not you, it’s me” – breaking up is hard to do…
As a final toss of the dice you’re going to have to send that “Dear John” letter. Make it count. Using humour, good grace, and even a bit of bluntness might actually be the thing that actually prompts reengagement. Especially if you use an engaging and humorous call to action.
And if not, at least you went out in style…
Take a looks at these two examples from Free People
and Bonobos to see what we’re getting at:
Figure 7 and 8: Free People Break Up Mail
One thing to bear in mind with this final “it’s decision time!” mail strategy is that whilst you might feel a little wary of taking such a bald approach with your lapsed customer, it is actually very beneficial to the overall health of your mailing list.
Weeding out the unengaged means that you will have a much more active mailing list providing you with much greater value as to the data you gather from it. Your success does not come from having a huge mailing list, it comes from what the members of that mailing list do as a result of your conversations.
At the end of the day a conversation requires at least two engaged parties. It’s better to have the people that are never going to buy or engage with your brand removed from your list.
8. When is enough, enough?
Whichever combination of the above strategies you choose to use in your win-back campaign, the most important thing is to know when to call it quits.
Depending upon how long a customer has lapsed, two or three well-crafted messages tailored to suit their specific case should be your limit. A typical strategy might consist of an “offer” mail, a “here’s what you’re missing” follow-up, and then the “Dear John” letter.
More than that, and you’re going onto the junk mail list.
With any win-back strategy, it is vital to remember that you’re more than likely swimming against the tide. The same Marketing Land research referenced above indicates that only 12% of mails sent as part of win-back campaigns are opened.
And if someone has lapsed already, the last thing you want to give them is a reason to moan about you to anyone and everyone that’s prepared to listen. We’ve all heard the nightmare stories about endless unsolicited phone calls from tone-deaf direct sales teams. Well, sending too many messages as part of your win-back strategy will risk adding your brand to the litany of shame.
Don’t be that brand.
Be the one that knows when to bow out gracefully.
That good grace and good humour might actually be the thing that ultimately wins that lapsed customer back.