Attracting a new customer costs at least five times more than retaining existing ones. Unfortunately, keeping your current clients engaged is easier said than done. No matter how they seem to love your product or service, there’s no guarantee they’ll stick around.
On the bright side, it’s possible to win back customers you’ve lost along the way. Those who stopped purchasing or subscribing to your service aren’t gone forever. Moreover, reasons for churning are rarely personal – customers merely want the best offering for them or their business.
Winning back lost customers with a well-planned series of communications is faster, easier and cheaper than acquiring a new customer to replace them. Best of all, it increases your revenue without returning to the top of the lead generation funnel.
As you aim to start the new year right and win back customers you’ve lost in 2023, we cover these topics to help you develop an effective winback strategy and achieve sustainable growth:
• What Is Customer Churn and Why Do Customers Leave?
• The Value in Winning Back Lost Customers
• How To Win Back Lost Customers
What Is Customer Churn and Why Do Customers Leave?
Customer churn, or customer attrition, is the loss of clients or customers over time. The customer churn rate reflects the percentage of customers who stopped using your products or services within a specific timeframe. It can be calculated using this formula:
Calculating your churn rate helps you understand the effectiveness of your product or service – or your customer retention strategies. A high customer churn rate may indicate dissatisfaction with your offerings, ineffective customer service or even better offers from competitors.
The first critical step in addressing churn and winning back lost customers is to learn why they chose to leave in the first place. Your lost customers have different motivations to go, so they naturally have different motivations to return.
Sending exit surveys to your email subscribers or specific questions to those who haven’t completed an order for a particular period are some ways to understand why your customers are leaving. Once you receive feedback, here are some questions worth pondering:
• Why did your customers leave? Was it because of a bad experience? Or was it because your product was hard to understand? Perhaps the price is too high?
• What do you want to achieve with your winback program? Do you want more sales or your customers to adopt a new product or service?
• What customer action will help you achieve this goal? Whether it be your customers placing a new order, re-downloading your app or re-activating their subscription, identifying the actions you want them to perform helps shape your re engagement strategy.
The Value of Winning Back Lost Customers
You may wonder, is learning how to win back lost customers worth your time and effort?
Before anything else, not all your churned clients are worth your reacquisition efforts.
However, some might be more valuable to your business than cold prospects.
A Marketing Metrics study revealed that businesses have a 40% chance of winning back a lost customer – double the 20% chance of converting a prospect into a new customer. Moreover, a Client WinBack Benchmark Study found that clients who return due to a strategic win back campaign double their customer lifetime value.
Why is this so? Businesses have better chances of re-engaging lost customers because of these primary reasons:
1. Lapsed customers have already demonstrated the need for your product or service.
2. They’re also already familiar with your offerings, so there’s no need to build brand awareness anymore.
3. Their records on your CRM and other customer databases make it easy for you to learn more about them and craft personalized win-back offers.
How To Win Back Lost Customers: 6 Strategies To Inspire Your Win Back Campaign
Here are six tips on how to win back customers who opted out of your product or service:
1. Analyze Customer Churn Trends
Understanding why your customers are leaving is crucial before crafting any campaign or sending win back emails.
With that said, remember that churn analysis goes beyond monitoring your customer churn rate and realizing your previous customers’ whys. Instead, it involves identifying patterns in customer behavior that lead to attrition.
You can look at various metrics, such as purchase history, customer service interactions and engagement levels, to spot trends. Doing so can reveal if churn typically happens after a specific time or during certain periods of the year, giving you valuable insights you can use to personalize your win-back campaign.
2. Identify Past Customers Ready for a Win-Back Campaign
Trying to win back every lapsed client can waste your time, human resources and marketing budget. Targeting and personalizing your campaign to generate the best returns is more efficient. This entails identifying those more likely to return based on their previous behavior and transactions.
But what does a lapsed customer ready for a win back campaign look like?
A Journal of Marketing article describes the most valuable former customers for re-engagement campaigns to be those who:
• Have referred your product or service to others
• Never issued complaints in the past
• Had issues that were successfully and satisfactorily resolved
• Left because of price rather than service quality
Take this step further by using the RFM matrix to segment customers to target in your winback strategy based on where they fall in the matrix. It has the following components that allow you to categorize your customers:
• Recency or how long it’s been since they’ve purchased/engaged with your brand
• Frequency or how often they bought from or engaged with your brand
• Monetary value or their average order value
With this matrix, we can classify the following:
• Your hero customers (those in the dark green colors) are okay, so there’s no need to re-engage them for now. However, you want to make them feel loved and cherished to turn them into brand ambassadors.
• Your heroes-in-waiting (those in light green colors) are also in the clear. However, while they’re not lapsing yet, it’s a good idea to reach out and connect with them.
• Your lapsing heroes (those in light and dark yellow colors) are heroes and masses who might have already stopped engaging with your brand. Don’t let them slip away completely – invest in regular efforts to get them back.
• Your lapsed heroes (those in orange colors) are customers who used to have a very high value but have churned. It’s worth re-engaging them at least one last time with a hard-to-resist offer.
• Finally, the lost cause (those in gray colors) consists of lapsed customers who are no longer worth your reacquisition efforts.
3. Tailor Your Communication Strategies for Each Segment
Increase your chances of successfully winning churned customers back by launching email campaigns appropriate for each segment. Here are some ideas worth exploring:
The “Hi There!” Email (for the Lapsing Heroes)
Consider this kind of email as your winback kickoff. You can use it to keep lapsing heroes engaged and reconnect with lapsed customers. Sometimes, they only need a straightforward message to make them feel recognized, appreciated and missed.
Here are some pointers when writing your “Hi There!” emails:
• Recognize the past relationship, especially if they were a highly engaged or long-standing customer.
• Help them remember why they chose you the first time. Highlight the benefits or unique offerings your company has that won them over in the first place.
• Let them know what’s new. If there have been product improvements since they left, this email would be a good opportunity to inform them about them.
The Incentive Email (for the Lapsing Masses)
Sometimes, a simple hello and refresher on your company’s benefits may not be enough to get the ball rolling. Feel free to proceed with offering incentives if you stumble upon such a challenge as you implement your winback strategy.
Here are some helpful tips to keep in mind when offering incentives:
• You want these incentives to be exclusive. Highlight your offer’s exclusivity (or time-sensitiveness) to inspire them to act urgently.
• Make the offer worthwhile. If you’re uncomfortable offering significant discounts, think of other ways to make the offer enticing and worth their time, such as unlocking an exclusive feature or receiving a free gift.
The Last Try Email (for the Lapsed Heroes)
Unfortunately, there will come a time when you need to wrap up your re engagement strategy or send your last-chance message to your lapsed heroes. Try sending them a final whopper of an incentive to win them back.
Ideally, your Last Try email should:
• Offer an incentive bigger and better than the usual deals you offer.
• Highlight how time-sensitive the incentive is to encourage them to perform your desired action.
• Ask subscribers if they want to remain on your list. Doing so can help you keep your email list clean.
4. Personalize Offers and Incentives
The offers within your win-back campaign can include discounts, product upgrades or exclusive content, but they need to be based on the reasons your customers left in the first place. It’s crucial to make the offers compelling and relevant enough to draw former customers back in without undermining your business’s profitability.
By analyzing customer churn trends and feedback, you can determine the best way to re engage churned customers – whether through pricing, retargeting campaigns, social proof, new announcements or targeted offers.
5. Leverage Technology for Reconnection
Thanks to the continuous development of artificial intelligence, it’s becoming much easier to turn data into actionable insights that can reinvigorate win back strategies. Here are just two of the many ways AI in customer engagement can help you re engage churned customers:
Predictive Analytics
AI can anticipate future customer behaviors using customer behavior analytics based on their past interactions with your business. The insights you gain from this enable you to proactively reach out to customers with timely and relevant offers, reminders or incentives.
Personalized Communication
By understanding individual customer preferences, behaviors and buying patterns, AI can tailor messages specifically to each user. This personalization not only boosts engagement rates but also helps re-engage customers who may have lost interest in your offerings.
When you maximize AI in customer engagement, you use the technology’s ability to analyze, predict and personalize at scale to regain lost customers and, ultimately, improve overall customer satisfaction and loyalty.
6. Aim for Continuous Customer Journey Optimization
Finally, it’s crucial that you measure the success of any win-back campaign you launch to understand what works and what doesn’t. This involves employing A/B testing on different campaign elements, tracking the return rate of churned customers and studying customer behavior analytics post-campaign.
With your customer journey optimization based on data from your past and ongoing win-back efforts, you maximize your time and budget while getting your desired results. Best of all, it lets you send communications that help you forge stronger, lasting relationships with your clients and achieve sustainable growth.
Launch Campaigns That Deliver Real Results With Thrive
Lost clients can be more valuable for your business than new prospects since they’re already familiar with your brand and may be easier to sell to.
However, you need to engage with churned customers through surveys or gather customer behavior data to understand what is customer churn for your specific context. More importantly, you must identify the best audiences for your campaign and personalize your communications to win back customers who have lapsed or are about to lapse.
With a well-planned strategy, relevant emails and offers and rigorous customer behavior analytics, you can maximize your win-back campaign to bring back previously loyal customers into the fold.
Let Thrive help you craft a data-driven customer journey optimization and win back campaign.
As a full-service agency, we’re proud to offer comprehensive solutions, including search engine optimization (SEO), pay-per-click (PPC) marketing, web design and digital marketing strategy. But the best part is that we always employ a data-driven approach. Our experts help you analyze customer churn trends, develop personalized win-back offers and implement an effective re engagement strategy.
Ready to draw customers back to you and enjoy sustainable growth? Talk to us today, and let’s discuss your campaign.
