If your customers are ghosting you faster than a bad Tinder date, you might need to slow down and address the issue:
Is it you? Are you the drama?
Whichever the case, today we’re going to walk you through the most effective win-back campaign: targeted email flows.
It’s time to say goodbye to blasting your entire email list with generic messages and hoping for the best. It’s time to get strategic about your email game.
Today’s post dives into the world of targeted email flows, the work that needs to happen before you even write a subject line, and best practices to stoping your best customers from churning.
Lost Customers in RFM Segmentation
Generally speaking, lapsed customers (or lost customers) are people who haven’t bought anything from you or engaged with your brand in a certain amount of time.
What’s important to note is that you won’t win back all lost customers, and not all lost customers are worth recovering. Some people genuinely don’t need your products anymore, so it’s best to leave them be.
Besides, you need to protect your resources and only spend them on campaigns that will bring you back your most important customers.
In RFM Segmentation, we’re focusing on two types of inactive customers, both worth your effort: Ex-Lovers and Don Juans.
Ex-Lovers are customers who slipped from the Lovers & Soulmates segments.
They were bringing in consistent revenue (Monetary Value score of 3-5) and placed repeat orders (Frequency score of 2-5), but are now inactive (Recency score is 1.)
Before attempting to orchestrate any customer win-back strategies, you should take the time to reflect on and understand what went wrong in your relationship.
- Don Juans
Don Juans are customers who only placed an order (but of high monetary value) and never returned to place a second one.
In RFM, their Recency and Frequency scores are low, while their Monetary Value is 4 or 5.
While some Don Juans might never return, you can still understand their motivations and why they didn’t place a second order. This knowledge empowers you to go further, address their concerns, and even turn them into loyal customers in the long term.
What Are the Benefits of Winning Back a Customer?
But should you put in all this effort? Is it worth bending over backward to win back people who abandoned your brand when there’s plenty of fish in the sea?
It’s a hard yes.
Winning back customers and creating long-term relationships that benefit you and the customer. Here are only some of the benefits you get when you successfully win back the heart of a customer who churned:
- Increase in Revenue.
The revenue impact is the most obvious win of winning back a customer (when you focus on Don Juans and Ex-Lovers).
When customers stop doing business with your brand, your revenue takes an obvious hit. Ignore customer churn, and you might soon find yourself in a lack of cash-flow situation.
However, if you win back customers, you can expect to earn more revenue from them.
Reactivated customers tend to make larger or more frequent purchases if they are satisfied with their experience. In fact, a Deloitte study reveals that customers are willing to spend up to 140% after a positive experience – and your reactivation campaigns will deliver that experience.
- Improved Customer Loyalty.
Customers will usually stop doing business with a brand because they were disappointed with their experience in some way.
Customer experience statistics show that 17% of customers will churn after a poor experience. In comparison, 59% of customers might give a brand a second chance but will leave if the incident repeats itself.
Each time a customer leaves, you have the opportunity to understand why and how the customer experience is defective, which are the customers’ main concerns, and what needs improvement.
At the same time, if you can address a lapsed customer’s concerns and win him back, you prove that you value his business and are committed to his satisfaction.
This will help build trust and loyalty, making the customer more likely to continue doing business with you.
- Word-of-Mouth Advertising.
Word-of-mouth advertising is the Holy Grail for marketers, so it comes as no surprise we’re all chasing it through our marketing campaigns.
If a lost customer is impressed with your reactivation campaigns, he is likelier to recommend you to his community. In turn, his recommendations can bring in new customers and generate additional revenue for your business.
- Access to Crucial Insights.
Your whole business is about satisfying customers, helping them progress, and providing so much value, they would have to be insane to leave you.
When that doesn’t happen, and customers churn, you can identify the exact point where you failed through customer feedback.
Simply reach out to a customer who has stopped doing business with you and ask why he left and what you could have done differently to keep him as a customer.
The collected feedback from all lost customers is precious in helping you identify areas for improvement and make changes to prevent similar issues from arising.
- Positive Brand Reputation.
Finally, winning back a customer helps enhance your company’s reputation.
When you successfully win back a previously dissatisfied customer, it demonstrates that your company is committed to customer satisfaction. More importantly, when people see you as a brand willing to go above and beyond to address customer complaints, your company becomes more attractive to potential customers.
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What Is the Cost of Winning Back a Customer?
Formulating the precise costs of bringing a lost customer back is difficult without looking at your data.
However, we can highlight the costs of losing a customer, and you can reverse-engineer it to uncover the costs of winning back a customer.
- Direct Costs.
This refers to the customer’s revenue, his Customer Lifetime Value, if you will. Winning back an average customer who churned shouldn’t cost more than the revenue he generated.
- Initial Acquisition Costs.
With the CAC at an all-time high, losing a customer will cost you the money you spent on acquiring him in the first place.
However, winning back this customer should cost significantly less than his acquisition because it’s 25x cheaper to acquire than retain.
- Brand Reputation Costs
Zendesk conducted a study to understand the real impact a bad customer experience can have on a brand. This study revealed that 95% of consumers share negative experiences with others, and 45% do so via social media.
A former customer might damage your reputation unless you focus on damage control and mitigating his potential social impact.
- Onboarding Costs.
When you win back lost customers, they need to be onboarded all over again, translating into new customer flows, retargeting campaigns, and all processes involved in the initial onboarding process.
Winning back a customer could cost you approximately the same as onboarding him.
- Strategy Costs.
It isn’t easy to win customers back without offering incentives or extra perks (such as discounts, special offers, free shipping, etc.)
All these perks will translate into expenses for winning back a customer.
Find Out Why You Lost Them
As you saw earlier, you must research why customers left before you embark on any win-back strategy.
The easiest way to uncover these reasons is to pick up the phone and talk to lost customers. Be approachable and empathetic, avoid pressuring them, and try to get truthful responses.
However, sometimes these customers won’t be available to chat. To that end, here are three other excellent sources to analyze customers’ behavior and uncover why they left.
- The Net Promoter Score Answers.
The first place to look for customer feedback is your data from NPS surveys (or any other customer satisfaction survey you sent).
Analyze the responses and find patterns in the Ex-Lovers and Don Juan segments. Customers might have left your brand after poor pre or post-delivery experiences, having unresolved complaints, or even unmet expectations.
Listening to the VoC usually provides crystal-clear insights into what you could have done better.
Are you using Reveal? Our Customer Intelligence platform allows you to analyze NPS feedback from Ex-Lovers and Don Juan segments in real time. Moreover, you can also go back and analyze NPS data from the past to look for issues that could cause customer churn.
- Returned Orders (Products).
For this analysis, you will need two sets of data:
- Products bought by one-time buyers.
- Product Returns.
If you find products that belong to both categories, that’s your Evrika! Moment. Products that Don Juans returned are usually why this segment buys only once from you.
Removing these products from your assortment might be a good idea to avoid losing more valuable customers and keep them loyal to your brand.
- Customer Effort scores
The Customer Effort scores reveal how much effort your customers have to put in to get their issues solved.
If these levels are high and solving an issue becomes a hassle, customers will get frustrated and stop doing business with you.
Ways to Win Back Lost Customers
When it comes to email flows that bring back lost customers, you need a tactful approach, where timing and the tone of voice are crucial elements.
Your primary purpose is to create meaningful and relevant experiences without trying to bribe customers or annoy them with tacky marketing techniques (such as fake discounts, aggressive copy, or excessive email blasts).
On a more granular level, win-back email flows can have any of these three goals (or a combination of them):
- Collect Feedback
This flow is designed to unearth why customers left your brand and understand what needs to be done to win them back. Get ready for honest and even negative feedback.
You can ask lost customers to complete a survey or reply to your email with their thoughts.
This flow is successful when you clearly understand what you did well, what you could do better, and what needs to be done to bring customers back and rebuild customer loyalty.
This flow aims to rekindle interest and encourage customer engagement. Unless there’s an obvious sign your Ex-Lovers and Don Juans left forever, re-engagement campaigns still stand a chance of winning back customers’ trust and love.
Use this flow to respond directly to customers’ issues and show them you fully understand their needs, challenges, and motivations.
You can also include a particular offer or a loyalty program perk that will improve their lives and remind them why they loved you in the first place.
- Build Trust
This type of campaign aims to do some damage control and earn back the trust of your lost customers.
Whatever the breakup reasons, it’s time to improve customer relationships and establish your brand as a reliable source of information and products.
This email flow can share customer success stories, offer expert advice, or provide helpful free resources that align with your brand values.
Thus said, let’s look at three types of emails we’ve included in our win-back flows for Omniconvert’s clients:
- “We miss you” message
This honest and heartfelt message can be an excellent way to let customers know you value their business and want to stay connected with them.
Sometimes, all it takes is a friendly reminder that you’re still around and ready to offer customers something they might be interested in.
It’s a small gesture that can make a big difference in how they perceive your brand and their likelihood of returning and purchasing.
- CX Assessment & Feedback
Feedback emails are a win-win situation: you get crucial feedback that improves your business, and customers feel valued and heard.
Asking for feedback shows that you care about customers and their experiences and will help you improve your products & processes.
Moreover, customers who haven’t bought in a while have valuable insights and opinions from which you can learn a lot.
After all, you need to understand what drove these people away and ensure you’re solving the issues, so you don’t lose any more valuable customers.
The difference between annoying email blasts and incentive flows that entice the customer to place a new order is the research behind them.
When sending incentives to your lost customers, make sure you’re doing it based on customer data & purchase behavior. This means only offering discounts or customized promotions for products these people would be genuinely interested in.
After all, incentives can be a great way to get customers excited about your products again. The trick is picking the right products to promote. You’ll need to research your customer base and uncover their favorite items to pull it off.
How Long Does It Take to Win Back a Customer?
Unfortunately, there’s no straightforward answer.
Remember that win-back strategies or even customer retention strategies will always depend on the personalities and motivations of your customers. You’re dealing with humans, who aren’t rational beings, so you can’t predict their future behaviors with 100% accuracy.
Various factors will affect the amount of time for a win-back strategy to yield results, including:
- the circumstances of customers’ departure
- your relationship before the breakup,
- and even your level of involvement & mindset behind your strategy for winning them back.
A disgruntled customer will be more willing to return if he left because of a past issue that has been resolved in the meantime.
For example, let’s say there was a mix-up in the delivery process, and the customer received the wrong order, but you addressed the issue and took the necessary steps to improve your logistics. In that case, the customer might be willing to give you another chance.
However, you will encounter situations where winning back the customer (and his loyalty) will take more time and effort.
Usually, these are the cases where customers have poor experiences regularly, which requires you to change your processes fundamentally to prove you’re committed to making things right.
Overall, seeing the results of your win-back strategies is deeply connected to the severity of customers’ complaints and their willingness to give you a second chance. It can take anywhere from a few weeks to several months (or even longer).
While these are not necessarily in your power, you can still control your efforts to address the issues and your commitment to rebuilding trust and loyalty.
Complete Series of Email Strategies for Your Customers
This article is the exciting conclusion of our article series based on Unlocking the Benefits of RFM Segmentation in Email Marketing.
We aimed to showcase the true power under well-thought email flows targeted and optimized for your customers’ behaviors.
If you missed the first articles, or you want to discover even more about effective email marketing strategies, here are the rest of the articles in the series:
- Email Flows for your Best Customers: Narrow your focus on your power customers and stop wasting resources.
- Email Flows for Active Customers: Unlocking the value of your most neglected customer segment.
- Email Flows for At-Risk Customers: How to to win them back and reduce customer churn in the long run.
Never underestimate the power of a well-crafted email flow. Some marketers might argue that email is dead, but that’s a false statement.
Email is very much alive – but limited to how you approach it.
Taking the time to understand your customers, address their issues, and treat them with respect is how you can win back their hearts (and wallets).
Keep on winning, my friend!
Frequently Asked Questions about Winning Back Lost Customers
The first thing to do is reaching out (through email, an SMS, or even a phone call) to customers and understanding why they left. Acknowledge the reasons behind their departure, show genuine empathy and understanding, and do everything you can to solve the issues that caused the Churn. You can also offer offering incentives such as discounts, exclusive offers, or other perks to try and re-enagage them.
It’s important to understand that, up until a certain level, customer churn is natural all not all customers have to be won back. However, one effective way to getting over losing customers is identifying the reason why they left in the first place. Use surveys, analyse customer behaviour and track customer interactions to identify the reasons why customers left. After you have your answer, you can address the issues and prevent them from happening in the future.
An ex-customer is someone who’s done business with your company in the past, but has since stopped doing so for one reason or another. In RFM Segmentation we call them Don Juan (a customer who ordered only once, but with a high monetary value) and Ex-Lovers (people who used to be your best customers but have now stopped buying form you).
The most common reasons behind customer churn are poor customer service, low product quality, high prices, lack of convenience, or a better alternative.
However, there are various reasons why someone will leave a brand and you can’t pinpoint the precisely unless you survey your ex customers.