How to win back lost customers and retain them for the long run?
Customers leave when they are not satisfied, charmed away by your competitors, or simply no longer see values in using our products or services and this is inevitable. When this happens, we lose sales, and profits plummet.
This applies to businesses in virtually every industry, but especially:
- SaaS: On average, a mobile app will lose 77% of its daily active users after the first 3 days of installation, according to Andrew Chen, a Silicon Valley venture capitalist.
- Online retailers: this business model usually has little to no switching cost to a different provider, making it easy for customers to churn.
Getting back customers is so important because, earning new customers is 25 times costlier than getting back and retaining the right ones. This post will address 9 strategies to help you win back and retain these customers, keep your churn rate low, and drive up profits from lost sales.
How to win back your customers?
1. Learn your customers
Whatever methods you may choose, the most important step is to learn your customers well. By doing this, you can gain a clearer look on why they churned, then use that as a tool to reel them back.
Where and what made the customers churn?
Timeliness and relevance are the keys.
No matter if it’s financial hardship, the need for your product, social context, or simply difficulty with transactions, each of these situations requires a different approach. To identify which one it is, analyze the churn right when it takes place. This enables you to tie it with real-time events, and understand the factors impacting their leaving decision.
Is the potential profit from this customer worth the cost?
RFM analysis is a powerful insight-learning model that answers to the marketing principle “80% of your business comes from 20% of your customers”. This model looks into 3 aspects:
- Recency: When was the last time this customer engaged with your company?
- Frequency: How often does this customer buy your products or services?
- Monetary: What is the amount that this customer is willing to pay for your products or services?
From there, you can decide whether the potential profits from the ex-customer you are trying to win back is worth the cost; and if yes, where the cut-off is.
That said, a thorough understanding of your customers will help you link the reason to the appropriate response.
2. Show them that you care
Allow your customers to give feedback.
Allowing your customers to raise opinions about your business shows that you take them seriously and value their satisfaction. Notice these when crafting a survey:
- Open-ended questions and not quantifiable ones help you learn many more underlying reasons that you haven’t expected.
- Take the blame on our side, by framing the question as “What did we do wrong?” “What made you cancel?”, instead of “Why did you cancel?”. This has proven to generate a 19% higher response rate.
Let’s take an example of IPSY, a beauty box subscription. They listen to feedback from customers at 4 key points: after the first products, every 3 months after that, before confirming cancellation and a few days after cancellation. This proves that they really care about their customers’ satisfaction.
Be sympathetic with the current external situation
Let your customers know that you can relate to their situations and are trying to help them win the best of both worlds. For example,
“We understand this is a hard time for all of us and we would like you to know that we are here for you. Please let us be of your service by accepting this offer”
Shaw Academy did this so well:
⇨ Winning back ex-customers is not only a sales-boosting strategy, but also about re-building a relationship. To do this, it’s essential to show care about your customers’ benefits.
3. Offer fruitful deals
This is the all-time-winning strategy, customers love deals and can easily fall for these baits. As long as your offer is enticing, your ex-customers will not pass up the opportunity. Below are some common deal models:
- Discount, free products: from 5-95%, plus free shipping; we’ve seen them all!
- Competitions: free entry to a giant prize giveaway on a purchase or re-subscription
- Value added offers: offer the premium tier at the price of the regular one
4. Give a time rush for your deal
Consumers, especially online customers, place orders on impulse. A time constraint will urge them to make a purchasing decision quicker, thus, eliminating the opportunity for second thoughts.
When you send an email offering a time-limited deal, psychologically speaking, the customers think that they’ve hit a jackpot. They assume that they’ve caught the email just in time when the offer is still valid. This, plus the charm of the deal, creates a rush of excitement, likely leading to a purchase.
To succeed with this tactic, notice these:
- The time period needs to be short enough before they forget about the deal, usually not over 24 hours.
- Odd numbers like 1h:17m:39s look more real.
- Use time-sensitive words like “urgent”, “time limited”, “deal expiring soon”
⇨ Time matters!
An example from Shaw Academy on leveraging time rush.
5. Make them aware of the alternatives
A lot of times, your business may have the option that your customer needs, it’s just not well-advertised. This could be an easy win-back. There are 3 possible situations:
- Offer your customer a lower tier if the previous product delivers more than what they need and are willing to pay for.
- Offer your customer a higher tier, along with extra customer service.
- The payment term can be a reason for churning as well. You can choose to deal with them individually to set up a more appropriate term.
⇨ A lot of the time, customers leave because we’re not 100% a good fit. Sometimes, they are not aware of other options. To fix this, simply learn what they want and send them a message: “Hey, we’ve been here all along. There’s no need to switch up.”
6. Send personalized, sincere messages
When you’re trying to rebuild a relationship with ex-customers, avoid being generic and cliché with automated email tools. Marketers see an average increase of 20% in sales when brands adopt personalized experiences . So be authentic and make sure to add a personal touch to your message.
- Address the customer on a “first name” basis
- Indicate some knowledge about your customers. For example: “It has been 2 weeks since the last time you used Fitness Gear. We miss you and would like to help you achieve your goal. – From Tara of the Fitness Gear team.”
- Send emails signed off by your very own CEO. The higher the position of the sender, the more sincerity your customer feels.
⇨ Personalized messages touch your customers on a personal level, rather from a business-to-customer to perspective.
7. Convince your customers that they need our product, “inspire them”
When your customers just don’t feel the need of using your product anymore, you need to inspire them. This tactic must go hand in hand with your positioning strategy.
- If it’s about cost-leading, make sure to highlight:
- Your pricing is competitive in comparison to your competitors’.
- You offer more benefits, but at the same price.
- If it’s about differentiation, stress that:
- Your product offers unique benefits that no other can replicate.
- Using your products could help customers achieve their goals. This can be done by showcasing testimonials from other users of their accomplishments; along with advice, and consultation from experts.
⇨ The intrinsic want of your customer is the first thing that drives their purchasing decision. Your customer must want the product first before he can look at any other factor.
By providing their active and ex-customers with insights and ideas from famous artists, Adobe is able to keep their customers engaged and inspired. This creates an intrinsic motivation for them to keep using the product to create their own.
8. Promise to do better…and really do it
Promising a better performance is a proven selling point.
What’s next? You try to keep them in your business for as long as possible because this costs extra and you don’t win back customers just to lose them again. Be sure to pay special attention to them after re-subscription:
- Keep records of their engagement
- Check up on them frequently
- Act immediately if anything unusual happens
⇨ Credibility is important. Customers count on you to play out your promises, so you need to respond accordingly.
9. Know when to give up… and when to come back
Sometimes, it’s just not a good time for your customers. Life happens: lack of funds, personal issues arise. After a number of non-replying follow-ups, it’s time to send a closing message and hope to gain their business in the future.
Depending on what the original reason is, the time when you decide to open up conversation with your ex-customers again must be a different situation. This could be when you have a new product, service, new policies to offer; or when the social economic situation is different from that when they cancelled (no more financial crisis, worldwide pandemic, etc.)
⇨ Retreating is to avoid spamming your customers, protect brand image, and save you dead costs. Remember, talking too much is not as good as talking about the right thing, at the right time.
Keep in mind
- Learn your customers thoroughly. This not only helps to win them back but also serves as a baseline for how to retain the relationship in the long run.
- When customers leave, it means you have done something unsatisfactory to them. Acknowledge the blame to yourself when addressing the cause and find ways to make amends.
- Be caring and understanding when communicating with your customers so they feel that they’re missing out on what we have to offer
- Treat your customers as if they were an actual relationship of yours. To win them back, it takes some “sorry”, acknowledging and promises.
Hannah started as a copywriter, but it turns out her true passion is e-commerce marketing.
She is naturally inquisitive about human behavior and its interaction with the digital world. Now, she’s part of the HappyPoints team with a goal to help Shopify merchants boost their business.
Her team helps merchants launch their e-commerce websites and optimize their sales conversions with fully managed Shopify store setup and theme customizations.