One of the most important marketing metrics that you'll ever need to memorize and learn is that it is cheaper to keep or win back customers than it is to acquire a new customer. This is true for several reasons.
Firstly, with an existing customer, even if he or she is lapsed or abandoned, you already have customer information. With a new customer, you need to go through the process of finding and collecting information such as a name, phone number or email address.
The second reason that retaining or winning-back a customer is more cost-effective than acquiring a new customer is that an old or abandoned customer will already have a relationship and a trust level with your brand, company or product. That means that convincing them to take an action or make a purchase will involve less work on your end.
However, when considering how to use email marketing to retain or win back customers, there are several steps that you should follow. In this section, we'll describe how to best use email marketing to retain and win back customers.
Step One: Identify What Makes a Priority to Retention or Win Back Customer
This metric could vary wildly with your business and industry segment. For example, if you sell football-related merchandise, it may not mean anything if a customer doesn't make a purchase from you between March and June. However, in June you'll want to start "retaining" your customer by reminding them that you're still the place to go in order to find great quality and deals on football gear. If you sell merchandise that is valuable all year long, however, you may be concerned if you haven't had a customer purchase or interact with you in a month or more.
The first step that you will need to take is to map out the seasonality of your business as well as look at your existing customer metrics and determine what a normal time between purchases is for a customer. You'll also want to look at your existing customer metrics and determine when a customer becomes "inactive" or "abandoned" to you. Is it if they haven't purchased for three months, or is it if they haven't purchased for a year?
Unfortunately, there is no "cut and paste" answer to what makes a customer a customer that has lapsed, left you, or is at risk of leaving you. You'll need to really dig into your customer data and ask others in your industry to determine what the timing on your customer cycles should be. Once you do, however, you'll have the information that you need in order to really dig into step two!
Step Two: Try to Identify the Tipping Point Where a Customer is At Risk of Abandonment
While winning back customers is much more economical than acquiring new customers, the best move is to retain customers before they have abandoned you. Looking at your customer data can help you to do this. If you determine that a customer who has not purchased for five months or more is likely to never purchase again, then your priority should be to win back customers who haven't purchased in three-to-five months.
Again, there's no simple math here. However, your customer data and metrics, as well as information from others in your industry, can tell you a lot about where your win-back and retention priorities should be.
Step Three: Identify Customers You Will Not Be Able to Win-Back or Retain
With any win-back or retention email campaign, you risk some spam complaints and unsubscribe requests from customers who have simply determined that they want to end their relationship with your brand or company. To minimize this impact, you may want to consider cleaning your email database by flagging customers or having your customer service team flag customers that have a negative relationship with your company or brand. Customers who have been dissatisfied with a purchase, have sent negative complaints, and, of course, have asked to be removed from your mailing list. While winning-back or retaining customers is important, it's often not worth damaging your ability to effectively send email by getting a high number of unopened emails, spam complaints or unsubscribe requests.
Step Four: Determine Messaging and Offers
Obviously, however, it doesn't matter how clean your email list is or how smart your data and metrics are if you don't put the right offer in front of lapsed or abandoned clients. You may have some in-house data that helps you to determine what the best offer to win-back or retain your customers is, but the best bet is to test a variety of offers, messages, and products. Collect data as you go along until you have an in-house best practices list for sending retention and win-back email campaigns.
The Truth: Using Email to Retain and Win Back Customers Requires Some Trial and Error
While all marketing is a process of testing and then determining best practices, retention and win back customers campaigns vary the most based on industry and even the individual practices of your company. To develop a successful win-back and retention program for your email marketing platform, you'll need to evaluate your in-house data, available industry data, and even potentially customer service data. Then you'll need to map out a plan and test a variety of offers, messages, and techniques to incentivize customers to continue, resume, or come back to purchasing with you.
Having a robust win-back and retention segment to your email marketing strategy is critically important to your company's ongoing customer health and revenue. However, there isn't a convenient "This is the best offer to send at the best time!" strategy to use. You'll need to take the time to consider your customers' behaviors and preferences. However, all of the work will be worth it in the end when you increase your lifetime customer value and therefore your overall revenue!