Winning Back Churned Customers 💁
Hello CX Savants,
We’re back, besties. If this was passed along to you by a friend or colleague, feel free to join the 2,991 folks that subscribe by clicking here:
We are so close to 3,000 folks–it would make my week if you could share the newsie on Twitter or Linkedin, or with a bestie who can use some help upping their CX or Customer Retention game. 😏
Some real quick updates for this week!
A. Cody and I just released our last Down To Chat episode of the season. We chatted about a topic I’ve been noodling on for the longest time; community building. You can listen to the last episode here.
B. Expo East is coming up and will be hosted in my home city, Philly. Are you coming to the Expo? LMK!
C. I wanted to highlight a newsletter I’ve been thoroughly enjoying. Nice Ads is a weekly creative strategy and inspiration newsletter for your paid media. Written by industry professionals, Nice Ads will help you get ahead of the competition and make better ads. Subscribe today for free.
For this week, we’ll be focusing on a question I’ve been asked about quite a bit lately:
How Do I Strategically Win Back Lapsed Customers?
Before we get into it, a massive shoutout to Gorgias, the sponsor of this week’s newsie.
Gorgias is my CX helpdesk of choice and what we use at JRB. If you have been here for a bit, you know how much I love Gorgias and why I think it’s an absolute must-have for any Shopify business. More on my fav Gorgias use cases here.
Gorgias makes it simple and easy to create a personalized and spectacular experience for your customers without taking out a mortgage.
Let’s get into it, shall we?
Okay, here goes. Imagine this:
You wake up feeling entrepreneurial on a Friday and decide it's TiMe tO bUiLd.
Working for someone else? Can’t be you.
You hit up the interwebs, perhaps a microdose of ayahuasca to get into the zone. A few hours (or was it a few days?) later, you come up with a novel idea.
✨ Superfood Collagen Protein Bar ✨
Easy million-dollar idea, right?
Okay, we’ve got the name in the bag.
Bootstrapped? Not you. You raise a quick round of 2 million and throw Gander some $$$ to build a DTC site for the ages.
If they did it for Magic Spoon, Immi, and Graza, they could surely make Barz a success.
The site is live, and you snag Hoox for some landing pages. You are all set and ready to go.
You choose the agency route to run paid acquisition to get your first customers. Then, you grab all the tools you need. You fill up the shopping bag with Gorgias, Klaviyo, Postscript, Retextion, Junip, Retently, Wonderment, and Peel. Nothing can stop you.
First 100 customers. “This shit is easy,” you think to yourself.
You even create a little humbled and grateful “screw the haters who said I can’t do it” LinkedIn post. Nothing can stop you.
“How much should we be willing to spend on acquiring new customers?” the agency asks you.
“If we can break even on the first purchase, that’s perfect,” you say.
A few months into it, you realize that gross profits don’t pay bills; net profit does.
“I don’t get it,” you ask the agency, ”if we are only paying to acquire customers once, why are they not coming back?”
“Where is the LTV everyone talks about?”
You look at the data and realize most folks are not returning and re-purchasing Barz.
The whiteboard comes out. Brainstorming ensues.
“What if we did a giveaway for folks who purchase again?”
“Why is our email agency not sending winback campaigns?”
An email goes out the following week with all the hacks in the subject line and offers your lapsed customers 20% off to come back.
🚨 50% off–final offer. LIMITED SUPPLY 🚨
Let me stop you here. You are spiraling. 😵💫
Let’s zoom out for a second and switch perspectives.
Put your customer hat on:
Imagine you, as a customer, find a new collagen bar while scrolling through Instagram on a fine Friday. You order it, and it takes weeks to arrive.
It comes to your door in a janky box, looking like something the cat dragged in.
“$44.99 for this?” you ask yourself.
Within a day of receiving it, the emails flood in, pushing you to purchase again.
You tune them out and stop opening emails. A few days later, you start moving them to spam, hinting to the gmail algorithm to take out this trash. The discounts don’t talk to you. You never liked the product in the first place.
This is not necessarily a common occurrence for most brands, but most brands would never know because they never ask.
Let’s talk practical.
The biggest mistake brands make when trying to “fix” their churn issue is attempting to solve the problem without diagnosing it.
If a customer hated your product's taste, how do a bunch of discount codes help?
Have you, as a customer, ever had something that you enjoyed and completely forgot to re-order?
Gentle nudges fix some problems, but there’s always an objection, and it’s not always a price one.
Back up for a second:
When you zoom out a bit and think about customers churning, the biggest problem is a brand thinking they can get every single customer back.
Alex said it best here.
Focusing squarely on retention without growth is obviously a no-brainer considering best-in-class brands only see 25-35 customers out of 100 making it to their second purchase.
But if we do focus on retention and winning back lapsed customers, is there a more effective way than spamming with discounts?
Learn from subscription-driven brands:
Subscription brands were some of the first to go hard on surveying customers upon cancellation. If you have no idea why a customer left in the first place, there’s not much you can do in winning them back.
With Retextion, OLIPOP was able to create winback flows based on specific cancellation flows. With their acquisition of RetentionEngine this week, I imagine we’ll see a lot more automation in winning customers back. 👀
The key to winning back a customer is that simple–understanding why they left or have not repurchased in the first place.
Let’s talk tactical:
Putting subscription aside, here is how I would tackle lapsed customers in a simple and straightforward way.
1. Take a cohort of customers that have not repurchased in a longer-than-expected time frame (varies by replenishment date of product, so look at your data).
2. Understand why they have not repurchased by surveying them with a typeform survey.
The email you would send would be something like this:
Q1. Why have you not repurchased Barz.
- I disliked flavor
- I disliked texture
- Shipping/Delivery issue
- Customer Service issue
- Other (please fill this box)
Q2. Anything else to add about your experience with Barz?
Here’s how you would tackle winning them back based on segment:
- Flavor: Keep them posted when you launch a new flavor with segmented messaging and a plain text email. E.g., I know you disliked our Chocolate Chip Cookie Dough, but we are launching a Mango Madness flavor tomorrow and I think you might like it. Click here for early access and a discount.
- Texture: Keep them posted if you ever change texture, but keep in mind these are potentially not salvageable, and that is totally okay. Not every product is for everybody. Focus on the wins.
- Shipping/Delivery: This is one of the easier winbacks, but you have to truly put in the work to make the change on expectations (and reality) for future customers before you ping them back and ask them to try again. Most customers give you one chance, two if they are feeling super generous. Don’t mess it up.
- Customer Service issue: Unless you or the team did something outrageous, a personal apology and follow up from the founder or Director of CX does wonders. The Service Recovery Paradox is a real thing!
- Price: When there are concerns about price, it can mean one of two things. Either your shit is too expensive, or you need to increase the perceived value. At OLIPOP, price concern came up frequently because most compare it to a can of coke which is under $1, so we needed to do a lot more education on our ingredients and value of the product. This can be solved, but it is generally a longer marketing objective vs. a quick email response or discount. Sending those folks a hefty discount might help get them back one more time, but not much more than that…
- Other: A great place to learn that we assume wayyy too much as marketers. A great place to be humbled that we, in fact, don’t know sh*t. 😵
That’s it for this week!
Any topics you’d love to see me cover? Drop a reply!
Appreciate you more than you know,
For this week’s CX Chronicles, I’m thrilled to be chatting with Ariel Kesterke, Community Lead at Zero Acre. Ariel was actually my first hire at OLIPOP, and one of the most amazing people I’ve ever worked with. She started on the CX team and eventually led our influencer operation there.
Ariel is behind the “waffle machine” story I’ve shared in the past, and brought so much heart and soul to the team. She is on my short list of folks that I will most certainly work with again in my career. I miss you, Ariel!
Thanks for stopping by. 🥺
1. What is your CX Philosophy?
My CX and Community philosophy is pretty simple: I want to make people feel awesome. People don't remember what you did; they remember how you made them feel.
I want to do my best to make people feel awesome about their experience and the product. The experience can be stellar whether you're selling soda, makeup, shoes, or couches. When you're building your brand, I think it's important to ask yourself, how do I want to make people feel?
Whether you're asking that question about your website copy, your social media presence, or your CX, it's all about how you and your brand make people feel. This lesson applies to real life, too. ;)
2. Your favorite CX story?
Of course, Eli has told the ~waffle maker~ story more than once, and it is still my all-time favorite thing I've done.
I'll share a recent story: last week, we had a customer whose FedEx tracking had gone off the rails. I took a look, told him I'd check in again on Monday to make sure it was back on track, snoozed the ticket in Gorgias, and followed up with him on Monday to let him know his tracking was back to its regularly scheduled programming.
He followed up and shared how he immediately used our product, and he's left me two positive reviews letting us know that he'll be a customer for decades and that I should get a raise for my service. All because I followed up when I said I would. The bar is so low for CX, and people are so used to being treated poorly by companies that you can easily knock things out of the park.