Why You Should Implement a Win-Back Strategy

They say “if you love something, set it free,” but that advice puts you on shaky ground with your customers. Subscription growth professionals have encountered churn ever since subscribers have signed on. Unfortunately, many companies don’t do enough to rekindle customer interest. Making that extra effort pays dividends. We call this process win-back—because you don’t have to admit defeat once a customer leaves the fold. 8 out of 10 customers aren’t actually “lost,” they’re just waiting on you to act.

Defining customer win-back is relatively simple: it’s the process re-engaging with former customers, typically stirring up renewed brand interest through personalized offerings. These practices are effective at minimizing churn once they’re dialed in.

The customer journey is comprised of four main stages: acquire, engage, retain, and win-back. Many growth executives fixate on acquisition, yet that final stage is criminally overlooked. We’ll explore the merits of implementing a win-back strategy, and demonstrate how customer and business success are fundamentally linked.

Why is win-back important?

You may notice that customers are divorcing themselves from your product or service. The ripple effect from these departures can be immense. Not harnessing the rapport you’ve built with customers means starting from square one. The best action plans combat that exodus via win-back. This keeps teetering customers happier and even galvanizes future brand loyalty. Winning back customers is far easier than onboarding new ones, after all. Here’s why:

The Power of Familiarity and Your Bottom Line

We know that customers leave for various reasons; many companies believe they can offset these losses by attracting new customers. Statistics on the issue say, “Not so fast!” SEO Hosting asserts that acquisition costs five times as much as customer retention. This is compounded by the fact that new customers haven’t yet developed brand loyalty.

Consider the reality that new products and services are flooding the market almost daily. It’s becoming increasingly difficult to differentiate your company’s offerings from a variety of competing options. This market saturation is especially troublesome for subscription services, where fatigue runs rampant. You must provide standout offerings without overwhelming customers with options.

It’s much harder to get noticed and loyalty is hard earned. Why not target those already familiar with your brand? Those extra marketing dollars can instead be saved or allocated more effectively.

Loyalty and Win-Back Unlock Sustained Profitability

Loyal customers are worth up to 10 times as much as their first purchase (White House Office of Consumer Affairs), and boosting retention by only 5% can supercharge profitability by 25% to 100%. Those figures suggest that acquisition-first approaches aren’t always optimal—especially for mature companies. Repeat customers are also the most valuable; just 8% of customers generated 40% of revenue, according to an Adobe study.

Win-back candidates have the potential to be your strongest customers once they’re back in the fold. A study on telecom win-back showed returning customers have a customer lifetime value (LTV) of $1,410, versus only $1,262 during their initial journey. Such customers will continually invest more money over time regardless of industry.

Customer satisfaction also leads to positive chatter via social media and word of mouth. Happier customers will tell at least five others on average. This reach is powerful. It also leads to organic customer acquisition, which costs nothing. Embracing a customized win-back strategy ironically plays a pivotal role in gaining new customers.

Customer Data Makes Personalized Win-Back Easier

We’re living in the golden age of customer relationship management (CRM). Tools and software make it easy to track customer spending habits, preferences, and more. These insights make it much easier to devise offers with the greatest appeal. This is possible with former-and-existing customers, but similar data on prospective customers is lacking. Your competitors can act on similar information, and so should you.

Why are personalized offerings so important? They make customers feel as though they’re being catered to. Touching back on our cable example, you wouldn’t offer a departing UFC fanatic a free Disney+ subscription. Similar mistakes will make you appear out of touch. This can damage your reputation and be the final nudge a customer needs to leave for good.

Performing market research and making assumptions are much less efficient by comparison—should you instead focus on acquisition.

How do you design a good win-back strategy?

Successful win-back relies on attention to customer feedback and an analytical eye. You may know why your customers are leaving, but you also may not. Pinpointing these reasons will guide your decision making.

You need tools that help identify why customers are leaving. The best solution takes win-back a step further by automatically generating suggested offers. Are you ready to start tailoring your win-back approach? Dive even deeper by learning how.