I want to tell you about a little recovery strategy that you can use on the backend of your business to increase the lifetime value of your customers and bring back some dead customers. We call it a win-back campaign. This is typically an email driven campaign, and it should be an automated campaign that’s triggered by data points that you set in your shopping cart or your storefront.
Basically every customer in your business has a life cycle. All customers have a life cycle, and each business has its own unique life cycle for that type of customer. Now within that life cycle there’s that initial phase where they’re starting to go up, and then there’s that prime– top of the curve phase where they are their in their prime buying habits. right they’re buying the most from you, they are buying repeatedly. And then they start to decline. And once they go into decline, they go into that dead zone where they’re just sitting there, and you basically have all these customers that are dead people, that have outlived their their life cycle with you, but they’re still on your list.
They still bought from you, so the idea with the win-back campaign is to catch people as they’re on that downward decline (and also into the actual dead zone) and try to bring some of them back. Now these customers are already on their way out, so any of them that you save is a huge win! So the idea here is you want to figure out what your life cycle is for a customer. In most retail ecom space, is it somewhere between 30 and 60 days. Now it depends on the types of products you’re selling. If you’re selling mattresses— that you would be measuring your drop-off rate by years instead of weeks or days or months. But for most retail or online etail… I should say it’s in that 30 to 60 day range.
So you figure out what that time is. If someone hasn’t bought from you an X number of days (say 45 days), the likelihood of them buying from you again is very low. So at that point you set your storefront to trigger an email, and that’s the first of your win-back campaign.
So the win-back campaign is basically offering a crazy incentivized discount or special offer to these old customers who have not purchased from you in a long time, trying to get them to come back and buy from you again. The point here is to actually “give away the farm” because only a very small fraction of these people are going to come back– but every single one that does, basically allows you to a chance to reset the entire buying cycle for that customer– and they can go through the entire life cycle all over again buying frequently.
Plus if you’re using funnels like you should be, every time you do a win-back, and someone takes advantage of it, they’re also put into a funnel sequence on the back end of that special offer. So what we like to do is a tiered funnel sequence. So basically the further out they are (or they have purchased), the more we stack the discount– the more we give them a bit bigger incentive. So at 45 days they may get 15% off — at 60 days they may get 25% off — at 80 days they may get 75% off their order— and free shipping or something like that.
We send out these campaigns on a completely automated basis. Once we write the email setup (the promotions)… we plug them into our storefront; activate the storefront with the criteria; and we never think about it again. The crazy thing is that a well done win-back campaign, by itself with one level, can be can bring a 3-5% of your reactivation of your get customers. When you tier it, you can actually get a couple more percentage points on top of that.
So it’s a very simple campaign to operate. It’s something that everybody should have in their business, because everybody has dead customers. And it’s something that just operates in the background like clockwork, bringing you in extra money without you having to lift a finger. So test it out in your business guys and let me know how it works for you you.