Reengaging churned customers: 3 ways to win them back

With the mere mention of customer acquisition costs making any savvy business owner mutter, "In this economy?", the knowledge of how to re-engage churned customers couldn’t be more important or relevant.

After all, when the cost of winning a new customer can be up to 25 times more expensive than keeping an old one, customer retention isn’t just good business sense—it's practically a survival skill. 

In this blog, we share three tactics to win back churning customers, including personalized re-engagement campaigns, enhancing customer experiences, and building quality loyalty programs that convert. 

1. Personalized re-engagement campaigns

Customers are going to purchase your products or services and then leave. It’s an inevitable reality of doing business. But understanding why customers drift away and tailoring your communication to address their specific concerns is an extremely valuable takeaway to win them back. The best way to do this is through first-party data. 

First-party data is collected directly by your business, and consensually given by your customer to help you understand the 'why' behind customer churn. It also creates connections back to them with better, more personalized communication. With the exit of cookies later this year, it’s no wonder 85% of businesses are prioritizing the capture and leverage of first-party data with the goal of better personalizing campaigns to existing customers. 

This is invaluable information because it educates you on exactly why a customer might have left such as a lack of engagement or dissatisfaction with a product or service. By leveraging first-party data, businesses can segment churned customers based on their interactions, preferences, and purchase history, allowing for a level of personalization that was previously unattainable. This means re-engagement campaigns can be designed not as mere generic pleas for return, but as targeted, resonant communications that speak directly to the customer's known preferences and pain points.

4 tips for successful re-engagement campaigns: 

• Consider the channel: Meet your customers on the channel they originally purchased, such as a personalized email, a timely SMS message, or a targeted social campaign.

• Focus content on the pain point: Design the messaging of this campaign to speak to why they churned with content like special incentives, new or improved products/services, and/or highlight other changes that address their reasons for leaving.

• Work smarter, not harder: Use automation tools (such as Segment’s CDP) for effective segmentation and personalized messaging taking the guesswork out of retargeting. 

• Measure and adjust: Don’t just set it and forget it! Measure the success of campaigns through engagement metrics and adjust strategies accordingly.

2. Enhanced customer experiences 

Great customer service is unfortunately an increasingly rare thing in today’s fast-paced, buy-it-now, get-it-fast over-crowded marketplace. When customers have great experiences, whether that be through easy transactions, kind and intelligent support staff, simple returns, etc, they remember and they often come back. 

On the flip side, slow website performance, unhelpful customer service, or difficult navigation can all push customers away. By identifying and addressing these common pain points, you create a smoother, more enjoyable journey that can entice churned customers to return.

3 tips for enhancing customer experience: 

• Audit your customer journey: Use analytics and customer feedback to pinpoint where and when frustrations occur. Identifying these moments allows for targeted improvements that can significantly enhance the overall experience.

• Small meaningful changes: Making the checkout process more straightforward or ensuring customer support is more accessible and helpful, small changes can lead to big improvements in customer satisfaction.

• Reach out directly: Often the most vocal customer is the unhappy one. You don’t have to look hard to see where trends of issues lie if you’re willing to reach out for feedback. Take the time to both respond to and recognize where you can do better. Acknowledging customer feedback directly can make a huge difference as to whether they attempt to do business with you again in the future. 

3. Effective loyalty and reward programs

Loyalty and reward programs can be powerful tools to entice churned customers into giving your brand another chance. These programs not only serve as a thank you to your repeat customers but also as a strategy to boost retention and re-engage with those who have drifted away.

Creating or revamping a loyalty program involves offering perks that matter to your customers. This could range from discounts on coveted products to exclusive access to special events, to special rewards for referrals. The key is to provide value that resonates with your customers' wants and needs, thus making the prospect of returning to your brand more appealing.

A great example of this is Allergan Aesthetics which relaunched its Allē loyalty program and generated $400 million in direct-to-consumer sales. You can read more about their success here. 

3 tips for effective loyalty and rewards programs: 

• Design with the customer in mind: Tailor your loyalty program to offer rewards that your customers genuinely want. Discounts, exclusive content, and referral bonuses are popular options that can entice former customers back.

• Keep it simple: A loyalty program that's too complicated will deter participation. Ensure the rules are straightforward and the rewards are easily attainable to encourage sign-ups and ongoing engagement.

• Continue to update and highlight new program features: Observe which aspects of your program are the most effective and lean into them, enhancing those features and reminding/informing your customers about new updates or improvements so they continue to see the value of the program.

Perfect the boomerang effect

There may be a variety of reasons that customers choose to not do business with your brand anymore. Still, it’s important to see these sales shortcomings as opportunities for long-term growth and improvement. In doing so, you can encourage churned customers to come back with a variety of tools enhanced by first-party data and improved by strategic personalization.

By testing these three strategies, you're not just re-engaging with previous customers; you're setting the stage for a future where every customer feels like coming back is not just an attractive option, but a compelling preference. Curious about enhancing customer retention strategies even further? Read the full 2024 guide to customer retention here