Episode 22 - Maximising Winback

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🤖 AI Feature

• BASIC: If you want to improve your outputs from generative AI, this structured prompting guide should help

• RETENTION: Here’s a great collection of prompts from Robert Skrob to help you develop a subscriber-centric proposition.

• ADVANCED: This tutorial will guide you through fine-tuning your own LLM for FREE using Google AI Studio.

📰 Top Story: Maximising Win-back

In episode 14 of this newsletter, we discussed how important it is to prioritise retention quickly after finding product-market fit and that once you reach the top of the maturity s-curve, it can be too late if you don't have a strong retention strategy in place. 

Your Total Addressable Market (TAM) is finite, so effectively re-activating legacy customers via winback programs can be an attractive, low-cost acquisition channel for many brands.  

However, many brands struggle to drive results from winback. 

Often, this is because they assume price is the key motivator for cancellation. 

While this can be the case, and promotional pricing can be an effective tool to bring customers back, the most successful winback strategies: 

1. Right-size the proposition to lapsed customers' needs 

2. Understand re-subscription triggers

3. Use behavioural science tactics to motivate re-engagement 

Right-sizing your proposition

Last week, Robert Skrob (Retention Expert and author of the Retention Point) and I discussed the importance of understanding the original drivers of cancellation to develop effective winback strategies. Here's a snapshot of our conversation. 

Tom: It is great speaking with you, Rob, as always. Many brands struggle with winback. What are the core issues in your experience? 

Robert:  Subscription leaders often try to add more value and benefits to the proposition, but this can create a bloated offer that confuses customers. 

Tom: I have seen that too. So, what do you think is the solution? 

Robert: If your offer has become bloated, streamlining the front-end proposition is key. Ensure the front-end product provides a fast benefit. Then, take all the other valuable things you have created and put them in premium tiers. It's much simpler to winback and re-onboard a subscriber because you can explain how to get fast value. You can also charge more to lapsed subscribers who want the premium offer. 

Tom: Can you share an example? 

Robert: Saltstrong.com is a subscription business that teaches fishermen how to find fish in saltwater areas. They have an app. Their one offer had become bloated with coaching, community, and masterclasses. So, we created a mid-tier at $250 a year and put the community and some master classes in that tier. Then, we put the coaching and additional master classes at the $500-a-year rate. This reduced churn, improved winback, and grew revenues. 

Tom: Any other tips? 

Robert: Instead of focusing on giving a discount on the same product that the customer cancelled, think about what you could offer at five times the price that would be more effective for the customer and give them a better result. For Saltstrong, rebuilding their tiers drove a ninefold increase in revenues. 

Understanding Resubscription / Repurchase Triggers

Time-based triggers can be another critical element of an effective winback strategy. If you include surveys in your cancellation journey (see episode 21 for an example), this data can help you optimise both the timing of your communication and the offer you include. Some examples of this: 

1. Customers who cancel a service often feel the pain of losing access quickly after cancelling. So automated winback programs that drop within 1-14 days of the subscriber's hard cancellation date can work well. These are often set-and-forget programs and can be a quick win.  

2. Seasonality can also be significant. If you are a media business, sports events, new content, or political events can be potent re-subscription triggers. However, they only work if you align messaging to audience preferences, requiring data on cancellation reasons and an understanding of preferences when the subscriber was active.  

3. There is a concept known as the new start effect; these are transition periods during customers' lives. This concept explains why dieting and self-improvement is so popular in January. So, depending on what your product is, you can leverage the new start effect: 

   • At the start of the year 

   • At seasonal milestones, e.g. the first day of spring 

   • At the beginning of the week or weekend

   • At the start of the financial year, if B2B 

   • Personal landmarks, e.g., the anniversary of when someone subscribed, birthdays, etc. 

   • Holiday periods like Christmas or summer holidays

Leveraging Behavioural Science Principles

Behavioural scientists have shown that around 80% of all decisions are emotional (even in B2B). As a result, we can elicit customer responses using specific colours, storytelling and imagery that helps consumers imagine using your service for their benefit (1). 

Specifically, we elicit emotion:  

• By making customers feel superior by using your product 

• Emphasising the prospect will be making a popular choice via social proof 

• Focussing on the experience of using the product and not just rationale drivers like price, features or benefits, but emphasising how the product is a solution to the ‘pain’ the customer is experiencing/outlining how the product will make the customer feel.

It's why the Snickers ‘You’re not yourself, when you’re hungry’ campaign drove a 14% increase in sales. It tapped into a pain that the product solved, while using very emotive language.

Emotional language tied to a tight, relevant offer, delivered at the most appropriate time, can be a powerful combination for winback. 

💼 CASE STUDY: Behavioural Science in Action for Photobooks Winback Campaign 

_{Together with Netcore Cloud}

Another popular concept in behavioural science is information gap theory (1), which means that if there is a knowledge gap, customers will take action to fill it because satisfying curiosity is rewarding (it provides a minor dopamine hit).

Photobook leveraged information gap theory to build a winback email marketing campaign that reactivated over 100,000 users and drove an 18% increase in active users. 

Photobooks help people preserve memories in customisable, premium-printed photo albums. Operating in over 100 countries and having printed 1 million photobooks since its launch in 2005, Photobook wanted to engage dormant customers. 

Photobook segmented users based on past engagement patterns and employed email intelligence to schedule highly dynamic interactive emails that strategically leveraged information gap theory, including a quiz, carousel and a spin-the-wheel game. 

_{Would you like to receive a complimentary Customer Engagement Audit with Netcore Cloud? Contact [email protected] and quote Retention Coach.}

The carousel reminded users of missed opportunities and showcased new products. The spin-the-wheel encouraged email engagement, offering coupon codes as rewards. 

Far from being the gimmicks that they might appear to be, these simple, dynamic email tactics engaged email openers and led them to the next step in the journey: to repurchase. They worked because they tapped into humans' automatic desire to fill the information gap; once the customer opened the email, they simply had to spin, click the carousel or play the quiz.

Final Thoughts

Successful winback results from right-sizing your offer, mapping temporal triggers to your audience's motivations, and leveraging behavioural science tactics to motivate re-engagement. Pricing promotions can help, but don't make discounting the only element of your winback strategy. 

Until next week,

Tom

“We’ve invested so much in acquiring customers—losing them feels catastrophic.”

When you are ready, contact me to discuss consulting, my fast-track retention accelerator, courses, and training.