Frustrated by customer churn? You’re not alone. Many of your fellow SaaS companies are facing the same challenge when you consider the average churn rate across industries and business types is 5.6%.
Churn is expensive because you’re losing monthly recurring revenue and paying up to 7x more to acquire a new customer than to keep an existing one.
When faced with this reality, some SaaS companies obsess over the competition or put more pressure on their product teams. Our advice? It’s time to get serious about trying to win lost customers back.
We have five effective winback campaign strategies that you can implement now. Read more below to discover how.
Winback campaigns are typically a sequence of targeted email messages focused on reactivating past customers. When done well, winback campaign strategies can be an effective and low-cost way of reducing churn and increasing revenue.
Sometimes, just showing up in your customer’s inbox with a small nudge is enough to remind them of your value and get them back. However, in our experience, the most successful winback campaigns are delivered at strategic intervals and divided into segments based on customer attributes and why they left.
Choosing the best moment to reach out to lost customers will vary depending on various factors, including why they canceled. Here are five effective winback campaign strategies to get you started:
Use a cancellation flow. Your first winback attempt should happen within your cancellation flow. Here, you have the chance to save customers at the last second with persuasive offers, discounts, or incentives. This step is easy to implement through an API feed integration with your billing platform (e.g., Stripe, Chargebee, Recurly). This step alone can help you reduce churn by 10-30%.
Ask for feedback. Even if you don’t winback customers at cancellation, you can gather information to help you win them back down the road. Use an exit survey and ask customers a few simple questions about why they’re leaving. Then, use that information to create tailored campaigns and messaging around everything from price to product features to leaving for the competition.
Address price sensitivity. When customers leave for price-related reasons, you have a few options. You can create a winback campaign soon after they leave that offers customers a discount for coming back. Another approach is to create a winback campaign that reminds customers of your value and invites them back at a lower pricing tier or free option (if you offer one). Once they’re back, you can upsell as you add new features.
Share product updates. You don’t always need to focus on price. When customers cancel due to product features, tailor your winback campaign messaging to focus on that. Time your campaigns to coincide with major product updates or feature improvements and use your exit survey data to target customers who left for feature-related reasons.
Acknowledge your competition. This campaign style requires some patience because you don’t want to reach out too soon when customers leave for the competition. Instead, wait 3-6 months. Then, check in to see if they’re satisfied, remind them of your value, highlight any improvements you made and offer a discount for coming back.
Ready to add a winback campaign to your customer retention program? Here are some best practices to keep in mind:
Personalize your campaigns. You can’t win customers back with a one-size-fits-all approach. For example, if a customer canceled because of a lack of features, you’ll want to tailor your messaging to feature improvements, not a discount or changes to customer service. To deliver the right offers to the right customers, you need to get personal and craft campaigns that combine survey responses with customer segments based on MRR, plan billing interval, or custom data from your CRM or CDP.
Experiment and test variations. Nothing is ever perfect at the start. Experiment with changes to your subject line and message content, being sure to compare results against previous campaigns to the same segment of customers.
Stop after 3-4 emails. Sending too many winback messages can backfire (plus, you don’t want to be the SaaS that can’t take a hint). Design your campaign to include three to four emails. In the final email, offer your best incentive and mention that you won’t reach out again.
At ProsperStack, we help SaaS companies improve the customer offboarding experience. Our solution provides you with all of the data you need to design and implement powerful winback campaign strategies.
Each of our paid tiers includes a fully customizable offboarding flow, feedback reporting, offer analytics and A/B testing, subscription platform integrations, and unlimited users. And because we integrate with your billing platform, you can be up and running today with just a few lines of code.
Book a demo to learn more.