SaaS companies invest significant amounts of money to move prospects through the sales funnel. From lead generation to lead nurture to purchase, it can feel like you’re fighting hard for new customers every step of the way. That’s why when you acquire a new customer, you want to keep them. And why when you lose a customer, it can be discouraging and sting a bit (not to mention how much it costs).
SaaS companies are putting more effort into customer retention strategies in this customer acquisition loop. While there are a wide variety of customer retention programs you could try, there’s one that’s growing in popularity because it’s cost-effective and relatively simple to implement. They’re called winback campaigns.
Winback campaigns (also called re-engagement or reactivation campaigns) are a sequence of targeted messages that try to – you guessed it – win back customers you’ve lost. You can use this type of campaign for customers that didn’t convert during their trial or for customers that canceled their subscription.
Email is the most common means for a win-back campaign because it can be automated and personalized at an incredibly low cost. In our experience, winback email campaigns that include several messages delivered over a period of time lead to the highest success rates.
Not convinced winback campaigns are for you? Consider that it costs 7x more to acquire a new customer than to keep one you already have. Plus, when you increase customer retention by just 5%, you can increase profits anywhere from 25-95%.
In our experience, these are the five of the biggest reasons SaaS companies should consider implementing a winback campaign:
Increase customer retention – let’s face it. Keeping customers is the primary reason SaaS companies implement winback campaigns. That’s because it’s easier and less expensive to re-convert a customer that’s solution aware than to convert a new lead. And when you increase customer retention, you decrease your customer acquisition costs (CAC) and drive up monthly recurring revenue (MRR).
Offer incentives to return – targeting past customers based on the reasons they canceled combined with incentives to return is a powerful strategy. For example, you can offer new or extended discounts (remember, the cost to acquire a new customer is likely much higher than a discount). But it’s not always about price. Maybe they’re on too high of a usage plan, and an alternative is better suited for their needs.
Gain customer insight – you can learn more about why people didn’t convert during the trial period or why they canceled altogether. Having this insight can help you improve your product or customer experience. It can also provide valuable data for your product, marketing, and customer success teams.
Announce new features – if you know you’ve lost customers because your product was missing a feature, adding that feature provides a natural opportunity to reconnect. This shows that you listen to customer feedback and are committed to offering more value. Another way to approach this is to offer lost customers the chance to beta test a feature they asked for. It could be the push they need to give you another chance.
Reinforce your value – depending on the nature of your digital product, customers may need help understanding your value proposition. Dropping into their in-box with an overview of how others get value from your product can be valuable – especially if your value proposition is even stronger than when the customer last used your product.
Not sure how to get started? Here are some best practices to follow when designing your winback campaign:
Personalize your approach – if you want to improve your winback campaign success rate, you need to get personal. This can be as simple as using the information you’ve gathered in customer exit surveys to create more targeted messaging. Or you can use data about which customers are the most profitable (and why they left) to create segmented campaigns with highly personalized incentives.
Show don’t tell – include testimonials, customer success stories, or social proof of your digital product's value. This can be especially effective when you segment your content to target why customers left.
Test variations – you can test various options to know what's working (and what's not). For example, you can test your subject line and message content changes. You can also test reaching out at different intervals or for different reasons. This helps you compare results against previous similar campaigns to the same customer segment and gather valuable data about your winback rate.
Keep it simple – stick with one primary message (e.g., we’ve missed you) and one call to action (e.g., re-subscribe now and save).
Know when to stop – sending too many messages can backfire. Plus, you don’t want to be that SaaS. We recommend a sequence of no more than four emails. In your final email, give them your best offer along with a message that you won’t be reaching out again. If they don’t take the offer, it’s time to say goodbye (at least for now).
Winback campaigns are an effective and low-cost method of increasing your revenue when done correctly and in an automated way. If you want to learn more about adding a winback campaign to your customer retention efforts, we can help.