SMS Winback Guide - How to Re-Engage Lost Customers with Text
With sky-high engagement rates, SMS may be the best way to win back lost customers. Here’s how to get started.
Churn is an inevitable feature of the subscription economy. The good news is as many as 30% of customers who cancel may come back later, and winback marketing is a low-cost channel to re-engage more of them, faster.
While email is still the most popular medium for winback campaigns, SMS/text messaging is growing in popularity due to serious engagement (open rates up to 98%), particularly among younger demographics.
This post is geared toward subscription-based businesses in SaaS, ecommerce and digital media looking to win back lost customers with SMS marketing.
Your subscription cancel flow is your final chance to save customers who’ve decided to leave but haven’t just yet. Utilizing deflections and persuasive offers, cancellation flows alone can reduce churn by 10-39%.
Why use SMS for winback campaigns?
While email is still the most common medium for re-engagement marketing, combining a mix of channels can prove highly effective. SMS/text can is a great compliment to email for the following reasons:
Personal and direct communication — SMS cuts through the noise of overflowing email inboxes and saturated social media channels.
Highest engagement of any medium — Unlike other marketing channels, your text messages will get read, usually within minutes. That means high click-through rates (CTR), conversions and ROI.
Immediacy — Immediate visibility makes SMS the perfect channel for time-sensitive promotions like Cyber Monday.
Highly customizable and automatable - Like email, SMS can be automated at scale.
Mobile-first — Reach younger demographics on the go.
Downsides of SMS marketing
While there are many advantages to text messages for winbacks, it’s important to consider the downsides:
SMS is more expensive — The cost per message of SMS is higher than email, although this expense may be negated by the higher engagement and CTR of SMS.
No graphical elements — SMS is principally a text-based channel. With only 160 characters per message, your messaging will need to be short and sweet. However, this limitation can also be a strength—you’ll save significantly over the production cost of marketing emails, display ads, video, etc.
Personal nature is a double-edged sword — The direct, immediate nature of SMS means you need to be careful. People use texting mostly between family and friends, so if your brand shows up too often with irrelevant content, it may frustrate recipients.
Opt-in is legally required — Prior consent is mandated for marketing-related text messages. Penalties can be severe, so make sure your campaigns are compliant with the Telephone Consumer Protection Act (TCPA) and guidelines from the Cellular Telecommunications Industry Association (CTIA).
Getting started with SMS winbacks
Creating an effective SMS winback series is much like designing an email winback campaign and can be broken down into four steps:
Identify target customers — Select a suitable audience for your winback campaign.
Segment your audience — Subdivide your list to personalize, customize and optimize your messaging.
Design your winback sequences — Inspiration for your winback marketing.
Test and optimize — How to refine your campaigns for maximum results.
Let’s get started.
Identify target customers
The first step in launching an SMS winback campaign is deciding which customers to target. The following questions will help you get started:
Why did the customer leave? Perhaps the most important question for identifying lost customers that can be won back, and what incentives might work.
How valuable is the customer? Consider CLV, MRR, and subscription duration. Don’t forget about expired free trials.
Was their experience positive or negative? Check customer support tickets, NPS and/or a “likelihood to return” question in your cancellation survey.
How long have they been gone? Is it too soon (or too late) to reach out?
How engaged was/is the customer? Do they still open marketing emails? Did they participate in a loyalty or referral program? Do they mention you on social media?
Did the customer opt-in to receive text messages? Don’t spam. Remember, SMS is a more personal medium—your customers really won’t appreciate receiving texts if they haven’t opted-in.
Segment your audience
Marketing is more effective when it’s personalized. At minimum, include the recipient’s name in your SMS messages. But more than that, personalization is about relevance.
Sending a generic message isn’t likely to resonate with recipients. By segmenting your lost customers based on shared characteristics and customizing your messaging to those needs, your campaign will receive greater engagement, more winbacks and fewer opt-outs.
When segmenting, consider factors similar to those you used to identify your target customers in the first place, such as: reason for leaving, customer value, engagement level and likelihood to return.
A rich source of this kind of data is your cancellation survey. Are you asking why customers leave and their likelihood to return? Use these answers to tailor both messaging and incentives. For more ideas on how to improve your customer exit survey, see this post:
When is the right time to trigger an SMS winback sequence?
Timing is important. Choose the right moment to reach out based on why the customer left. Consider these common “exit reasons” and relevant winback timing:
Too expensive - Customers who cancel due to price sensitivity are good candidates for immediate retargeting. If they are otherwise happy with your service, a juicy discount can win them back.
Missing features - It’s probably not ideal to engage these customers right away. Instead, wait until your product fills specific features gaps—then reach out.
Temporary - Customers sometimes come and go, particularly with digital media and box subscriptions. Check your billing analytics for the typical timeframe between cancellation and resubscription, and see if you can’t improve on that with winbacks.
Left for a competitor - There’s usually little you can do immediately to win back this customer. Give them 3-6 months and check in to see if they’re satisfied with the competition. As they say, the grass isn’t always greener on the other side!
Design your SMS winback sequence
When building out your reactivation campaign, consider these best practices:
Be selective. Remember, SMS is more immediate and personal. Save this channel for big events like Black Friday, not minor announcements.
Identify yourself. Make sure you mention your brand immediately. This helps mark your messages as relevant and legitimate, not junk.
Leverage emotions. Whether nostalgia, desire, urgency, or “FOMO,” emotions motivate human behavior. Create urgency with limited time or supply.
Personalize, personalize, personalize. At the very least, include the recipient's name.
Include a clear call to action. This is the whole point. Grab their attention and make them click!
Include a way to opt-out. It’s the law.
Don’t overdo it. Too many messages will frustrate your customers and increase opt-outs. Keep your SMS winback campaign to a typical three or so messages over the span of several weeks or longer.
Send messages during business hours. A text at 2am might not be appreciated!
Now, here are some content ideas to inspire your next winback campaign:
1. Offer an exclusive, time-sensitive discount
This one is obvious but effective. For typical winback campaigns, discounts of 10-15% are common. With SMS, consider going even bigger. Other incentives to add on: free shipping, bonus points, a free gift or other “exclusive offer.” Make it “too good to miss”!
2. Remind customers of unused rewards and benefits
Do you offer loyalty rewards or other benefits? Remind customers of reward balances they can still claim or that are expiring soon.
3. Share product updates
Highlight significant changes and improvements. For customers that left due to a missing feature, adding that feature provides a natural opportunity to reconnect and shows you listen to customer feedback.
Test and optimize
Like anything, your winback campaign will improve with experimentation, testing and refinement. You’ll want to try out wording variations, different incentives and timing. Look for areas that could be improved, brainstorm changes, and try again to see how your new results compare.
To evaluate the effectiveness of your changes, make sure you’re tracking these key metrics:
Response rate to SMS messages
Click-through rate on included links
Win-back conversion rate
Customer lifetime value of won-back customers
ROI of the SMS campaign
Tip: Use an SMS marketing platform that integrates with your subscription management system.
Personalized winbacks with ProsperStack
SMS winbacks are a powerful revenue tool for subscription businesses—and are even more powerful with the right data from customer exit surveys. That’s where ProsperStack comes in.
Trusted by household names like Nutrafol, Nestle and Hootsuite, ProsperStack Retain is churn-busting cancellation flow software with customizable surveys, seamless branding, robust reporting, A/B testing and AI offer optimization to maximize your results.
Upgrade your cancel button today to reduce churn up to 39% and power your SMS winback campaigns.
