Top Strategies for Customer Winback and Reduce Churn

Losing a customer isn’t the end of the line. It’s par for the course for every business on the planet — even those with powerful retention engines. But how they react to losing a customer separates very successful SaaS businesses from everyone else. 

Rather than pouring even more money into paid ads to acquire new customers, successful SaaS brands implement a comprehensive strategy for winning back clients. In doing so, they recover a significant chunk of that lost revenue, boost their bottom line, and regain customer loyalty.

In this article, we’ll lay out the basics of customer winback strategies, explain what most companies get wrong, and tell you how to create an effective customer win-back program. We’ll even show you examples of proven win-back methods and explain how you can measure your success. 

What Is Customer Winback?

Customer winback (also known as customer reactivation or re-engagement campaigns) is a strategy that aims to re-engage churned or inactive customers and push them back into re-considering a purchase. 

Some amount of churn is entirely normal. Even the most effective customer retention strategies won’t eliminate all instances of churn in your business. 

Your customer churn is rising. Our data shows customer churn rates are up across the board, with the average reported churn increasing from 5.9% to 7.1% in 2022.

Some amount of churn is bound to happen, but not all churn is created equal. Some customers leave because they no longer want or need the product. But others leave unintentionally (like when the card on file expires). Some customers who choose to leave do so because there is a disconnect between your product’s value and the value they have seen so far.

Because there are so many reasons a customer might leave, and so many of them are due to reasons well within your power to fix, you need a strategy to win these customers back before it’s too late. If you fail to do so, you could hamper the growth rate of your business. That’s because when your churn rate is too high, it can mean:

• There is an untimely loss of customers
• You need to spend more to acquire new customers
• There could be negative customer sentiments. 

The good news is that you have a good chance of winning back customers. The Customer WinBack Benchmark Study found that, on average, 26% of customers returned. 

Customer Winback vs. Customer Churn

It’s important to note that none of the win-back strategies discussed below are about reducing churn. Customer winback and customer retention are two different things. 

While customer retention strategies focus on retaining existing customers who may be at risk of churning, customer win-back is about reacquiring customers who have already left. 

The strategies we discuss below will focus on winning lost customers rather than retaining existing ones. If you want to learn how to boost customer retention rates, we already have an article covering that.

4 Common Mistakes in Customer Winback

Before discussing win-back strategies that work, let’s take a second to discuss the most common reasons customer win-back strategies fail. 

Typically, this comes down to a need for four things: good data, efficient processes, personalization, and speed.

Not Using Churn Feedback to Identify Win-Back Opportunities

Different customers will churn for various reasons. We have an in-depth article on the main reasons why customers cancel their subscriptions, but they include:

• Product bugs
• A lack of value
• Payment failures
• No longer needing the service

If customers churn for some of these reasons above (like no longer needing your product), there’s very little you can do to win them back. In other cases, however, you can change your product or service that may tempt them back.

Creating win-back campaigns that rectify common causes for churn can be highly effective. But without accurate data, most marketers are shooting in the dark. 

You need to understand exactly why customers cancel their subscriptions. That starts by having a method to collect feedback when customers churn using a platform like Chargebee.

When you understand the reasons why customers churn, you can identify what to fix and, as a result, which customers will be most likely to return. You can go even deeper by analyzing each customer’s engagement over time to confirm they were using your product before their issue caused them to churn. 

One of the best ways to make your win-back campaigns as effective as possible is to let churned customers know you have fixed the issues that made them leave in the first place. 

Having Inefficient Systems

The more time and manual effort your marketing team has to devote to customer win-back strategies, the less likely they will be to succeed. It’s tough to effectively target and persuade hundreds or even thousands of customers to reactivate their subscriptions every month without some level of automation. 

Having a CRM or email automation platform isn’t enough. Each marketing and subscription tech stack tool must integrate to make uncovering insights and automating workflows easier.  

That’s why having a good retention engine is so powerful. When your tool for managing subscriptions also collects customer feedback when they churn and connects with your email marketing tool and CRM, your team has everything they need to create win-back campaigns in one place. Leverage the data from one tool, re-engage customers with another, and automate the process to run in the background, constantly re-engaging churned customers. 

Failing to Personalize Efforts

What kind of win-back message would you respond to? A generic email with a 10% off coupon or a highly personalized email that references why you canceled shows how they fixed the problem and includes a relevant coupon, too.? 

It’s probably the latter, right?

People respond to a personal touch. But most companies use bland attempts to win back that lack any form of personalization at all. And when campaigns aren’t personalized based on exit reasons, they will see low engagement rates and low success rates. Customers will usually see it as a low-value marketing effort and delete the email without even reading it. 

Not Acting Fast Enough

Time is of the essence when it comes to customer winback. The longer you leave it to reacquire customers, the more likely it will be that they’ll have found a competing product or no longer have a need for your tool at all. 

Companies need two things to act fast: a data stream and software capable of running experiments. Chargebee offers both of these things, which is why brands like Superfoods Company are now able to launch new experiments in 30 minutes and see a four-times growth in revenue in less than a year. 

4 Tips to Create a Customer Win-back Program That Works

Avoiding the mistakes above will see you on your way to success. Increase your odds further by using the tips below. 

Use Customer Data as Effectively as Possible

You should have a wealth of data about churned customers — especially if you provide cancellation surveys that let customers explain why they are leaving. Don’t let that data go to waste. If you’ve gone to the effort of collecting reasons why customers leave, use them in your win-back strategies. 

The most obvious strategy is to fix the issues customers highlight and then notify them with an offer to come back and try your product again. 

But you can also use the data customers generate while using your platform to personalize your messaging even more. For instance, you could:

• Show the ROI of using your platform
• Highlight the features they used most
• Target specific user accounts that were very active and then churned

The best thing about this strategy is that personalization is baked in. The process of using churned customer data makes your offer incredibly relevant and appealing. 

Make Churned Customers Feel Valued 

It can take a lot of effort to win back customers who have already decided to leave your brand. Renewing a subscription means they go back on their initial decision — something not every customer will be willing or able to do. 

While personalization and high-value offers are compelling, they won’t work half as well if you don’t make customers feel valued throughout the process. 

One of the best ways is to use hyper-personalization to make it feel like you are emailing them and no one else. Use their name, reference why they left, and add first-party data to get the point across. 

Make it clear that you’ve taken their feedback on board and demonstrate the changes you’ve made and why you think it’s worth their time to give you another go. 

Find the Right Offer

Your win-back chances hinge on the quality of your offer. Try to personalize it where appropriate, but don’t be afraid to use data to pit offers against one another. 

With Chargebee, you can run experiments to test your hunches. Chargebee Retention allows you to run randomized, rules-based, or ML-based (Smart Routing) tests, so your experimentation isn’t restricted.

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The truth is, you just don’t know what kind of win-back offer will be effective. The only way to find out is to start testing. 

Don’t Spam Customers

It can be tempting to send dozens of messages asking customers to return. After all, what’s the worst that happens if they don’t?

However, aggressive and spammy campaigns can put off customers and further decrease customer sentiment. Send three emails to churned customers at most. Don’t waste your time or theirs if they aren’t tempted to return. 

6 Proven Methods to Win Back Lost Customers

Are you looking for concrete strategies to win back customers? Below, we’ve detailed six proven methods for winning back lost customers.

1. Targeted Email Re-Engagement Campaign

Target email campaigns are one of the most powerful and cost-effective methods to re-engage churned or lapsed customers. 

They can be used by any business that depends on recurring payments, like SaaS companies. Still, they are particularly effective for e-commerce brands — especially to win back customers who have abandoned their carts.  

Your emails need to grab the user’s attention to work — after all, these customers have already rejected your brand in some capacity. 

This example from D2C haircare brand oVertone shows the power of targeted personalization.

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Not only does it put the abandoned product front and center, but it also provides a personalized discount code to encourage them to come back. 

SaaS brands can use emails to remind them of the benefits of being a customer or to notify them that a relevant feature has been introduced — something we discussed in detail earlier.  

When Avocode released a new update that made their software faster, they made sure to reach out to churned customers to notify them of the speed improvement:

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The brand had clearly identified speed as a major churn factor, so this campaign would have been particularly compelling for those churned customers.

2. Provide an Incentive to Return

Customers are much more likely to return if they feel they are getting a one-of-a-kind discount or an offer that is too good to turn down. So go out of your way to provide an incentive that really encourages action. This can include:

• Significant discounts
• A free month of subscription
• Additional product features
• Increased usage limits

Just be careful to temper your offer with a time limit. Ideally, it will be open-ended. No one likes to feel rushed, especially after canceling their subscription. 

Price is a common reason for churn, which is why online form builder Typeform offered customers a range of discounts to return based on which plan they purchased:

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Incentives don’t have to be monetary, however. They don’t need to focus on persuading churned customers to sign a new contract. Providing consistent value can be just as effective of a strategy to win back customers in the long run. 

Take content marketing, for instance. Regularly publishing informative, insight-packed articles and emailing them to past and present customers gives you an incentive to re-engage with your brand. Continue to provide value over a long enough timeline, and customers may re-engage naturally without any kind of monetary offer. It’s all about keeping customers engaged. 

3. Show Customers What They Have Lost

You don’t know what you’ve got until it’s gone. Make that old saying ring true for churned subscribers by creating personalized cancellation messages from first-party data to demonstrate how much value they got from your platform. 

Seeing facts and figures in black and white can really hit none.

Take a look at this example from the DTC social commerce platform Teespring:

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It shows customers exactly how successful they were on their platform and includes how many products they’ve sold and how much revenue they generated. If churned customers were even half-tempted to give the platform another go, seeing their previous success could be highly motivating. 

4. Send Personalized Product Updates

Personalization is essential to any effective win-back strategy. But you can go beyond personalized subject lines and email bodies by sending wholly personalized emails based on the specific reasons customers left in the first place. 

This method works particularly well for customers who left because of a lack of a specific feature or because of a product bug. 

Let’s say your marketing team noticed that a high percentage of users were listing a lack of a competitor analysis feature as a reason for churning. Knowing this, prioritize developing such a feature. 

Once developed, the new feature can become a major selling point for new and existing users. But it can also be a huge selling point to all those users who churned because of a lack of it in the first place. 

So, if you’re introducing new features based on customer feedback, make sure you send personalized product updates to those churned users and existing users.  

Don’t spam churned customers with every update, however. Only reach out if they requested certain features before leaving or if they mentioned a lack of specific features as the reason they left. 

5. Retargeting Ads

Retargeting ads are adverts that readvertise to users who have previously engaged with your website or brand. They are most commonly used to target customers who have visited a website but have yet to make a purchase. In this case, however, we’re going to use them to re-engage customers who have churned. 

Retargeting ads are particularly effective for e-commerce stores or websites where customers make regular purchases. They can be used across social media or in display ads. 

For instance, the D2C health and wellness brand Love Wellness uses personalized Facebook retargeting ads to encourage users who abandon their carts to return and purchase. 

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You can make your retargeting ads more effective by personalizing them to as many customer segments as possible. 

For instance, you can retarget customers based on the products they have left in their abandoned carts or items closely related to their purchase history. Exclusive discounts can also work well with retargeting ads, too. 

6. Personal Check-Ins With Churned Customers

Sometimes, a simple one-on-one email can be all it takes to encourage a churned customer to reactivate their subscription. Forget the high-res images and the sexy discount code — just send a heartfelt email that makes the customer feel valued and ask what you can do to make them come back.

These kinds of genuine emails can be incredibly effective at getting a response. Even if customers don’t come back, you could find valuable information, like why they churned in the first place.

Check out this example from Basecamp below.

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It doesn’t ask them to return or provide the churned customer with an offer upfront — it’s a simple request to see what they could have done differently. 

It ends with a very soft offer to continue using the product for free. That’s a great way to re-engage customers who aren’t ready to commit to another paid subscription, adding them back into your platform and giving you the opportunity to up-sell to them in the future. 

At the very least, this email gives Basecamp genuine feedback on how they can improve going forward. 

How to Measure Customer Winback Success

Tracking your win-back efforts is essential to determine whether your campaigns deliver a positive return on your investment or throw good money after bad. 

There are several metrics you want to track to see how successful you’ve been.

The first is to measure your reactivation rate. This calculates what percentage of users return once they have unsubscribed. Calculate it by dividing the number of customers you win back in a period over the total number of customers churned in that period and multiplying by 100.

That’s a good headline figure, but you need to make sure that customers you’ve won back continue to subscribe in the future. In other words, they aren’t just taking advantage of win-back offers and leaving again. Here’s how you measure customer lifetime value:

CLV = ARPU* Gross Margin * Average duration of customer contracts

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You can also gauge this by measuring your reactivation MMR. This is the monthly revenue you earn from users who have previously churned. It’s simple to calculate using the formula below: 

Reactivation MMR = Sum of MRR from customers that previously churned

You can make the process easier for yourself by using a subscription management platform that automatically tracks which customers reactivate their subscriptions and how much they spend with you from that point on. 

Deflect Churn With Chargebee

There are plenty of ways to win customers back. Regardless of which of the above strategies you choose, remember what makes a winning win-back campaign: personalization, enticing offers, and making the customer feel valued. 

But do you know what’s better than winning back customers? Not losing them in the first place. That’s why leading SaaS companies use Chargebee to understand why customers are leaving and create personalized offers that reduce cancellations before they happen. 

Schedule a demo with one of our specialists today!

While you wait, read our customer retention cheat sheet. It contains all the insights, metrics, and strategies you need to beat churn.