September 06, 2017

"Win-Back" Programs - Sound Good, But Do They Make A Difference?

You read articles from vendors writing in trade journals. They encourage you to "Win-Back" the customer. Just make a great offer (as if the customer hasn't seen your great offers five days a week for the past sixteen years via email marketing) and tickle his/her buying bone, and you'll "Win-Back" the customer.

Uh huh.

Look at what happens one month after 10,000 16 month 1x buyers are analyzed.

You "won-back" 70 customers out of 10,000. And that's with business as-is. Let's say you were able to improve by 10% through some sort of magical marketing program ... you'd boost the total from 70 out of 10,000 to 77 out of 10,000 ... for an incremental seven (7) customers.

But the vendor got paid - the vendor gets paid not on the 7 customers but on the 10,000 customers.

What happens to the 1x / 16 month segment one year later?

Not depicted are the 9,313 customers who did not repurchase ... only 6.9% of the customers were "won-back" after a year ... bump that by 10% and you are up to 7.6% of the customers. However, the quantity is close to zero, isn't it?

Why work so hard to convert a lapsed buyer (win-back a lapsed buyer) when you could invest that money in a new customer, a new customer who has a 17% chance of buying in the month following a first purchase?

I'm not saying your "win-back" program isn't profitable ... it may well be very profitable. That's a good thing. But you aren't moving the needle on the business ... the customer counts are simply too small to matter.

Go find a new customer, and then apply your marketing prowess to the first three months that customer is on the file.