Why Winback Flows Suck in DTC - And What to do About It

Why Winback Flows Suck in DTC - And What to do About It
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Winback flows are probably the most overrated and overinvested emails in eCommerce. In this article, I’ll discuss why they don’t work (most of the time) and what to do instead to bring back revenue from churned subscribers.

Why Don’t Winback Flows Work?

Most winback flows are pointless and not incremental for DTC brands.

Think about it logically:

The default trigger for a winback flow seems to be standardised to around 90 days across most industries (another issue for another day).

There's a general acceptance that if a customer hasn't purchased again before then, the chances of churn go up exponentially.

And this is largely true: a really good repurchase rate for a DTC brand is between 30-40%.

This means that for every given month, you’ll lose 60-70% of your newly acquired customers. That sucks and is painful given the lack of profitability most DTC companies operate under so it stands to reason that most people will try to rope customers back with a discount before they churn.

Nothing against this strategy in particular, but...

Most brands are already slamming customers with discounts in general campaign sends.

Yet now you expect them to act upon an offer just because they're in a winback flow?

To be clear, I am not saying all winback flows are pointless.

But I am saying that the overwhelming majority are in conflict with many brands' existing campaigns & discounting strategies.

Some critical points that I believe strengthen my point further:

  • Email engagement plummets post 30/60 days which reduces the effectiveness of your offers
  • Discounts assume that price is the sole reason customers aren't buying again (how do you know?)
  • It's likely you've already offered them similar incentives multiple times before

Are all winback campaigns a waste of time?

Absolutely not - I believe for subscription brands, in particular, they warrant a serious amount of attention.

But for most general DTC companies, you're wasting your time over-optimising these flows expecting for significant results.

It’s better to analyse the reasons for churn and commit to improving the customer journey for future buyers so that you’re not repeating your mistakes.

Why Email is Ineffective at Winning Customers Back

Take a look inside your ESP and you’ll notice a stark trend: your winback flows will seldom have higher than a 1% placed order rate.

Now that’s better than nothing, I agree, but it does justify my position that it’s not incremental to over-invest resources in these flows.

Email alone is also largely ineffective at winning these customers back as well and this graph shows why.

Why Winback Flows Suck in DTC - And What to do About It | Magnet Monster
Graph showing why email is ineffective in winning customers back

For this brand, nearly 30% of customers are making their second order after 100 + days.

Here's the problem:

In the first 100 days after a customer signs up, most brands tend to pepper them with offers and a high frequency of emails & SMS.

It's also likely that most brands have an automated winback flow set up over email & SMS around 60-90 days to mitigate churn.

The result? Most subscribers churn over email & SMS but NOT necessarily as a customer.

What is the best course of action here?

In my opinion, it's Direct Mail.

When we consider retention touchpoints, it's important to note that even with an exceptional open rate on email (say, 50%), that means over half of our acquired customers miss our communications post-purchase.

When this happens, we need to move to the next most profitable channel with consent to market (usually SMS), and then failing that, Direct Mail.

While it's important to know drop-off points in the customer journey, it's equally important not to just give up and assume they're lost because they're disengaged with email.

DON'T MISS: 3 eCommerce retention myths to be aware of

Not all Winback Emails Are Created Equally

OK, I’ve been fairly ruthless so far on winback emails, but here’s something I have seen decent results from.

A simple letter from the founder when the customer is about to churn 📧

Why Winback Flows Suck in DTC - And What to do About It | Magnet Monster
An example of a simple letter from the founder of a DTC brand for customers who might churn

1) Switch up the sender name (i.e. "Jack at Duradry")

2) Write a simple message re-establishing the value proposition

3) Sweeten the deal with a time-sensitive discount

It's not going to add masses of profits to your bottom line, but I've seen some decent conversion rates and opens on these emails.

Bottom Line: Prevention is Better than the Cure

Winback flows have modest results at best (and that’s being kind to them) yet people seem overly invested in their importance.

Better to invest the energy into creating a better customer journey and focusing on driving profits this way by preventing churn rather than reactivating people who you’ve already lost.

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