Dec 7, 2023

Are your winback campaigns affecting your profit margins?

Building a community of loyal, returning customers is the dream for eCommerce merchants, as the cost of retaining existing customers is significantly lower than the cost of attaining a new customer. The reality however, is that not all customers return to make repeat purchases. 

Many customers make one purchase, perhaps with a promo code, during a sale, from a limited collection- whatever the reason may be- and they don’t return on their own. Unless you intervene with some well timed marketing- they may be lost forever. 

This type of intervention is also known as a winback campaign. A winback campaign is a series of targeted communications at a customer who has purchased from you before, designed to incentivise them to make a repeat purchase. 

What are winback campaigns?

Winback campaign communications can take many forms- they could be emails, text messages, notifications and more. A winback campaign aims to keep the brand front-of-mind for the customer and to incentivise them to return with new products and attractive offers. 

What are the benefits of running successful winback campaigns?

In a nutshell- you won’t be spending exorbitant amounts of marketing efforts to acquire new customers just to have them churn after one purchase. 

Research shows that it can be up to 5 times more expensive to acquire a new customer than to retain an existing one with winback campaigns. That is a significant amount of cost savings to be realized just by focusing on winback campaigns. 

Types of winback campaigns

Most winback campaigns rely heavily on email marketing. The customer contact data is readily available to merchants from their first purchase and assuming the average email conversion rate is 0.1% and your store’s AOV is $40, sending a win-back campaign to a list of 10,000 subscribers could drive $40,000 in otherwise lost revenue. 

However many merchants also leverage other channels to run their campaigns such as; 

  1. SMS Marketing
  2. Push Notifications
  3. Paid Advertisements


What to include in your campaign messaging? 

There are many ways to attract a customer to return to your store. You could announce new collections, upcoming sales seasons or limited edition products. However, one very effective and commonly used tactic is to offer an exclusive “one time only” promotion or discount code on their next purchase? Who doesn’t love a good deal?! 

Sounds like a sure fire-way to re-engage customers right? But what if we told you that misting these winback campaign offers could actually hurt your profit margins?

The danger of mistimed winback campaigns

Mistimes winback campaigns are campaigns that are sent out too early or too late in a customer’s journey such that you miss that optimal time to get them to make a repeat purchase. Many merchants send out winback campaigns without truly understanding what their customers’ product journey looks like and what their repurchase rate is. 

What happens is that either the winback campaign is sent too early- meaning you did not have to offer a discount as some of these customers would have made a repeat purchase on their own or it was sent too late, when the customer has lost interest in the brand. 

So how do you find the optimal time to send out winback campaigns and increase profit?

Use Repurchase Reports to time winback campaigns

Repurchase reports help you figure out how many of your new customers actually turn into new buyers and when this conversion is most likely to happen. THe report gives you visibility into where the pain points of your customer lifecycle may be and help you target your winback campaigns effectively. 

By looking at what percentage of your customers usually make a second order within 30, 60 or 90 days you can identify when intention is at its peak and when it starts to wane. Therefore you can time winback campaigns to go out just as interest is beginning to wane to boost it back up and not offer discounts too early- that could impact your profit margins. 

Lifetimely by AMP helps you track repurchase rate, time-lag between orders, the customer product journey and more to give you an in-depth understanding of your customer’s buying behavior. This in turn gives you the data to spend those marketing dollars in the most profitable way.

Start making more informed decisions about how to grow your business.

Neeta is the Content & Community lead at AMP. She has over 8 years experience in eCommerce marketing having previously worked for TradeGecko.

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