In this post we’ll be covering why you should be sending win back email campaigns (and why we see this as one of the most profitable campaigns for eCommerce companies) and an advanced tool we use to know exactly when to trigger this campaign for maximum impact.
At Rejoiner, we’re constantly having conversations with our clients about segmentation and delivering emails to customers when they will have maximum impact (and not before).
We believe that marketing to customers before marketing is needed is wasteful. Worse, if you send email to customers that doesn’t have context or is out of step with their purchasing behavior, they begin to ignore you.
In this article, we’re going to show you how to send less email that generates better response and more profits, by using one underutilized metric that most eCommerce email marketers aren’t even aware of.
What is that metric?
Latency is defined as the time between two events. Purchase latency is the time between purchases.
The sum of latency periods between purchases is combined to represent your customer lifecycle.
Why latency matters
Understanding latency helps us deliver emails to customers when they will have maximum impact.
For this post, we’re going to use latency to determine the optimal time to deliver a “Win Back” email campaign.
A Win Back campaign’s goal is to re-engage a customer who is exhibiting signs of defection. Defection means that the customer is no longer shopping with us (probably a competitor now) and has not purchased for an abnormally long period of time.
How to use latency for win back email campaigns
The key idea is to measure what “normal” and “abnormal” purchase latency looks like for your customer base. How long does it take the average customer to go from purchase 1 to 2, 2 to 3, 3 to 4, 4 to 5, etc. Understanding these average latency periods gives us the ability to assess when customers have crossed the threshold into “abnormal” behavior.
Hint: These are the customers who need to be marketed to.
We’ve built a powerful tool for eCommerce marketers that takes a customer purchase dataset and calculates average latency periods (even within specific product categories).
We then plot average latency periods between purchases and can understand what the customer lifecycle looks like for any business. Here’s an example:
Notice that in the early part of the customer lifecycle, engagement with the company is accelerating as the time between each purchase decreases.
These are customers who are heavily engaged with your brand and want more. Then after the 4th purchase, engagement starts to decrease and the latency between purchase events starts to increase. We’ve all been here as consumers — we start off heavily engaged with a brand and then lose interest over time.
The important part of this analysis as it relates to win back campaigns is being able to determine when that deceleration starts to occur. In the example above, deceleration starts after a customer has made their 4th purchase.
This is perfect moment to trigger your win back campaign as your customer is signaling signs of deceleration.. aka defection.
Here’s the thing: This analysis brings to light that sending customers marketing before the point of deceleration is the equivalent of sending a promotion to a customer who was going to purchase anyway. It’s lost profit margin and abuse of your customer’s attention.
Their engagement is already increasing and marketing to these customers is a waste!
So if you’re blasting your list with unsegmented broadcast promotions, they are falling on deaf ears or are just cannibalizing sales you would have gotten anyway.
That’s why data-driven lifecycle thinking is so powerful. It helps you eliminate this marketing waste and focus promotions only on customers who need attention.
Now you may be thinking: “My customers will have drastically different latency periods depending on what category they buy in.” This is true.
A customer who buys furniture will have very different purchase latency compared to a customer buying cleaning supplies. This is why we recommend starting simple with catalog level latency analysis, then dig into specific segmented product categories.
Latency powered win back campaigns in action
Once we determine the point of deceleration, it’s time to build a win back series to engage those customers who are behaving “abnormally”.
This is the rare case where we recommend pulling out all the stops with your discounting approach. Remember, these are customers who are defecting and it’s our job to get these customers back to the site and purchasing again to extend their customer lifecycle.
Break out an aggressive offer that customers can’t refuse.. But also remember to run the promotion using a holdout group to verify that the promotion is generating profitable lift.
Here are some examples of effective win back emails we’ve seen out in the wild (and a few of our own):
Latency triggered win back campaign takeaways
- Use purchase latency analysis to understand the average time it takes customers to move between purchase events
- Run your latency analysis on a category level to understand latency differences based on which products customers are buying
- Trigger your win back series at the point of deceleration (where customers are signaling that they are about to defect)
- Employ an aggressive offer that is designed to entice customers to come back to the site and purchase
- Extend your customer lifecycle and profit!
What to do next
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For current Rejoiner customers on the Retain & Optimize package that would like to run this analysis – let us know you’re interested.