Developing a strategy to win back lost customers

Cameron Welland
Published in
5 min readApr 14, 2023

Whether it’s a long time customer, or a promising new one, a customer churning sucks. The good news is, it’s not the end of the story, as long as you develop a customer win-back strategy — in fact, the story may still have a happy ending.

Enter, the win-back strategy. A strategy that focuses on rectifying mistakes and generating goodwill to regain your customers. It’s not out with the old and in with the new (ouch, that’s expensive) — it’s a strategy about making sure that you don’t throw the baby out with the bath water.

Obviously, the gold standard is keeping as many customers for as long as possible (check out our blog on reducing customer churn for that nugget of wisdom.) But in the case they have jumped ship — don’t worry. Read on and we will go over the practical steps to develop an effective win-back strategy to regain your customers.

What is a customer win-back strategy?

A customer win-back strategy is a marketing campaign, designed specifically to reacquire churned customers so that they return to being regular customers. No matter what your conditions are for a customer to be considered “churned”, you can still develop a strategy to reengage old customers.

Why you want to win back customers.

It may take some time and effort to get started, but a customer win-back campaign is particularly powerful in two main areas; It’s one of the most efficient marketing campaigns, and it’s effective in boosting customer satisfaction.

One of the most efficient marketing campaigns

These two factors lead to win-back campaigns being top-tier in efficiency in terms of both conversion rate and profitability.

  • Conversion Rate: Lost customers are the perfect target. They’ve already demonstrated a desire to use your product or service before, they’re already familiar with your brand, and you (hopefully) have information about how there interactions with your business previously.
  • Profitability: Retaining a customer is cheaper than acquiring a new one, and long term customers tend to spend more on products and services than a new one. This means that reacquired customers have low cost of acquisition (CAC) + high lifetime value (CLV) = high return on investment (ROI).

The numbers will be entirely dependent on your business, but as a benchmark, this customer winback study found that 26% of lost customers returning, with upwards of 32X ROI.

An opportunity to improve customer satisfaction

If the cause of a customer leaving was dissatisfaction as a result of poor customer service experience, it might not end up being such a bad thing. Alright, it’s not ideal, but it’s not the end of the world, because it gives you an opportunity with the win-back campaign.

By acknowledging the mistake, and making an earnest effort to rectify it, a business can reacquire the customer, and can even leave them with a higher satisfaction than before. As the article, “The Profitable Art of Service Recovery” puts it: “A good recovery can turn angry, frustrated customers into loyal ones. It can, in fact, create more goodwill than if things had gone smoothly in the first place.”

Satisfied customers that have their problem solved also like to talk about it. It’s hard to track directly, but this boost in customer satisfaction can do wonders for your brand image, and word of mouth referrals.

Creating your win-back strategy

To create an effective win-back strategy, it’s important that the messaging and offer is personalized and relevant to that customer, instead of a one-size-fits-all campaign. This will involve targeting the right people, giving them the right offer, and measuring how it’s performing so you can iterate and improve.

Winning back lost customers infographic

Targeting the right people

The first step in the strategy is to make sure you’re targeting the right customers with your campaign. To do this you’ll want to analyze you churn data. If you’d like to learn more, be sure to check out our guide on customer churn analysis.

The four best categories of customers to target are:

  • Customers that belong to the segment that tends to churn the least among your customers
  • Customers that had a long a significant customer lifespan before they churned
  • Customers that exhibited behaviour of referring others, never complained or who had complaints resolved
  • Customers who cancelled because of price or poor services, but not both

Give them the right offer and messaging

Once you’ve decided “who”, you can make your move. Personalized messaging in combination with a relevant offer is a powerful way to entire them to return.

There’s many types of offers you can choose from, but they usually involve some monetary incentive. These can include:

  • Discounts
  • Service upgrades
  • Bundles

It’s preferable to personalize the offer and messaging using the information you have about the customer, so that it’s relevant. For example, offering someone that left because of price a discount, or someone that left because of a poor customer service interaction an apology and a service upgrade.

When it comes to delivery, 1:1 communication makes them feel special, and messaging that references their usage history reminds them why they became a customer in the first place. This combination with the right offer may be enough to win them over.

Measure, iterate, improve

The last step is measuring, which is important because between the targeting and the offer, there’s a lot of combinations of variables.

For each target that returns, it’s critical to measure how long they’re staying, and how much they’re spending in order to determine the ROI of the offer. In the article “Winning back lost customers”, despite expecting customers to quickly leave soon after, they actually tended to stay longer, especially those who originally left because of price.

For each offer you’ll want to measure the success rate vs the return of the offer, striking a balance between getting a healthy percentage of customers returning, while each customer staying profitable.

However the ROI isn’t always the end goal, for established companies in highly competitive markets, gaining market share may be worth exchanging some profitability for.

Reaching out before they churn

I briefly touched on it before, customer win-back strategies are powerful but it’s even better to prevent churn before it even happens. You don’t need a time machine though, The AI & Analytics Engine is a machine learning-powered tool, making it possible to predict customer churn with machine learning algorithms.

The latest update includes a tailor-made customer churn prediction template to guide you to getting churn predictions. It tells you which customers are exhibiting churn signals, so you can step in and stop it from happening.

Wrapping Up

So that’s it, hopefully you’re feeling inspired to go and develop your own customer win-back strategy, because it’s certainly worth it. If you’re looking to predict customer churn, consider using the AI & Analytics Engine’s new template, and let us know how you go.