3 Steps to Reduce Churn
Sending emails 30, 90, 180 days after last purchase... Wrong!
Most brands are bad at Churn Prevention.
If you send an email 30, 90, or 180 days after last purchase... you're too.
You’re literally burning money and hurting your unit economics.
Churn = Lost $$
The good thing is, you can fix it in 3 steps:
#1: Don’t guess, measure
Lots of brands don’t measure, they guess.
If you are sending reactivation emails to customers 30, 90, or 180 days after their last purchase you are guessing too. It is “best practice”, but you can do better. Data can help you, without the need to get extra fancy.
Here a simple data-driven approach you can follow:
Look at all orders for each repeat customer
Determine the maximum # of days between 2 orders for each
We can call this “max_interpurchase_interval”Count the # of customers per “max_interpurchase_interval”
Plot them on a chart
Source: Sebastian Hewing
In this chart, you can see extremely important information. How long do customers take on average to make a second order.
Armed with this info, you can easily calculate:
Soft churn: # days after which 60% of clients won’t make a purchase
In this graph, 32 days.
Hard churn: # days after which 80% of clients won’t make a purchase
In this graph, 65 days.
Now you know exactly when you should be activating clients. Go to your activation emails at 30, 90, and 180 and change it.
But 2 questions remain…
#2: Don’t use 1-fit all, personalize
You have a reactivation flow, and some customers click. Good, let’s make them better.
A customer that bought from you in the past, is a customer that trusted you. Assuming you didn’t f**k the experience, you only need to remind them. How? Give them a reward for a similar or complementary product.
You need to personalize.
Here’s a 5 step process to personalize at scale:
Look at all orders for each repeat customer
Categorize all 1st orders based on the category of the products
We can call this “interpurchase_order1_category”Categorize all 2nd orders based on the category of the products
We can call this “interpurchase_order2_category”Distribute the most common category for the 2nd order, based on the category of the 1st order
Plot them on a matrix
In this matrix, you can see which products customers are more likely to buy on their second order based on the category of products they bought first.
Armed with this info, you can do 2 things:
Category-based flows: replicate your churn prevention flows, and personalize the message and the rewards offered to the most relevant category
Don’t go crazy, for 5 most prominent categories is enough
Default flow: keep 1 general flow and use it for customers whose most relevant category doesn’t have a specific flow
Now you also have the right message to activate your customers.
Last trick left for today…
#3: Add WhatsApp to your flow
Email is cheap, effective, reliable… it is great.
But it ain’t WhatsApp.
WhatsApp is more personal, gets you closer to your customer, and is more intimate. It’s literally the door to their private life, where they text friends and family. Once you are there, your value as a brand 10x.
But how do you use it to prevent churn? You combine it with email.
Here’s a 5-step flow you can use:
Email: Remember us?
Get the user to remember who are you and why did they care about you.
Catchy subject line, and references to prior interactions can help.WhatsApp: The Reward
They remember why they used to love you. Now make them try you again.
WhatsApp because of its higher Open and Conversion Rates + use a good incentive.
WhatsApp: Any Feedback?
They didn't buy? At least understand how and why you lost them.
You can offer a small incentive like a voucher to help push them over the edge.
Email: Is this Goodbye?
You have one strategy left, make them feel a bit of FOMO.
If they do not click a CTA, they will be unsubscribed automatically in 30 days.
Email: See ya later alligator
The time has come, you have to let them go...
It's the best for both.
And there you have it, the last piece completed.
How to improve your churn prevention strategy in 3 simple steps.
Don’t guess, measure.
Don’t use 1-fit all, personalize
Add WhatsApp to your flow
Close yourself in a room for an afternoon, and implement these changes.
Stop your customers from churning.
Make
Whenever you're ready to grow your DTC brand:
→ Book your 1:1 Strategy Call: We’ll explore your brand needs, and I’ll help you come up with a plan to generate 20-30% of your revenue via Direct Marketing.