How to Win Back Customers Without a Discount | #649

Most of us have a segment sitting in our email platform we've quietly given up on. The customers who haven't opened anything in months. And every time the Klaviyo bill lands, someone suggests deleting them to clean up the list.

Deleting that segment is one of the more expensive things you can do. Because someone you've stopped emailing isn't the same as someone who's stopped caring, and for a brand with product people actually want, the cheapest way to win those customers back is to remind them what they're missing, not to hand them a discount that trains them to lapse again.

This came out of a conversation with Dom Moretti, Head of Ecommerce and Digital at A&S Labels, the home of Tiger Mist and I.AM.GIA. At Tiger Mist, a plain re-engagement flow with no discount, just "here's what you've missed", is now the best-performing flow in an entire region, beating the welcome flow.

In this playbook, we cover three things ecommerce operators need to know about winning customers back without a discount:

• Your disengaged list is a segment to talk to, not a cost to delete, so build it a re-engagement flow before you prune it
• A discount to win someone back costs you twice, in margin now and in training them to only buy on sale, so reach for a product-led trigger instead
• A win-back flow only works if the rest of your list isn't burnt out, so protect your engaged base and put a dollar value on every unsubscribe

Connect with Dominique Moretti
Explore Tiger Mist | I.AM.GIA

Transcript

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Rapid E-Commerce Growth Case Study

SPEAKER_03 0:00

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The Segment Everyone Wants To Delete

SPEAKER_03 0:50

Most of us have a segment sitting in our email platform that we've probably given up on. The customers who haven't opened anything in months. Every so often, and it's usually around the time the clavio bill lands, someone in the business suggests that we just delete this segment and move on. Clean up the list, cut the cost, keep the numbers looking healthy. But I want to make the case this week that deleting that segment is one of the more expensive things that you can do, and that the customers that you may have written off might be sitting on your best performing flow.

Dom’s CRM Setup At AS Labels

SPEAKER_03 1:28

Dom is the head of e-commerce and digital at AS Labels. That's the home of Tiger Mist and IMGR, two of the best international success stories in Australian fashion. IMGR now does around 90 of its revenue in the US, all run by a small team out of Melbourne. Dom is one of the best CRM operators that I know. She leads e-commerce across both brands, but it's the detail of CRM that she really loves. I caught up with her at K C Sid, and one number that she shared really, really surprised me. So let's hear it from Dom

Building Core Flows Before BFCM

SPEAKER_03 2:05

first.

SPEAKER_02 2:05

In terms of like CRM in total, so when I came back into the business, the team had done a migration to Clavio. I think it was around maybe like April, May. So coming back into the business, I had learned Clavio at Calabar because prior to that, um, Tygmus and IMG were with the masters. So coming back into the business, ready knew like the system, how it worked. But my number one thing, especially before Black Friday, Saber Monday, was we need to get flows in this system. ASAP. So I think we ended up launching about 13 or 14 flows right before Black Friday because there was so much happening in the business. We're investing a lot in like paid marketing and SMS. It was like we need to make sure if we're getting these customers to side, we're then still constantly targeting them through other channels if they don't convert. So everything from like your welcome flows, your card abandonments, your browser abandonment, checkout abandonment, like all the flows you can think of, server-side tracking flows, claimio flows.

The No-Discount Re-Engagement Winner

SPEAKER_03 2:58

What's your most underrated flow?

SPEAKER_02 2:59

Do you know what? We recently launched a re-engagement flow. And for I think it's our Tiger Mist rest of world region, that's now our best performing flow. And all it is is we're looking at customers that haven't opened or clicked an email in the last 90 days. And we just show them, hey, this is what you've missed, this is what's new, this is what's hot. And it's our best flow at the moment.

SPEAKER_03 3:21

Really? Directly converting to sales or is it engagement? That's pretty amazing when you might have just lost those customers totally.

SPEAKER_02 3:27

And there's no discount, but you're literally just showing them what's new and what's hot. And that's all I was shocked. I had to double check the numbers when I saw it. I was like, how is this meeting like our welcome flow? People come to site, they're engaged, they sign up to your welcome flow, use a welcome discount, but yeah, the re-engagement's doing really well in like one of our regions. So that one definitely surprised me.

SPEAKER_03 3:45

Do you know what kind of subject line that's got? Because I could imagine that's got to have some sort of really strong hawk.

SPEAKER_02 3:51

I honestly could say something like this is what you've missed recently. Something along those lines. It's hard to remember them all from the top of my head. There's like 200 or 300 emails in total across them all. But yeah, I think it's something like this is what you've been missing, or like this is what you've missed.

unknown 4:06

Yeah.

SPEAKER_03 4:07

Yeah, okay.

Simple Segmentation And Send Frequency

SPEAKER_03 4:08

And how are you thinking about your customers? Obviously, you've got two very different brands and have two very different personalities, all in fashion. But how are you then taking that down a level and segmenting customers? You talked about engaged versus disengaged. Are there any other key segments for you?

SPEAKER_02 4:24

Gonna be honest, not really. We're kind of still doing a bit of like From a Clabio champion, everyone. Kind of still doing a bit of a like a batch and blast. You know what though? Our open rates are still really good. And like even during Black Friday, we worked with some agencies and they were kind of telling us how a lot of brands in the US are not just sending one email anymore a day. They're sending like six or seven. I was a bit nervous to do that, but some days we did do two or three. Yeah. And like in terms of unsubscribes, like there wasn't really any changes there. Open rates were still high. So I know we do talk about segmentation a lot, but if your customers that engage to open your content anyway, I'm kind of okay with it.

SPEAKER_03 5:03

And what do you consider a good engagement rate in terms of open or something? That's huge.

SPEAKER_02 5:09

Yeah. So like if I saw that dropping, I'd be like, all right, we need to do more segmentation. Sometimes we will have like there might be a promo on a product or something's back in stock, and we're like, okay, very strategically, like these are customers that have shown interest in that or they've got that on their wish lists that they've saved. So like let's target them to be more direct. But for the most part, if you're talking about like new arrivals or a promotion, our customers are still eager to like open.

SPEAKER_03 5:33

And obviously, I know you were provocative there saying that we just batch and blast, but that's in amongst a whole bunch of flows as well. So you're getting personalized emails. Yeah.

SPEAKER_02 5:42

And when I say batch and blast into as well, I have like we've got engagement segments where we are looking at like people that are engaged or subscribed within like zero to 30 days, 30 to 61 days, 61 to 91 days. So there's that kind of segmentation happening and with deliverability as well. Like we do change that weekly if we're seeing like, okay, the segments are not doing that well. Let's drop them out for a little bit and then reput them back in. So it's not completely batch and blast our whole entire database.

SPEAKER_03 6:07

But don't get too pretty about it.

SPEAKER_02 6:08

Yeah.

SPEAKER_03 6:09

Like just some people overanalyze it. Keep it simple.

SPEAKER_02 6:12

It is a volume game at the end of the day.

Lesson One Reactivate Don’t Prune

SPEAKER_03 6:15

What Dom just described runs against what most e-commerce teams believe about a disengaged list. And it's one idea from the whole conversation I've actually repeated to a whole bunch of people since we've recorded it. So that leads us into a few lessons around this theme of reactivating a disengaged list. Lesson one, your disengaged list is a segment to talk to, not a cost to delete. Before you prune inactive profiles to save on the platform bill, build them a flow of your own. Decide what lapsed means for your buying cycle. 90 days with no opens or clicks is a sensible starting line. Then send those customers one email that does nothing more than show them what's new and what's hot. No code, no countdown timer, a subject line as plain as here's what you've missed. The instinct when that bill climbs is to cut these people loose. And it's worth resisting because someone you've stopped emailing isn't the same as someone who stopped caring. Ed Hallen, co-founder and chief product officer at Clavio, put it really well when he was on the show a couple of weeks ago, also joining us from K Sid. Just because you're not sending to them doesn't mean they're interested. Dom said her biggest, her most engaged send is to her disengaged customers that she sends after it looks like they're totally opted out, saying, Hey, here's what you've missed. She said it's the bestseller for her. So there's something there around even if you're not sending to them regularly, they're still valuable. You've just got to find the right ways to activate that value.

SPEAKER_01 7:50

Yeah. I think more and more they I will see. The promise we have to deliver on is basically making making it easy to create and craft that journey. Because that journey is different. Like the the marketing flow to that customer might be way more one-to-one to that customer who like has been around. But we have to make that very easy. Versus like you, your customer base who wants like all your brand drops and the you know, standard add to carts, the standard, all those things, like that might be a different set of messages. But to the point, the disengaged flow is quite different, but we need to make that really easy. And AI should, you know, I think as we think about things we can automate and do, it's like that's something that AI should be very good at with the Clavio platform to help build out those sorts of flows.

SPEAKER_03 8:27

For a brand with a product that people actually want and have cared about in the past, that simple reminder can beat the flow you spend the most time polishing your welcome flow. If you don't have a re-engagement flow

Lesson Two Discounts Cost You Twice

SPEAKER_03 8:40

live, that's the one to build this week. 90-day non-openers, one email, what's new, no discount. Lesson two, reaching for a discount to win someone back costs you twice. The coupon is tempting because it works straight away. You send it, revenue comes in, everyone feels good. The problem is you've paid for that order twice. You've given up margin on the sale, and you've taught that customer that going quiet is how they earn a discount next time. Do that often enough. And you build a base that only opens when there's money on the table for them. Rob Ward is the co-founder of the phone mount brand Quadlock, and he put the training problem about as bluntly as anyone has ever on the show. Every time you're doing it, you're training the customer cheap. Only buy when we're cheap. Come back when we're cheap. Yeah. You know, wait till we're cheap. So Petra, a customer who had her eye on a jacket that sold out. You don't need 20% off to bring her back. You need to tell her it's back in stock. If your contribution margin on that jacket is already tight, a win back discount can turn a profitable reactivation into a loss. So before you attach a code, ask whether a product-led trigger, back in stock, price drop, what's new, a little bit more information would do the same job for nothing.

Lesson Three Measure Unsubscribes As Revenue

SPEAKER_03 10:01

And that brings us to lesson three. A win back flow only works if the rest of your list isn't already burnt out. A re-engagement flow assumes you've still got customers worth re-engaging. Blast the whole database every day with no thought to who's actually reading, and you manufacture the disengaged segment, you'll scramble to win back later. The fix isn't endless segmentation, but it's watching your frequency and protecting the engaged base that you already have. On frequency, Dan Ferguson, then chief marketing officer at Adore Beauty, said it best. It's not how many emails you can send, it's how helpful or how irritating they are. 50 might be helpful and that's fine. 50 could be irritating and you've lost them at number seven. The number that makes the case came from Justin Bausch at the ActiveWare brand Ritaware, who actually ran the test and told us all about it.

SPEAKER_00 11:01

It might look like you're making more money, but if you run it across 50 different campaigns, all those unsubscribes that you've just collected has just chunk like removed a chunk of your revenue.

SPEAKER_03 11:14

Justin compared sending to an engaged segment against the broad list across 40 or 50 campaigns. The broad list won on raw revenue, but it generated far more unsubscribes. And once you put a dollar value on each subscriber or unsubscriber, the smaller, more engaged segment came out in front. Most brands never put unsubscribes into the revenue number at all. So put a dollar figure on a subscriber, fold unsubscribes into your campaign panel, and have a look for the segmentation when you've got a real reason, a wish list, a back in stock, a promo, not just for its own sake.

The Week’s Playbook And Community Invite

SPEAKER_03 11:54

If there's one thing to take out of this, it's that the customer who's gone quiet usually hasn't gone anywhere. She's just busy and she's waiting to be reminded why she liked you in the first place. After all, our customers aren't thinking about us all day, every day. A discount doesn't need to be the reminder. The product usually is. So before you delete that segment or reach for a code, build the flow that just shows people what they've missed and put a real dollar value on the subscribers you'd otherwise burn through. If you're trying to work out what counts as a lapsed buying cycle or how other e commerce teams are pricing the cost of an unsubscribe, these are the conversations that are happening in the Ad to Cart community every day. It's free to join over on addocart.com.au. That's the playbook for this week. Go have some fun with those disengaged customer lists. I'll see you next Friday.