Why Your Churn Reactivation Email Isn't Working
Preventing and reactivating customer churn is a significant growth lever and a challenge for many SaaS applications. At HVL, we work with and learn from our portfolio companies, including tactics for mitigating churn and reactivating churned customers. One of our companies, TrustSpot, has been experimenting with reactivation emails for delinquent churn with some success. Today, we are sharing some of what they’ve done successfully.
Problem
The standard churn reactivation email for delinquent churn wasn’t working. Delinquent churn is churn from inaction after expired or inactive cards. It’s a common problem in SaaS.
TrustSpot’s generic churn reactivation emails weren’t working. TrustSpot’s response rate for delinquent churn was negligible if the customer didn’t quickly update a card and allowed the subscription to lapse, after say a month. The chance of recovering these types of customers was close to 0%
Solution
Personalization: TrustSpot decided to pursue personalization of churn reactivation emails, starting with their higher MRR customers. If they didn’t respond to the typical churn sequence, they would initiate a personalized email with a compelling offer to trigger action. Typical reactivation emails don’t do this level of customization, even when you use tools like Profitwell.
An example of personalization: TrustSpot’s software includes widgets on the customers' website that show reviews and results of user experience surveys and testimonials.
TrustSpot would create a screenshot of the site without the widgets to demonstrate what not having TrustSpot would mean and reiterate the value of the software.
You may not be able to go to the customer’s website to demonstrate value, but how can you make your reactivation email specific and relevant?
Could you include a video or pictures of your software in action? They need to be reminded how the product makes their life better.
A Compelling Offer: In addition to a personalized message, TrustSpot adds a compelling offer, say, a discount. Discounts are a great offer to bring back a customer, given the cost of acquiring a new one is much higher than reactivating an existing one. TrustSpot offered personalized discounts for reactivating.
Offers could be an upgrade to a higher tier at a discount, personalized support for a particular issue, bonus education, etc. The key is to make it compelling enough to bring the customer back and communicate the offer as clearly as possible. The offer and guarantee should be compelling enough to make the customer take action as soon as possible.
Ease: TrustSpot made it easy for the customer to reactivate, including a direct payment link that didn’t require logging into the software. The team also ensured they were communicating with the decision-maker. The email on a customer account may not be the decision maker. The billing contact or primary user may not be the buyer. Plus, don’t waste time emailing someone who no longer works at the company. Even when forwarded, it’s not the best look.
Timing is also essential. Initially, TrustSpot waited about a month to reach out to churned customers with reactivation offers hoping they would return or respond to the generic email.
One current experiment is integrating a compelling offer into the typical churn sequence rather than waiting.
This strategy takes more time than just sending a generic reactivation email, but it’s worked, helping to move TrustSpot’s reactivation rate higher, even after a customer had been delinquent for a significant period.
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