iVend Loyalty - Winning back Churned Customers

There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.

- Sam Walton

Acquiring a new customer usually costs a retailer three to ten times more than he spends for retaining an existing profitable customer.

Customers who are at higher ‘tiers’ of loyalty have already spent at our Enterprise and have shown interest in our offerings. Also, they have willingly given their contact details, as they want to keep in touch for better offers and promotions. So, it is easier to reach out to them, rather than expend more capital in attracting new customers.

Considering the above, making an effort to know your churned customers and rolling out effective marketing campaigns at the right time makes sense.

Business Challenges

1. How do you define and identify churned customers? In order to win back churned customers, we need to first agree on our definition of churn. Do we consider a customer inactive/churned when they do not shop with us for 3 months, 6 months or a year?

2. How to identify the reason for inactivity? Customers don’t walk away without reason. Getting to the heart of why they left is paramount. There might be various reasons for customer inactivity, i.e. moving to some other store, change in requirements or may be because of being unhappy with our products and/or services.

3. Creating a Written plan for winning back the customer. We think about winning back our churned customers; but very often, do not make a written plan on how to achieve it. As long as the plan is not on paper, it is difficult to implement it over a long duration.

4. Knowing what promotions to offer to win them back and when! After identifying the churned customers, we find out why they have moved away and formulate a business plan to win them back. Then, it is a question to have great offers and promotions to woo them back. What would entice them to reaffirm their loyalty to us?

5. Retaining them once they are back with us. Retaining the customer, whom we won back is as important as winning them back. We would not want to lose them again.

Proven Solution

1. Knowing the churned customers. The definition of churned customers vary from business to business. For example, a grocery store may define a customer as churned if they do not visit them for a month. Whereas an electronics store might consider someone as churned who have not visited them for the last 3 months. The iVend Loyalty system gives a retailer the flexibility to configure their reports and dashboards as per their definition of churn. The iVend Loyalty system has parameterized reports to show inactive and active members’ details. A retailer can schedule this report daily, weekly or monthly to know their churned members and take action accordingly.

iVend Active/Inactive Members Report Parameters

iVend Active/Inactive Members Report Results

2. Identifying the reason, as to why they turned inactive To identify the reasons as to why customers have turned inactive, performing a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) is most useful. This assesses why our products are no longer perceived as having the best value. Along with a SWOT analysis, it is also important to check and analyse the communication history and buying pattern of churned members. 

1. Creating a written plan for winning back the customer. Having a written plan helps in retrospection and shows us our status and achievements at desired intervals. iVend retail helps a retailer by providing information and tools required to create a written plan. A retailer can identify what products/items a member used to purchase. With the help of demographic data and change in purchase patterns, a retailer can segment members based on which they can plan separately for each set of members.

The iVend Loyalty – Member Segmentation dashboard displays the graphs that show how members are distributed with respect to gender and age. It also provides a comparison of revenue generated by gender and age. The Age Wise – Revenue and Member Count graph displays an age-wise count of members in a given date range on a secondary axis and the revenue generated by them on a primary axis. It also shows the count of members who have not provided a DOB (Date of Birth) and the revenue from them.

The Age Wise – Gender Distribution graph displays the age-wise count of male, female and members without gender for a given date range. It also includes a count of members without gender and DOB.

2. Knowing what promotions to offer to win them back and when! The winning campaign should support the customer experience and must be based on the research and analysis done on the customers buying behavior. What is it that the customer wants? iVend Retail provides a retailer an option to design a winning campaign, by setting up promotions by various means like discounts, rebates, points, gift cards or a combination of these to reward the customers. iVend Retail provides a query builder and predefined reports and dashboards, which can be used for segmenting customers to identify inactive members. The system has the capacity to design a personalized ‘Win Back’ Email/SMS campaign that can be scheduled to engage these churned customers again. Knowing the time to launch the campaign is as important as anything. Such as for a month of Special ‘Annual Grand Sale’ shopping that happens around special days of the year i.e. Christmas, Long weekends, public holidays, etc. iVend Loyalty provides a feature to configure these Special Days for a retailer and then to define exclusive promotions for these Special Days. iVend Loyalty Special Days

Special Days Plan

Predefined special days that can be attached to a plan

Retaining them once they are back with us. All customers want to feel important and valued, and this is true for those who have been inactive for some time. One of our multiple strategies to successfully retain customers is to keep doing what we have done to win them back. Keep the cycle moving.

Conclusion

While churn is an inevitable part of the customer lifecycle, our clients have successfully mitigated churn within their customer base by segmenting, personalising, and targeted Emails powered by using iVend Retail and iVend Loyalty’s customer retention solutions.