#150. How to Use Churn Risk Segmentation for Your Business | Podcast

Vira: 0:41

Hello everyone and welcome back to Email Einstein, the podcast by Flowium. I’m your host, Vira Sadlak, And I’m really happy to welcome you guys back to yet another episode of Segmentation May. Yes, you’ve heard it right. We called it Segmentation May because for the entire month of May, we were talking about segments. We were discussing segments. We had some excellent guests to discuss, honestly, all things segmentation. And today’s episode, even though it’s going to be short, it’s a very important one because today we will be talking about the group of customers that is called the churn risk segment customers. In this episode, we will be talking about this advanced strategy that will help you to win back those customers. And I will also explain the details of the churn risk segment. Basically, research shows that approximately 80% of your company’s future revenue will come from 20% of your existing customers. So here you have the 80/20 rule again. In other words, your team ideally should not only focus on bringing the new leads to your website, to your brand, but also using the existing one and ensuring that your existing customers are still gaining value from your content, from your brand, no matter how long they’ve been with you. And the segment that we will be talking today about is called the churn risk lapsed customer. It’s a vital segment to have in your account. It’s a vital segment to have as a part of your strategy. This segment basically tests the likelihood of a group or a customer to stop purchasing entirely from you or to move to the other competitor. You can basically target these people through your win-back series, through your win-back automations. And by the way, we discussed the win-back automations back in the day here on this podcast. But ideal combination, ideal combo is when you actually marry the two, when you marry the strong win-back flow, but also when you have some win-back campaigns in place as well. Of course, win-back flow is always a good idea to automate the process, but the campaign is where you can actually make it even more personable, even more timely, and even more relevant to the customer. So right now I’m going to discuss the definition of the churn risk segment. This definition is from Klaviyo. So if you’re using other email marketing platforms, this definition might be a bit different for you guys, but the logic is still the same behind it. So it should work for all of your your email marketing efforts, no matter what platform you are using. So here you go, churn risk segment. So definition is, first of all, the person should be someone who has purchased at least once from you over all time. So this person is your customer no matter when they purchase. So they’ve purchased from you at least one. And this person should also be someone who have placed zero orders in the last 180 days, meaning that yes, they’ve purchased from you, but the purchase was not recent. And this person should be someone who have received email at least 2 times in the last 3 months, and they opened 0 emails in the last 3 months. And obviously this person should not be suppressed. So again, the person should be someone who have placed at least 1 order with you, and they placed 0 orders in the last 180 days, and they receive at least 2 emails from you in the last 90 days. And they open 0 times and they are not suppressed. I like this definition of a segment more than someone who just haven’t purchased from you in a while because it basically covers— it’s more like segmented down. It’s basically targeting people who haven’t opened the emails even though you were trying to reach them, right? It’s also targeting people who haven’t purchased anything from you. And I think it’s a great way to sort of like segment out that group of people. Now, I’ve mentioned this number of days, like 6 months and 3 months, like 90 days and stuff like that. Obviously, this is a generic example. If you are, say, selling the mattresses, you probably wouldn’t consider someone inactive after a year of not buying another mattress, right? Because the lifecycle of the product is longer. And also, since this is a high-value, high-quality items like this, they are created to hold up for years, right? So your customer probably won’t need another one for for, I don’t know, like 5 years or 10 years. If you would be selling like mattresses, that’s the whole— or sorry, the socks. If you would be selling the socks, that would be a whole different story. It would be more reasonable for you and your customers to make the repeat purchases more closely together since they are probably going through socks more frequently, you know what I mean? So if you’re just like getting started with the win-back campaigns or like win-back series, consider like experimenting with the amount of time you use as a threshold before sending a win-back email to customers. So obviously it all comes down to understanding your customer’s behavior, customer’s typical journey. We usually go with something like as little as like 60 days for the win-back series. But again, it all comes down to what product you’re selling and what’s your customer sort of like behavior is. So here you have it. You have one quick tried and true strategy. This is basically like a more advanced version of the win-back segment for you to try this month. Definitely, definitely talk to these people. I know sometimes you might think that winning back your inactive email list subscriber and customers is like trying to squeeze water out of a stone, that no matter what you do, they will never come back. Well, in reality, that’s not true. You can still win some of those people back. And given that it’s at least 5 times more expensive to acquire a new customer than to retain an existing one, and win-back email campaigns are actually must-haves. In your email marketing arsenal. So here you have it, a fun little strategy to try. Send some promotion to these people, maybe remind about yourself, maybe give them additional discount or additional little nudge, you know, to, to make that purchase. Definitely don’t give up on those people. They are your valuable customers. They know your brand already. They’ve purchased from you already. So don’t give up on them. Try this strategy. We’ve tried it internally many times. It does work. It does bring So there you have it, yet another advanced segmentation strategy in your toolbox. You guys, even though today is the last week of May, we thought that we have actually one more very important Segmentation May topic to discuss with you. So we might bring a really exciting guest to our podcast next week. I’m trying to convince them to come and share their wisdom. I’m not going to spoil it for you now, but it’s going to be a good one. So definitely come back next Tuesday. And as always, if you like what we do, please leave us a review. And don’t forget to send us a screenshot of your review. Just email it to me or to my team, because once you do that, we will send you something special as a thank you for supporting our little podcast. So thank you so much for hanging out with us here. I hope you enjoyed yet another episode of Segmentation. And yeah, let’s hang out together again next Tuesday. See ya!