With a shout out to Beef marketers who dug themselves deep into my childhood brain with the "It's what's for dinner" campaign – wanted to take a moment to unpack a retention marketing tool exclusive to Thanx: Winback.
~72%. In a recent data study we did at Thanx across more than 15 million transactions and 15 industries (more specifics to come at the end of this month), that's the percent of loyal customers that visit a business only once in a 6-month period. To me, that number is mind-blowing. Think of the revenue gains a company could earn from reducing that number just 5%. And that's the whole idea behind what we've built. Here's how it came to be.
The issue of Merchant Blindness
There's a sandwich shop close to my my old apartment that I used to love. I would go there literally every day. However, as the sandwich shop became more and more popular, my experience became worse and worse. So, every day turned into once a month. Once a month into once a quarter. And now? Not sure I'll go back again. At this point, there's a clear disconnect between customer and merchant:
- If it seemed like the sandwich shop cared, I would go back (I still love the food). Every customer wants to feel appreciated, especially those who once had a deep relationship with a business.
- If you asked any employee at the sandwich shop if they care about their loyal customers, they would give a resounding "Duh."
- The sandwich shop has been unable to communicate to me that they do actually care. The new employees don't recognize me and, even though my behavior changed, the sandwich shop's communication toward me hasn't.
It's a clear case of merchant blindness – a business, concerned about customer loyalty, can't do a simple task that they would do if they could. There's no way to take action according to changing customers behavior.
Interestingly, if all previously loyal customers felt the same as I, this business would essentially be operating the sandwich shop version of a Ponzi scheme. Sure, profits might look good, but revenue from first-time customers does not make a business successful in the long run. You need repeat customers to create long-term viability.
To be clear, merchant blindness impacts every brick-and-mortar business every day. Each time a customer comes in store, a business has to convince that customer to come back again. But, if the merchant has no clue if customers are repeat customers or if customers do actually come back, there's nothing that can be done.
In a perfect world
It's not hard to imagine how a merchant would like its customer relationships to work in a perfect world:
- Every customer who visited would have the best experience possible.
- Those who had a good experience would come back to have it again.
- Those who didn't have a good experience would be open to a conversation with the merchant, during which the merchant would convince that person to come back and try out the business again.
What's funny – but perhaps not obvious – is that this "perfect world" is exactly how loyal customers would prefer their relationships with their favorite merchants. Every customer wants to have the best experience possible every time they visit. For those experiences that are less than stellar, customers just want to know that the merchant cares enough to make it up to them the next time.
Of course, we don't live in a perfect world. There's that whole issue with scale. No merchant can talk to and remember every single customer –
Why Winback works
And that's exactly why customer loyalty technology exists (and, when effective, works): to help merchants and customers foster more personalized and beneficial relationships with each other. At the simplest level, the Thanx Winback tool allows merchants to automatically re-engage their lapsed customers via highly targeted promotions. Here’s how it works:
- Merchants use Thanx to enable Winback
- Once enabled, Thanx automatically uncovers any previously loyal customers who haven’t recently made a purchase, and sends them an offer reflecting what made them loyal in the first place.
- Merchants thus get the chance to solidify long-term revenue from those who would have otherwise churned out of their business.
- The solution comes with a bunch of cool features, including reporting and an up-to-date return on investment calculator.
- Merchants can leave this feature turned on for any desired amount of time, as Thanx automatically delivers only one offer per customer.
Cool, right? Shout out to our hard-working product team for ironing out something that merchants can use to reach their revenue goals – while also not introducing any extra hassle.
Below you can access a detailed report of Winback in action, including exact redemption figures and ROI. Any other questions, please let us know.