The Forgotten Funnel: Why Winback Should Be Your Highest ROI Retention Strategy

With trade tensions, economic shifts, and market volatility in play, brands are feeling the pressure to drive fast growth—with high margins and high AOV.

To that effect, many companies (especially in ecommerce) pour significant resources into proven retention tactics, like welcome flows and abandoned cart emails. However, brands often overlook one the most potentially lucrative retention strategies: winback campaigns.

Neglecting the gold mine that is your lapsed or churned customers can mean leaving millions in untapped revenue on the table.

Let’s take a look at how brands can engage previous customers and transform retention into a high-ROI growth engine.

What Is Retention?

Retention refers to a brand’s ability to keep customers returning and purchasing over time. It’s not just about making a sale—it’s about building long-term relationships that drive consistent revenue, brand loyalty, and high lifetime customer value (LTV).

As a brand grows, they acquire more customers, and naturally some of those customers stop shopping with the brand. These are referred to as lapsed or churned customers.

Many brands have millions of lapsed or churned customers. They are sitting on a goldmine of potential customers whom they can re-engage with a strong retention strategy. 

What Does Retention Strategy Mean for Most Brands?

Most brands focus on the early stages of the customer journey, investing heavily in acquisition and first-purchase optimization. They spend a lot of time optimizing the following flows and that’s why they typically have the highest average revenue per recipient (Klaviyo benchmarks). 

Revenue by flow types

• Welcome flow ($2.35 avg revenue per recipient)
• Abandoned cart ($3.07 avg revenue per recipient)
• Browse abandon ($0.95 avg revenue per recipient)

While these efforts are valuable, many brands neglect post-purchase engagement and fail to develop a strong retention strategy beyond initial touchpoints.

• Post-purchase flow ($0.38 avg revenue per recipient)

Read the full report for a breakdown of benchmarks based on company size and AOV.

The Most Common Retention Tactics

Welcome Flows

Welcome flows are automated email sequences designed to nurture new subscribers or customers. These typically include brand storytelling, product education, and an incentive to make the first purchase. They usually start with the pop-up you see on a brand’s website that asks for your email address and/or phone number, sometimes in exchange for a discount code.

While welcome flows are essential for capturing customer email addresses and phone numbers and building your subscriber list, they do little to retain lapsed customers.

Abandoned Cart Emails and SMS

Abandoned cart messages aim to recover lost sales by reminding shoppers of items left in their carts. They can be highly effective in nudging customers to complete a purchase, but primarily address short-term intent rather than long-term retention.

Browse Abandon Emails

Browse abandon messages also aim to recover lost sales by reminding shoppers of items they viewed on the website or app. These emails can be a valuable touchpoint but tend to be less effective since customers often browse many different items.

What Is Winback?

Winback is a strategy focused on re-engaging past customers who have stopped purchasing. Unlike welcome flows, abandoned cart, and browse abandon messages, winback campaigns target lapsed or churned customers with personalized messaging and sometimes incentives to reignite their interest. 

Why Most Winback Campaigns Fail

Many brands attempt winback campaigns but see lackluster results. Why? In my experience, there are three common culprits:

1. Generic messaging: A one-size-fits-all discount email won’t rekindle customer interest.
2. Poor timing: Outreach happens too early (i.e., when the customer is not ready to make another purchase) or too late, after the customer’s intent has completely faded.
3. Lack of personalization: Without individualized engagement, winback emails feel irrelevant and easy to ignore.

ROI of Personalized Winback vs. Other Campaigns

Brands that get winback right see remarkable results. In a case study, one brand was able to address their rising CAC and 20X their ROAS. In some instances, the right hyper-personalized winback campaigns can generate $5–10+ revenue per customer compared to $0.10 for industry-standard re-engagement emails. This is 50-100X improvement. 

Compared to traditional paid advertising which sometimes yields 2–3X ROI, optimized winback programs have the potential to deliver 5-10X ROI, which is the highest ROI per marketing dollar spent. 

Why such a stark difference? Precision targeting and hyper-personalized messaging that resonates.

How AI-Powered 1:1 Personalization Transforms Retention & LTV

Advanced AI-driven winback solutions can unlock new retention potential by helping you:

• Select the right customers to win back
• Predict the right moment to re-engage each lapsed customer
• Craft dynamic content tailored to individual shopping behaviors
• Deliver hyper-personalized incentives, increasing conversion likelihood

Let's dive deeper into these four pillars:

Selecting the right customers to win back

Choosing the ideal customers to target takes more than identifying everyone who hasn't purchased in X days—it requires a nuanced understanding of their potential future value and likelihood of re-engagement. Ideal targets include:

• High-potential lapsed customers: Customers who previously had high order values, frequent purchases, or engaged with premium products/services, but have churned
• "Sleepers" with undiscovered potential: Customers who made a few initial purchases but then went dormant
• Customers with "soft churn" indicators: Users who haven't fully churned but show decreasing engagement (e.g., lower frequency of visits, fewer items viewed, abandoning carts more often) 
• Customers who engaged with specific campaigns/products: AI can help identify customers who have lapsed after engaging with a particular product category or promotion and tailor win-back efforts around that specific interest. For example, a customer who purchased only sustainable fashion items and then churned would be perfect for a winback campaign highlighting new sustainable collections.

Predicting the right moment to engage lapsed customers

The “when” is just as important as the “who” when it comes to successful winback campaigns. Consider the following triggers and moments:

• Peak re-engagement probability: For a SaaS product, customers who churned due to a specific missing feature are most likely to re-engage immediately after that feature is launched. For retail shoppers, this moment might be right before a major seasonal sale.
• Event-triggered moments: For a travel booking site, a trigger event could be when a customer starts searching for flights to a destination they previously visited.
  Lifecycle-based moments: It is crucial to align winback efforts with key customer lifecycle stages, even after churn. For a subscription box service, the right moment to re-engage a lapsed customer might be just before they typically replenish a product they used to receive.

Crafting dynamic content tailored to shopping behaviors

This is about graduating from generic "we miss you" emails to highly relevant, compelling messages, such as:

• Personalized product recommendations, based on: past purchases, browse history, wish lists, and even what similar customers are buying
• Reinforcing value props based on past use: Highlighting the specific benefits or features a customer previously engaged with or seemed to value
• Content addressing known pain points: Directly addressing a reason for churn (e.g., price, specific feature, onboarding difficulty), when AI is able to identify one
• User-generated content (UGC) and social proof: Showcasing how other users, similar to the lapsed customer, are benefiting
• Personalized updates on new features and products: Especially relevant if a customer churned due to a perceived lack of features or product fit

Delivering hyper-personalized incentives

This moves beyond generic discounts to incentives that resonate with the individual's value perception and past behavior. Examples include:

• Tiered discounts based on LTV/churn risk: Offer a deeper discount to high-value customers at higher churn risk, or a smaller, more targeted offer to others.
• Incentives tied to preferred product categories/brands: Offer a discount specific to the products they frequently bought or browsed.
• Value-add incentives: Offer non-discount incentives, such as free shipping, bonus loyalty points, exclusive early access to new products, or a personalized consultation.
• Match the incentive to the pain point: If a customer churned due to price, a discount is appropriate. If it was due to a bad experience, a dedicated customer service follow-up or a credit might be better.
• Dynamic expiration dates: AI can optimize the urgency by setting expiration dates that maximize conversion for that specific customer, rather than a one-size-fits-all approach.

Apply this AI-driven personalization, and your brand will see increased customer lifetime value (LTV), stronger brand loyalty, and revenue that compounds over time. 

Take CookUnity for example, who moved beyond basic segmentation and embraced AI-driven personalization in their email marketing—resulting in an ROI of over 1,000%. 

The shift from segmentation to true personalization doesn’t just increase conversions—it transforms customer relationships. When messaging feels genuinely relevant, customers engage more, buy more, and stay loyal longer.

Common Mistakes to Avoid in AI-Powered 1:1 Personalization

Although tools like Remarkable AI can help you build truly powerful campaigns, it is important to harness that power—and to remember that AI cannot fix fundamental issues like cross-channel misalignment or lack of customer insights. Common mistakes (and solutions) include:

Not respecting customer preferences or opt-outs

• The mistake: Aggressively pursuing customers who have clearly indicated they don't want to be contacted or who have opted out
• The solution: Respect communication preferences—overriding these can lead to brand damage and compliance issues.
  

Over-reliance on discounts

• The mistake: Defaulting to discounts as the primary or only win-back incentive, which can train customers to wait for discounts and erode perceived value
• The solution: Use AI to identify the most effective incentive for each customer, which might not always be a discount. Sometimes, highlighting new features, exclusive content, or a superior customer experience, is more compelling.

Creepy over-personalization

• The mistake: Using data in a way that feels intrusive or like you're watching them. For example, referencing a very specific past browse session in a way can make a customer feel violated.
• The solution: Focus on relevance over recollection. Aggregate past behavior to infer preferences rather than using explicit messages. For example, instead of saying, "We saw you looked at those red shoes last Tuesday…" use more general phrasing like, "Based on your past interest in red footwear..."
  

Ignoring the “why” behind the churn

• The mistake: Sending generic win-back offers without attempting to understand why the customer left. If they churned due to a bad customer service experience, make sure you acknowledge that and apologize.
• The solution: Tailor the win-back message to address the root cause where possible.

‍Lack of cohesion across channels

• The mistake: Sending a win-back email, but not personalizing the rest of the experience (e.g., when the customer visits the website, they see generic messaging, or are prompted to buy something unrelated).
• The solution: Try to ensure your AI-powered personalization engine integrates across all customer touchpoints (email, website, app, ads, customer service).

‍One-shot approaches

• The mistake: Sending a single win-back email and then giving up if there's no response
• The solution: Design multi-touch winback sequences. The AI can adapt the next message/incentive based on the customer's interaction (or lack thereof) with the previous one. This could be a gentle reminder, a different incentive, or a change in content focus.‍

Failure to test and iterate

• The mistake: Assuming that the first success is perfect and not continually refining the models or testing different approaches
• The solution: Use AI to continuously A/B test different elements of your win-back campaigns (subject lines, content, incentives, timing)

How do I calculate the potential revenue from optimized winback?

The formula to calculate potential winback revenue is: 

Number of lapsed or churned customers X expected conversion rate X average order value (AOV)

Traditional email marketing campaigns have a 0.08% placed order rate. Imagine if you could boost that to 5%+ with a truly personalized winback strategy. Here’s a calculator to help estimate the potential revenue for your brand.

Ready to unlock untapped revenue by implementing personalized winback?

Many existing marketing automation tools have default winback strategies that you can turn on or enable. They might also provide webinars or videos with tutorials—here is a sample tutorial from Klaviyo. That said, most marketers are already so busy running campaigns that they don’t have the time to set up and optimize their winback flows. 

Don’t let winback be the forgotten funnel in your retention strategy; explore Remarkable AI's winback solution to maximize your revenue potential and connect with Right Side Up today to optimize your retention approach and transform past buyers into lifelong customers.

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