Latest / The Retention Marketing Podcast with Fexingo: Email, SMS, and Loyalty for Repeat Customers / How a Pet Brand Uses SMS to Retain Customers After Price Hikes
Transcript
- Lucas: Luna, I want to talk about something that keeps retention marketers up at night — a price increase. Specifically, how do you keep your best customers when you have to raise prices on them? Luna: It's the ultimate loyalty stress test. Most brands just send an email, brace for churn, and hope for the best. But I've seen a few handle it really well. Lucas: Exactly. And one that stands out is a premium pet food brand — let's call them 'Paw & Co.' Not real name, but real case. They faced a 20 percent cost increase in early 2026 on their core kibble line. Grain prices, supply chain, the usual. They knew they had to pass some of that on. Luna: And they chose SMS as their primary channel. That's interesting — most brands would default to email for something this delicate. Lucas: Right, but they had a theory. Email gets lost. It sits in a Promotions tab, or people see it and think 'I'll deal with this later' — and they never do. SMS lands in the one place people check constantly. So they built a three-message sequence over ten days. Luna: Three messages sounds aggressive for SMS. Most brands are terrified of being marked as spam. Lucas: They were careful. The first message went out ten days before the price change took effect. It was purely informational — no ask, no urgency. Just: 'Hey, we've held our prices for two years. We've absorbed as much as we can. On March 1, the price of our Classic Chicken recipe will go from $45 to $52 per bag. Here's why.' Then they linked to a short page with the breakdown. Luna: Transparency first. I like that. Most brands would just announce the new price and expect customers to accept it. Lucas: Exactly. The second message came three days before the change. This one was about value. They reminded customers that their subscription also included free shipping, a loyalty program, and a money-back guarantee. And they offered a one-time 'price lock' — if you upgrade to their top loyalty tier before March 1, you're locked in at the old price for six months. Luna: That's smart. They gave customers a path to avoid the increase entirely, but it required a behavior change — moving to a higher tier. Lucas: And that tier had higher minimum order size and a longer commitment — so it actually improved retention. The third message was on March 1, the day of the change. It was a simple confirmation: 'Your new price is now in effect. We're grateful for your trust. Here's your updated subscription summary.' It ended with a direct reply line: 'Text us if you have questions — a real person will respond.' Luna: Did it work? What were the numbers? Lucas: They retained 85 percent of their recurring subscribers. That's compared to an industry average of around 60 to 65 percent for a price increase of that magnitude. And the 15 percent who left — they tracked them via a follow-up SMS a week later — most said it was purely a budget issue, not a trust issue. Luna: So the transparency actually preserved the relationship, even for people who couldn't stay. Lucas: That's the key takeaway. They didn't try to hide it or soften it with vague language. They said, 'Here's exactly why our costs went up, here's what we've done to mitigate it, and here's how we can help you.' That level of honesty builds long-term trust, which is the foundation of retention. Luna: And I think the SMS choice was critical. If they'd used email, the open rate might have been 20 percent. But SMS open rates are often above 90 percent within minutes. The timing of the three messages — spaced out, not crammed into one day — also gave customers time to process and respond. Lucas: Absolutely. And it's worth noting that this brand had already invested in building a clean, opted-in SMS list. They weren't cold-texting anyone. These were people who had chosen to receive texts from them, so the trust was already there. Luna: That's a good reminder. SMS isn't a silver bullet — it's a channel that works when the relationship is already warm. Lucas: And by the way, the reason we can talk about cases like this in detail is that we don't have to answer to advertisers. We keep the show ad-free, and if you find these conversations useful, you can support that at buy me a coffee dot com slash fexingo. It's a simple way to keep this independent. Luna: Yeah, and we really appreciate those who do. It lets us dig into real examples without worrying about pleasing a sponsor. Lucas: Back to the pet food brand — they also did something interesting with their loyalty program. They introduced a 'Price Lock' tier. It's not a common concept in retention marketing, but it's powerful. Luna: How did it work exactly? Lucas: Customers who committed to a six-month subscription at a minimum of two bags per month were placed in the Price Lock tier. That meant their price per bag was frozen for six months, regardless of future increases. In exchange, the brand got predictable revenue and higher order value. Luna: So it's a win-win. The customer gets price certainty, the brand gets stickier revenue. Lucas: Exactly. And they marketed it exclusively through SMS — no email blast. They wanted to make the SMS channel feel special, like an insider channel. That's another retention tactic: channel exclusivity. If SMS becomes the place where you get the best offers, people will stay opted in and engaged. Luna: That's a great point. We often talk about email as the workhorse, but SMS can be the VIP lounge. Lucas: And that's exactly what they did. The Price Lock offer was only available to SMS subscribers. They even had a line in the second message: 'This offer is not available via email. Only here.' That created a sense of privilege. Luna: I can see how that would drive SMS opt-ins too. If people hear that the best deals are on SMS, they'll sign up. Lucas: It's a flywheel. Now, one detail I want to highlight — the timing of the first message. Ten days before the change. Most brands send a price increase notice a week or less in advance. But by giving customers ten days, they gave them time to ask questions, to consider the Price Lock, and to mentally adjust. Luna: That also reduces the shock factor. If you get an email on a Friday saying 'your price goes up Monday', you feel ambushed. Ten days feels fair. Lucas: Right. And the second message at three days out served as a reminder and a nudge to take action. That's classic behavioral design — give people a clear deadline and a clear action. Luna: What did the third message look like exactly? You said it was a confirmation. Lucas: Yes. It was short: 'As of today, your Classic Chicken subscription is $52 per bag. Your next delivery is on schedule. If you have any questions, reply to this message and a team member will get back to you within one hour.' They staffed the SMS line during business hours specifically for that day. Luna: That one-hour response promise is huge. It shows they were prepared for backlash or confusion. Lucas: And they actually got very few negative replies. Most people just said 'thanks for the heads up' or 'I upgraded to Price Lock, so I'm good.' The transparency defused the anger. Luna: I want to go back to the 15 percent who left. You said they followed up with a text a week later. What did that say? Lucas: It was a short survey: 'We noticed you paused your subscription. We'd love to know why — just reply with a number. 1 for too expensive, 2 for found another brand, 3 for other.' Eighty percent replied with 1. That's useful data, but it also keeps the door open. They then sent a follow-up to the 'other' group asking if they could help. Luna: So they used the churn moment as a data collection opportunity. That's smart retention — not just accepting churn, but understanding it. Lucas: Exactly. And a few of those 'other' respondents came back after a month because the brand helped them with a different issue, like delivery timing or recipe preference. So the SMS follow-up recovered some customers who might have otherwise been lost. Luna: I think the key lesson here is that a price increase doesn't have to be a retention disaster. It can actually strengthen loyalty if handled with care. Lucas: Absolutely. The brand came out of this with a higher average order value, a larger share of subscribers on the Price Lock tier, and a more engaged SMS list. They actually saw an increase in SMS reply rates after the campaign — people felt heard. Luna: That's the opposite of what most brands fear. They worry that any price communication will trigger a flood of complaints or unsubscribes. Lucas: But those fears are often based on assuming the worst. If you treat customers like adults, explain the context, and offer a way to mitigate the impact, most will stay. The ones who leave probably would have left anyway at the next renewal. Luna: So for marketers listening, what's the one takeaway they should apply? Lucas: Plan your price increase communication as a sequence, not a single blast. Three touches: inform early, reinforce value with an action, confirm with a support offer. And use the channel where your customers are most responsive — for many brands, that's SMS. Luna: And don't forget the Price Lock concept. It's a creative way to turn a negative into a loyalty driver. Lucas: Definitely. I'd love to hear from anyone who's tried a similar approach. You can reach us — but for now, that's the story of how a pet food brand turned a price hike into a retention win.