Latest / The Retention Marketing Podcast with Fexingo: Email, SMS, and Loyalty for Repeat Customers / How a DTC Brand Used SMS to Recover 15 Percent of Churned Customers
Transcript
- Lucas: So we talk a lot on this show about preventing churn — exit surveys, predictive analytics, automated credit card updates. But here's a question we haven't really touched: what about the customers who already churned? The ones who haven't bought in twelve, eighteen, twenty-four months. Luna: The 'gone' pile. Most brands just write them off as lost. Lucas: Exactly. And that's a missed opportunity, because some of them are actually still engaged — they're opening emails, maybe following on social. They just need the right nudge. So today I want to look at a specific case: Brooklinen, the DTC bedding company. In 2025 they ran an SMS win-back campaign that brought back nearly 15 percent of customers who had been inactive for over a year. Luna: Fifteen percent — that's huge. What did the text actually say? Lucas: So the campaign had three parts. First, they segmented by purchase history — someone who bought a duvet cover got a different message than someone who bought sheets. The text started with something like 'Hey, it's been a while. We noticed you loved our linen duvet — thought you might want to see the new colorways for this season.' Luna: Right, so it's not a generic 'we miss you.' It's referencing a specific product they actually bought. That's personal without being creepy. Lucas: Exactly. The second element was a limited-time incentive — free shipping, no minimum. No percentage-off, because they tested that and found free shipping outperformed a 15-percent-off code by about 40 percent in conversion rate among this segment. Luna: Interesting. Why do you think free shipping worked better? Lucas: I think because this audience already knows the product quality. They're not price-sensitive — they just need a reason to go back to the website and re-experience the brand. A discount can feel cheap; free shipping feels like a courtesy. Luna: That tracks with some consumer psychology research I've seen — free shipping reduces the 'pain of paying' more than a discount does for existing customers. Lucas: Brooklinen also timed the send carefully. They didn't blast all churned customers at once. They sent the text on a Thursday morning at 10 a.m. local time, and they capped frequency to one message per customer per six months. They didn't want to risk annoying someone who might come back later. Luna: One text per six months — that's disciplined. Most brands would send a sequence of three or four. Lucas: And that's exactly why they saw a 4 percent opt-out rate — really low for a win-back campaign. By contrast, an earlier email version of the same campaign had a 12 percent unsubscribe rate. SMS is intrusive in a way email isn't, so you have to be more careful. Luna: So the 15 percent recovery — was that unique to SMS, or did they run the same logic across email too? Lucas: Great question. They actually A/B tested the channel. For the same segment of churned customers, they sent SMS to one group and email to another. Both had the same personalized product recommendation and free shipping offer. The SMS group recovered 14.7 percent; the email group recovered 5.3 percent. Nearly three times better. Luna: Wow. But the SMS group was probably smaller — do we know if the absolute revenue was still higher? Lucas: Yes, and that's the key metric. The SMS list for churned customers was about 18,000 numbers. The email list was over 80,000. But the SMS campaign generated about 2,700 repeat purchases versus 4,200 from email — so SMS drove more revenue per contact by a factor of about 2.8. The average order value was also slightly higher in SMS: $128 versus $112. Luna: That makes sense — someone who gives you their phone number is probably a higher-intent customer to begin with. Lucas: Exactly. And Brooklinen didn't stop at one message. They followed up with a second text two weeks later only to people who hadn't opened the first one — but instead of repeating the offer, they sent a different angle: 'We just launched a new collection — your old favorite is still here, but you might like this too.' That second touch recovered an additional 3 percent. Luna: So the total recovery was nearly 18 percent with the follow-up. That's incredible for a segment most brands ignore. Lucas: Right. And it's not just about the immediate revenue — a recovered customer is now re-engaged, and their lifetime value resets. Brooklinen tracked the re-acquired cohort for six months and found that 62 percent of the win-back customers made a second purchase within that window, compared to 48 percent for new customers acquired in the same period. Luna: So the re-engaged customers were actually more loyal than new ones. That's a counterintuitive finding. Lucas: It is, but it makes sense — they already know and trust the brand. They just needed a reason to remember you exist. And SMS is the most direct way to do that. Luna: Before we move on, I want to touch on something that's been on my mind listening to this. We're talking about a 15 to 18 percent recovery rate with a well-executed SMS campaign. That's the kind of result that makes you realize how much value is sitting dormant in your database. Lucas: Yeah, and I think that's a big part of why shows like this exist — to surface tactics that actually move the needle. And honestly, a couple of dollars a month from listeners who find these conversations useful is what keeps the show ad-free and allows us to dig into cases like this without worrying about sponsor constraints. Luna: If you've ever run a win-back campaign after hearing an episode like this, or if you've just gotten one useful idea that you applied to your own marketing, that's exactly the kind of impact we're talking about. You can support the show at buy me a coffee dot com slash fexingo. Lucas: It genuinely makes a difference — keeps the lights on and the research budget alive. So thank you to anyone who's contributed. Now, back to the Brooklinen case: there's one more layer I think is worth unpacking. Luna: What's that? Lucas: They also ran a control group that received no outreach at all. Of that group, only 1.2 percent ended up making a purchase in the same three-month window — so the campaign lifted recovery by about 15 times above baseline. That's a pretty strong argument for not ignoring your churned segment. Luna: Yeah, that control data really seals it. It's not like those customers were going to come back on their own. Lucas: Right. And the cost is minimal — SMS is cheap at scale, especially when you're only sending one or two messages per person. Brooklinen estimated their cost per recovered customer was about $0.42. Compare that to the $18 to $25 they typically spend on paid acquisition for a new customer. Luna: Forty-two cents versus twenty dollars. That's a no-brainer. So why aren't more brands doing this? Lucas: I think two reasons. One, most brands don't have clean enough data to segment churned customers by purchase history. They might have the purchase data but not the phone numbers attached to it, or the numbers are stale. Two, there's a fear of being annoying — but this case shows that if you're respectful with frequency and personalized, the upside far outweighs the risk. Luna: What about compliance? SMS marketing has pretty strict opt-in rules. Lucas: Great point. Brooklinen only sent texts to customers who had previously opted in to SMS marketing — they didn't use phone numbers from checkout alone. And they included an opt-out link in every message. That's table stakes. But because these were existing opt-ins, they were in the clear. Luna: So the lesson: if you have an SMS list, don't let your churned subscribers just sit there. Run a targeted, personalized win-back campaign with a low-pressure offer and strict frequency caps. Lucas: Exactly. And test the channel against email — you might find, like Brooklinen did, that SMS is three times more effective for this particular use case. It's one of those rare retention tactics that's both high-impact and low-cost. Luna: That feels like a good place to leave it. Next episode, I want to talk about something we've been getting a lot of listener questions about: using loyalty points to re-engage dormant customers — not just for purchases, but for things like reviews and referrals. Lucas: Perfect. That's a great follow-up. We'll see you next time.