Latest / The Retention Marketing Podcast with Fexingo: Email, SMS, and Loyalty for Repeat Customers / How One Brand Uses SMS to Reduce Churn by 35 Percent
Transcript
- Lucas: So we've talked a lot about email win-back campaigns on this show — episode 35, episode 36, even episode 31 on payment recovery. But there's another channel that, when used right, can actually outperform email for certain retention moments. I'm talking about SMS. Luna: And not just any SMS — triggered SMS, timed around specific churn signals. I've seen some brands get really sophisticated with this. Lucas: Exactly. I want to walk through a specific case today. It's a mid-sized DTC brand — let's call them 'Bright Goods' — that sells premium home organization products. They had a monthly churn rate hovering around 8 percent, which is not terrible for DTC, but they wanted to get it under 6 percent. Luna: And they used SMS to do it? Lucas: They did. Over six months, they cut churn from 8 percent to 5.2 percent. That's a 35 percent reduction. And the primary lever was a three-message SMS sequence triggered when a customer hadn't ordered in 45 days. Luna: Forty-five days — that's interesting. Most email win-back sequences I've seen trigger at 60 or 90 days. Why 45? Lucas: That's the key insight. For their product category — home organization — the average repurchase cycle is about 60 days. So by day 45, a customer who hasn't reordered is statistically less likely to come back. Triggering earlier gives you a chance to intervene before the habit is broken. Luna: So the SMS acts as a gentle nudge before the customer fully drifts away. Lucas: Right. Message one is what I'd call the 'early warning' — it's simple, no discount, just a reminder. Something like, 'Hey, it's been a while. Your favorite drawer organizers are still in stock. Here's a link to reorder.' Short, personal, no pressure. Luna: And what were the open rates? Because SMS open rates are notoriously high, but they can drop if you send too many. Lucas: Bright Goods saw open rates above 90 percent on that first message. And click-through rates around 12 percent. Compare that to email, where their first win-back email had open rates around 35 percent and click-throughs under 3 percent. SMS was roughly four times more effective at driving that initial re-engagement. Luna: That's a massive difference. But what about the second message? If the first one didn't convert, what then? Lucas: Message two fires five days later, and this one includes a small incentive — 15 percent off their next order. The copy is still tight: 'Here's 15 percent off to help you get organized. Use code ORGANIZE15. Valid for 72 hours.' That sense of urgency is deliberate. Luna: Seventy-two hours — not 24, not a week. Why that window? Lucas: Their data showed that 72 hours gave enough time for the customer to see the message and act without feeling rushed, but short enough to create a real deadline. Longer windows — say, a week — had dramatically lower conversion rates because people just forgot. Luna: And the third message? Lucas: Message three comes seven days after the second, and it's the 'final call.' No additional discount — the offer from message two is still valid — but the tone shifts. It says something like, 'Last chance to use your 15 percent off. After tomorrow, it's gone.' That final message recovered about 8 percent of the customers who ignored the first two. Luna: So the three-message sequence, in total, brought back roughly one in five lapsed customers? Lucas: Roughly. Bright Goods calculated that the sequence reactivated 22 percent of the customers in the segment. Combined with the customers who naturally returned without any nudge, the overall churn rate dropped from 8 percent to 5.2 percent. That's a meaningful improvement for any DTC brand. Luna: I want to push back a little, though. Isn't there a risk of over-messaging? If a customer gets three SMS in two weeks, couldn't that annoy them enough to unsubscribe or even churn faster? Lucas: That's a real concern. Bright Goods actually tested that. They had a control group that received no SMS, and they tracked opt-out rates. The opt-out rate for the SMS group was 1.8 percent — slightly higher than the control group's 1.2 percent, but not catastrophic. And the net effect on revenue was strongly positive. Luna: So the trade-off was worth it. Lucas: In this case, yes. But it's a reminder that SMS is a high-intimacy channel. You have to respect it. Bright Goods kept every message under 160 characters — one text, no links that required a click to see the full message. And all messages came from a recognizable short code, not a long number. Luna: One hundred sixty characters — that's the classic SMS limit. But with smartphones, you can send longer messages. Why stay under that? Lucas: Because longer messages actually reduce engagement. Bright Goods tested messages of 200-300 characters and saw click-through rates drop by nearly 40 percent. People skim SMS. The shorter the message, the more likely they are to read and act. Luna: That's a great data point. So the lesson is: keep it tight, trigger early, and don't be afraid to follow up. Lucas: Exactly. And there's one more nuance I want to mention. Bright Goods also segmented by customer lifetime value. High-value customers — those who had spent more than $200 — received a slightly different sequence. The second message offered 20 percent off instead of 15, and the copy was more personalized, referencing their previous purchase: 'Your bamboo drawer dividers are back in stock. Here's 20 percent off to complete your set.' Luna: That personalization likely drove higher conversion rates. Lucas: It did. For the high-value segment, the reactivation rate was 31 percent — nearly 10 points higher than the general segment. And the average order value for those reactivated customers was actually 15 percent higher than their previous orders, suggesting that the incentive encouraged them to buy more. Luna: So the SMS sequence didn't just bring people back — it brought them back with bigger baskets. Lucas: That's the ideal outcome. And it's why I think sms based retention deserves more attention. A lot of brands invest heavily in email automation, but SMS can be a powerful complement, especially for time-sensitive moments. Luna: It's also worth noting that SMS doesn't require an app or a login. It's right there in the native messaging app. That's a huge advantage for brands with a mobile-first customer base. Lucas: Absolutely. And if these marketing conversations have sparked something you've actually used in your own work, that's exactly what keeps this show ad-free. If you'd like to support the show, you can do that at buy me a coffee dot com slash fexingo. It's a small gesture that helps us keep doing deep dives like this one. Luna: Yeah, and we really appreciate every bit of support. It lets us stay independent and focus on the cases that matter. Lucas: So back to the SMS flow — one thing Bright Goods did after the three-message sequence was to move non-responders into a 'cooling off' segment for 90 days. No messages during that time. Then, at day 135, they sent a single re-engagement SMS with a stronger offer — 25 percent off. Luna: And how did that perform? Lucas: It recovered an additional 6 percent of customers. So the total reactivation rate across the entire lapsed base was about 28 percent. Not every customer can be saved, but almost a third is a strong result. Luna: It makes me wonder: could this approach work for subscription brands too, where churn is often measured monthly rather than by purchase gap? Lucas: That's a great question. For subscriptions, the trigger might be different — like a failed payment or a skipped renewal. But the principle is the same: early, short, and with a clear incentive. We've covered payment recovery in episode 31, but SMS for subscription churn is a topic worth its own episode. Luna: We should do that. Maybe dig into a specific subscription brand that's using SMS effectively. Lucas: I'll put it on the list. For now, the key takeaway from Bright Goods is this: SMS isn't just for promotions or transactional alerts. Used strategically, it can be one of the most effective retention tools in your arsenal — if you respect the channel and test rigorously. Luna: And keep it short. Lucas: And keep it short. I think that's a good place to wrap up. Thanks, Luna. Luna: Thanks, Lucas. See you next time.