Latest / The Retention Marketing Podcast with Fexingo: Email, SMS, and Loyalty for Repeat Customers / Why Your Loyalty Program Feels Like Spam
Transcript
- Lucas: We need to talk about the noise in our inboxes. Specifically, the noise generated by loyalty programs that have forgotten their purpose. It is October tenth twenty twenty-six, and if you look at the latest quarterly reports from mid-tier apparel brands, you see a strange trend. Their acquisition costs are stabilizing, but their retention metrics are actually worsening for anyone who hasn't bought in ninety days. Luna: So the more they push, the less people stay? That feels counterintuitive when every dashboard tells me to increase frequency. Lucas: Exactly. We are seeing what I call retention fatigue. Brands are treating loyal customers like vending machines where you insert points and expect a purchase to drop out. But when a customer goes silent, sending them another email about how close they are to a free coffee or a ten percent discount doesn't remind them of the value. It reminds them of the obligation. Luna: It feels like harassment disguised as care. Do we have data on how much revenue these 'win-back' campaigns actually lose versus the brand damage? Lucas: The data is hard to isolate, but the anecdotal evidence from CRM platforms is stark. There was a report last month highlighting a major retailer that saw a four percent spike in unsubscribe rates during their standard birthday-month blast sequence. They were rewarding active users while simultaneously punishing inactive ones with digital clutter. Luna: That is terrifying. So the cost isn't just the wasted ad spend; it's the permanent loss of the channel itself. Lucas: Right. And before we get too deep into the psychology of why this happens, I want to take a quick second to talk about how this show exists. We deliberately don't run ads on these episodes. If you want to support that choice, the link is buy me a coffee dot com slash fexingo. Luna: Yeah, it really helps keep the production clean and focused on topics like this without third-party interference. Lucas: Thanks for listening to the show and supporting us directly. Now, back to the problem. The core issue is that most loyalty programs are built on a transactional model. You earn, you spend, you repeat. But human relationships aren't transactions. When someone stops engaging, they are signaling a change in status or interest, not a failure to accumulate points. Luna: So instead of asking 'why haven't you spent your points?', we should be asking 'why did you stop caring?' Lucas: Precisely. And the answer is rarely that they forgot you exist. It is usually that the relevance has dropped. Let me give you a specific example. Look at how a few forward-thinking outdoor gear companies handled the shift in post-pandemic leisure habits. They didn't send coupons to people who stopped hiking. They sent guides on local trails that required no purchase. Luna: They gave utility without asking for money first. That is a huge psychological shift from extraction to contribution. Lucas: It is. And here is the concrete thing you can take away from this today. Stop measuring your win-back campaigns by redemption rate. Start measuring them by 'silence acceptance.' Some of the best retention strategies involve doing absolutely nothing for sixty days. Luna: Doing nothing? That sounds like giving up on the account entirely. Lucas: It feels like giving up, but it is actually respecting the boundary. When you pull back, you reduce the cognitive load on the customer. They remember the brand positively because you weren't there to annoy them. Then, when you do reach out, it carries weight because it is rare. Luna: I am curious though, does this work for lower-ticket items? Like if I buy toothpaste every month, I can't just wait six months to email me. Lucas: That is a fair distinction. For high-frequency, low-cost goods, the rule changes slightly. You don't need to go silent. You need to go invisible. Instead of pushing a sale, you push information. A tip on brushing technique, a reminder to replace your filter based on usage, not time. Luna: So the message becomes helpful context rather than a demand for attention. Lucas: Exactly. And this brings us to the mechanics of SMS marketing, which is where most brands mess this up hardest. SMS is intimate. It is in the pocket. Using it for generic point updates is intrusive. If you are going to text a dormant customer, it must be urgent or highly personalized. Luna: Or gone. Most people delete texts they don't recognize instantly. Lucas: They do. And that deletion is a signal. We see brands running automated flows that trigger after thirty days of inactivity. Thirty days is nothing in many categories. Triggering a flow that early is just guessing wrong. Wait until the behavior pattern actually breaks. Luna: So patience is a feature of the algorithm, not just the strategy. Lucas: Yes. And let's talk about the financial side of this mistake. When you bombard a dormant user, you are burning through your deliverability reputation. Email providers like Gmail and Outlook start flagging your domain as spam if engagement drops. One bad campaign can tank your open rates for the next six months. Luna: So the short-term gain of one extra sale could cost you millions in future visibility. That is a massive risk ratio. Lucas: It is. And nobody tracks that cost. They only track the immediate conversion. I had a client recently who cut their win-back volume by half. Their total revenue from those segments went up fifteen percent because the remaining messages hit an audience that was actually paying attention. Luna: Less volume, higher quality. It is the opposite of growth hacking. Lucas: It is sustainable growth. Which brings me to another angle. Tiered loyalty programs often punish dormancy by making it harder to progress. If you miss three months, you drop a tier. That creates anxiety, not loyalty. Luna: Anxiety is a terrible motivator for long-term relationships. People leave when they feel managed, not when they feel valued. Lucas: Correct. Instead of penalizing silence, reward consistency over longer windows. Or better yet, decouple the reward from the frequency. Give people access to something exclusive regardless of when they last bought. Luna: Access over assets. That shifts the power dynamic nicely. Lucas: It does. Think about airline status. It is based on historical performance, not recent activity. Once you are elite, you stay elite for a year even if you fly nowhere. That security builds immense brand affection. Luna: Because you know you belong there. You aren't constantly auditioning. Lucas: Right. Auditioning is exhausting. If your customers feel like they are constantly performing to keep their status, they will eventually quit the game. You want them to feel like members of a club, not employees of your company. Luna: That framing changes everything. How do you implement that without a massive tech overhaul? Lucas: You start with your copy. Stop using imperative verbs. No 'Buy now', no 'Claim your points'. Try 'We saved this for you' or 'Here is what you might like'. Small linguistic shifts signal respect rather than demand. Luna: And it lowers the pressure. It invites them back rather than dragging them back. Lucas: Exactly. And finally, look at your segmentation. Are you grouping all dormant users together? A user who hasn't bought in ten days is different from one who hasn't bought in ten months. Treat them as completely separate audiences. Luna: Ten months ago, they might have been interested in a completely different season or product line. Lucas: They might have moved cities, changed jobs, or lost interest entirely. Sending them a seasonal sale email is tone-deaf. You need to diagnose the reason for the silence before you prescribe the cure. Luna: Diagnosis before prescription. That applies to marketing just as much as medicine. Lucas: It does. And the cure isn't always a pill. Sometimes the cure is space. Giving the customer room to breathe is a powerful retention tool in an economy where everyone is shouting to be heard. Luna: So the quietest brands might end up being the loudest in terms of impact. Lucas: In a noisy market, silence is a luxury good. If you can afford to be the brand that respects your customer's attention span, you win. Luna: I wonder if other industries are ready to make that leap, or if they are too addicted to the dopamine hit of the click. Lucas: Probably addicted. But the ones who break the habit first will own the next decade of customer loyalty.