The digital revolution has empowered today’s customers like never before. With competition on the rise and loyalty factors taking a backseat, customers don’t think twice before shifting to your competitors. If you don’t look after the interests of your customers well, chances are they will abandon you. You need to have a customer-centric approach to retain your current customers. It is, therefore, vital for businesses to adopt ways and means to retain their existing customers. A customer relationship management (CRM) system can provide significant help in achieving this objective.
Yes, CRM software can help improve customer retention.
Most organizations now use a CRM system to further their business interests. But using it to its full potential is essential in accomplishing your goals. Acquiring new customers is important, but it can cost you five times more to acquire a new customer than to keep an existing one. If you increase your retention rates by 5%, it can increase your profits by 25% to 95%. In comparison to new customers, your current customers are 50% more likely to try new products and spend 31% more.
So, what is customer retention?
Customer retention refers to the activities that businesses undertake to increase the number of repeat customers and to increase the profitability of each existing customer. If you have a robust customer retention strategy in place, you can extract more value from your existing customer base. You need to make sure that the customers you acquired with so much hard work remain with you and continue using your products or services.
To improve customer retention, you need to use your CRM system to its full potential.
Find profitable customer segments – With a CRM system in place, you get a better view of your customers – including your most profitable ones. You can focus on these customers and make the most of the relationship. With these metrics, you also get to know about those customers who can turn more profitable if targeted properly.
You can get to know the needs and preferences of your customers – You can easily learn the needs and preferences of your customers in order to formulate effective solutions. Also, with CRM software, your customers get new ways of communicating with you (social capabilities, web portals, and self-service options). Customer feedback gives you the information you need to improve.
Devise effective marketing campaigns – The traditional ways of marketing don’t prove to be all that effective these days, mainly because it is difficult for you to track the results. But when you have CRM software, you can use it to track your marketing campaign results so you learn what works for you and what doesn’t. When you track the success of your marketing campaign, you also get to know what’s important to your customers.
Improve target marketing – Targeted marketing allows you to identify customers who need higher levels of contacts. When you use a CRM system properly, you can identify those customers who need expert sales rep support for better satisfaction. By doing this, you can enhance the overall experience of your customers and improve your business opportunities.
Manage customer channels – You need to find out which channels work best for your organization – web channels, direct sales or retail locations. When you know your customer’s most preferred channel, you can put more emphasis on it and improve it further. For example, if you get to know that web channel is what your customers prefer, you can improve your web presence and use your direct sales team to focus on other productive tasks.
Track the success of your campaigns – Your marketing can only be successful if you know its outcome. With a CRM system in place, you can track the success of your marketing campaigns in real numbers. Since your CRM system lets you know whether your campaign is successful or not, you can change your campaign in between if you are not getting the desired results. Therefore, a CRM system allows you to invest in campaigns that are effective for your organization.
Develop value-added services and products – A CRM system allows you to identify where and how value-added services and products can increase customer retention. You can then develop services and products that your customers want.
Identify customer attrition patterns – It is difficult as well as expensive for businesses to deal with customer attrition. Attrition hurt businesses on two fronts – loss of customer sales and the amount you waste in ineffective marketing to those customers. Hence, it is vital for businesses to find out why their customers leave them. Your CRM system can identify the patterns in customer attrition and show you ways to prevent it.
Improve the overall experience of your customers – If you don’t keep your customers satisfied, they can shift to another service provider or vendor. CRM analytics and capabilities empower you to improve your customer’s overall experience by improving communications, enhancing service offerings, and providing excellent customer service.
Lower overall operating costs – A CRM system is known to reduce your overall operating costs. With CRM software, you get a 360-degree view of your customers, which helps you devise efficient and cost-effective ways of serving your customers. It allows you to invest in customers who will give you higher returns. As mentioned earlier, if you increase your customer retention rates, you can also increase your profits.
If you’re considering a CRM for your business, we invite you to learn what eZnet CRM has to offer. Our solution allows easy, seamless management of every aspect of the customer experience. Make sure you don’t fall behind in this increasingly competitive business environment.