How can CRM help improve customer retention?

Retaining your existing customers should always be preferable to the relentless grind of finding new ones. Selling to existing customers costs far lower than new business acquisition by a factor of 6-7x. At the same time, the chance of selling to an existing customer is also far greater (60-70%) than the chance of selling to a prospect (5-20%). ¹

Yet, many businesses treat existing customers as second-class citizens, almost encouraging customers to leave with their poor support.

How can your business use its number one selling tool, the CRM, to improve the chances of retaining business?

The R in CRM stands for relationship, which is key when discussing retaining customers. Building trust with your customers, from knowing who they are, when and how they were sourced, and how they’ve responded to your marketing efforts, will encourage loyalty to your firm.

Your CRM provides the tools to manage customer interactions and improve the customer experience. A happy customer is a repeat customer!

Why do customers leave?

Customers leave for various reasons, but mostly because they feel unvalued. If you sell a product or service that can easily be replaced by another company and take your customers for granted they will almost certainly leave.

If you stop trying to win their business every time, they’re more than likely to move their business to someone actively trying to win their attention.

These are the top three reasons customers leave, according to CallMiner’s churn report.

1. Unfair treatment – customers who feel they are poorly treated and receive ineffective support.
2. Customer experience – a poor customer experience can sometimes be overlooked, but overcharging for a poor experience will definitely make a customer leave.
3. Human service – customers want to talk to humans. We all do. Not providing the human touch to your support, buying assistance, or chatbot meetings makes customers feel unappreciated and frustrated. Those who can provide that service are more likely to win their business.

So what do you need to do to improve customer retention?

1. Treat customers as individuals

Customers are people. Remember that. People just like yourself. Everybody wants to feel unique or special, so a blanket approach to dealing with customers is often wrong. That’s why a database is so crucial to your business. Knowing all your customers’ interactions with your business is key to building a long-term relationship with them.

2. Listen to your customers

Reducing the churn of customers leaving your business for the pleasant, green fields of ‘someone who cares about them’ is all about listening.

What are your customers saying about you and your business?

Do you respond to their issues and in time before they can tell others of their poor experience?

A report by Oracle found that 89% of customers move their business to a competing brand following a poor customer experience. This is a high number. Can your business afford to ignore customer complaints?

The way to get ahead of issues is to follow up with customers after delivery. Have they used the product? What did they think about it? Is there anything that could be done better with the service?

Customer feedback is vital. Companies that try to operate without feedback will soon find themselves having to spend big to find new customers.

Your CRM can assist by sending post-purchase feedback surveys, storing the results in the account record card, and enabling reporting on the results.

3. Look out for signs of churn

The best method to retain customers is to stop them from leaving. And to do that, you need to look for signs that they are thinking of moving their business. Look for patterns in any of these:

• purchase decisions
• product usage
• customer service history

BuddyCRM reports can be used for all of these leading indicators. An example is the downtraders report, which lets you know when customers are trading below previous levels. Other reports could be created to give account managers warnings when support cases are opened or purchase decisions are delayed beyond a set period.

Being proactive could stop a customer from leaving your business and prevent potential poor reviews that damage word-of-mouth recommendations. Using automated reports from your CRM to check for leading churn indicators is an excellent way to retain customers.

4. Automate customer communication

Everyone gets busy and it can be easy to overlook the small engagements that make transactions more personable and pleasurable. The thank-you notes for a purchase, the follow-up emails to see how things are going, and the sending out of brochures all make for a better customer experience. A CRM can automate all of these, including scheduling calls in your calendar to remind you to follow up on customers.

You can also re-engage customers that have dropped off regular purchasing with reminder emails and special offers. These can be automated from the CRM and could include discount codes, new products, and latest news from your industry.

5. Track customer loyalty

A CRM can reward customer loyalty by tracking purchases allowing you to gift your most loyal customers with discounts and special offers. Reports can be created from the CRM to measure lifetime customer value, from which you can identify your various bands of customers and create bespoke offers.

Customers that are rewarded for their loyalty and informed of their progress towards specific rewards are more likely to stay with your business than move and lose out on their volume discount or special offers.

6. Create personalised experiences

A CRM gives you a complete overview of your customer, bringing in information from sales, logistics, support, email, marketing, contact centres, admin, ERP, and accounting. Included in your CRM you can also store details on interests, preferences, and past purchases.

With this information, you can segment your customer database and invite sections of your customers to special events and promotional offers. Companies that include their customers with the latest information at launch events will be rewarded with customer loyalty and increased word-of-mouth recommendations on social media and broadcast media.

7. Automate customer support

Your CRM comes with powerful tools for automation and connecting your other software tools together. Tying your support into your customer experience means responding quickly to customer queries with automated emails from the CRM, including FAQs, brochure requests, and links to support articles and videos. This can speed up customer response for a busy support team while providing your customers a speedy response with potentially the information they are looking for.

Summary

All companies look for business growth through new customer acquisition but the costs for doing so outweigh retaining existing business by up to 80%. Losing customers is an expensive cost for a business to deal with.

Existing customers allow you to meet your targets and even increase profits, as they are more likely to buy from you than prospects.

Using a CRM gives you tools to increase customer loyalty and improve the customer experience throughout the sales process and into repeat purchases.

CRM software provides a single customer view with all the information you need to manage your customer interactions and increase customer experience. The data in your CRM gives you reporting capabilities that warn of the possibility of customers moving and provide opportunities for personalised experiences.

The greater your customers’ satisfaction with your products and service, the more customers you’ll retain, the lower your marketing costs will be, and the greater your profits will be.

¹ Marketing Metrics, Neil Bendle, Paul Farris, Phillip Pfeifer, David Reibstein