A common opinion that attracting customers is the core purpose of most businesses is not an absolute truth. When your business experiences a constant outflow of clientage, it is a sign of some malfunction caused by either poor quality of services/products or an insufficient level of customer satisfaction. In any case, the emphasis should be shifted to retaining your client base rather than investing resources in swift-flowing clients.
The bulk of the Earth population enjoys achievements of the digital revolution every day. This includes both hardware solutions represented by versatile devices and software products disclosing their potential. In this cohort of products, a CRM tool acts as a mean to shift the relationships with customers to the new level. Otherwise speaking, numerous essential functions and tasks can be optimized to increase sales and earn a positive reputation. Here we’ll uncover how you can use a CRM system to prevent your clients from leaving your business.
1. Why Is It Important?
Leading a successful business means to succeed in each component of the commercial activity. It can be compared to a chain, each link of which should be firm enough to prevent it from breaking. Obviously, neglecting some constituent parts of a business activity can have subtle consequences in a short-term perspective. However, if you care and strive to be prosperous within a prolonged period, each detail of your activity matters.
The importance of customer retention is discernible from the point of view of customer satisfaction. The latter is a prerequisite for a high rate of loyalty. Put it plainly, if you do not like something, you leave and refuse to choose this service or company in the future. On the contrary, if you are satisfied, there is no need to search for anything else.
2. Why Should You Care About Customer Retention?
As it was mentioned above, loyalty and customer retention are interrelated notions. It goes without saying that new customers evidence the progress of every commercial activity. Still, the foundation of business is the existing client base. Those people who already purchased your merchandise or used your services should not be undervalued.
There are three major reasons why customer retention is important to sales of services/products:
- Better conversion rates
- Lower marketing costs
- Increased profits
These pillars can convince any experienced businessperson to pay more attention to work with existing clients.
The high conversion rate is an indicator of a decent state of affairs. At the same time, new visitors to a website, store, office or another place, where merchandise/services are introduced, need to be induced to become customers. The situation with existing customers is different. They already have an experience of purchasing goods or services in a particular company. Hence, if they are satisfied, they will return and can bring more clients represented by friends, relatives, and workmates with.
Thus, the high conversion rate leads to an increase in profit and the reduction of marketing costs. The latter is especially relevant since attracting new clients costs much more than dealing with the existing ones.
3. The Role of CRM in Customer Retention
Actually, we need only one word to characterize the role of CRM tools in retaining clients. It is referred to a relationship. Still, do not be confused with an almighty functionality of systems providing customer relationship management. They do not manage customer retention but act as an assistant by ensuring required data about clients. Thus, CRM systems know when and how to deal with clientage. A salesperson or a sales team takes advantage of received information and converts it into the fruitful relationship.
Greetings on a memorable occasion, propositions made to a certain period of a year, unobtrusive advertising complying with customer’s interests and other small but effective features allow you to retain and refresh your client base via CRM. At the same time, before making certain activities, it is essential to know how to measure customer retention.
4. Measuring of Customer Retention
The calculation formula of the client loyalty rate is rather simple. According to the former director of marketing at Evergage, Rob Carpenter, you need to know three variables to insert into the formula. These include:
- Number of clients at the end of a period (E)
- Number of clients at the beginning of a period (N)
- Number of newly attracted customers within the period (S)
Subtract new clients from the number of customers remaining at the end of the period and divide the resulting value by your clients at the start. The obtained fraction is multiplied by 100 to get a percentage value. That is your customer retention rate.
An impeccable business can boast of 100% rate. Still, it is unlikely to meet such result on the Earth. Rates approaching 80-90% are good enough and evidence the prosperity of your customer relationship. If your rate is much lower, it is time to find the answer to the question “how to increase customer retention”.
5. Best 15 Ways to Increase Customer Retention Using CRM
The following ways are a blend of solutions offered by numerous experienced specialists. Perhaps, some of these prompts will be of use for your demands.
Your CRM tool can be connected with a marketing automation service. As a result, individual contacts will receive personalized messages(news, offers, events, media content etc.) according to their preferences. Their responses can be assessed via click analysis and email opens to make a behavior pattern.
By virtue of target marketing implemented via the metrics available through a CRM tool, companies are able to monitor clients that can benefit from contact with expert sales reps. Based on this data, customer satisfaction can be increased and business opportunities can be enhanced.
It is advised to use personalized emails stuffed with a dynamic content corresponding to customer’s preferences. This activity can be fully carried out using the Personalized Mass Mailing in NetHunt CRM. E.g., a customer’s location together with its order history evidence the possible interest in a certain event.
Providing solutions to clients is much simpler if you know their needs and preferences. You can stay in touch with clients’ demands using a CRM system. E.g., this can be done by offering a new way of communication including social capabilities, self-service options, web portals, and others with your company to customers.
The database of your CRM contains a plenty of useful information that can be scheduled for the automated email sending.
Some companies undervalue a web channel and give preference to old-fashioned ways of delivering messages to clients. Still, today, a web presence is a driving element of sales. Nevertheless, it does not mean to refuse from proven ways of communication. The balance among customer channels is what a contemporary business needs.
A CRM tool can be used as an event planner and task manager to invite clients, sending reminders and post-event follow-ups, as well as to perform other relevant functions.
It is a common practice that a company is successful but it is not aware of its success. Due to versatile metrics available in CRM systems, companies can avoid such scenario and monitor actual values of their activities. Such measurement is essential for building a proper marketing campaign and proper distribution of investments.
Tracking demographics and essential background details regarding a certain client can be performed in a single interface of your CRM. Such solution is beneficial for a quick response to client’s requests.
It may happen that an implemented marketing campaign fell short of expectations. A CRM tool is a way to see what works and what doesn’t and make timely adjustments. Otherwise speaking, tracking marketing campaigns can provide a clear understanding of customers’ preferences.
Most CRM systems allow capturing clients feedback scores. Based on this information received via email alerts and feedback reports, you can assess performance and take corrective actions if necessary.
Some clients can bring more profit compared to others. On this account, with a CRM tool, it is possible to focus efforts on a separate customer and make the most of this relationship.
Automation of certain processes is a great way to save versatile resources. E.g., if a service case is updated or closed/opened, an automated email reminder is your magic wand.
Being flexible in offerings is a slogan of any successful company. You can identify the possibility to increase customer retention rate by means of value-added products and services using CRM systems. Thus, the priority of undesirable and less popular merchandise/services can be reduced.
In general, operating costs are reduced when using CRM tools. Such a software solution can implement versatile functions in one place and cost-effective manner. Thus, companies can redistribute investments to lagging activities and demands.
6. Tips To Improve Customer Retention
The above-mentioned ways or strategies are effective and will definitely bring fruit. At the same time, do not forget that a CRM tool is only an instrument to assist in your work on gaining clients’ loyalty. Here are some customer retention tips to use properly the information obtained from CRM systems.
CRM software shows a client’s purchase history to determine the most appealing offer to each individual. Special offers will keep your brand fixed in minds of your clientage.
Scheduling time using CRM is a way to optimize your relationship with clients. Tracking appointments and completing tasks for your customers will be much easier with such digital assistant.
An individual approach is highly appreciated by each client. CRM software optimizes operations related to personalized follow-ups.
VIP clients are a special cohort of contacts on your list. A subtle mistake can lead to the reduction of this list. Still, following up them is more convenient and less stressful if you choose this smart software.
Hopefully, now you comprehend the advantages of customer retention and implement the said prompts in your commercial activity. Besides, activities aimed at retaining your client base do not seem such a burden if implemented by virtue of a CRM tool. Discover a new advanced way of leading business in the epoch of digitalization.