Managers and business owners need ways to balance revenue streams from new customers and existing ones.
Statistics show that 80% of the revenue of most companies comes from their existing customers, whereas the new ones provide only 20% of the revenues. Furthermore, you will spend six or seven times less retaining existing customers than acquiring new ones. It is, therefore, wise for an organisation to invest in the retention of new clients than soliciting new ones.
Conveniently for businesses, the process of customer retention can be easily managed through the implementation of Customer Relationship Management (CRM).
What is a CRM system?
Customer Relationship Management (CRM) is a set of processes which ensure that an organisation maintains contact and follow-up with their customers, prospects and contacts.
CRM processes are best-handled through CRM software which helps in the management of processes such as marketing, customer data, customer interaction, customer support, support vendor/partner relationships, track leads, contracts, accessing business information, and the automation of sales, among many more.
4 ways that CRM can help increase customer retention rates:
1. Product development and testing
One important component of customer retention is product development and innovation. Making changes to your existing products facilitates improvements to meet ever-shifting customer needs and demands.
Using customer purchase data from your CRM system, you’ll be able to monitor the reaction of customers to product and marketing changes. This will allow you to determine which changes to implement and which ones to discard. This ensures you don’t lose any customers while trying to improve the product.
2. Easy customer follow-up
Customers want a reactive organisation that can keep the promises made to them during marketing and sales. This means offering enhanced customer service.
CRM software, such as Microsoft Dynamics 365, allows the scheduling of follow-up calls and emails and can also be used to assign some of the follow-up tasks to team members.
Regular communication will ensure your staff are more attentive to customer needs, in turn leading to better relationships and potentially more sales.
3. Personalisation of special offers
To improve the effectiveness of marketing efforts, they should be personalised to suit the needs of those targeted. Using CRM software, organisations can track the purchase history of their customers, know their preferences and determine needs. This will enable the customers to feel like the business understand their needs, increasing their loyalty and their potential to purchase.
4. Noticing and preventing customer departure
Before a customer deserts your business for a competitor, there will be warning signs in their behaviour. These include changes in their use of your product and purchasing patterns.
A CRM system can not only track these predictors but create alerts when customers show the potential of leaving. This means that your sales or customer service staff can then dedicate effort to retaining them. By increasing customer retention rates by just 5%, you can potentially increase your profits by as much as 25%.
Improve your customer retention
CRM software such as Microsoft Dynamics 365 is a cost-effective way to track your customer and employee information.
To arrange a demo or to discuss options for your business, please get in touch.