Here’s something to remember when you’re thinking about acquiring new customers: retaining a current customer by nurturing their loyalty can be less expensive and more profitable.
As a rule, customers generate increasing profits each year they stay with a company. This means a slight increase in retention can lead to significant returns.
For example, a 5% increase in customer retention in financial services produces more than a 25% increase in profit, according to a famous study by Bain & Company.
Yet, to turn those same numbers on their heads, the cost of acquiring a new customer is much more expensive than retaining an existing one, anywhere from five to 25 times, according to the Harvard Business Review.
The reason for this is pretty straightforward. More resources and energy are needed to identify target customer groups and to take them on that journey – from a ‘cold’ prospect to a buyer. This is the same in B2B and B2C settings.
One sound way to ensure your customers feel happy and listened to – and remain loyal to your products and services – is to use a good customer relationship management (CRM) system, such as Microsoft’s Dynamics 365.
Here are some ways a CRM can support your customer retention efforts.
Find out why your customers love you – and do more of it!
If you’re not gathering data on why your customers are buying your products and services, you could be missing key insights that will help you grow! So ask yourself how you are currently collecting data insights.
How did your customer first hear about you?
What contact points led to them buying from you, and how well did those interactions work?
What did you learn from their first, second or third purchase?
More importantly, is the data you’re gathering being fed into your CRM system?
A clear view of how customers interact with you will help you sculpt a more profitable journey.
Make it easy for customers to contact you
Are your customers able to make enquiries on their favourite social media channels?
Can they arrange a call-back if they’ve phoned you and can’t get through?
How many clicks do they need to navigate to get what they want from your website?
In an online and increasingly autonomous world, modern customers want as few hoops as possible to get what they want – a good CRM enables you to view all these touchpoints in one place and make incremental improvements.
Hence, you become increasingly available to your customers.
Keep an eye on the less engaged
Use your data to find out who isn’t engaged and could be at risk of lapsing. Track customers who are not opening or clicking on your emails, visiting your website, or looking at your videos.
Your customer data isn’t meant to be just stored – you need to USE it.
Is your CRM servicing your needs? A good sales CRM will be able to provide you with intelligent insights into customer behaviour with easy and accurate reporting.
With these insights, you can create an informed plan of action to reach out to your less-engaged customers with a targeted campaign to reduce the risk of losing their loyalty.
Assess and improve your customer service performance
Dynamics 365 allows you to gather customer feedback scores by sending survey forms in an automated email after you’ve dealt with an issue.
With Power BI, you can identify, review and nail recurring matters, whether they relate to the time taken to resolve problems, the language used in the interaction, the thoroughness of resolution or any other case the survey throws up.
The results will help you tailor your service so it gets better with each patient.
Get feedback from lapsed customers
Sometimes customers go to competitors, no matter what you do. As long as you learn from each experience, it doesn’t have to be wrong. Reach out to your lapsed customers and ask for feedback.
You can automate this process with a good CRM by, for example, sending a pre-prepared email with an offer to customers who haven’t returned to your website for a while.
The insights you gather can be used to improve your product offerings or services, and you never know; this proactive step may encourage them to re-join.