Benefits of CRM for customer retentionSchedule a Free Demo
It is no secret that customer retention is a vital metric to monitor. Its significance certainly varies by industry and brand specifics, but it demonstrably complements customer acquisition efforts. Many find it cheaper, and more lucrative, to prioritize customer retention over customer acquisition, and data does support this strategy. Furthermore, such beneficial software as CRM for movers lends itself perfectly to both, with no compromise as regards its main function. However, many still overlook the value of customer retention strategies, as well as how CRM software can bolster them. Thus, in this article, we will explore the benefits of CRM for customer retention.
A short overview
Customer relationship management (CRM) software, as the name implies, seeks to allow companies to manage and analyze digital interactions with customers. Thus, it compiles massive volumes of data that can inform marketing campaigns and SEO efforts, enhance team cohesion, and more. In turn, businesses can use such knowledge to enhance both their customer acquisition and customer retention strategies.
While many CRM solutions provide a holistic asset, specialized solutions also exist. They are divided into 3 main types:
The degree to which any of these types will yield the typical benefits of CRM for customer retention will vary. However, all such software will invariably enhance your company’s interactions with customers, with visible long-term benefits.
Re-evaluating customer retention
As a definition, customer retention is simple; the activities that a company undertakes to ensure customers remain loyal to it. Once customer acquisition strategies provide a foundation of customers, retention ensures that said foundation remains valuable. Indeed, maximizing the profitability of each customer tends to be more lucrative than focusing on acquisition after a certain threshold.
According to an Adobe Digital Index report, returning customers account for 40% of all revenue in the US online retail industry, while only representing 8% of all visitors. Such findings will, of course, vary across industries, but the core concept will remain the same. Repeat customers will often make bigger purchases than new ones and have a higher purchase frequency. Furthermore, returning customers will often need less effort to maintain than new ones need to be acquired.
Naturally, this does not mean that customer retention should ever be one’s sole focus. Rather, one should always strive to find the optimal balance between acquisition and retention that best fits their business. However, the value of customer retention strategies should still be noted, as it is often overlooked.
The benefits of CRM for customer retention
Having established the value of customer retention, one should then analyze what best facilitates it. Simultaneously, one should consider how CRM functionality enhances such factors.
Swift, efficient customer support
Customers consider their time to be valuable and thus value efficient customer support. A dissatisfied customer is less likely to return if they believe you cannot effectively and reliably address their concerns. On this front, CRM software can enhance your customer support, and thus your retention rate.
Operational CRM can automate processes that require little to no creative oversight. This automation will allow your teams to invest their time in more pressing matters, such as customer support.
Analytical CRM can efficiently analyze the data on each inquiring customer’s history and interactions with your company. With this information in hand, your representatives can more easily and quickly identify problems and address them.
Collaborative CRM enhances internal team cooperation and data sharing. This can allow your customer support to truly be swift and responsive, redirecting requests to the appropriate employees when needed.
Quality services or products foster brand loyalty, which drastically improves customer retention rates. Brand loyalty hinges on well-maintained relationships between brands and customers, from marketing and promotions to communication and interactions. On this front, the benefits of CRM for customer retention are vast and overreaching.
Operational CRM can use acquired data to inform marketing efforts. It can automate tailored promotions and outgoing emails to specific existing customers, fostering a mutually valuable relationship. Customers who consistently receive quality promotions tailored to their interests are more likely to remain loyal to your brand.
Through profitability analysis, analytical CRM can fine-tune a brand’s target demographics. The information it collects and analyzes can improve customer engagement through tailored promotions and services, inspiring brand loyalty.
As collaborative CRM streamlines internal communications, it can improve your company’s interactions with customers across the board. From collected information on recurring customer concerns to better channel management, it offers invaluable assets towards fostering brand loyalty.
Valuable content and quality interactions
Lastly, customer retention hinges on both valuable content output and quality interactions with your brand. The former naturally depends on your SEO efforts and content creation teams, while the latter depends on communication. The benefits of CRM for customer retention cannot be overstated on both of these fronts.
Through marketing automation, operational CRM can provide sales teams with invaluable lead quality and sales information. Such information can enhance your SEO efforts and boost content quality, as you optimize both for your intended audience. In doing so, you can ensure that your customers receive valuable content and promotions that are relevant to them. In turn, as outlined above, this can positively affect your customer retention rates.
Through both predictive modeling and customer segmentation, analytical CRM excels at enhancing customer interactions. Analyzing consumer trends and past customer behavior can inform your teams’ strategies and improve engagement. Furthermore, pinpointing your ideal demographics can inform both your SEO efforts and your communications platforms and tone.
Through channel management, collaborative CRM can consolidate customer communication channels. Interaction channels will often vary but frequently include both social media and traditional communication channels such as phone and email. Thus, as many brands tend to use various social media platforms, channel management is crucial toward quality interactions. Furthermore, improved internal communications will reduce response times and increase response quality. These assets will allow you to respond to inquiries more swiftly, as well as engage through social media more organically. In turn, this will have a net benefit on your customer retention rates.