The primary goal of a CRM (Customer Relationship Management) system is to boost a business’s customer retention by enhancing customer satisfaction. But how exactly does a CRM impact customer retention?
Let’s dive into the specifics.
What Is Customer Retention?
Before we delve into the impact of a CRM on customer retention, it is essential to understand what customer retention means.
Simply put, customer retention refers to the ability of a business to retain its customers over a period of time. It is measured by calculating the percentage of customers who continue to do business with the company over a specific period.
For instance, if a business had 100 customers at the beginning of the year and ended with 90 customers by the end of that year, its customer retention rate would be 90%.
Customer Retention Strategies
Customer retention is rooted in keeping your customers happy by forging strong, lasting relationships built on trust. If customer retention is successful, a business’s customers will remain interested in the products or services that the said business is selling.
There are multiple aspects that have been tried and tested and are known to assist along the way to keeping a customer satisfied.
1. Data Storage and Analysis
It is important for a business to collect, store, and analyse all the customer data that they possibly can. This data will be used for later review, ensuring a company can make informed decisions.
2. Document Interactions
The data to be collected should include every interaction that a company has with a customer. This documentation should be as detailed as possible. This documentation will aid future and other colleagues in their interactions with a client.
3. Personalisation
The data collected can be used to personalise future interactions with clients. Examples of the information can be previous issues experienced, the stage of the sales process that a potential client resides in, and much more. By personalising relationships with clients, relationships will strengthen, trust will be built, and customers will feel valued.
4. Customer Journey Tracking
A customer journey refers to the stages of the relationship that a business will have with a customer. These are touchpoints at which a customer will interact with the company. These can include marketing campaigns, sales, customer services, and more. It is vital to track each customer’s journey with a company, as this will allow a business to identify where they can improve on customer services.
5. Customer-Centric Approach
A customer-centric approach is a sales strategy that prioritises the customer’s needs, wants, and communication preferences during the purchasing process. From beginning to end, the consumer experience should be structured in such a way that all communication and sales activities are geared towards assisting the client in achieving immediate and long-term satisfaction.
Customer-centric selling should extend beyond the sales department to include your customer support, marketing, and account management departments as well. When you run a customer-centric business, you will acquire customer loyalty, enhance retention rates, and increase recommendations – making it a win-win situation for both you and your customers.
Implementing a customer-centric business strategy may appear straightforward, yet most businesses fail to do so.
Here are 5 steps to develop a customer-centric approach in your business:
Step 1: Ask The Right Questions
Throughout the consumer journey, every customer encounter should be centred on the consumer. Encourage your salesperson to ask probing questions that get to the core of the customer’s problems, hopes, and reservations. Then, tell them to pay close attention to the responses they receive. Always giving the consumer a solution to their unique problem.
Step 2: Communicate in the Customer’s Tone of Voice
Active listening and asking probing questions will put your sales representatives ahead of the curve; however, if you want to stand out from the pack, train your reps how to recognise and adapt to the customer’s preferred communication style. Adapting to the customer’s communication style will put them at ease and improve their overall satisfaction with your business.
Step 3: Invest in Customer Service Training
Customer centricity is a company strategy that reaches far beyond the sales team. Your customer support team is an essential component of the overall consumer experience. When the two teams work together, it leads to greater customer loyalty, retention, revenue, and referrals.
Customer service training programs are designed to provide your customer service staff with the knowledge and skills needed to satisfy consumers, increase customer loyalty, and establish your organisation from the competition.
Step 4: Customer-Centric CRM
The purpose of a customer-centric CRM is complete customer satisfaction. It views relationship marketing as a continuous goal rather than a means to an end. Companies who consider CRMs to be merely software wind up automating company operations rather than leveraging the tool to optimise customer encounters and improve customer experiences. CRM software already includes numerous customer relationship management features, like before and after-sales assistance, to name one.
Step 5: Do Your Research
Customer-centric sales companies focus on learning about their customers, both at the market and individual levels. Equip your sales force with CRM software gathered, data-driven insights on their clients, and train them to conduct initial research on each prospect.
Customer Retention Strategies in a CRM
Customer Relationship Management is key to customer retention, and below are some of the ways in which the functionality of a CRM will assist in the implementation of other customer retention strategies:
Sales Management
CRM aids in customer retention from the moment a potential customer first interacts with a company. This is because a CRM can provide information on the feasibility of a deal, informing a salesperson on how to interact with and approach a potential client.
Customer Status
Employees who have access to the CRM system will be able to view a customer’s status. This will provide the employee dealing with that customer with the needed information to appropriately interact with that customer. This information can include previous issues, whether upselling to that client is feasible, if a relationship needs strengthening, and more. This can aid in the personalisation of customer interactions.
Information Logs
Informed decisions are made possible due to the correct collection, storage, and data analysis provided by a CRM. When one can access information easily, it simplifies decision-making, promoting authenticity in interactions with customers. This can include a customer’s previous interactions, preferences, and feedback. Utilising this information ensures that the customer feels valued and understood.
Bottom Line
As you can see, using a CRM to implement customer retention strategies is crucial in maintaining long-term relationships with customers. It not only aids in providing personalised interactions but also allows for informed decision-making based on accurate data.
By using a CRM, businesses can increase customer satisfaction and build stronger connections with their clients, leading to increased loyalty and retention rates.
So, investing in a good CRM system definitely impacts a business positively in the long run.
Contact Leadtrekker to transform and automate your business operations to create a customer-centric organisational strategy.
