CRM: Increase Profits Using CRM for Customer Retention

Using the power of your customer relationship management (CRM) tool can help boost your company’s bottom line in one way you might not expect: improving customer retention.

A study by Bain & Company, has shown that increasing customer retention by even 5% can increase your profits anywhere from  25% to 95%.

So why wouldn’t you want to go for those kinds of numbers?

As a small business, it is easy to get caught up in the excitement of growing your customer base.  In fact, many small businesses still focus the majority of their resources on customer acquisition (finding new customers) versus customer retention (maintaining existing customers).

But, keep in mind that it is five times more expensive to woo a new client than to keep an existing one. Additionally, the success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.

Additional research by Salesforce shows that customers who trust a brand (such as yours) are overwhelmingly likely to make more purchases and spend more money with those companies that they already trust. It’s simple… customer retention is essential to the sustainability and growth of your company and your current customers are a group that you most definitely do not want to take for granted.

Focusing on customer retention means a more successful company all around

Customer retention doesn’t stop at the purchase of your product or service. It also requires that your customer service and communication be top notch and consistent after the sale.

Here are a few opportunities where you can focus on customer retention:

  • Give great service — follow up when you provide a service or product.
  • Resolve issues promptly and accurately.
  • Stay in touch about upcoming events and new services or products.
  • Reward loyalty.
  • Say “Thank You!”

Other ways to bring your customers into the fold might be to do surveys or enlist their feedback in other ways that causes them to feel like they have an investment in your company. Consider creating a chat room where involved customers can test prototypes of products or services. All of this great involvement can and should be noted in your CRM.

Happy customers become loyal customers, who not only continue to buy from you, but they also recommend you to their contacts. So while you’re keeping your existing customers happy, those same customers are making inroads for you by sharing their positive experiences with their circle of trust including friends/family and colleagues.

How much more likely are you to buy a product or service from a trusted recommendation or referral?

Working from within: Gain success with internal buy-in of CRM

Using a CRM in your company will only be successful if you persuade your own employees to engage in and use the CRM.  There are many stories of companies starting—and ending—the use of a CRM because no one inside the company was persuaded of the benefits they might get from using one.

Time after time, research shows that engaged employees provide better customer service and are better brand ambassadors.

Providing ample training and feedback sessions on the use of your CRM will ensure that your employees understand the value of this tool.  Listening carefully to their thoughts and acting on the feedback you receive will result in a more valuable tool for the entire company.

Once you have introduced a CRM to your company, check in with the employees to ensure they are comfortable with the tools and make sure they have the resources they need to do their jobs.  Whether it is training or equipment, whatever you can offer them to improve their work lives will go a long way toward enhancing your current customer retention program.

How can retaining customers work with your CRM?

There are many ways you can improve your customer retention.  HubSpot has several suggestions to help your customer retention, including the most powerful tool of all — your CRM.

In a previous post, we discussed the basics of CRM, including the key benefits. A CRM exists to help you organize and chronicle your customers’ journey.

Knowing what that journey has been makes it easy for you to provide a seamless experience to your customer. And they, in turn, will remain loyal to your brand.

There are several benefits offered by a CRM. You’ll create the perfect environment to keep your customers happy and engaged with you, such as:

  1. Getting to know your customers and their needs.  This allows you to create targeted marketing programs that will speak to each customer.
  2. Creating personalized communications based on various factors…where they live, what they purchased, whatever is relevant in your SMB. Personalized campaigns really shine in targeted email campaigns.
  3. Allowing cohesive coordination between your sales, marketing and customer service teams.  A CRM is especially useful if some of your team members are outside consultants.
  4. Helping you understand what was successfuland what was not. Getting feedback through your CRM provides a clearer picture for you.
  5. Running sales reports, for example, allows you to track purchase patterns and possibly forestall the loss of any regular customers.

Your CRM is a part of your marketing foundation

At the heart of any customer retention program, you will find a CRM. It boils down to this:

  • Increasing customer retention increases your profits.
  • Using a CRM can make a huge difference in the perception of your customers about your company.
  • And if your customers trust you, they will remain your customer.

A company that wants to grow needs to retain its current customers to be their brand ambassadors. And using a philosophy that makes keeping your current customers happy is as important as acquiring new customers. Both will keep your pipeline flowing.

In short, using  CRM to achieve that flawless relationship with current customers improves the strength of your company.

If you are wondering how a CRM can work for your small or midsize business, Tomato Fish can help.  Schedule a short, free call with us to get started in the right direction.

Tomato Fish Is An Indianapolis Consulting Company Focused On Helping Small And Midsize Businesses Make Good Strategic Planning Decisions.