Increase your customer retention with CRM

In a study together with a Harvard professor, Bain & Co has concluded that it can cost up to five times more to acquire new customers than it costs to keep existing customers. In a completely different study carried out by Invesp, it was suggested that a small increase of 5% in the customer retention rate could lead to a profit increase of between 25% and 95%.

Regardless of which study you rely on, this logic is likely to be the common denominator; why spend more money on acquiring new customers when it is enough to keep the existing ones happy?

With numbers like these, it's no surprise that customer retention has been high on the agenda for businesses and their marketers. Achieving the goal of retaining customers is about customer churn or retention rate.

Your customer churn is the percentage of customers who stop using the company's products or services within a certain period of time. Customer churn can be costly for businesses, as it can be more expensive to acquire new customers than to retain existing ones.

On the other hand, the retention rate evaluates the percentage of customers who continue to do business with your company over a certain period of time. This metric is important for businesses to track as it can show how well they are managing to retain their customer base.

You can choose to see your glass half full by monitoring and reporting customer retention, or see your glass half empty by tracking customer churn. By and large, both metrics examine the same thing in terms of customer relationships.

In this article, we define what customer retention is, and then highlight the use of CRM software along with other technologies as a strategy to improve customer retention.


What is customer retention?

Customer retention is a measure of how well you succeed in getting customers who have already converted to continue shopping with your company over a certain period of time.

B2B companies must focus on retaining their customers in order to maintain a strong customer base. By keeping existing customers happy, they are more likely to continue doing business with the company and recommend it to others.

To calculate your customer retention rate, you need to subtract the total number of new customers at the end of the period (CE) from the total number of new customers (CN) that you had during the period under review. You then proceed to divide the sum by the total number of customers you had at the beginning of that period (CS), then multiply by 100; as described below.

(number of customers at the end of the period (CN) - new customers acquired during the period (CE)) / (number of customers at the beginning of the period (CS)) x 100


What strategies are there to retain customers?

Customer retention is directly linked to customer satisfaction. The more satisfied your customers are with your product/service, the more likely they will continue to ignore your competition. Below we outline some customer retention strategies you can use to keep your customers coming back.


Take help from CRM

Although the quality of your product or service is of great importance to how satisfied customers are, the many choices available mean that how good your customer relations are is of great importance. It's one thing that your products deliver value. It's another thing entirely for your customers to be happy doing business with you.

Most people only want to do business with a company that recognizes them as an individual. And the best way to achieve that is to use CRM software in your business. Among other features, CRM software offers, e.g. Efficys, 360 ° customer view, interaction log, segmentation, interest management and many other tools that enable you to keep your business relationship with your customers intimate and personal, regardless of the size of your customer base.

CRM data also gives you a blank check to customize the user experience. There are a number of ways to do this. You can target specific offers to customers based on their past interactions and purchases. Another way is to customize the customer's experience on your website or in your store. It could be about showing different content or recommendations based on what you know about the customer. Using CRM data, companies can create a personalized experience for each individual customer, leading to higher satisfaction and loyalty.


Pay attention to early signs

Customers rarely just get up and leave; it's an ignored complaint here and a bad batch of product there before they mentally check out and finally decide to go to a competitor. Catching these signs in advance can go a long way in helping businesses keep churn at bay.

Customers often exhibit behavioral patterns that reflect their feelings, such as late orders, reduced order volumes, and gradual changes in customer service relationships. However, tracking all of these on one can be a nightmaret meaningful way.

As a concrete example, a trend of lower engagement is a sign that the customer is less likely to do business with you. Just before they walk out the door, you can take a survey or send a short email campaign to re-engage them.

This is where CRM software can give you a bird's eye view, a better view of the customer, with the help of an interaction log and other CRM tools that collect all the interactions each customer has with your business in one place. You can also get real-time access to all the insights needed to spot downward trends that may precede customer churn.


Reward loyalty with special offers

Rewarding your customers' loyalty is not only one of the best ways to nurture your business relationship with your customers and, by extension, improve retention rates, but also a way to ensure that defecting to the "other side" remains an unattractive proposition for customers. You can give special discounts, gifts or bonus products to celebrate milestones.

And with CRM it has never been easier. CRM data gives you insight into your most valuable customers, then it's up to you to make them feel like it's their birthday! Instead of creating gift offers based on guesswork, you can create special, personalized benefits, incentives and promotional packages for individual customers, developed based on customer profiles collected and streamlined by your CRM system.


Map your buyer's journey

Then create a strategy to reach and engage customers throughout their time as a customer. Continuous communication and commitment are essential to building long-term relationships. With CRM, you can tailor your communications to each step of the buyer's journey, leading to increased sales and loyalty.

When it comes to building a strong customer journey, there are a few key things to keep in mind:

First, it's important to understand your customers' needs and problem areas. What are they looking for? What are their goals? What challenges do they face?

Second, you must provide a consistent, positive experience in all contexts. Customers should be able to interact with your business in the way they prefer, whether it's via phone, email, chat or social media.

Third, you need to ensure that your sales and marketing efforts are aligned. The messages you send out must be consistent with what you offer your customers.

Finally, you must constantly measure and optimize the customer journey. Use data to see how well your efforts are working and make changes as needed.


Improve customer retention with Efficy's CRM

It always looks good on paper to bring in new customers, but registering new purchases from a bunch of satisfied existing customers brings the most revenue and brand value. It is not only about the obvious confidence in your product and customer service, but above all that it costs less in marketing expenses, which allows you to increase your income.

Regardless of the size of your organization, keeping an eye on all aspects of your company's relationships with customers so you can measure their satisfaction while personalizing their experience may seem like too much to take in at once, but not when using CRM.

To increase your customer retention, a solution is required that works both strategically and practically. There are plenty of solutions. But which one gives you the functionality you need to succeed with your CRM? With Efficy's CRM software, you can harmonize and manage all the information about each individual customer in one place, and then use those insights in the way necessary to remedy customer churn and improve customer retention. Does that sound like your thing? Book a demo to see how it works!

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