What is the Importance Of Customer Retention: Saphyte CRM
Customer retention is a crucial aspect of a business — it determines future purchases, sales growth, and profitability which are needed for a business to be successful and survive.
With the help of technologies like CRMs, customer retention is now easier to achieve. In fact with a CRM, you can easily track and monitor your customer retention rate and check out aspects of your sales and marketing process that have contributed to the closing of a deal or to its failure.
When you are able to monitor these closely, you can at least have an idea of which aspect of your workflows to improve so you can keep a particular lead or customer interested in your business.
All of these can arguably be achieved through the use of manual methods — such as recording customer data and interaction using pen and paper, gathering customer information using phone calls, or organizing data using an online spreadsheet. However, with the help of a CRM, the process of doing all these can be much smoother.
In fact, most companies believe that CRMs are an important part of doing business these days. It has also been observed that the ROI (return on investment) rate for CRMs is $8.71 per $1 spent.
Benefits of a CRM
We list down examples of a CRM can benefit a business:
With a CRM, not only are you assured that your data is safe and protected, but it can also be accessed by the other members of your team whenever and wherever they are. A CRM can also serve as a centralized repository of information which can give updated analytics to your team members in real-time.
What’s more, CRMs are also often designed to enable its users to perform other functions using the centralized platform. Users can, for example, send emails using the customer data and information in the CRM database. They can also automate these processes like sending a welcome message when a trigger is activated (in this case, when a new client is registered in the CRM)
3. Better information
CRMs often have dashboards that are designed to show you data and analytics that you are interested in. For example, if you are extremely concerned about your sales performance, anything sales-related can appear on your dashboard (e.g. current deals, lost deals, successfully-closed deals, number of leads, number of customers, etc).
4. Better customer retention
The main benefit of a CRM (and an often underlooked one) is its effect on a business’s customer retention. Customer Relationship Management (CRM) is a managerial approach that focuses on building meaningful relationships with customers. CRM tools (which are often called CRMs) are designed to ensure that its users can foster these relationships (converting leads who have zero knowledge of your brand into loyal customers).
Importance of Customer Retention
Customer retention has become the primary goal of every business. In a research study by KPMG, they found that around 52% of respondent companies believe that customer retention is the biggest revenue driver in retail.
Many retailers have also started to become “customer retention-conscious” with efforts being channeled towards making sure that a lead is converted into a customer and a customer is “retained” over time. Efforts such as open communication, promotional messages, and improved customer experience are being shaped and reshaped so that customers will make a purchase in the future once again.
The classic concept, “Pareto Principle,” which suggests that 80% of consequences come from 20% of causes, is applied in customer retention. Most business experts believe that majority of the sales of a business (80% of its sales) can be attributed to only 20% of its loyal customers. Here, it is emphasized that providing the best service to that 20% is important for the business to thrive.
Customer Retention v Customer Acquisition
While there is nothing wrong with customer acquisition, the strategy can be costly. In fact, it has been observed by many companies that acquiring new customers (through lead generation efforts) costs them more than investing in efforts to ensure that customers stay.
Even with that distinction, it should be noted that CRMs can deal with both strategies. CRMs are designed to help users acquire new leads and ensure that these leads stay.
Customer acquisition strategies using CRM
CRM users can get more leads using CRM with minimal effort using the following techniques:
Drop your forms on your marketing channels for leads to fill out
Here, it is important for businesses to use their marketing channels to their advantage. Businesses should leave forms on their online marketing channels such as websites, social media accounts, and online markets for visitors to fill out. It is advised that these forms gather the following data:
Name of lead
Company (if applicable)
Contact number (mobile phone number, home number, etc.)
Email address (used for email marketing)
Work Role (optional)
2. Incentivize your leads to provide their information
In a privacy-concerned world, giving your personal information can be seen as a risk. So not many leads (or potential customers) will be willing to give out their information. A little push is needed for you to encourage them to provide this information and it can be done using lead magnets.
Lead magnets are anything that you can offer to prospective customers so they will provide their information. It can take the form of a FREE PDF FILE of an industry report, an eBook, email templates, and market data and analytics, among others.
3.Organize your leads using CRM
It’s not enough that you have acquired new leads. You must start categorizing them as “hot, warm, or cold.” Here’s the difference:
Hot lead – a lead that has expressed interest in purchasing your product or service and has taken extra steps to close the deal.
Warm lead – a lead that has responded to your first message (or your initial offer) and may or may not continue purchase from your business.
Cold lead – a lead that has been recently added into the system that has not indicated any interest in your product or service yet.
4. Get those hot leads fast
Start managing your customer relationships using the CRM’s features and functionalities.
Perform lead scoring
Score your leads according to the criteria you have set (e.g. +10 points for responding to the first email, +50 points for making a call for a free demo, -10 points for saying “no” to the email).
Here, categorizing can be done according to the preference of the user (e.g. Cold Leads = 0-50 points, Warm Leads = 50-75, Hot Leads = >75).
Automate your email marketing
Using the CRM, you can automate the sending of your emails so you can start engaging these leads right away. You can also segment your email (i.e. filter it and send it only to those who fit a particular criteria) according to the “scores” of the leads after you have automated the lead scoring on your CRM (e.g. 50% discount email to cold leads, a “thank you” freebie to hot leads, etc).
Customer Retention Strategies
The next step after acquiring new customers is, of course, to retain them. And this part may be a bit difficult to implement, but can be made easy with a CRM:
Identify the customer churn behavior
Not all customers are meant to last, but you can encourage them to come back anytime if you exert enough effort. When a customer is about to leave you for another business, there are a few behaviors you can spot which can serve as “signs” that they won’t be back anytime soon. Examples of these are:
Not opening your emails
No purchase in the last six months
Unsubscribed from your newsletter
Left a bad review on your website
When your customers start to exhibit these behaviors, you have to prepare a response to nudge them a little bit to continue doing business with you.
2. Segment your customers and encourage purchase behavior
Some customers will exhibit an active purchase behavior and some will not. Some are likely to leave you after their first purchase. Here, it is important to categorize your customers according to a set criteria (e.g. frequency of purchase, amount of purchase, number of purchases, etc)
After segmenting your customers, perform a targeted message for each customer segment and trigger a purchase behavior. This can take the form of:
Discounts to those who have not made purchases within the last six months
Freebies to those who had made a purchase within the last month
Promotion of other products to those who have purchased specific items
Free delivery to those whose purchases exceeded a specified amount
It’s easier to do all these with a CRM. In case you are unfamiliar with your system, find a CRM solution provider that will provide one-to-one support for free, so you can provide exceptional service to your leads and customers with ease.
At Saphyte, our support team will teach you how to do all these using the system.
3. Personalize your approach
Using their names in emails, targeting them with relatable content, avoiding redundant and unnecessary messages — these are all acts that follow personalization.
With a CRM, it’s easier to know your customers at a deeper level, which stage at the sales pipeline they’re situated in, and what to do with them. At one glance, a CRM user can get real-time information about leads and customers without the need to check a pile of papers or find them on an online spreadsheet one by one.
For Better Customer Retention, Use Saphyte
Saphyte is a cloud-based CRM that can help you improve your customer retention rate using your leads and customers’ contact information. With this CRM software, your sales team can perform they day-to-day sales process with ease, so they can shorten your customers’ sales cycle and increase sales.
Whether you’re a small business or not, you will certainly benefit from the improved customer interaction that your business will provide using Saphyte.