A customer relationship management software is to help with dealing with customer issues in order to offer better services to them. But over the years, demands from CRM software solutions have evolved a great deal and during all this it has lost its primary focus, i.e. to maintain customer relation. It is now mostly being used to acquire new businesses. For a firm, aiming at long term success, however, it is equally imperative to retain its most loyal as well as profiteering customers.
Why customer retention is important
Acquiring new business always involve huge expenses and time. On the other hand customer retention is much less expensive from marketing point of view. It further adds to company’s value as it:
- Lowers costs of marketing and customer management
- Promotes brand and generates greater value
- Improves sales value by lowering customer’s sensitivity to price change
- Results in improved financial condition
All these factors are crucial for any business, irrespective of size, to succeed in the competitive environment. It is essential to ensure growth sustainability for long time.
Why customer loyalty is diminishing
Today it is hard to find a customer who will stick to a brand for long time. This is because:
- The competition in the market has intensified. Companies are striving to offer more features at lower price to entice customers.
- There are more brands to choose from than before.
- Modern consumers are better informed than the past. Customers are gaining and sharing information on products/brands on various web platforms.
- The social media has promoted a platform where customers can interact among themselves on products and services, experiences with brands etc.
- Customers are now more influenced by their peers than before while deciding on brands.
- The spending habits of the consumers have changed considerably over the years.
How CRM can help with brand loyalty
CRM offers a unified platform where you store a trove of information on your customers. This information can be extracted and analyzed to build a business strategy that will ensure long term growth.
Know your best customers: Customer relationship management service software solutions can be used in gaining insight on customer behavior and learning about his history with your company. You can get information on:
- How long he has been with you
- What products/services he has purchased
- How often he has made purchases
- How many times he has upgraded his services during the life cycle of a product
You can use this information in planning a targeted marketing campaign. Most CRM software solutions will let you organize and conduct targeted marketing campaigns, such sending email newsletters to targeted group of customers informing them about new products and services or updating them on existing services plans pertaining to their interests.
Anticipating business growth: Once you have enough information on your current business situation you can plan ahead and set targets for future. The data from the CRM helps in understanding your current and future prospects, let you fine tune your marketing strategy and reinforces your relationship with your clients. It is also important in knowing if some of your contacts need nurturing.
It has been observed from market trends that brands tend to lose about 10% of their customer base yearly even after successful branding campaign. So, the information from the software will help you in learning about your current business size.
Forging brand loyalty in new customers: The software help you track how a contact has been managed. Winning customer loyalty is all about creating favorable images of yours among customers and only then you can expect them to talk about you. You cannot win customer loyalty by providing poor and untimely services. Since the software integrates all aspects of customer management, namely- sales, marketing and services, it let you track the interaction you had with a particular contact. With the help of the information you can even turn a negative situation into a positive one.
CRM is not a standalone software. But it is an essential business strategy. It is about service. No business can go unaffected, no matter how big it is, by losing its most loyal customers. CRM software induces professionalism in handling your contacts so that you can grow your business by simultaneously retaining old ones and winning over new customers.