How your Customer relationship system (CRM) can reduce customer churn?

  • Parth Patel
Here are ways your CRM can help serve your Most Valuable and Loyal Customers.
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New Customer Acquisition Cost = 5X Customer Retention Cost. Probability of Selling-to New Customer: 5-20% vs Existing Customer: 50 - 70%. Still most Sales and Marketing budget is aligned for new customer acquisition, is it time to rethink? 

For those in the numbers game, getting more clients means more business. Which means all their efforts and your budgetary allocations are geared towards engaging these new potential clients.

However, research has shown time and again that the differentiating factor between companies that grow and those that don’t is their ability to retain customers.

The numbers speak for themselves. According to research, with a 5% increase in customer retention, you can increase profits by 25% to 95%.

Read on for tips on how your CRM system can help you curb the dreaded customer churn.

What is customer churn

Customer churn or customer attrition refers to the rate at which your customers stop doing business with you. So, if you started with 100 customers and 10 customers left you at the end of the year, that would mean an attrition rate of 10%.

Why do customers leave

Nine times out of ten, these are the common factors that motivate customers to switch.

Cost – the cost of the product is often the deciding factor. However, if the customers are unable to see the value they can get for their money, they will most likely leave before long.

Does not meet their needs – the ever-changing demands of the customers have to be accounted for to increase sales. Failure to evolve and offer better services is another critical error.

Poor customer engagement – Today’s customer has a wide range of platforms where they prefer to engage with the manufacturer. Poor customer service due to disjointed teams and information, lack of interaction as per their convenience and preference is soon becoming the most important reason why customers choose to leave.

Considering that these dissatisfied customers would share their experiences online, you tend to lose on any potential new customers as well.

 

Personalized engagement with your most valued customers will ensure repeat as well as new business via referrals.

  • Danny Yehya
  • Salesforce Certified Architect
  • Six Consulting, Inc.
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How your CRM can help

A good CRM system can help you fight this problem at the root and boost your sales.

Identify the primary cause

When a customer leaves, always get in touch with them personally. With a plethora of online platforms ranging from e-mail, chat, social media or even a personal phone call, this one is easy to implement. An honest conversation on what did or didn’t work for them is very important in analyzing the problem and improving your services. read more

A good CRM system can help you fight this problem at the root and boost your sales.

Identify the primary cause

When a customer leaves, always get in touch with them personally. With a plethora of online platforms ranging from e-mail, chat, social media or even a personal phone call, this one is easy to implement. An honest conversation on what did or didn’t work for them is very important in analyzing the problem and improving your services. In addition, data integration can sync your CRM to other systems. It enables the system to listen to conversations on online platforms and identify common factors that are affecting performance- be it price, functionality, customer service, etc

Engage with customers

A CRM allows you to engage with customers as per their convenience. DO they prefer to engage on social media or chat sessions or after-hours phone calls? Analyzing the trends in their interaction history can help you devise a personalized strategy that works for them and create meaningful conversations that benefit both of you.

Set up warning flags/markers for changes in buying patterns

Typically, there are several flags or markers that could alert you of a customer’s decision to leave. For e.g. they have posted unfavorable feedback on social media, they are not as active as they used to be etc. You can set up strategies to get such customers interested again with deals or offers.

Identify and engage your Most Valuable Customers at a different level

With access to customer’s buying history, it is easy to identify your most valuable customers. You can create a specific list of these loyal customers and focus your efforts on retaining them. Dedicate a team for a personalized interaction on their preferred channels for engagement. Evaluate what makes them happy – i.e. do they like free offers or additional services or content. Such strategies are easy to plan and execute with your CRM.

 Personalize, personalize and personalize engagement and touchpoints!

 Of course, the most important takeaway from this entire exercise is the critical need for personalized customer engagement. For example, you have personally met and interacted with your customers at trade shows where you participate. Compile a list of those who have attended that event and cross-reference it with those who have not. This way you now have a list of people whom you can follow up with on a personalized level – by either offering them free tickets to attend the next event or set up meetings as per their convenience.

 In conclusion, with the help of an intuitive CRM system, it is easy to devise strategies to deal with the threat of customer churn and grow your business.

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Niki We typically reply in a few minutes

September 21
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