Why a Great Customer Retention Strategy is Key to Your Customer Relationship Management Program

A lot of new businesses prioritize customer acquisition, and that makes sense when building a reputation from the ground up. But it’s also smart to set aside time to charm every one of those customers so they have reasons to return. 

Many businesses rely on repeat customers to achieve lasting success. Bain & Company and Harvard Business School’s data evaluation found that a 5% customer retention rate has the potential to increase profits by as much as 95%. Such impressive results require more than optimism, though. 

To nudge your retention rates upward, you’re going to have to make every interaction with every customer count. One of the best ways to entice existing customers is via a customer relationship management (CRM) program.

What is Customer Relationship Management? 

CRM is a catch-all term that encompasses all the processes, techniques, and tools a company uses when interacting with their customers and clients. CRM strives to improve your relationship with customers, resulting in the satisfaction needed for future profitability.

Usually, this acronym refers to customer retention management software specifically thanks to its high adoption rates. Modern technology makes automating processes so much easier, saving you a ton of time and effort.

Some benefits of customer retention in CRM:

• Gain a clearer picture of who your customers are and their interests
• Access various tools that improve communication across channels
• Provide customers with solutions that improve their experience
• Learn what’s been working well and what needs improvement
• Personalize the customer experience for different target groups
• Consolidate everything in one place, providing the full picture

Combine these together along with implementation of customer feedback, and your competition will have good reason to reevaluate their own customer retention methods.

What is a Customer Retention Strategy?

Customer retention strategies aim to turn one-time customer purchases into repeat business. Ongoing transactions from loyal customers can add up to significant returns. That’s why coupling a customer acquisition strategy alongside a customer retention strategy is essential to revenue growth.

According to an Invesp report, 89% of companies believe a top factor for customer retention is a positive customer experience. That means the cornerstone of success lies within your ability to keep your customers happy throughout their interactions with your business.

Picking strategies that match your business objectives makes it easier to reach your goals. These strategies may include improving customer communication, simplifying every interaction, and offering shopper incentives.

How Customer Relationship Management and Customer Retention Go Hand-in-Hand

It takes an unrealistic amount of luck for things to always go your way with minimal effort. Relationships, especially, require maintenance to last into the future. To keep customer retention from falling, you must recognize the significance of your customer relationships and nourish them.

CRM and customer retention are inescapably intertwined with your business performance. Once you recognize you can’t have one without the other, you’re ready to improve the customer journey with a compatible CRM system that optimizes the entire process.

Tips for Creating an Effective Customer Retention Strategy

Each business is unique and has different areas to target for improved customer retention CRM outcomes. Below are a handful of tips that are universal best practices to consider adding to your own strategy starter pack.

Invest in Customer Retention Management Software

Customer retention management software is the ultimate way to track everything happening with your customers, so you can easily reference that data as needed. With everything organized meaningfully, CRM customer retention becomes less of a chore and you’ll be able to gain better results.

There are plenty of CRM tools out there that help facilitate business functions, both private and public. CRM software typically allows you to store customer data for easy access and automation. This could include communication, lead generation, task management, billing and payments, plus many other features that put everything you need at your fingertips within a single platform.

Another great perk of CRM? Managing existing customers through modern methods puts less of a strain on your resources, allowing your employees to focus on other important workday tasks so you can accomplish more.

Don’t Let Your Customer Support Be a Letdown

Some businesses cut corners with their customer support, and it shows. Don’t let this be you! Customers are looking for the support they need without much fuss. It’s important to provide a variety of options for anyone who has a question or concern, including both automated and human responses.

Nobody wants to waste their time on poor customer service. Do your best to ensure everyone leaves the conversation with the information they need to move forward.

The best customer service experience includes:

• Several contact options
• Quick turnaround times
• Thoughtful and thorough answers
• Patient, friendly communication

If you’re not sure how it’s going, try sending a brief survey to each customer who contacts your support team. Identify any areas that regularly cause problems and make improvements.

Start Customer Loyalty Programs & Referral Programs

Two ways to keep customers invested in your brand are inviting them to a loyalty program and a referral program. Both strategies offer incentives that benefit both the customer and your business with a potential ripple effect worth celebrating.

A loyalty program rewards repeat customers for choosing you. It shows that you value people who stick around, rather than taking them for granted. And freebies are especially potent incentives. Beyond gifts at purchase milestones, you can also offer discounts and sale previews. These are member-only perks, making joining an exclusive club. But that doesn’t mean members aren’t willing to pass along the perks to their favorite people. According to Bond’s Loyalty Report, 73% of members were likely to recommend a brand’s loyalty program if it impressed them.

Similarly, consider offering a referral program to reward your biggest fans. If a customer invites their friends and family to check out your business, they receive something in return as compensation for their recommendation. Remember, people typically trust a company more when someone they know sings its praises. Encouraging your followers to share their interest is worth rewarding them for the additional business you may receive as the result of the program.

Personalize Interactions & Prioritize Relationships

If you play video games, you might be familiar with the way player characters are almost always the hero. The funny thing about this setup is that thousands of other players are on the same journey where they, too, are the hero. We all want to be the main character, the special one. Recognizing this and treating customers like individuals who aren’t just side characters is a smart way to do business.

This can be easier for smaller businesses, but a bit of automation goes a long way. Ask your customers for their birthdays and use this data to present gifts on their special day. Track their purchases and send customized suggestions based on previous behavior. Use merge tags to personalize newsletters and other communication. There are so many ways to catch the attention of your customers without lumping them into an impersonal group.

You’ll also be able to further your relationship with customers when you answer their questions or address their concerns, whether through chat boxes, social media, email, or text messaging. Engaging on a personal level helps you unravel any disruptions that need to be addressed and reveals the aspects of your business that your customers love the most.

Improve Moods by Decreasing Response Times

The only time when service is a little too fast is when your food is served undercooked or something else isn’t handled with enough care to do the job well. But no one complains about customer support that is present and eager to resolve a problem within moments of contact.

Lower response times lead to better customer satisfaction, which is a good way to improve customer retention rates. Reducing wait times is an obvious solution, but if that’s not possible, you can also implement other methods to get customers the answers they need. According to HubSpot, 82% of consumers say it’s important to get marketing and sales responses within 10 minutes.

This doesn’t mean you always need to be present, though. A well-curated and organized FAQ page with a search function allows customers to find what they need without human assistance. If they’d rather have a little more guidance, chatbots can also locate helpful information with ease. Similarly, text is a useful resource, especially if live agents are available.

Podium + Small Business = Customer Relationship Powerhouse

If you’re looking for CRM tools that align with the needs of your business and your customers, look no further than Podium. With our free 14-day trial, you’ll be able to connect with new customers more effectively, boost your ability to retain customers, improve your brand’s reputation, and seal the deal on the next sale. 

Give us a chance to show you how simple CRM can be, even if you’re just starting out.