Finding ways to increase customer engagement is good for the bottom line. That’s because engagement is closely correlated to customer loyalty.
Indeed, research shows that loyal customers are more likely to buy again, and typically will buy more when they do so. They also stay customers for longer.
Clearly, boosting customer retention should be a top priority for any B2B or B2C organisation.
Yet customer retention is often one areas of sales that doesn’t always get the attention it deserves. Far too often, resources and people are focused primarily on bringing in new customers.
But I’d argue that that’s a short-term approach that could ultimately damage profitability and business growth.
There are lots of good reasons for investing in a longer-term retention strategy that builds customer trust, loyalty and satisfaction:
- Existing customers are worth more than newly acquired one. According to industry analyst Gartner, 80% of your company’s future revenue will come from just 20% of pre-existing customers.
- Existing customers have already bought from you; if they’ve had a good experience they’ll buy from you again. What’s more, now you ‘know’ them – it’s easier to identify their needs and respond appropriately.
- Customers with you for the long term are likely to be highly invested in your continued success – they’ll give you the feedback and insights needed to adjust processes and ensure you continue to be with them for the duration of the journey.
- If your customers are satisfied, they’ll make recommendations to others – generating leads at no cost to you.
- You’ll get more ‘bang’ for your marketing ‘buck’ – in other words, you’ll spend less time finding and convincing them you’re the one they should buy from. Instead, you can focus on strengthening and deepening the relationship.
- According to Bain and Company, a 5% increase in customer retention can increase a company’s profitability by 75%.
Little wonder that a survey by KPMG of senior US executives found that more than half (52%) said customer retention would be the most significant driver of their company’s revenue growth over the next 1-3 years. For these respondents, customer acquisition was their second most important focus for revenue growth.
So, just how do you go about keeping customers engaged and loyal?
The good news is that CRM software can help you manage those all-important activities that relate to customer engagement.
- Know your VIP customers
Measure and analyse their behaviours to understand exactly how engaged with your brand they are – demonstrating how customer-centric you can be through the execution of timely and context-sensitive communications and contact.You need to ensure you nurture these customers and proactively allocate resources where they will have the most return.
- Reward your most profitable customers
When it comes to increasing loyalty, you need to offer rewards and incentives that make them feel special. That might include giving them ‘first peek’ VIP access to new services or products, preferential opportunities that acknowledge their spend with you, one-off special deals, access to free seminars and events or opportunities to gain access to subject experts to review how to address the challenges they face in their markets.Use your CRM system to uncover your profitable customers, and monitor them hard so you can step in the moment their order volumes taper off.
- Make it personal
Use information in your CRM system to personalise your outreach and adjust your follow-up and communication strategies accordingly. Knowing their preferences and purchase history is just part of the story. If front line staff are able to use your CRM system, they’ll be able to speak in a knowledgeable way that demonstrates the customer is more than just a number – and that every aspect of your operation knows exactly who each individual customer is.
- Fix Problems Fast
Keeping customers loyal depends on doing what your customers expect you to do – solve their problems. And that’s where you can add value. Using your CRM platform to keep a close eye on the end-to-end customer journey – from onboarding and beyond – will ensure any problems are dealt with fast.
With the average cost of winning a new customer around five-times higher than that of retaining an existing customer, building customer engagement and loyalty should be a top priority. Because building brand loyalty could save your organisation up to 500% on new customer acquisition
Initiating CRM-powered relationships will enable you to profile what makes a loyal customer – so that you can nudge more of your customers into the high value VIP category.
What’s more, you can use your CRM system to evaluate the buying behaviours of customers – what they are buying, when, and if price is a factor. Finally, you can initiate proactive outreach, contacting customers with personalised communications and offers that boost engagement and loyalty.