Getting a new customer can cost 5-to-25 times more than keeping an existing one. But increasing customer retention rates even a mere 5% can increase profits by 25% to 95%.
Keeping customers equates to more business because: (1) existing, loyal customers tend to buy more from a company, (2) they will pay a premium to stay with a known company rather than face uncertainties dealing with a competitor, and (3) they will often refer others to their preferred vendor.
Although it costs less to keep and grow existing customers than to acquire new ones, most organizations continue to devote significant time chasing after new customers, often at the expense of retention efforts.
If it is true for most organizations that 80% of sales come from existing customers, perhaps at least an equal amount of time should be spent serving profitable existing customers. Here are three tips to better serve customers and three ways
(1) Make it easy for your customers to do business with you. Eliminate hassles, misunderstandings, and inconveniences. Make sure nothing slips through the cracks.
►This is what Dynamics CRM is all about: Getting marketing, sales, and customer service all on the same page for a cost-effective, fast, and satisfying customer experience. Dynamics CRM should be used in a manner with which everyone in an organization is familiar and has quick access to your customers' business data, such as sales by product group, frequency of orders, billing and payment history, discounts, returns, and profit margins. Customers' business data should also include all you can learn about a customer's business, including company headquarters, all locations, parent company, divisions/units, primary and related products/services, primary and secondary SIC or NAICS code(s), industry segment, annual revenue, employee size, years in business, market share, major customers and their market share, competitors and their market share, decision makers, publications read and websites visited by the decision makers, influencers to the decision, mergers/acquisitions, partners/affiliations, latest press releases and website, and industry trends/challenges.
(2) Respond quickly to critical situations, such as when a customer needs help right away.
► Whether a request comes through sales or customer service, Dynamics CRM has the ability to associate activities (like call-backs, emails, and tasks) with the account for immediate follow-up. Correctly configured Dynamics CRM provides vision into open items between service and the account manager. Worked correctly, any issue that is not being addressed in a timely manner gets escalated to a manager for intervention. After all, a primary goal of an organization is to keep the customers you want and grow transactions with them. The only way to achieve these goals is by integrating sales and customer service so anyone in the chain can transparently be accessible anytime.
(3) Establish a communication rhythm with the customer, so as not to be connecting only when you want something (like the next sale). Relationships with organizations are no different than relationships with people. If you always are asking, but not giving, how well will the relationship develop?
► The utilization of workflows within Dynamics CRM provides the ability to set a communication rhythm with the customer for account managers, service agents, and even upper managers. Consider setting strategic calls, quarterly reviews, and client-centered events as opportunities to make a tighter connection. Make effective use of tools like
Inherent in these tips are two key ingredients for keeping customers: "great communications" and "strong customer knowledge." A Dynamics CRM system provides for both of these items. More than a software or technology, a CRM system should be seen as a strategy for sustaining customer interaction. Dynamics CRM combines processes, technologies, and people so you can better understand, serve and retain your customers. For more tips and specifics about how Microsoft's Dynamic CRM can help you retain profitable customers, please call me . . .
Bob, 800-897-9807, x224.
by Bob Sullivan, InfoGrow