Many business experts would submit that the heart of a business is its customers. Therefore, when a company invests in its own customers, it is investing in the heart of its business. For companies that value customer relations and satisfaction, having a foundation to track everything about customers becomes essential. That is what Customer Relations Management (CRM) is for.
Retaining existing customers versus finding new ones
Research suggest that 80% of a company’s profits comes from 20% of their existing customers. The consensus seems to be that instead of looking outside of the company to bring in new business, efforts should be used with current customers to find ways to generate more business from them.
You might be convinced that your business can benefit from a customer retention campaign. Yet this can be tricky as there is no one best way to boost customer retention. It needs to be based on the nature of your business model and customers. However, judging by some successful retention campaigns, there are always two common features to a high retention rate:
- Great products
- Excellent customer service
So before rushing off to cook up a loyalty program, first start with these two components. Then go from there.
While reading this you may have considered that in order to retain customers, you first need to find them. True. And finding new customers is the purpose of marketing which is automatically considered essential for any business. So these findings about existing customers are cited to emphasize the importance of customer retention as it may be even more lucrative than a marketing campaign. Remember what Jeff Bezos, Founder & CEO of Amazon said. "You know, if you make a customer unhappy they won't tell five friends. They tell 5000 friends."
But then, you don't need to choose between finding new customers and retaining existing ones. If repeat business by your customers is feasible, consider doing both – as separate but important parts of your business.
The importance of CRM
A CRM system is like a sophisticated contact management system for a company's customers. It is a single place for a business to store every customer, every lead, all contact history, every service request, a customer’s contact info, their preferences, and any other pertinent history. Then, by referring to this information, your conversations with your customers can be personal, relevant, and current.
Interactions with customers produce a large amount of information. Details can get lost, meetings can fail to be scheduled promptly and prioritizing customers and their needs can be a matter of guesswork rather than a rigorous exercise based on fact. On top of this, customers may contact you on a range of different platforms – phone, email and social media - asking questions, following up on orders or complaining. Without a common platform to record customer interactions, communications can be missed or lost in the flood of all of the information. This, then, may lead to an unsatisfactory response to your customer and then, there goes your customer retention program.
CRMs can be highly sophisticated programs that do a lot more that what is described here and cost a lot of money. But anything a company can do to track and use information about their customers will help improve the quality of their customer support and customer relations. So instead of blindly selling products or services, consider the value of working with customers and trying to understand them.
How to get CRM to work for your company
The main purpose of CRM is to drive profit by helping companies effectively track the relationship with current and future customers. It can involve any or all customer-oriented processes in a company, such as sales, marketing, and technical support. An effective CRM strategy could encompass a whole range of activities including customer-centered services and product design. But it primarily relies on software capable of automating, tracking, and organizing communication with customers.
It is crucial that an organization’s CRM system be fully integrated and customized to meet a company's needs. Otherwise the information collected through the system might not reflect the reality of each customer relationship. And how can a customer relationship be improved with inaccurate information?
What Sartosoft can do to help your business with CRM
Sartosoft can help you determine the information that you expect should help you with customer relations, satisfaction and tracking needs. From there we can help you select a software application that has many of the desired features. Then we can help customize the aspects of the software to more fully implement and meet the purpose of a CRM for your company.