How CRM Can Help in Strengthening Customer Loyalty
An old sales adage suggests that 80% of your company’s profits come from 20% of your customers. This might be an overused pair of numbers, but it still tells the truth: Companies still rely on customer loyalty. However, customers are more powerful than ever before and building connections to retain them isn’t as easy. The key to this problem is an effective customer relationship management (CRM) software.
So how can your CRM system help in strengthening customer retention and loyalty? A CRM software allows you to leverage customer data, enhance customer communications, gather feedback, hone customer needs, manage loyalty programs, and keep “being a customer” easy. Overall, the primary purpose of a CRM software is to build and retain healthy relationships with customers.
What Is Customer Loyalty?
Customer loyalty is defined as a customer’s likeliness to do repeat business with a company. Whenever you purchase a product you liked or engaged in a service you appreciated, you tend to return to the company that provided it.
Aside from becoming a patron of a brand, loyal customers encourage others to do the same. On average, Americans tell 11 people about a good experience they had with a business. This means that your loyal customers will recommend you to potential new customers for free.
Oftentimes, customer loyalty isn’t derived from the product or service being good enough. Loyal customers must have found additional value from that brand specifically. Common reasons why customers return are:
- Exceptional customer service: Consistent, excellent customer service will bring a customer back when they are in need of what your business offers. Exceptional customer service means you deliver helpful and professional assistance to the customer before, during, and after providing them what they need.
- Social proof: Positive customer reviews reinforce the way your customers perceive your brand. If the reviews and recommendations are good, then more people will be open to your brand.
- Reliability: Part of excellent customer service means being able to fulfill your promises to the customer. A business that keeps their word and provides impressive service will be able to win over customers easily.
Checklist: Characteristics of Loyal Customer
The question now is how can you tell if you have managed to win over loyal customers? Aside from returning to your business and referring your brand to others, there are other characteristics that define customer loyalty.
Here is a checklist of some common characteristics to help you identify them:
- They aren’t concerned with the cost: A truly loyal customer will not question the price, because they are assured of the results they receive. Similarly, they are more likely to buy more products or higher value offers.
- They give you rave reviews: Loyal customers love to share their positive experiences because they want other people to enjoy the same experience as them. Whether they do it in person or share it online, these customers will advocate for you.
- They tend to ignore competitors: Once they find a brand they believe in, customers will wholeheartedly support the brand. This makes them less likely to search for an alternative supplier or hear pitches from competing companies.
- They offer feedback: A loyal customer will be honest and open with you because they want you to improve and succeed. They are more likely to offer suggestions or mention other products and services they need.
- They are more understanding with errors: Loyal customers are more forgiving of errors because they trust you will resolve them. They are also more likely to treat your staff kindly, even in such instances.
How CRM Strengthens Customer Loyalty
At its most basic, CRM software is a tool that allows you to form meaningful connections with your customers. CRM software tracking features help you manage the communication between a business and every potential lead, as they progress down a sales pipeline
CRM software helps you record and retrieve data, manage administrative tasks such as scheduling follow-ups, and developing insights to share with other departments in your business. For example, the data synthesized through a CRM software can teach marketing how to build a stronger brand that entices more customers to follow your business. Here are six specific ways CRM promotes loyalty and customer retention:
1) Leverage customer data
As the saying goes, data is the new gold. Businesses who can extract insights from data can find the value in it. With CRM, you can gather data on your audience, prospects and customers to tailor a more personalized experience for them. Providing these custom experiences goes a long way in winning customer loyalty, continuing conversations, and generating interest.
- Personalized messaging: Your company can use CRM to keep track of important details and dates for personalized messaging. People and their circumstances change: their name, email addresses, contact numbers, and marital status don’t stay the same, so your data should be updated to reflect these changes. Little things like changing the title from “Miss” to “Ms” after a woman marries shows that you care.
- Interaction tracking: Another way to maximize your CRM software would be to keep track of important dates and interactions with your customers: their birthday, their first purchase, purchase history, the products they viewed but did not purchase, and more. Your CRM software can send an auto email to them on their birthday with a special discount, for example.
- Targeted campaigning: Based on the demographics and behavioral information you gather from your CRM, you can create targeted campaigns for leads and prospects. If you observe that you have more success selling to customers from a specific region, you can allocate more resources for marketing there. CRM will help you discover how to better address your customers’ needs so you can tap into them.
2) Enhance customer communications
CRM software will help you grow customer loyalty and brand awareness by maintaining open communication channels with your leads and customers. By combining CRM customer data and market automation features, you can send them curated information that is engaging, informative, and valuable for them.
You can program your CRM software to automatically send a thank-you SMS after someone makes a purchase, monitor social media conversations to respond to issues, or email regular newsletters on company news. Plan your communication strategy around CRM capabilities so you can build long-lasting customer relationships, even after they have left your sales funnel. Other things you can include in these messages are:
- Opinion or feedback surveys
- Product release news
- Relevant tips, blogs, or articles
- Promotions and exclusive offers
- Company updates
- Sales and special discounts
3) Discover and hone customer needs
Growing customer relationships begins with understanding what your customers need. Aside from requesting for customer feedback, you can harness the power of CRM in collecting relevant data about your customers. Your CRM software can help keep track of customer information, such as:
- Their purchase history
- Their preferences and habits
- Their web and email interactions
- The links they follow
- Their social media interactions
- The products they are interested in
How can this information help your company? You can gain insights into what topics they are interested in, what processes affect customer satisfaction, and even what time they are most active in making purchases. These insights will help you build targeted marketing strategies and improve customer experiences.
Data stored in a CRM system can also smooth out internal processes in your business. For example, if your data indicates that customers make their second purchase six months after conversion, then you can increase your inventory or arrange for additional support staff.
4) Gather useful feedback
The more you learn about your customers, the more capable you become at accommodating what they need. High-quality CRM software will definitely have engagement and information gathering tools at your disposal.
For example, you can utilize your CRM system to automate a satisfaction survey or poll. You can then program your CRM software to send a discount code to your customer’s email once they have responded with their feedback.
Feedback allows you to figure out what people think about your business, your products, and your customer service. By implementing the changes recommended by your customers, you can grow your business and show your customers that their opinions matter to you.
5) Manage customer loyalty programs
A well-planned customer loyalty program allows companies to reward loyal customers, while a CRM helps companies to identify potential loyal customers. Combining both can encourage loyalty and customer retention, because you provide additional satisfaction while building on existing relationships. A CRM software can build your loyalty program by:
- Identifying prospective loyalty program members: With CRM pipelines, you can create sections such as “First Purchase” or “Likely to Join Loyalty Program” and sort customers based on these stages. Based on their status, you can reach out to the contacts who would join your loyalty program.
- Tracking program member rewards: After contacts join, your CRM can be used to sort the rewards based on preferences or location. This helps you find more appropriate, personalized appreciation gifts for loyal customers.
- Reminding you of special dates: Whether it’s their birthday or first purchase anniversary, your CRM can remind you on when to celebrate your customers’ special day by treating them with exclusive offers or gifts.
6) Keep “being a customer” easy
Modern customers have more options and information available to them now than ever before, so decision making has grown into an elaborate process. With CRM, you can accommodate your prospects and customers so they can easily find what they need at every stage. Your CRM can give you a snapshot of your sales pipeline – so you can visualize what is required at each step of the pipeline.
You can help keep “being a customer” easy by providing accessible information, responding actively to questions or requests, and maintaining a consistent service.
Providing accessible information
When prospects browse, they are not always ready to sign-up to receive communications from your business. Sometimes, they would prefer to find information on their own – and this is something you can address. Keep a detailed list of your products and services easily accessible, and make updates to these immediately when changes occur. You can also curate a knowledge-base of FAQs and relevant articles they can read through.
Responding to customer queries
Customers want an immediate response whenever they ask something. However, companies aren’t fulfilling this need. One research shows that a company’s average response time to customer service requests is 12 hours. That long turnaround time can cause prospects and customers to disappear, since they don’t receive attention.
CRM ensures that none of these inquiries are lost by logging them into a central system. Your CRM can also hour email response templates or automate a sequence of emails for whenever someone requests information. These emails can include a tracking number, FAQs about the received inquiry, or links to resources so that these potential customers aren’t neglected.
Maintaining consistent service
As your business’s lifeline, your customer should be treated well all the time. They’re going to expect a consistently professional customer experience, and it’s important to maintain that. Aside from improving the way your brand is perceived, consistent service will also build customer satisfaction and trust. Create a service strategy with your CRM software so you can deliver a satisfactory experience for prospects and customers each time.
Harness Customer Loyalty With Commence CRM
Create a seamless customer experience and improve customer loyalty with Commence CRM.
The Commence CRM has advanced customer profiling and segmentation features to equip your team with the information they need to build professional, personal connections with your customers. Our award-winning customer relationship management (CRM) software is a one-stop shop for automating and streamlining your customer communication efforts as well, so you can effectively reach out to leads and customers.
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