How And Why You Should Focus On Customer Retention and CRMs

A focus on customer retention has a number of key benefits for a business, but above all, it is cost-efficient. The cost to acquire new customers has been found to sit anywhere from 5x to 25x more expensive than retaining existing customers. Meanwhile, some marketing studies show that the probability of selling to an existing customer can be 10x higher than selling to a new customer. Increasing your focus on retention over acquisition is about getting value for your time and resources.

But how does a business shift the focus toward customer retention from a practical standpoint? What steps and actions should one put in place to position themselves for maximising retention? Here are some ideas from the team at Frankly:

Evidence-Based Customer Experience

Too many companies rely on instinct and gut feel when it comes to the design of their website and the experience of their users/customers. This is a mistake when there is a wide array of data (both in-house and with external software) that can indicate holes in your CX/UX and point you towards clear, beneficial changes. 

There are many, many avenues to improving your CX and UX. For example, metrics such as exit % and bounce rate on certain pages indicate that those pages are where customers are more likely to get frustrated/bored/uninterested in their path to purchase. You can use surveys and post-purchase comms to find out the customer views on the process, as aggregating such feedback can be insightful and lead to obvious or not-so-obvious changes for your company. Furthermore, you can use software such as Hotjar or Crazy Egg to figure out how potential customers actually interact with your website, where the shortcomings are in terms of path-to-purchase, and how to gear the behaviour flow of users towards purchases and signups.

Remarketing and Retargeting

Remarketing and retargeting involve grouping together users that have been on your website before, and targeting specific messaging towards them to encourage them to return. This can take many forms such as through customised display ads or through emails upon cart abandonments. Any measure to drive past customers or near-customers to return is very likely to net a positive ROI for a business over the long-term. Creating remarketing audiences and implementing these measures is a key step to retaining customers and fostering loyalty.

Implementing CRM 

“Customer relationship management” or CRM is a type of technology that has become a starting point for conversations around customer retention. CRM helps a business to manage their relationships and interactions with customers. The software pulls together and stores individual customer’s information such as demographic profiles, what they last purchased, how loyal/interested they are in the business, and more. Tools that fall under the definition of CRM are helpful across a range of functions such as driving sales and market segmentation, but their key purpose is arguably to assist in retaining customers.

CRM is often reported as the fastest-growing category of software for businesses, with CRM companies such as Zoho and Salesforce seeing extremely high growth and uptake in recent years. That’s down to the clear value-add of organising key customer information for a business. With so many different data sources coming from all directions - sales, marketing, customer service, and more - the ability to filter out what’s important and store it all in one place, where your team can access it easily, makes CRM software a crucial consideration for any business in 2022 and beyond.