The main priority of sales is to increase revenue.
To do this, they need to sell more, which, in turn, means – they need more clients.
As a result, very often salespeople get so focused on gaining new customers that they neglect their current customer therefore negatively impacting their customer retention.
Did you know that it costs businesses six times more to acquire a new customer than to retain an existing one?
Also, according to Marketing Metrics, the success rate of selling to an existing customer is 60-70%, while the success rate of selling to a new customer is only 5-20%!
So why do we keep on spending more money on getting new customers?
Many companies around the world think that if they have a great product or service, then customer retention will follow naturally. And, while this may be true in some cases, the harsh truth is that it’s only a short-term strategy. An even harsher truth is that, sooner or later, your customers may just … leave!
Why do customers leave? The main reason a customer will leave is that they think you don’t care about them.
Here is why you should care for your existing customers.
- Better conversion rates. Existing customers have already bought from you, so unless they had a disappointing experience, they will buy from you again. You have also already gained their trust.
- Less marketing. You’ll spend less time and effort finding new customers and convincing them that you are the one they should buy from, which means – less expenses.
- Room for improvement. You have a golden opportunity to improve your offering and customer satisfaction rates just by listening to your customers’ feedback. Was your customer service good enough? Did your product meet their expectations? Was it a good value for money? Just ask, listen and improve.
- Higher profits. Less marketing expenses = higher profits. Since your existing customers trust you already, it gets easier to convince them to become interested in even more of your products or services through up-selling and cross-selling. In fact, Gartner Group statistics tell us that 80% of your company’s future revenue will come from just 20% of your existing customers.
How can CRM help you improve customer retention?
When it comes to CRM, the secret lies in that one word – Relationship.
CRM is about knowing who your customers are. If all goes well, you keep selling to them, and that’s when the fruitful relationship really starts.
While you cannot rely on a CRM system to manage customer retention by itself, it will provide you with the tools to help you manage the activities around customer engagement to improve the customer experience.
You need to have a wide range of data and information about your customers to be able to measure and analyse your customers’ behaviour. Which will help with your customer retention strategies.
This is why you need a CRM system!
The more customers you retain, the higher your profits will be. Contact us get a free personalized demo to see how you can use CRM software to retain customers - (011) 462 6871/ email@example.com