Customers come and go. It’s a fact. But while it’s to be expected, lowering your churn rate is always a good idea. Doing so isn’t just about preventing customers from leaving, but also about fostering customer loyalty and good relationships. And happy, loyal customers have a higher customer lifetime value, and that means more revenue for you.
Realize this: the higher your churn rate is, the more at-risk your business is. If you can’t retain customers, then you may not be able to maintain steady revenue, and you certainly won’t gain new customers through word of mouth.
One of your most vital tools in reducing churn is a customer relationship management system. When you have a CRM on your side, it’s easier to lower your churn rate and convert more customers into delighted evangelists.
CRM Data Makes You Smarter
While it may be easy to think of your customers as a collective, there are many times when it’s important to remember that this collective is made up of individuals, especially when it comes to reducing churn. Your CRM can help you parse your accounts, because it gives you insight into the actions and behaviors of individual customers, thereby helping you customize your strategies and campaigns to each client’s specific wants and needs.
Your CRM provides you with one of the most powerful marketing tools around — knowledge about your customers — which in turn helps you:
- Personalize customer relationships
- Tailor your marketing campaigns
- Target your messages more effectively
- Identify at-risk customers
- Find causes for churn
- Accurately track and measure key performance indicators (KPIs)
You Can Personalize Relationships with Customers
CRM gives you detailed insight into each of your customers, including basics like names, workplaces, and places of residence. While it may seem like inconsequential data, it can create a huge impact when you use that data to create personalized marketing messages for each customer. From your own perspective, what would grab your interest more: an email addressed to “To Whom It May Concern,” or an email addressed to you specifically?
Just as importantly, a CRM also gives you information about the purchase histories — and therefore the interests — of your customers, which allows you to pick and choose the most appealing products or services to cross-sell or upsell.
Tailor Marketing Campaigns and Offers to Reduce Churn
Detailed data, if you take the time to record it, can provide valuable insight to helping you customize offers and communications.
For example, if customer A has complained about shipping prices in the past, then you can target a marketing campaign to customer A with a free shipping promotion. Other scenarios include customers who respond best to email marketing offers, customers who like half-price sales, and customers who are most interested in social media offers.
Determine Churn Risks and Causes
Another vital insight that your CRM can give you is which customers aren’t engaged and who are at risk of taking their business elsewhere, as well as the possible causes for that potential churn. For example, say you sell a product to customer B that comes with an activation code, but customer B still hasn’t used the activation code a month after the purchase.
This is a good indication that customer B isn’t engaged, and that you likely won’t hear from this customer again unless you take steps to prevent the churn. A good first step is sending a welcome email that gives customer B extra information about the product, details about the activation code, and perhaps a survey asking about his or her experiences.
You can also comb through your CRM data to find potential reasons behind your churn rates in general. You can go over emails, phone calls, chats, and survey results that show trends in dissatisfaction, and that can also point you in the direction of possible solutions.
Your best bet to reducing churn is to leverage your CRM to gain insight into the needs, wants, and preferences of individual customers, and using that data to create personalized and targeted campaigns that are most likely to resonate with those customers.
Your CRM, therefore, allows you to reach out to customers with the most potential on their preferred channels with personalized messages and offers about products that are most likely to interest them. What this means for your business is happier customers who feel like their needs are being met by your company, and who will, consequently, be more likely to make more purchases more often, which is the opposite of churning.
Our sales and marketing leaders are available to ask questions on how to build customer loyalty. To learn more, contact our team today!