While every business wants to constantly capture new customers, the priority should be on pleasing your existing customer base.
Companies that fail to nurture and retain current customers ultimately fail as a brand.
Customer relationship management (CRM) programs, which are designed to help you achieve this, have proliferated and grown in the past two years. Good CRM programs help companies attract customers, learn their preferences and shape brand initiatives.
They’re designed to keep customers coming back, and with good reason -- it is five to 10 times more expensive to find new customers than keep old ones, and repeat customers spend nearly 70 percent more than new ones. Brand success means listening to your customers, earning their trust and continuously improving your relationship with them.
The Importance of Listening
I know what you’re thinking: this isn't a new revelation. But becoming a well oiled "listen and improve machine" is easier said than done. So to help the processes along, let’s look at three ways brands can ensure CRM programs are working correctly, for both the customer and the company.
Keep Capturing and Using Data
We’re all a little tired of hearing the same data buzz words and, frankly, about how we’re supposed to use data to make our decisions. This is partially because we know that we’re supposed to use it, but that making it work for us in a real, automated and insightful manner often isn't the cake walk it's made out to be.
However, data combined with listening is the driving factor behind successful CRM strategies. Whether its return on investment (ROI), response rates, mailable quality, incremental sales, average basket size, retention rate, dollars made per email sent, open rates or simply responses to customer surveys, these valuable data collection points determine a CRM program’s next move, next improvement and/or next change.
It’s important to not to get overwhelmed or overzealous with data. Pick a few starting points that will give you the greatest insights on how your customers and prospects are behaving and improve and iterate on that. A test, learn and improve culture is vital to the consistent improvement of CRM practices and participants. Listen to your customers -- directly or indirectly -- and they will tell you what they want.
Understand the Lifetime Value of a Customer
Beyond data, the voice of the customer is what brands are (and should be) listening to improve their CRM programs. In fact, learning more about current customers, when and how they spend with the brand, and what they need to keep spending is top priority for most brands running a CRM program. It’s all about being extremely relevant at the right time and place.
Today’s smart brands have come to realize that using a variety of tactics to achieve omnichannel success is crucial to improving a customer’s lifetime value. Why? Because customers don’t view a brand by how they behave in a certain channel, but rather want complete access to them across a multitude of channels -- whenever and wherever they please.
So whether it’s SMS, email, direct mail, social media, in store, web or mobile, giving personalized recommendations based on their persona, past purchase, and items bought is often better than offering a discount -- because you've offered to make them feel special.
Live and Die by Loyalty Programs
Loyalty is forever being reinvented. Every brand wants a loyal customer, but there are many different avenues for achieving this. For some customers, simply knowing they will continue to receive extremely high quality products is enough. For others it may be discounts, membership perks or credit card points, while for still others it's personalized product recommendations and offers.
Whatever it may be, for most companies loyalty is crucial to success -- and a formal loyalty program is the gas that makes their CRM vehicle run. But often overlooked is the loyalty program’s ease of use, for both the customer and the employees. The customer must be able to easily understand their rewards, while employess should be empowered to easy sell and deliver the benefits to their clients. But, most importantly, a loyalty program must be a part of the company culture, and requires a dedicated team and customized communications to work properly.
Loyalty programs work best when the customer appears to benefit more than the company. It makes the customer feel exclusive, empowered and loved. Too many black out dates, expiration periods or restrictions on rewards will only turn the customer off. If a deal is too difficult to use, then it simply is not worth the effort.
As you continue to develop, nurture and improve your customer relationships, your marketing spending will produce more meaningful results. But no matter which tactics, data or technology you employ, you must show your customers that you truly get them and that you are listening. Today’s savvy consumer can easily detect insincerity, and will not tolerate it. Long term customer love is an essential key to success, and it starts with every transaction -- big or small.
Title image by Zurbagan (Shutterstock).