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.