Reduce Customer Churn by Using CRM
April 25, 2017
Reducing customer churn is an integral part of business success. Lowering a business' churn rate is not only about preventing customers from leaving, but it fosters customer loyalty and builds lasting relationships. Loyal, satisfied customers mean more business revenue and, ultimately, a higher lifetime value.
Conversely, the higher a business' churn rate, the higher the business is at-risk for lower revenues and reduced long-term viability. Lost customers also mean less positive word-of-mouth referrals or customer testimonials that are vital for most businesses.
An important tool in reducing customer churn is CRM (customer relationship management) data. This data can be used to lower a churn rate and convert average, one-time customers into loyal followers.
Power of Knowledge
While customers are sometimes thought of as a collective group, it is important to remember that the group is comprised of individuals (B2C) or individual businesses (B2B). CRM gives insight to businesses on the actions and behaviors of individual customers allowing a business to tailor strategies and campaigns to specific wants and needs. The data extracted from a CRM system can provide a business with one of the most powerful marketing tools available...knowledge about customers. This allows a business to:
● Personalize relationships
● Customize marketing campaigns
● Target messages more effectively
● Identify at-risk customers
● Find causes for customer churn
CRM provides critical data on each customer. While some data such as name, address, and contact information might seem like inconsequential data, it can have a huge impact when the data is used to create a personalized marketing message. From your own perspective, which message attracts your interest more...an email addressed to “To Whom It May Concern” or an email addressed to you specifically with a "Dear and your name?"
Equally or more important, CRM also gives a business information about the purchase history of customers allowing businesses to pick and choose the most appealing products or services to sell, cross-sell, or upsell.
Achieve the Most Success
CRM data can be used to personalize messages to achieve optimum success. Marketing campaigns and special offers can be targeted for particular customers knowing what will trigger a positive response. For example, if a customer has complained about shipping charges in the past, then a marketing campaign to that same customer can target a free shipping promotion...simple but effective. Similar type campaigns can target practically anything that appeals to a particular individual or business customer.
Determining Churn Risks and Causes
Other CRM data that is extremely important is information on customers who are not engaged and, therefore, at risk of being lost and possible causes for a potential customer churn. For example, a product with an activation code is sold to a customer but after a period of time, the customer still has not activated the code after purchase...a possible customer churn in the future because the customer is not engaged. Rather than waiting to hear from the customer for one reason or another, the business could take steps through the use of CRM data to contact and engage the customer with additional information about the product or service, details regarding activation, or just giving the customer an opportunity to ask questions.
Leveraging CRM Data
CRM data allows a business to not only improve sales but also to find potential reasons behind churn rates. Data on emails, phone calls, online chats, or surveys might show trends for possible customer dissatisfaction that can then lead to corrective action and possible solutions.
The key to leveraging CRM data is using it to gain an understanding 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 a particular customer. When customers feel as though their needs are being met by a business, sales follow...just the opposite of customer churn.