Did You Know? A mere 5% increase in customer retention can produce an increase in profit of more than 25%.

An existing customer is generally a more profitable one, as repeat customers are more likely to buy more, and spend more per purchase. According to Bain & Company, a mere 5% increase in customer retention can produce an increase in profits of more than 25% (and up to 95%). So what does this mean for [potential] CRM users? 

Let’s take a look at how exactly CRM platforms are able to create such an impact:

Functionality

CRM platforms provide a series of features that directly contribute to improving customer retention, such as:

1. Tracking and managing customer interactions – This helps your business to provide personalized service, keeping your customers happy. 
2. Storing customer data – From a customer’s preferences, to their purchase history, all your customer’s data is stored in one place and easily visible. This data can be used to identify opportunities for upselling and cross-selling, as well as to personalize marketing campaigns.
3. Automation – CRM platforms allow you to automate some basic customer service tasks, like sending out follow-up emails and reminders, ensuring consistent contact, and freeing up time for your sales team to focus on building relationships. 

Real-World Scenarios

Here are some ways businesses can implement these customer-retention strategies with their CRM platforms:

1. Identifying Opportunities
   Melanie works for a sporting goods distributor. While looking through her CRM platform, she notices one of their wholesale clients, a bike shop, has previously ordered a number of bike saddles, and, based on their purchase history, are likely to repurchase soon. Her company has recently received a large shipment of a complementary product – cushioned seat covers. Melanie decides to use this information to create an opportunity for cross-selling, and contacts the client, offering a discount on cushioned seat covers. 
2. Personalized Campaigns
   There are a number of ways to use the customer data in your CRM to create personalized marketing campaigns – from methods as simple as sending out a birthday email, to segmenting your customers based on their interests and purchase history. Chandler owns a comic shop, and is using his CRM platform to help him create a new email marketing campaign. He’s created 3 separate segments to advertise to: clients interested in D&D (segment A), clients interested in comics (segment B), and clients interested in games (segment C). For each segment, he sends an email with a different focus, offering discounts on products they’re more likely to purchase, and announcing relevant new arrivals. Segment A, for example, will receive an email with deals on dice, miniature and paint set combos (ex. 20% off when you purchase together), and announcing the arrival of new plush figures. 

Overall, CRM implementation can directly impact customer retention rates, and, in doing so, can significantly increase profits. If you’re considering a CRM platform for your business:

1. Check out this post, in which we compare some of the major CRM platform options.
2. Contact us for help defining a customized solution for your company – from custom development, to implementation assistance and user training.