Why you should get to know your customers
Did you know that it costs 5-6 times more to acquire a new customer than it does to retain an existing one?
As digital entrepreneurs it can be really easy to fall into the ‘acquisition trap’ where we end up spending all of our resources on strategies and channels that gain new customers.
If this describes you, you’re not alone. In fact, only about 18% of companies put a focus on retention over acquisition.
This number is quite startling inasmuch as every business owner I’ve ever spoken to puts a tremendous value on their existing customer base. Unfortunately, there seems to be a major disconnect in implementation.
Customer acquisition strategies are incredibly important but not at the expense of your current patrons. It reminds me of a nursery rhyme. You know, the one that goes “make new friends but keep the old, one is silver and the other’s gold”.
Cliche, I know, but gold is absolutely the right metaphor. Recent surveys have shown that increasing customer retention by as little as 5% can result in as much as 25-95% increase in profit!
Consider a company like Red Bull. Red Bull is one of the best examples of a company that knows its customers and develops relevant content to keep them coming back regularly.
There is no mystery about who Red Bull’s target customer is. In fact, they have done such an excellent job that nearly anyone could clearly articulate Red Bull’s niche market.
Through knowing their customer, Red Bull has established itself as the top brand in its industry and one of the world’s most valuable brands.
Red Bull isn’t doing this by hawking skinny aluminum cans filled with their patented go juice. No, Red Bull understands their audience and puts them first.
Mack Collier, who featured a case study on Red Bull in his book Think Like a Rockstar, has a blog article titled, “The Power of Being Second, How Red Bull is Winning the (Content) Marketing Wars”, in it he states:
“What separates Red Bull from most brands is its customer-centric marketing. Everything about the brand’s content, marketing and communication efforts is about its customers and what’s important to them. The product itself is secondary to the activities that the customer engages in, and cherishes.”
The message is simple. It’s important to know your customers. Your business will be better off because of it.
5 Ways CRM Software Can Help You Know Your Customers
Customer Relationship Management (CRM) refers to all the strategies and practices that a company uses to manage and enhance their customer interactions. CRM software is the technology that a company uses to achieve this goal.
When people use the term CRM, it is usually the latter that they are alluding to. Of late, CRM has become synonymous with contact management and sales productivity.
Essentially, the benefit of CRM software is in the data. CRM allows you to capture streams of information from various departments like sales, marketing, and customer service. From there you can utilize this data to better understand your customer and grow your business.
CRM software has shown proven results, time and again. Here are just a few of the ways that CRM can help you know your customer and increase your bottom line.
1. Identify Pain Points
Any good sales trainer will tell you, if you want to delight your customer take away their pain.
Discovering a customer's true pain points can be tricky, especially in an e-commerce environment where you may never meet them face to face.
This is where a CRM really shines.
A CRM will collect data on every visitor that comes into the system. From there you can identify common actions that help illuminate common pain points.
Are your customers abandoning the cart at the shipping page? Are they having trouble finding the specific product they are looking for? Are they not engaging with a specific CTA?
A CRM can help you determine which user actions are relevant and should inform your future decisions vs. which actions just noise that can be disregarded.
CRM software help you make knowledgeable decisions that help you capitalize on future visits.
2. Analyze Buying Patterns
A CRM provides a backlog of information on every individual customer that purchases from your business.
This allows you to better understand your customer's buying patterns and create valuable ensuing offers, a technique that has been proven to create repeat sales.
When integrated with the right content management system (CMS) a CRM will give you insight to properly cross sell or upsell a customer, based on previous history or commonly bought items.
A great example of this in practice is Amazon. Amazon has stated that an astonishing 35% of their profits come from targeted cross-selling alone.
3. Nurture Relationships
It’s no secret that relationships take time.
A CRM allows you to gather information about potential customers and follow-up in an appropriate manner.
In fact, if you don’t have some type of lead magnet actively collecting visitor information on your site, you may be missing out on a lot of subsequent business.
Considering that 80% of initial sales take an average of 5 follow-ups it behooves you as a business owner to have a follow up practice in place.
In addition to following up with new leads a CRM allows you to stay in touch and nurture your current customers, thus increasing the likelihood that they will buy from you again or refer your business.
4. Improve Customer Service
The majority of online shoppers surveyed expect an e-commerce company to remember them and provide personalized service when they have a problem.
A CRM can greatly help you address customer concerns due to the fact that it creates an ongoing history of customer interactions.
It may not sound like much, but offering your customers personalized attention can greatly increase the perception of your brand and positively affect future transactions.
CRM software allows experienced representatives in your organization to quickly review customer information when a problem comes up and provide an immediate, individualized solution. Additionally, it allows them to document the solution for future troubleshooting and collaboration.
5. Greater Organizational Efficiency
One of the more common challenges among teams is a deficiency in sharing information within the organization.
This may be the result of a broader problem like lack of trust but it may simply be a consequence of individual busyness or poor application. Regardless, in a traditional setting sharing information between multiple departments like sales, marketing and customer service may be lacking.
A CRM allows multiple teams to individually obtain information and contribute to shared customer profiles, calendars, etc. With ease, independent teams can seamlessly work together to positively impact the organization's goals.
Knowing your customers is one of the important pieces to growing your business. Keeping your customers happy is integral to your long term success and should be a top priority.
Having the right partner can mean all the difference. Don’t risk your customer's satisfaction by investing in the wrong CRM.
AltiSuite’s customer management tools are built around you. Our focus on the e-commerce customer ensures you get relevant software that can automate many of your day to day tasks.
Trust AltiSuite, we’ll help you get to know your customers and meet them where they are.