You probably rely on a CRM system to keep your data and contacts, but do you tap into its ability to make you money? If you increase your customer retention rate by 10%, you can add 30% to your margin. Plus, keeping a client costs five times less than finding a new one. So can you really afford not to?
1. Cleanse, correct and collect
Keep client data current and accurate. It can make it much easier to secure a repeat sale. Sales teams should build relationships with multiple people within each client’s organisation to ensure the longevity of the relationship, even if a key contact moves on.
2. Cross-sell and up-sell
Why not sell an additional product or service to an existing client? It will cost you five times less than it would to acquire a brand new customer.
Collect information about your clients’ businesses, and then you can make educated suggestions about other products and services which might be useful to them. Show that you go the extra mile in order to build trust.
3. Contacts of contacts
How many of your clients have contacts in their address books who may need your services?
Introduce a simple ‘reward on referral’ scheme in order to sell without leaving your desk. Give clients a reason to bring you up in conversation – it’s not who you know that counts, but who they know.
4. Loss versus cost
Losing a customer can be a blow for anyone, and the cost of conversion for a new one can be high. Compare acquisition spend versus client management spend. You will be surprised – it can cost you five times more to gain a new client than to retain an old one.
When you next have a cancellation request, think of ways to retain that customer; even if it costs you money. It will probably cost you more to find a new one.
5. To survey or not to survey, but do you really listen?
You don’t know what you don’t know – Donald Rumsfeld was right.
When you survey clients, use a simple rating and free-form questionnaire so customers can talk freely and you can gain valuable feedback.
Address any grievances promptly and learn from them. They are more likely to respect the company and talk positively about you to others if you listen to them.
6. Integrate your data
Does your CRM system contain multiple data sheets and paper files? Having inconsistent methods of holding information will adversely affect your ability to manage and retain your clients.
It doesn’t have to cost the earth either. A simple spreadsheet which holds all the data will suffice as long as it is up-to-date and shared so the client gains a consistent and informed service.
7. Retain and gain
Research shows that increasing your retention rate will increase your margin by as much as 30%.
Moreover, increasing your retention rate doesn’t necessarily increase your costs. For example, stepping in to retain a client who is about to cancel a contract can often open up the conversation for up-selling and cross-selling opportunities.
Next time you think about your churn rate and dismiss it as ‘just one of those things’ maybe you should look at your CRM system again.