An old sales adage suggests that 80% of your company’s profits come from 20% of your customers. This might be an overused pair of numbers, but it still tells the truth: Companies still rely on customer loyalty. However, customers are more powerful than ever before and building connections to retain them isn’t as easy. The key to this problem is an effective customer relationship management (CRM) software.
So how can your CRM system help in strengthening customer retention and loyalty? A CRM software allows you to leverage customer data, enhance customer communications, gather feedback, hone customer needs, manage loyalty programs, and keep “being a customer” easy. Overall, the primary purpose of a CRM software is to build and retain healthy relationships with customers.
What Is Customer Loyalty?
Customer loyalty is defined as a customer’s likeliness to do repeat business with a company. Whenever you purchase a product you liked or engaged in a service you appreciated, you tend to return to the company that provided it.
Aside from becoming a patron of a brand, loyal customers encourage others to do the same. On average, Americans tell 11 people about a good experience they had with a business. This means that your loyal customers will recommend you to potential new customers for free.
Oftentimes, customer loyalty isn’t derived from the product or service being good enough. Loyal customers must have found additional value from that brand specifically. Common reasons why customers return are:
- Exceptional customer service: Consistent, excellent customer service will bring a customer back when they are in need of what your business offers. Exceptional customer service means you deliver helpful and professional assistance to the customer before, during, and after providing them what they need.
- Social proof: Positive customer reviews reinforce the way your customers perceive your brand. If the reviews and recommendations are good, then more people will be open to your brand.
- Reliability: Part of excellent customer service means being able to fulfill your promises to the customer. A business that keeps their word and provides impressive service will be able to win over customers easily.
Checklist: Characteristics of Loyal Customer
The question now is how can you tell if you have managed to win over loyal customers? Aside from returning to your business and referring your brand to others, there are other characteristics that define customer loyalty.
Here is a checklist of some common characteristics to help you identify them:
- They aren’t concerned with the cost: A truly loyal customer will not question the price, because they are assured of the results they receive. Similarly, they are more likely to buy more products or higher value offers.
- They give you rave reviews: Loyal customers love to share their positive experiences because they want other people to enjoy the same experience as them. Whether they do it in person or share it online, these customers will advocate for you.
- They tend to ignore competitors: Once they find a brand they believe in, customers will wholeheartedly support the brand. This makes them less likely to search for an alternative supplier or hear pitches from competing companies.
- They offer feedback: A loyal customer will be honest and open with you because they want you to improve and succeed. They are more likely to offer suggestions or mention other products and services they need.
- They are more understanding with errors: Loyal customers are more forgiving of errors because they trust you will resolve them. They are also more likely to treat your staff kindly, even in such instances.
How CRM Strengthens Customer Loyalty
At its most basic, CRM software is a tool that allows you to form meaningful connections with your customers. CRM software tracking features help you manage the communication between a business and every potential lead, as they progress down a sales pipeline
CRM software helps you record and retrieve data, manage administrative tasks such as scheduling follow-ups, and developing insights to share with other departments in your business. For example, the data synthesized through a CRM software can teach marketing how to build a stronger brand that entices more customers to follow your business. Here are six specific ways CRM promotes loyalty and customer retention: – Read more
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