Best Tips From Companies That Use Customer Relationship Management
Knowing how to build relationships with customers is an important part of every marketing strategy in modern business. It’s not only 5 times cheaper to retain existing customers compared to acquiring new ones, but its also much more profitable in the long term.
One of the key pillars in this process is the ability to create effective retention strategies; in other words, having customers buy more products, more often.
Retention strategies are the main focus of customer relationship management. While the role was somewhat overlooked in the past, modern market conditions have forced large companies to hire dedicated CRM managers to focus solely on the task of building a loyal customer base.
So what is it that CRM managers do to help the most successful companies build a stronger relationship with their customers?
In this article, we explore what successful companies that use customer relationship management (CRM) do differently. We will briefly talk about the importance of CRM, its main benefits, as well as some good practices that you can use to improve your company’s retention rates and engagement.
Understanding the importance of building customer relationships
Every relationship is based upon the same foundation - you give some to get some. The same applies to business. For a customer to know and trust your brand, you will need to invest time and resources to cultivate a trustworthy relationship. And this is where CRM comes in.
In essence, CRM is a data-driven approach that helps companies better understand their customers and adjust their marketing efforts, in order to increase repeat purchases and create loyalty. Since both of these elements have a direct effect on sales, one could say that CRM indirectly increases a company’s revenue as well.
Consider watching the following video to get a better understanding of the concept and its applications. If you don’t have 30 minutes available, make sure you save it for later:
Here’s how the process works for the majority of businesses:
- CRM tools are used in order to collect customer data (more on that below);
- The data is analyzed to understand the customer’s wishes, needs, and preferences;
- Based on the findings, companies are able to create targeted strategies to improve customer loyalty and recurring purchases;
- CRM managers and marketers repeat steps 2 and 3 to scale their efforts, adjust the strategy, and improve the customer experience.
At its core, CRM is an important area of marketing that “infiltrates” all of your business’s communication efforts. This could start from digital activities (email marketing, social media, etc.) and even affect tactics used in physical stores (sales rep behaviour, loyalty programs, etc.)
What companies that use Customer Relationship Management do differently
The following points can help you build better systems. More specifically, here some of the best CRM practices that successful businesses employ:
They invest in the right tools
Your CRM needs will vary depending on the industry and niche you operate in. There are numerous software tools that help you collect and store data to improve the decision-making process. Here are some important points to keep in mind:
- The tool you choose needs to integrate with many different ERP systems (Futura, Advarics, SAP, etc.). This is especially important for retail stores that have both an online and physical presence.
- Integration with analytics tools, social media, payment platforms, email software tools, loyalty programs, and e-commerce stores is also very important to keep all your data in one place. The more options you have, the better.
- Mobile access is also a strong point as it helps sales and customer service reps make better decisions.
- Cross-departmental communication is also important since CRM spans across multiple departments (sales, marketing, and customer service).
- Since CRM needs are very individual, it is important to explore modular tools or software with many different pricing options to make the most from your budget.
- Finally, it is best to use tools that don’t require extensive upfront training or continuous maintenance. User-friendliness is one of the determining factors that will allow your team to analyze data effectively.
Make sure you checkout Retail CRM Cloud if you operate in the retail sector and are looking for customized solutions.
Adopt a customer-centric approach
Companies with high retention rates understand their customers’ pain points, values, wishes, and needs, which enables them to extract valuable insights from data analysis. This information can then be used to improve upon all areas that affect the bond between brand and customer:
- Acquisition strategies (attracting new customers)
- Retention strategies (nurturing existing customer)
- Customer service approach (provide valuable information across all communication channels)
From the three options above, retention strategies and customer service and obviously more CRM-oriented, as they increase engagement and bridge the gap between brand and customers.
So, how can a company adopt a more customer-centric approach? Here are some helpful tips we learned by observing companies that use customer retationship management effectively.
- Double down on personalized marketing efforts (read more below)
- Collect customer feedback (mainly through email and social media campaigns)
- Make it easy to contact your company (large contact us button, live chat, etc.)
- Develop an omnichannel approach to customer service (available across different channels).
They understand the importance of personalization and exclusivity
79% of customers feel more inclined to engage with brands that use a personalized approach in their communication. And that is just one of the countless studies that show the importance of personalization.
We previously talked about the preferred communication tools that can lead to better audience segmentation. But dividing your audience into subgroups is just the start. There are several other areas you need to explore to make your campaigns more personalized:
- Analyze sales data to improve product recommendations and build effective (and engaging) loyalty programs.
- Based on your data analysis and audience segmentation, create buyer personas to address each part of your audience individually.
- Map out your content based on your buyer personas and their position in the sales funnel (top, middle, bottom).
- Offer a personalized customer experience with elements of exclusivity to make your customers feel valued. Check out this article to get more ideas on the implementation process.
- More importantly, empathize with the core values of your audience by tapping into deeper emotional needs. For example, many companies have taken it upon themselves to support social movements or organize community events.
Wrapping up
The most successful companies that use customer relationship management effectively have certain things in common. While we analysed them above, here is a brief summary of the points you need to remember:
- CRM is an important element of your overall marketing strategy as it aims to increase repeat purchases and customer retention.
- The best way to gather, analyze, and use collected data is by investing in an industry-relevant CRM software.
- To maximize the effectiveness of your retention strategy, keep a customer-centric approach, and focus on personalized offers. This includes developing loyalty programs too.
So, where do we go from here? Your company most likely has its own individual needs and thus needs a customized solution. That’s fine - we’re here to help! Retail CRM Cloud has several modules that can be used separately so that you only invest in the things you need most.
Let us show you just how our tool can improve your marketing and communication efforts by booking a free demo here.
Frequently asked questions
If you have any more questions regarding the common traits of companies that use customer relationship management, make sure you check out the following Q&A section bellow.
What companies use CRM managers?
In the retail sector, CRM managers are often hired by enterprises and large brands. This includes shopping malls, fashion outlets, but also clothing brands that distribute their products internationally. These managers will work under the supervision of the head of marketing and are mostly concerned with the development and execution of retention strategies.
Which companies use CRM systems?
While CRM systems are mostly used by large-scale companies, it might be a good idea to start exploring your options when your company is still mid-sized. Not only will this give you lots of experience but it will also help you set up retention strategies before the size of your audience makes such systems necessary.
What is the best CRM tool?
The best CRM tool is one that is versatile depending on your business and its needs. Retail CRM Cloud is a tool that is focused (but not limited to) retail businesses and has additional modules to help companies:
- Build their loyalty program in an easy and cost-efficient way (including app development)
- Improve the performance of sales representatives in physical store locations.
- Improve engagement by measuring their reputation over time.
