Customer Retention and Loyalty: 5 Key Strategies using CLM
Customer Lifecycle Management (CLM) is a vital link that convolve of the most important components of your business – your customers. “Pay attention to your customers, and business stability, revenue and growth will take care of itself” is a well trusted, and tested, lesson in the business world.
In today’s intricate and challenging business scenario however, a general road-map simply does not cut it anymore. The components of CLM have to be broken down so that its specific advantages may be explored. An important component that a great CLM strategy drives is customer retention and loyalty. This post deals with the fundamentals and strategies that help a business maximize these rewards while driving CLM to pursue them.
Why is customer retention and loyalty important?
Even the basic rules of business acumen tell us how important customer retention and loyalty is, in order to ensure the success of a business. Well, these 7 statistics and facts should help drive the point home.
- On an average, every customer a business loses translates into a loss of around INR 14000
- 71% of the customers have found poor customer service an important enough component to end their loyalty streak with a company
- In the US, enterprises lose around $83 billion due to loss of customers
- Customer retention practices cost 7 times less than customer acquisition
- 70% of customers decide on their buying patterns depending on how they are treated
- Increasing customer retention levels by even 10% translates into a 30% increase in the value of a company
- 61% of your ex-customers move on to a competitor, making your rivals stronger
Clearly, customer retention is a component your business should take seriously.
Strategies aimed towards customer retention and loyalty
CLM studies the challenges associated with customer retention and handles them efficiently. There are several strategies CLM heads and CEOs can put to work through the CLM structure.
The rewards strategy: Right off the bat, this strategy works to the advantage of every business. Offering rewards enables a business to entice a customer directly into remaining loyal. Remember those frequent flier miles that added up to great benefits and made your airline a favorite? Well, that’s what the rewards system is about. Loyalty programs help boost the marketing engine, and yet need to be efficiently managed so that what is planned is delivered. A loyalty program gone wrong is often more detrimental than the absence of one.
Tracking down dormant customers: Just because a customer is not buying, it does not mean he does not wish to. Ignoring these customers is an error no business should make. While keeping track of this database and reinitiating the customer-business process is difficult, CLM solutions are the best answers in this scenario. Not all customers are regular buyers, irrespective of the industry. Yet, the sporadic buyers make an impact too and of course, should the buying patterns show increased activity, the business that keeps in touch will be the one reaping advantages.
An eye on competition: CLM helps draw information from customers, thus allowing a business to keep an eye on what the competition is offering them. Your team after all, may not always come up with the best customer retention ideas. Yet, keeping pace with changing scenarios is always possible, and essential too.
The metrics: Retention metrics help a CLM structure understand the details of customer retention pointers, in turn allowing a business enough time to tweak its operations in favor of retaining its valued customers. This retention information comes in handy at various levels too, helping in improving customer service as well as drawing back in a customer who may be thinking of leaving.
Conversions: While conversions may often be seen as a customer acquisition scenario, it also refers to conversions of existing customers into continual buyers. CLM works a business into a steady pace, a pace that increases over time depending on the yanks the business heads make.
At Conneqt Business Solutions, we know the exact connections that make the CLM machinery drive the important components of customer retention and loyalty, making them primary contributors to revenue and growth. Our CLM solutions ensure that your organization’s key challenges are transformed into competitive advantages.
As strategic leaders at your organization, how do you put to work the advantages of CLM? Which CLM moves work best for you? Share your experience below.