How CRM Can Help Increase Customer Loyalty for Your Business

In a fiercely consumer-driven market, businesses have had to make some drastic changes to their marketing strategies. For every product or service, consumers are showered with countless options to choose from.

Because of this, getting your brand to stand out is a real challenge. What is even more challenging is retaining your customers once they have made their first purchase.

Customer Relationship Management (CRM) is used by brands to analyze customer behavior and generate new leads. However, business owners and marketers often fail to recognize the usefulness of CRM in retaining existing customers.

Before we understand how CRM boosts customer loyalty, let’s take a look at why businesses should focus on customer loyalty.

Customer Loyalty: Why is It Crucial for Brands?

The title of business trainer and author, Jeffrey Gitomer's, book is, “Customer Satisfaction is Worthless. Customer Loyalty is Priceless.” This statement holds true for every business in this competitive market.

According to Invesp, acquiring a new customer is five times more expensive than retaining an existing one. So, marketers and business owners must focus their strategies to hold on to their existing pool of customers.

In addition, loyal customers can become advocates of your brand. Apart from returning to you time and again, they are likely to recommend your products or services to their friends and relatives.

Your potential customers are more likely to trust the recommendations of existing users. In fact, according to Collective Bias, 70% of millennials are influenced by their peers. Brands that blow their own trumpet are no longer considered trustworthy.

Finally, customer loyalty can also earn you the benefit of the doubt in case of any goof-ups. Let’s say you run a successful e-commerce business and happen to deliver a faulty product to one of your customers. Proactive grievance redressal or compensation will help you win the customer’s trust. Then they might be willing to give you another chance, despite the sour experience.

Now that we have established how important customer loyalty is, let us see how CRM helps businesses increase customer loyalty.

Stay Connected

Businesses spend a lot of time and effort to communicate with their new and potential customers. However, they often fail to keep in touch with these customers once they exit the sales funnel.

This is a huge deterrent in establishing customer loyalty. In fact, according to a study, 79% of customers in the U.S. only choose brands that “care” about them.


Image via Wantedness

The key is to make your customers feel valued by maintaining personalized communication with them.

A CRM stores customer data including contact information, birthdays, anniversaries, etc. You can use all of this data to stay connected with your customers. This, in turn, will make them feel valued, reinforcing their loyalty to your product or service.

For instance, your CRM software can be used to send you reminders about your customers’ birthdays and anniversaries. This will enable you to reach out to your customers on such special occasions.

By integrating your CRM software with your email marketing tool, you can send automated emails to wish your customers happiness on special occasions. Including an incentive such as a discount voucher can go a long way to make them feel special.

Hawaiian Airlines, for example, sends out birthday emails to their loyal flyers. They also give out bonus air miles as a gift to make their customers feel even more valued on their special day.

hawaiian airlines

Image via Hubspot

You can also send emails to customers seeking their feedback on a recent purchase they made. This gives you a chance to improve your product or service based on the feedback.

For instance, Warby Parker sends an email survey once you’ve purchased their product. They even give customers an incentive to fill it out.

warby parker

Image via Klaviyo

In addition, the customer feels valued since you didn’t abandon them right after they made their purchase. You can also reward customers for providing their valuable feedback, which further strengthens their trust in your brand.

Know Your Customers

You can use your CRM to gather up-to-date information about your customers. The data that they provide while making their first purchase is likely to change with time. People switch jobs, change houses, and foster new relationships. CRM software can help you keep track of all these changes in your customers’ lives and use them to your advantage.

Let’s say you own a restaurant chain, and one of your customers moves to a new location. You can welcome them into the neighborhood by sending a discount voucher applicable at the nearest outlet. This sends the message that you care about them.

You can also personalize your communication based on customer data. For instance, you can divide your customers into different categories based on their relationship status. You can then create and send special offers targeting a specific category. You are likely to see better engagement for such campaigns.

CRM software like Zoho, Salesmate and Salesforce can help you monitor your customer interactions. This includes tracking email and web clicks, purchase history, etc. As a business owner, you can use this information to create targeted marketing campaigns and deals.

A classic example of tracking customer data and utilizing it can be seen in KFC’s loyalty app- Colonel’s Club. Customers can download this app to earn stamps with every purchase. They can claim free rewards in exchange for these stamps.

The app also keeps track of a customer’s location, purchasing habits, and much more. This enables the company to create targeted marketing campaigns such as geo-specific deals.

KFC’s loyalty app- Colonel’s Club

Image via TechCrunch

Knowledge of historical data can also help you identify those people who haven’t purchased from you in a while or aren’t engaging with your content. Integrating your email marketing platform with CRM software can help you re-engage inactive customers.

Special offers and discounts will reignite their interest in your company. This increases the likelihood of them using your product or service once again in the future.

Survey and Adapt

CRM software can help you automate surveys or polls asking for customer feedback. This is useful for your business in two ways.

First, your customers know that their satisfaction is important to you. Second, data from the surveys give you insights into the shortcomings of your product or service. Coming from the horse’s mouth, this information can be used to hone your offerings.

You need to act on the data from surveys to improve the quality of your product or service. This will guarantee better customer satisfaction in the future. Your customers will also notice when you are actively responding to their feedback. This makes them feel you valued and cared for them.

Drift, for example, picked up on feedback and introduced new features requested by their customers. They introduced geo-targeting for their live chat feature and as a result, solved a problem faced by their customers.


Image via Drift

Loyalty Management

Having a pool of loyal customers isn’t enough. You need to constantly create rewards for loyal customers to reinforce their trust. Many companies offer loyalty programs in the form of memberships. Integrating such loyalty programs with your CRM software enables you to manage loyalty.

By tracking customer behavior and history, you can create innovative rewards for loyal customers. It could be something as simple as a coupon for a free meal. The idea is to strengthen your relationships with customers who have shown their faith in your product or service.

Sephora has a customer loyalty program called Beauty Insider. They offer certain perks to customers who spend more with them. These include free shipping and customer makeovers as well.


Image via Salesforce

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Final Thoughts

Gone are the days when Customer Relationship Management was merely a tool to gather data and generate leads.

Today, CRM is an extremely effective tool for earning the trust and loyalty of customers. From tracking user behavior to seeking their feedback, it can offer meaningful insights to help you improve the quality of your product or service.

It also helps you maintain personalized communication with them. This is perhaps the reason why there are CRM plugins on WordPress too.

Owing to the vehement competition in today’s market, consumers are in the position of power. It is high time that business owners and marketers understand this and strive for customer loyalty.

Loyal customers are brand advocates in disguise who can fetch you many potential customers. Your business strategies should focus on making them feel valued and special.

How effective do you think CRMs are for maintaining customer loyalty? Let us know in the comments section below.

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