Businesses both large and small need to work hard to attain customers. However, once they become your customer, you need to work even harder to keep them happy to retain them. Customer retention is, by far, the single most crucial issue for businesses of all sizes.
Enter relationship marketing. This is a strategy of customer relationship management (CRM) that emphasizes customer retention, satisfaction and lifetime customer value. Its purpose is to market to current customers versus new customer acquisition through sales and advertising.
As the Association of National Advertisers (ANA) defines it, “A good relationship marketing strategy is rooted in building customer loyalty and lasting, long-term engagement with your customer base. Benefits include increased positive word-of-mouth, repeat business, and a willingness on the customer’s part to provide valuable feedback to the company and their peers.”
But to make relationship marketing effective, you need robust customer relationship management software and other communication tools.
You need all the information about your prospects and customers to build a strong relationship with them. And it is your CRM that gives you all the information you need about your prospects and customers. The valuable information you get from your tool is known as relationship intelligence.
The way you keep your business records of customer interactions is vital for every business. To do this efficiently, you need robust customer relationship management software. The customer-centric marketing strategy is the need of the hour for every business because it helps them grow as an organization.
Let us, therefore, take you through what relationship intelligence is and how it can help you retain your customers and grow.
What is Relationship Intelligence?
According to The Pipeline, relationship intelligence is a data set stored in CRM databases and used to obtain new insights into your existing and potential customers. You cannot limit prospect contact data to just phone numbers, job titles, emails and company pain points. You need valuable customer insights – known as relationship intelligence – that brings you closer to your customers. Relationship intelligence data comes from company interactions or customer-facing communications.
Business owners can use relationship intelligence to add records to their existing databases and clean unwanted, inaccurate data to create a new and improved database. Relationship intelligence helps create family tree-like branches between professionals and every bit of customer intelligence.
Whereas customer intelligence is customer-centric, relationship intelligence is connection-centric. While customer intelligence includes information like phone numbers, email addresses, reporting structure, job titles and social media handles, relationship intelligence deals with such information as outreach campaign targets, support tickets submitted, renewal cycles and social media traffic.
In his article for Destination CRM, Jody Glidden – cofounder and CEO of Introhive – observes that just as IQ (intelligence quotient) and EQ (emotional quotient) define the personality of a person, RQ (relationship intelligence quotient) guides a company to deal with the outside world (read customers) intelligently. Relationship intelligence is about knowing what your customers want, keeping them happy so that they remain with you and cultivating a long-term relationship with them to further the growth prospects of your organization. To engage with your customers and prospects effectively, you need to have a detailed understanding of the interactions they have had with your organization.
“This third wave of intelligence focuses on how an organization/company can be emotionally intelligent with the outside world,” Glidden says. “Relationship intelligence is about having a pulse on your entire network, not letting those relationships lapse, and building long-lasting strong relationships that can end up being an accelerator in your career and life. When it comes to engaging customers and prospects, having a detailed understanding of the interaction web is an incredibly valuable resource. It helps with revenue acceleration unlike any other bells or whistles that a CRM has to offer.”
Using the Data in Your CRM to Build Relationship Marketing
Writing for Chron Small Business, marketing author Neil Kokemuller covers the numerous ways that making effective use of the data in your CRM can increase revenue:
Higher conversation rates – One way in which CRM boosts revenue is through higher sales conversation rates. When salespeople have greater access to details about prospects, they have a better ability to sell. CRM software allows you to manage profiles of customers, keep detailed notes on meetings and better assess mistakes or issues. Over time, this improves your ability to get more sales from opportunities.
Longer relationships – Another benefit of such intricate data is the ability to turn customers into long-term, loyal supporters. The software has tools that allow you to schedule email and phone contacts during and after sales. This is important to the follow-up and follow-through service portions of customer relationships. Also, by having good records of customer meetings, you can maintain stronger personal rapport with each individual buyer.
Suggestion selling – Enhanced opportunities for suggestion selling also boost revenue with CRM. Suggestion selling includes add-on sales and cross-selling. Add-on sales occur when you sell more related products to an existing customer. Cross-selling is when you get the customer to buy additional, unrelated items. The idea is to leverage relationships by having sales and service employees’ customer profiles and order histories to see where additional sales opportunities exist.
Referrals – CRM can also help you expand your customer base through referrals, which leads to more revenue opportunities. You can set up automated follow-up emails that ask customers to provide information on referrals. You can also use incentives to reward existing customers whose referrals make purchases. By tracking how prospects heard of your company, you may also recognize patterns of referral sources and better use those in your future marketing and referral programs.
Retain Your Customers and Grow Your Revenue
To cultivate loyal customers, you need to know them thoroughly. Retention is the outcome of how you deal with your customers and the relationship you develop with them. The more you can retain your customers, the more you grow your revenue.
“Retention is the outcome of your relationship strength – it’s the revenue you keep,” Glidden says. “It’s important because it not only represents the quality of your product, but also the value your customers place on it. Retention is important because it means you’ve built a product people want to use.
“While revenue and growth rate are important metrics to track, dialing in retention should be a top priority. Make sure people love your product. Once you can retain customers, focus on growing as fast as you can.
“Increasing your customer retention rates by just 5 percent has the potential to increase your profit margin by 25 percent or more. Having access to timely and quality relationship analytics improves decision making that can result in organic growth at a lower cost, driving business effectiveness, efficiencies, and revenue. Retaining happy clients has an impact on prospective business development as well. Eighty-four percent of B2B decision makers use referrals when kicking off their buying processes, so having a clear understanding of your client networks also results in developing a broader pipeline for future business.”
However, you need timely, quality relationship analytics to improve decision-making that can result in organic growth, drive sales and improve revenue. But you must use a robust CRM solution to obtain timely and quality relationship data to serve your customers better and increase customer loyalty. There is no doubt that businesses need a CRM to get all the relationship intelligence data necessary to achieve this goal. Our blog post – “How a CRM System Increases Customer Loyalty” – covers this topic in greater detail.
If you offer the right solutions and incentives to your customers, they are less likely to take their business elsewhere. There are many strategies that you can adapt to cultivate long-term customer relationships. With the right CRM solution, you learn which strategies and tactics will work for each particular customer.
If you’re considering a CRM solution for your business, we invite you to learn what eZnet CRM has to offer. Our industry-leading system allows easy, seamless management of every aspect of the customer experience. We’re here to make sure you don’t fall behind in this increasingly competitive business environment.