How Can You Increase Customer Retention? Learn How a Cloud Erp Solution Can Help

Do you have a café you visit regularly? Why do you return? Sure, the coffee’s good, but perhaps they remember your name, or your order. Perhaps they suggest new menu items they think you’d like. Maybe you get a loyalty discount.

Your clients and customers need the same personalised care to stay loyal to you. They need to feel welcomed understood and well looked-after. But you’ve got hundreds of clients, perhaps even thousands of customers, how can you possibly get in touch with each of them personally? The answer is technology - and more specifically, a cloud ERP solution.

Drive customer loyalty through cloud ERP solution technology

Small business software such as an ERP (Enterprise Resource Planning system) or CRM (a customer relationship management system) can help you boost your client retention rates and reduce churn and attrition. How? By helping you develop a better understanding of your customers through analysis of their buying trends and habits.

A cloud ERP solution for small business gives you the data and tools you need to engage your customers on a personal level. It allows you to create a positive customer experience, and make repeat business easier. 

Why focus on client retention: the cost of acquisition

There’s no doubt it’s more expensive to attract a new customer than to retain an existing customer. In fact, multiple sources quote the cost difference to be anywhere between five times to thirty times more to acquire new customers.

Gartner Group says “It costs five times as much to attract a new customer than to keep an existing one satisfied.” (Gartner also estimates that 80% of your company’s future revenue will come from just 20% of your existing customers).

And the Chartered Institute of Marketing says, "Research shows that it can cost up to 30 times as much to get a new customer as it does to keep an existing one."

In addition, returning customers generally spend more; around five time more than first-time customers.

Australian business are using customer retention as a core growth strategy

Customer retention is essential for business growth. This is reflected in a 2016 study on Australian businesses by JCurve and Smart Company. The 2016 SmartCompany – JCurve SME Directions Survey found that the most-cited growth strategy for businesses was to increase revenue from existing customers.

JCurve CEO, Stephen Canning says, “When customers have a good experience dealing with your business they are less likely to go to the competition. We’ve seen that the SMEs who proactively adopt tools to improve how their sales and customer service teams manage interactions with clients, consistently sell more to their existing clients.

“CRM, eCommerce, business intelligence and marketing automation have all changed the game in this space.”

How to use technology to grow your customer retention rates

So you know customer retention is vital for growth, and you know technology can help – but how, exactly? Here, we outline four key ways that technology such as an ERP can help you increase customer loyalty and retention.

1. Understand your customers with analytics

Real customer loyalty requires personalised contact, tailored to each customer’s needs and behaviour.

To identify these needs and behaviours, you need data and analytics from a good ERP or CRM.

A recent report by the International Institute for Analytics looked at the success factors for a high performing customer loyalty program. Analytics was a key factor. The vast majority of businesses who had strong customer loyalty said analytics were “somewhat” or “very” important.

The report found that businesses with strong loyalty used analytics to identify and cultivate their best customers. They also used analytics to take action on at-risk customers and to anticipate customer needs. 

2. Segment and personalise

A successful retention strategy relies on segmentation and personalisation.

Imagine this - a customer has just bought a new product. The next day, they receive a generic marketing email promotion with a 20% discount of that product. They feel cheated and unappreciated.

Now imagine - the next day they receive a thank you email from their Account Manager offering 20% off a similar product to the one they bought, with an easy one-click ordering button. Each week, they receive advice about topics of interest to them, and offers on products relevant to their needs.

A good CRM allows you to segment your customers into groups. You can base these groups on service or product types, or location or even types of clients. You can then use your automated marketing to send different updates, offers and useful content to the different groups.

In addition, your CRM can help you personalise each communication. This goes beyond using their name in the email. It includes reference to recent purchases, or recent contact with your business, or even personal events such as their birthday. 

3. Make re-ordering easy

When you make reordering as easy as clicking a button on a smart phone, your customers are much more likely to order; and more often.

Again, technology can help here. A good ERP system with an eCommerce function, such as JCurve’s could ERP solution, allows you to set up self-service portals for easy reordering.

Your customers will no longer have to go through a sales rep. They can logon to your cloud ERP system anywhere, anytime, on any device and place an order. This gives you a clear advantage over your competition.

For regular orders, you can even set up an automated reordering system, so they don’t have to remember to reorder.

4. Create a great customer experience

Remember that café at the beginning of this blog? You return there because the experience is good. This experience is based on a mix of factors that include the quality of the coffee and food, the service, the convenience and of course the personalised touch we talked about earlier.

Customers who receive a positive experience are more likely to return, and more likely to recommend you to others.

To help create a positive customer experience, you’ll want to think about the following points, which all contribute to the overall experience:

• Order tracking: let customers know exactly when to expect their order, so they don’t have to follow up with a sales rep.
• Provide convenient ordering from any device any time.
• Reduced risk of out-of-stock items: with an ERP, you can streamline your inventory management and put systems in place to minimise stock run outs.
• Send follow up emails and thank you emails.
• Provide useful tips and advice based on their purchase.
• Streamline your invoicing and payment processes to make it as easy as possible for the customer.
• Eliminate double up communications from sales, marketing and finance. Using an ERP which has CRM integrated allows everyone to see the latest real-time data and contact information, so the client doesn’t receive conflicting calls or emails from different people within your business.

5. Harness the power of social media

Another technology solution to increase customer retention is social media. Social can be a powerful tool for engaging with your existing customers – as well as helping to acquire new ones. It’s a low cost way of communicating, interacting and get your brand out there.

Customers, and those yet to become customers, can like or following your company page to continue receiving updates from you without any effort.  

On Twitter alone, research shows that 74% of people who follow small-to-medium sized businesses do so to get updates on future products. Plus, 85% of Twitter users feel more connected to a business after they begin following them.

Use social media to reward your followers with VIP discounts, or high value content such as an expert guide or handy templates for example.

Encourage your customers to like and share your social media posts, so your reach extends to their friends and followers too. Monitor your social media for positive messages as well as negative messages, and reach out and thank your most loyal followers.

6. Prove your success with metrics

Using a CRM that’s integrated with your ERP can also give you analytics and reports on the success of your client retention strategy and initiatives. It can show you your customer retention rates, and help you calculate your customer lifetime value.

You’ll be able to compare the value of an existing customer vs a new customer. In addition, you’ll be able to see which marketing campaigns result in the most sales. And, of course, be able to segment the data based on customer industry, size, geographic location and a number of other ways which may be important to your business’ future marketing efforts. 

Conclusion

Client retention is essential for sustainable small business growth. Fortunately, small business technology such as cloud ERP systems can help you retain customers. And just like that café that serves a great coffee, but also knows your name, your regular order and gives you some nice loyalty perks, a good cloud ERP solution can also help you provide a great experience to your customers.

To find out more about how JCurve’s ERP system can help you retain your customers, talk to one of our consultants to get a conversation going.