CRM as a strategy: The power of repeat customers
Today’s market is all about growth, and not just your own. Competition is also constantly growing. This makes it more difficult for many marketing teams to convince new customers of their offerings. More and more companies are therefore increasingly focussing on maintaining their existing customer relationships.
“Once an online shop has crossed the threshold of around 100,000 customers, various measures to maintain customer relationships pay off,” says Rob Rebholz, co-founder of optilyz.
In the following article, we will take a closer look at why modern companies can only secure their long-term success with CRM. We have 6 good reasons for you that clearly support your investment in existing customer management.
6 good reasons why companies should invest in their customer relationship management
New customers, more sales, faster growth – strategies like these are certainly nothing new to you. However, as soon as a company already has a certain customer base, investing in this customer base is a good idea. Why?
Reason number 1: Because it’s cheaper
In recent years, the cost of customer acquisition has skyrocketed due to the e-commerce boom. In most cases, a profitable first contact can no longer be financed at all, says Uli Zimmermann, Managing Director of the online marketing agency eMinded. Big players such as Zalando may invest huge sums in acquiring new customers in order to further increase their already considerable growth. For the majority of companies, however, a positive return on investment in new customer acquisition is becoming increasingly difficult to achieve.
The situation is completely different with existing customers: They already know and trust your company. Maintaining and strengthening relationships with them is therefore not only cheaper, but also more efficient. After all, you don’t have to start from scratch.
Reason number 2: Because it gives your customer journey a common thread
The customer journey of today (and tomorrow) has become so much more complex and unpredictable. Today, your customers reach your company and your brand via various channels and touchpoints: mostly online and offline. And they expect to find content that is relevant and appealing to them anywhere and at any time.
As part of good existing customer management, you can give the customer journey a common thread again and actively manage it. Accompany your customers on your journey together, pay attention to their individual needs and preferences, learn from them and show them that you value them and their contribution to the success of your company. In this way, you will ensure that you retain loyal customers in the world of tomorrow – which may look very different from the world of today.
Reason number 3: Because it increases customer lifetime value (CLV)
Successful existing customer management allows you to increase your customer lifetime value (CLV) – the value that a customer adds to your overall customer relationship. Whether customers generate a lot or a little revenue for you over the course of your journey together depends, among other things, on how long they stay with you as customers. In addition, your company has usually already invested a lot in existing customers. It would therefore be a shame to stop nurturing customers after a purchase and run the risk of not creating any real customer loyalty. You would then have to start all over again (keyword: expensive new customer acquisition).
It is also a fact that returning customers usually spend more than first-time buyers. Statistics show that existing customers can account for up to 66 per cent of sales, even if they only make up 32 per cent of the customer base. For you, this means that regular customers will bring you more sales over the course of their customer lifecycle – at significantly lower costs. You therefore receive an ROI that gets better and better over the course of the customer lifecycle.
Reason number 4: Because you can fully utilise the advantages of your Marketing Cloud
Thanks to new technological solutions, we now know more about our customers than ever before. Marketing Clouds enable us to collect customer data centrally, connect it with each other and analyse it efficiently. As a company, this allows you to keep your finger on the pulse, track your customers’ preferences and behaviour across various touchpoints and communicate with them much more effectively and efficiently – especially in existing customer management. You can safely ignore your gut feeling or that of your team. Instead, you can rely on the data and the technology to optimise its analysis for you.
Thanks to modern Marketing C louds, you can also automate your campaigns and save valuable time. And the technology allows you to highly personalise all aspects of your online and offline campaigns – not just content, but also delivery times and the like. And we all know by now that personalisation works.
Reason number 5: Because CRM also works without third-party cookies
Third-party cookies will soon be a thing of the past. They still play a major role in digital marketing, as they provide data about people we didn’t know or didn’t know that well. However, this will soon come to an end and it is high time to find alternatives. One of these alternatives is first-party data.
This is data that your customers voluntarily share with you. It is inherently personal, persistent and transparent. The risk of getting into data protection problems now or in the future or annoying people with irrelevant information is comparatively low with first-party data. For your existing customer management, it also means that you can target your budgets much more effectively by only sending customers the information that really interests them.
Reason number 6: Because modern marketing is about more than just sales
Nowadays, sales should no longer be everything. Modern customers favour companies and brands that offer added value. Values such as sustainability, ethics and fairness are highly valued. Premium services for VIP customers are also currently very popular (keyword: loyalty programme).
Active customer relationship management gives you and your company the opportunity to communicate your values and your entire offering on an ongoing basis, thereby increasing customer loyalty to your brand. This also increases the chance that your customers will advertise for you, your company and your brand(s) free of charge and thus take over part of your (expensive) new customer acquisition.
Factors such as these should also be included in the strategic calculations and given a fixed place in the ROI. After all, it is not just turnover that determines whether a campaign was successful or not (you can find more information on this topic here).
Be it cost savings, digitalisation, technology, cookies, customer loyalty or ROI – there is a compelling case for investing in existing customer management. Whether you follow the trends and rely on a loyalty programme in CRM or whether other approaches are more likely to lead to success in your company may ultimately depend on the industry, product range and target groups. However, it is never wrong to look after your existing customers. After all, the power of repeat customers is real – and it’s high time to utilise it to the full.