Long-Term Customer Retention: Data Is the Key
From an ROI standpoint, there’s no contest: dollar-for-dollar, resources directed toward customer retention yield significantly more impact than those dedicated to new customer acquisition. And while customer acquisition efforts are vitally important to enterprise growth, the upside of nurturing and growing existing clients is critical to short- and long-term business success.
For IT teams tasked with finding, implementing, and integrating solutions that enhance customer-centric goals, few technology investments offer more impact than a proven data integration solution. These powerful technologies connect customer data collected and housed in CRM, email, and calendar platforms. They then leverage that data by to provide just-in-time access to the customer at the right moment in their journey in order to nurture and sustain relationships.
Whether interacting directly with customers, developing new products and solutions, or overseeing and improving data use, the right data integration solution puts current customers front and center for every stakeholder—and makes it easier to create longer, stronger relationships. Here’s how:
- Existing customers are predisposed to additional purchases. When your enterprise establishes a relationship with a customer, you’ve overcome the greatest hurdle to future sales. As time goes on, the data will point to ways a relationship is poised to deepen, providing opportunities to grow. This is particularly true in highly regulated industries like finance and insurance. Once you’ve used the data you collect to demonstrate your familiarity with the nuances of a customer’s business you’re a natural go-to, because:
- Advisors and agents demonstrate a comprehensive understanding of customer needs and histories at every interaction.
- You demonstrate care about their data, customers gain confidence that their information will remain safe from breach or misuse, and that they won’t run the risk of compliance sanctions.
“Existing customers are 50% more likely to try new products and spend 31% more, on average, compared to new customers.” – Patricia Rioux, The Value of Investing in Existing Customers, Forbes, January 29, 2020
- Deeper customer knowledge can identify—and secure—clients at risk. In the insurance industry, customers who purchase only one product or service are referred to as “clients at risk.” In effect, that distinction means they’re a lot like retail commodity buyers who are more inclined to shop by price vs by value. Riva’s data integration capabilities allow customer-facing stakeholders to better understand those customers’ needs and objectives.
“A 5% increase in customer retention correlates with at least a 25% increase in profit.” – Fred Reichheld, Prescription for Cutting Costs, Bain & Company
- Satisfied customers become brand ambassadors. Depending on a given customer’s experience, word of mouth can work for and against your brand. Fortunately, good news travels fast. The goodwill generated by strong customer relationships has the potential to carry well beyond the customers you serve, creating new revenue opportunities—and the potential for new business relationships and new long-term revenue opportunities.
“77% of customers would recommend a brand to a friend after a single positive experience.” – Patricia Rioux, The Value of Investing in Existing Customers, Forbes, January 29, 2020
- Strong relationships lead to deeper penetration. As the tenure of any customer relationship grows, it increases opportunities to demonstrate the value of your product or service—and to become part of the fabric of your clients’ success. In effect, there’s less resistance to working with vendors that have demonstrated the ability to address needs, solve problems, and do so promptly, efficiently, and reliably. Once you’ve crossed the threshold from unknown to known, you’re in a better position to build and broaden your relationship throughout your established customer’s enterprise.
“The probability of selling to an existing customer is 60–70%. The probability of selling to a new prospect is 5–20%.” – Neil Bende, Paul Ferris, et al., Marketing Metrics (Fourth Edition), 2020
- Sustained customer relationships enhance the enterprise’s ability to anticipate customer needs. Data integration solutions like Riva bring vast predictive potential to bear, making it easier to play a proactive role with customers and prospects. When you can anticipate what’s coming, you can promote and sell solutions before customers even realize they need them—cementing your role as a partner and not just a vendor. To achieve this predictive potential, Riva helps your stakeholders to:
- Analyze customer-specific data to understand pain points, initiatives, and goals
- Leverage broader data sets to understand trends within the customer’s industry—and to apply that knowledge to the customer’s situation
Strong, lasting customer relationships mean commitment. They require hard work, diligence, and dedicated attention to grow and thrive—and to yield sustainable returns on the investment of time and resources. They also require good data stewardship and an understanding how to leverage data to continue to help the customer as the relationship matures. But when compared to customer acquisition, there’s no contest: the ROI for keeping existing customers—including the cost of smart, secure data integration—justifies every ounce of the commitment it requires.
If you are interested in more about how Riva Engine creates a true customer retention advantage for enterprises, we invite you to find more here.