Statistics show that it costs between five and 25 times more to sell to a new customer than it does an existing customer. Existing customers have already given you their seal of approval; therefore, they are easier for sales teams to convert. The problem, however, is finding ways to retain customers. Thankfully, there are several data-driven solutions to increase customer retention rates and ultimately drive more sales.
One effective way to increase customer retention rates using data is to cross-promote relevant products and services. For instance, you can use analytics software to track the customer's purchases. Using this information, you can then recommend similar products or services based on the customer's purchase history. If a customer buys a forklift, for instance, maybe he or she is also interested in an extension for it.
Using data, you can automate follow-up emails with your business's customers. If it's been several months since a customer has made or purchase or otherwise engaged with your business, for instance, why not send him or her a follow-up email? While you can always send these messages by hand, a customer relationship management (CRM) solution can automate this and other tasks associated with follow-up correspondences.
Data can also be used to handle problems that customers encounter. When a customer experiences a problem with a product or service, they'll look to the respective company from whom it was purchased for a solution. Neglecting to handle these problems in a timely manner could result in the customer leaving your business and choosing a competitor instead. Collecting data on the customer's actions can help you resolve problems such as this before they snowball into dissatisfaction.
Of course, data can also be used to create personalized messages for customers. With CRM or other analytics solutions, you can collect and curate data on customers, including names, companies for whom they work, past purchases, past correspondences, and more. And once you've collected this information, you can then create personalized sales messages to increase the chance of another conversion.
These are just a few ways that businesses can use data to improve their customer retention rates. Whether you sell a product or a service, to consumers or businesses, be sure to include these data-driven solutions in your marketing strategy. Because after all, it's more cost-effective to focus on existing customers than new customers.