Statistics have shown that acquiring a new customer is 5-6 times more expensive than holding on to an existing one. This indicator alone serves as ample proof that customer relationship management (CRM) is vital to the success of any sales rep. Instead of spending thousands of dollars and man-hours focusing exclusively on customer acquisition, businesses are starting to realize the importance of customer retention.
CRM Increases the LTV of Customers
One of the most important metrics to track in sales is the lifetime value (LTV) of a customer. After an initial sale, sales reps should aim to sell additional products to the same customer over time, rather than focus on closing a deal and moving on to the next customer. In this way, the cost of acquiring each customer is covered and reduced with each subsequent sale.
CRM Gives Sales Reps a Competitive Edge
In any particular industry niche, there are often hundreds of companies selling similar products. In order to stand out from the pack, sales reps need to find a competitive advantage. CRM helps because customers like doing business with companies that are attentive and responsive.
With CRM tools, information about clients can be stored and accessed at any time, including:
- Order history
- Summaries of past meetings
- Reports on phone calls
- Past emails
- Customer preferences
Having this type of information readily available is invaluable for a sales rep. Customers (current and former) get a more personalized experience when new products are pitched. The more targeted and personalized the sales approach is, the higher chance sales reps have of closing a deal.
CRM Eases the Sales Process
Trying to remember what a customer expressed interest in months ago is difficult. Recalling a particular conversation from out of hundreds of other clients can be nearly impossible. With CRM tools, the entire sales process becomes much easier for both the sales rep and the customer.
For instance, perhaps the rep sent over some paperwork to a client that detailed certain discounts. With a mobile CRM app, the rep can easily pull up all pertinent correspondence for the next meeting and go over it in person.
CRM Ensures All Staff is on the Same Page
Sales reps are not the only people involved in CRM. Every department has to collaborate in order to truly be successful and maintain healthy customer relationships. The billing department, marketing department, sales reps, managers and even top executives are all interrelated in achieving this goal. With CRM software, every department can input valuable information about customers that another department may find useful. It can eliminate a lot of confusion and boost efficiency by offering a cohesive platform that all employees can utilize.
CRM Reduces Marketing Expenditure
One of the key benefits of CRM is that it can indirectly lower the cost of marketing to new customers. When a sales rep has established a strong relationship with a client, the likelihood of that client referring a new prospect is increased.
Statistics from Nielsen show that a person is 4 times more likely to purchase from a business that was referred to them by a friend. Depending on the company’s customer acquisition cost (CAC), focusing on CRM could potentially save thousands in marketing costs.
In order to generate this free word of mouth advertising, CRM needs to be a top priority for every business.