What is customer retention and why it is important?

At the forefront of any business, you will find three critical departments that interact with customers on daily basis: Sales, Marketing, and Customer Service. Their main goals, irrespective of business type are (1) to market the product or service, (2) to sell more and grow the business, and (3) to offer an excellent customer experience.

These goals are geared toward acquiring more customers that are willing to do business without leaving or opting for competition. So, keeping existing customers for as long as the business exists is a top priority for any customer success, sales or marketing manager.

• Why is customer retention so important? According to analytical data by Salesforce, the answer is straightforward: 
• Customer retention is way cheaper.
• Existing customers mean more income at a higher conversation rate.
• Amounts to more profit and lifelong loyalty.

Customer retention rate (CRR) is defined as the customers' choice to stay and do business with you over a specific period.

Below is the formula to calculate it,

For example, you start with 101 customers and end with 108 in Q1, losing 10 and gaining 17,

The CRR = (108-17/101)*100% = 90% 

100% retention rate means the business has not lost any single customer or in other terms, it has 0 churn rate. 

Whether the number is below the minimum threshold of 85% or higher, there is always room for improvement by implementing the right customer retention strategies.

Another essential customer retention metric to consider is customer lifetime value, or CLV, which is the amount of revenue your customer is expected to generate throughout their relationship with your business. It helps companies strategize to keep them loyal and profitable.

If the average revenue a customer generates is $2,500 over 4 years, the CLV will be $2,500*4 = $10,000.

Knowing that the customer is worth $10,000 in 4 years of doing business with them, you might be willing to allocate $1,000 to acquire them and maintain their loyalty.

 

Innovative strategies to retain your customers using Salesforce in 2022

Now that we know how to measure the customer retention rate and its importance, here is a look at eight strategies that can help any business work on its customer retention strategy using Salesforce data and features in 2022.   

1. The power of centralization in one platform
2. Personalize customer experiences, big time
3. Create outstanding customer loyalty programs 
4. Re-engage inactive customers with Marketing Automation
5. Leverage AI-driven insights & reports 
6. Power up by upselling (and cross-selling) to existing customers
7. Be realistic and identify customers that are likely to churn

In this article, the customer retention smart strategies using Salesforce will mainly be centered around Sales Cloud, Marketing Cloud, Commerce Cloud, Loyalty Management, and Service Cloud products. We will also highlight other Salesforce products depending on proven use cases across different industries. 

Salesforce CRM provides users with an all-in-one platform with a variety of products and features that could improve the rate of customer retention in several ways. 

Hopefully, the customer retention strategies discussed here will provide you comprehensive guide you can apply to your business for a better customer success journey. 

1. The power of centralization in one platform 

The first step toward successful customer retention is to understand the problem your customers are facing in detail. Salesforce CRM is specifically designed to optimize and streamline sales and marketing activity in servicing a customer and is primarily intended to centralize all these processes in one platform: a central point for receiving, processing, and sending data around your customers. Unlike other CRM applications, Salesforce can manage your customer experience in one platform hence making timely and real-time decisions to serve them better. Research from Markinblog shows that 89% of companies see customer experience as an essential factor in driving customer loyalty and retention.

This strategy was implemented at Paypal and managed to streamline their customer experience by unifying sales, service, and customer success in Salesforce. With their data-first and customer-first approach in a single source of truth, they were able to serve over 1bn customers while creating opportunities for revenue growth.

2. Personalize customer experiences, big time

With Salesforce Marketing Cloud, businesses can gain in-depth insights into each customer and apply AI to deliver a human-touching personalized experience. Smart sales and customer success teams know they must leverage such insights to personalize emails, landing pages, forms, and telephone conversations to show customers how much they matter. Using Marketing, Service and Sales Cloud in their tech stack, AXA Business Insurance managed to sell insurance policies directly to their customers without relying on traditional brokers. By automating marketing journeys to simplify the insurance process, they gave their clients access to a personalized and omni-channel service delivery.

3. Create outstanding customer loyalty programs

Creating customer loyalty programs is another smart strategy to boost customer retention using Salesforce. 

On February 2021, Salesforce launched a great product in their ecosystem called Loyalty Management. It is built on the Salesforce customer 360 platforms and integrated with the Salesforce Service Cloud and CRM Analytics - formerly known as Tableau and Einstein Analytics.

It enables companies to provide more personalized and relevant consumer experiences with loyalty programs such as interactions with the brand, promotions, points accumulation, real-time offers, conversation rate, and more. These interactions drive business value by creating customer loyalty hence boosting customer retention.

• Steps to enable Loyalty Management in Salesforce
• Click the Quick Find Box > Setup > Users.
• Select the User you will assign permissions to.
• Go to Permission Set Assignments > Edit Assignments
• Available Permission Sets > Loyalty Management > Add +
• Click Save Changes

4. Re-engage inactive customers with Marketing Automation

Your customers will enjoy doing business with you if provide them with personalized dynamic content that addresses their daily challenges. By applying marketing automation, you can tailor every engagement based on consumer data to create ongoing, seamless journeys across multiple channels.

Using Salesforce Marketing Cloud, businesses can build marketing automations to create relevant content such as emails, text, articles, or social media conversations. These interactions can create digital ads and recommend the right products on your website for your customers along their journey, no matter where they are in the customer lifecycle, from onboarding to advocacy. Delivering timely, personalized content that reaches customers when, where, and how they prefer will help your business convert prospects into lifetime brand ambassadors.

5. Leverage AI-Driven Insights & Reports

With Salesforce Einstein, businesses have the power to employ essential machine learning and advanced deep learning concepts to process customer data into valuable insights. This way you can further segment the targeted audience, helping sales and customer success teams know which clients are most valuable to do business with in the long term. The AI-driven insights and reports will show which customers are more likely to return or spend more and where they can be found. You can leverage such information to reach out to those customers with personalized product or service offers at the right time through the right touchpoint. Furthermore, the service rep and sales team can stay updated with customer issues and channel them to the best-suited resources in an organization for proactive and timely resolution.

Typical use cases of AI are deflected routine customer service questions with chatbots and recommending products to customers similar to ones they've already purchased or are prospecting. You may want to check Einstein’s guide to AI use cases for a step by step interactive process of bringing AI into your business. With customer retention use case for example, the tool will help you to anticipate customer churn, mitigate unhappy customers, or recommend products customers will purchase.

6. Power up by upselling (and cross-selling) to existing customers

Upselling is nothing more than selling premium products to customers on top of primary ones. Cross-selling is the practice of offering customers additional products to complement an existing purchase. 

Customer success and sales teams can utilize Salesforce CPQ (Configure Price Quote) to configure bundled packages and promote up-sell and cross-sell opportunities to existing customers. Creating bundled products allows the business to provide the ‘complete solution’ that meets the customer needs as additional features/options with flexible pricing. You can learn How to create a Product Bundle in Salesforce CPQ here. 

7. Be realistic and identify customers likely to churn

Customer churn rate is opposite to customer retention, meaning the rate at which a business loses customers, impacting the revenue and profit coming out of that sale. Every business experiences customer churn irrespective of product or customer service quality. In order to boost customer retention, you can use Einstein Discovery to identify the areas of churn and take the necessary next steps to reduce churn. Combining this tool's analytics and artificial intelligence power, you can have a 360 view of a customer's last interaction, website visit, and purchase behavior.

If the customers are not using your product or service and haven't been in touch, they are more likely to increase your churn rate. Einstein automate gives you an automation workflow to reduce the customer churn rate by triggering emails to attempt at re-engaging with these customers, offer discounts, or provide promotional materials about your products and services.

In Conclusion

Applying these strategies to help your business boost customer retention using Salesforce will yield a better customer experience and a worthwhile investment to grow your business.

Putting your customers' needs at the heart of your business can improve customer experiences, retain their trust, and ensure that they remain loyal to your products and services for a long time. To sum up, customer retention and maintaining their loyalty are mandatory to strive in this competitive arena. With its ecosystem of products and features, Salesforce provides us with a comprehensive solution for retaining customers in no time. Now that you know how to use Salesforce to boost customer retention, you can apply these strategies in your business to build better partnerships and ultimately achieve business growth.

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