Customers are the building blocks of enterprise. Retain them over the long haul and they’ll provide the stability and dependable revenue that forms the launchpad for your future. Retaining existing customers is especially important during uncertain economic times, when fewer new customers may be signing on with your service.
That’s why customer retention management software is a vital component of your retention strategy. When executed correctly, it drives growth by solidifying your relationship with the customers that are the foundation of your future. It does this by keeping you accurately informed of the customer experience as it evolves, giving you the context to make timely customer engagements that produce the kind of real-world value that inspires repeat commitments.
If your customers are the foundation of your enterprise, then customer retention is the most important aspect of a successful business.
What Are the Benefits of Customer Retention Management Software?
The digitization of business has changed the way we measure the value of our customers. The prevalence of recurring subscription and Software-as-a-Service arrangements means the majority of customer value is realized over time, rather than being captured at a single sales event. This reality forces enterprises to think of their relationships in terms of customer lifetime value, a concept that measures customer potential as the total spend over an extended period.
With this perspective, customer retention is the only way to unlock the full value of any customer partnership. Not only does customer lifetime value increase as a simple result of additional years of revenue being added together, it is multiplied by the service and value efficiencies that emerge from well-established, trusting relationships.
These efficiencies are best represented in the following facts:
- It costs 5 times as much to attract a new customer as it takes to keep an existing one
- Enterprises that have high customer satisfaction ratings grow revenues 2.5 times as fast as their industry peers
- About 80% of your future revenue will come from 20% of your existing customers.
- Increasing customer retention rates by 5% increases profits by 25% to 95%
These facts speak to the value of customer retention for the enterprise, but they are driven by the value achieved by the customer. Retention in the customer-centric, on-demand marketplace depends on an enterprise’s ability to align its goals with those of their customer, and to deliver ongoing value that creates mutual growth. Our enterprises grow on the back of the expanding needs that come with our customers’ long-term success.
One of the most efficient ways to nurture growth in our partners is to invest in customer retention management software that lets us accurately understand current and future needs, scale efforts, pivot messaging, and act on the right data at the right time.
How Customer Retention Management Software Works
Put simply, customer retention management software turns customer information into results-driven actions. It is a platform for the collection and analysis of customer data that creates a holistic image of the customer’s relationship with your company. The right customer retention management software can collect and analyze:
- Financial data
- Product usage data
- Support ticket data
- Interactions with your company
- Demographic and user behavioral data
- Customer survey responses and satisfaction scores
By adding this live data to our product knowledge and experience with previous customers, we can create customer engagements that deliver value to our customers at every stage of their product journey. Early in the onboarding phase, for example, it is important to ensure steady progress through learning modules, accelerating a customer’s ability to use the product independently and start to experience value. The right customer success platform can provide detailed feedback on customer progress, trigger next steps, and track results.
In each phase of the customer journey, the ability to raise retention rates is guided by the process of identifying the real-time customer experience and acting on it. You should know at-a-glance how your customers are doing and what their experience is. You should also have playbooks and campaigns ready to go to help deliver the right value at the right time.
Features of Customer Retention Management Software
Effective customer retention software needs to provide two key functions: 1) Gather customer information; and 2) Organize it into actionable, results-driven goals. In order to do that, it needs to include the following features:
- Collection of data from a wide range of sources, structured or otherwise
- Analysis of qualitative and quantitative data
- Enterprise-wide dissemination of information
- Track team impact against goals
- Rules-based customer health score
- Customer outcome tracking and collaboration for plans
- Customizable communication templates
- Dynamic task assignment
- Powerful customer segmentation based on real-time data
- Automated action-based processes
Essentially, retention software should give you a living understanding of the current customer experience so that you can act to proactively increase the realization of value. Your software should be able to monitor product use and other metrics and automatically alert your customer success team to any fluctuations in behavior and provide next steps so they can act to capitalize on upsell and renewal opportunities, or ward off potential churn.
The worth of your retention software is measured in its ability to help you better understand and therefore serve your customers. This, in turn, helps you work toward mutually beneficial growth.
Customer Retention Builds Business
Your future is tied to that of your customers. If you can deliver the kind of continual value that drives their long-term growth, you’ll reap the rewards that come from their increasing demands, needs, and assets.
Customer retention management software helps you deliver that value. It provides you with a detailed understanding of your customer’s current behaviors so that you can plan personalized engagements that prepare and promote the next phase of their development. With the right platform you can maintain your position as an integral partner in your customer’s growth.
If your customers are your future, then customer retention should be your focus.
Totango gives you the business advantage of knowing exactly how your customers are using your product. Explore Spark to learn how the platform provides a unified view of your entire customer portfolio and makes the data actionable. Experience the advantage yourself and get started for free today.