CRM Tech for Building Customer Trust in Manufacturing
Considering the recent economic trends in Europe and the rest of the globe, the emphasis is on cost-effective solutions in all business areas. It is well established that retaining existing customers is cheaper than acquiring new ones. That's why directing efforts towards customer retention strategies is a fruitful route for manufacturers to boost profitability.
In this article, we discuss the importance of customer loyalty and how CRM software can help build stronger, lasting relationships with customers.
Why choose customer retention over acquisition
Both customer retention and acquisition strategies are undoubtedly important. However, when faced with the question of which to focus on, the choice is clear.
Different studies have proven that the cost of acquisition can be as high as seven times that of retention. The main contributor to this disparity is the high cost of marketing and advertising campaigns needed to win over new customers. In addition, it may take one to five years for new customers to contribute to profits.
In contrast, increasing customer retention by just 5% leads to an increase in profit by 25-95%, according to Bain & Company. This happens because repeat buyers contribute more revenue and have a higher customer lifetime value. Also, loyal customers are likelier to share their satisfying experiences, helping businesses tap into word-of-mouth marketing and acquire customers for much less. Therefore, retention offers higher returns on investment (ROI), necessitating manufacturers to build and maintain the loyalty of their clients.
5 reasons manufacturers fail in retaining customers
The most recent statistics show that the average customer retention across industries is 75%. However, the retention rate in manufacturing is behind the average at 67%. This shows that many manufacturers are still not managing churn optimally. Here are five major reasons why manufacturers are struggling to retain their customers:
Lack of Personalization
Manufacturers who fail to gather customer data and insights cannot understand their preferences and needs. This causes to inability to truly engage customers and make meaningful connections with them. Consequently, manufacturers miss opportunities to deliver personalized offers and recommendations. Eventually, such brands will be at a competitive disadvantage as the customers and prospects troop to businesses that provide these important personalized services.
Single-Channel Customer Services
Many customers use multiple channels to engage during their journey, making single-channel services limiting and frustrating. However, delivering omnichannel experiences remains difficult for most European companies. For context, Infobip and IDG Research revealed that only 25% of European companies had adopted omnichannel strategies. Consequently, many manufacturers have yet to perfect engagement with their customers, leaving room for churn.
Transparent and timely communication is key to sustaining strong customer relationships. For example, consider a scenario where a manufacturing company has a production delay and cannot fulfill orders. Failure to promptly communicate these delays to customers may disrupt their business operations and cause financial losses. Hence, breakdowns in communication can damage relationships and force wholesalers or retailers to find new manufacturers to work with.
Building and maintaining trust and loyalty requires businesses to open two-way communication. By so doing, customers can submit their feedback on products and services, and businesses can improve their offerings. However, poor feedback management will leave clients feeling undervalued and cause them to lose faith in the brand, particularly when this becomes a repeated pattern. Hence, neglecting feedback is the surest route to losing customers to the competition.
Poor or Outdated Products
Innovation in European enterprises is picking up pace, with about 53% of companies in the EU being involved in some level of product or business process innovation between 2018 and 2020. Manufacturers must gather and analyze market insights, customer preferences, and competitor strategies and use the information to develop innovative products. Failure to do so means the output at production plants will fail to meet expectations, providing unwanted motivation for customers to churn.
CRM software: the missing key to earning customer loyalty
A high churn rate must be addressed immediately, and Customer Relationship Management (CRM) systems are ideal for this purpose. CRM technology allows manufacturers to collect, store, and manage customer data in a centralized database. This gives brands a comprehensive 360° view of each customer by centralizing their demographic data, purchase history, previous interactions, and more. Here are six ways manufacturers can harness CRM to increase customer retention:
- Customer Segmentation.
Segmentation involves dividing the customers into smaller groups based on shared characteristics. CRM systems can perform smart and precise segmentations using criteria such as firmographic segmentation that considers industry, company size, and location or behavioural segmentation that involves purchase history and average order value. Consequently, manufacturers can better understand customers, improve interaction, and efficiently manage sales cycles.
- Personalized Communication.
CRM software is a powerful tool for companies aiming to personalize communication with customers. In addition to being a central location for customer data, CRM can be integrated with communication channels such as email and social media. By leveraging these functionalities, marketing and customer service departments can send personalized offers, product recommendations, customized messages, emails, newsletters and surveys. Furthermore, the tone and timing of the correspondence can be personalized to fit each customer’s preferences.
- Improved Customer Service.
When customers submit feedback or make inquiries, they expect timely and satisfactory responses. CRM systems help manufacturers collect and analyze feedback, track inquiries and complaints, and manage support tickets. Through shared access to customer information, customer service agents can view customer profiles and communication history, enabling them to provide personalized support. Furthermore, CRM software can empower customers with self-service options such as tutorials and step-by-step guides to improve resolution rates.
- Enhanced Sales Processes.
The sales cycle for manufacturers is typically long and requires proactive management to keep customers from leaking out of the sales funnel. CRM technology helps manufacturers manage their sales processes better. This includes lead management, sales forecasting, and pipeline management. Manufacturers can identify potential problems and opportunities and take decisive actions.
- Powerful Analytics and Insights.
CRM offers powerful analytics capabilities that turn raw data into actionable and valuable insights. Hence, manufacturers can use this feature to understand better customer behaviour, buying patterns, market trends, and customer feedback. By conducting detailed analysis, businesses can make accurate predictions and data-driven decisions to improve their operations, from production to supply chain management and customer relations.
- Stronger Collaboration Between Teams.
For the sales, marketing, and customer service teams to work in perfect sync, there must be a reliable information exchange platform. CRM is the ideal platform for sharing updated, real-time information between departments for smoother collaboration and consistent customer experiences.
Salesforce CRM: the solution for manufacturers looking to retain more customers
Salesforce CRM is a leading software solution that helps customers address the persistent challenge of retaining customers. The software boasts powerful automation and integration capabilities to help manufacturers work more efficiently and collect data from multiple sources into the central platform. Additionally, Salesforce offers mobile CRM, allowing salespeople, marketers, or customer service agents to execute their duties from any location. It offers advanced analytics, too, thanks to the AI-powered Salesforce Einstein Analytics, and presents real-time insights on dashboards.
Manufacturers can produce high-quality sales content using these and many other features of Salesforce CRM and personalize messages, offers, and promotions. Thanks to Salesforce Loyalty Management, brands can also create loyalty programs that incentivize purchases and provide value. Marketing and sales teams will enjoy stronger collaboration and coordinate activities between themselves seamlessly. Customers are the ultimate beneficiaries of all these features of Salesforce CRM because manufacturers are better equipped to deliver unforgettable experiences that build and maintain the loyalty of their customers.
Building towards retention with ACTUM Digital
Retaining more customers is critical for generating revenue and staying competitive. Lack of personalization, communication breakdowns, and failure to innovate are some of the biggest reasons why manufacturers are unable to satisfy their customers. CRM technology solves these problems, particularly the tested and trusted Salesforce CRM that empowers manufacturers with numerous features for enhancing customer experience and building loyalty.
At ACTUM Digital, we understand that implementing a new CRM solution might pose a challenge. Therefore, we excel at providing a full-service implementation that makes introducing a new CRM system seamless and efficient. Contact us today and let us guide you towards a customer retention rate that will set you apart in this competitive industry.
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