Churn Prevention

What is customer relationship management and how can it improve customer retention?5 min read

May 5, 2022 4 min
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What is customer relationship management and how can it improve customer retention?5 min read

Reading Time: 4 minutes

Customer retention is key to business success in this modern economy. One way to ensure you retain existing customers as you attract new ones is to engage them constantly. Brand loyalty comes after customers feel a connection building between them and your brand. Therefore, customer relationship management is essential in your customer retention efforts. This article will define customer relationship management and show its importance to customer retention.

What is customer relationship management?

Customer relationship management (CRM) is the collection of resources that businesses use to manage and analyse customer interactions and data in the customer’s journey. The aim is to ensure the customer remains loyal to the business or brand by delighting the customer and solving any issues. Customer relationship management also helps to improve revenue collection by getting customers to buy more from the business. An example is the introduction of the subscription business model to loyal customers.

CRM systems focus on contact points between the business and customers, like the website, calls, live chat, direct mail, and social media platforms, to collect customer data. Such data helps refine the customer experience, identify customer concerns, and improve products and services. For example, customer-facing staff will have updated customer information to enhance interactions. Examples of such information include purchase history, personal information, buying preferences, checkout page contents, etc.

What is customer retention?

Customer retention refers to a business’s ability to keep customers over a given period. You may have heard of it being called the churn rate. Churn simply means the percentage of individuals who fall off your loyal customer bandwagon. Therefore, all churn prevention tactics help your business’s efforts to build brand loyalty.

Customer retention is critical to business success. If your business can demonstrate its ability to retain existing customers, it becomes more appealing to new customers. Research indicates that building brand loyalty through customer retention practices leads to more profits. Long-term customers spend more than new customers, are more patient with your business, and easily refer other customers. In addition, marketing to existing customers has a 70% success rate instead of the 20% for new customers.

Furthermore, customer retention helps lower overall business costs. It is cheaper to retain existing customers than to attract new ones. You can see this in the budgetary differences between sales and marketing departments, and customer support teams and after-sales services.

Similarly, upselling and cross-selling are easier to execute on existing customers. These customers trust your brand and are thus open to trying out new things.

What is the role of CRM in improving customer retention?

CRM systems improve customer data management to improve customer experiences, leading to better customer retention. Here are more ways CRM fulfils its role in customer retention efforts:

Better data organisation

Customer data is a goldmine for any business. However, disorganised data is useless. CRM systems help consolidate customer data and draw meaningful conclusions from it. Once you understand your customers through accurate and up-to-date customer data, you can devise better ways to approach them, solve their problems, and delight them with an incredible customer experience journey. For example, CRM systems allow you to access relevant customer data at specific contact points. Imagine if such data was not well organised and you were facing a customer at a critical point, such as when handling a complaint.

Ability to present personalised content

CRM systems help your business keep tabs on customer behaviour, preferences, and challenges. Such information is critical in personalising the engagement experience. For example, you can make more relevant suggestions and present reasonable offers by referring to previous purchases and buying behaviour. Additionally, the CRM system will inform you which communication channel a customer prefers so that you can reach this customer there.

Improve customer care efforts

Customer support is vital to the customer experience journey. CRM systems give you access to records of previous customer interactions, the nature of those interactions, and their present issues. In addition, a summary of all your client’s previous interactions can help you prioritise your interactions to resolve burning issues first and ensure positive feedback across your customer base. Furthermore, CRM systems enable the automation of repetitive customer support tasks, leading to a more efficient approach.

Facilitate consistent engagement

Through CRM systems, you will identify your customers’ most popular communication channels. You can then engage them there and keep the engagement going. In addition, CRM logs all engagements to ensure no hiccups or confusion in your communication.

Produce useful reports

CRM systems allow you to access reports of your interactions with customers. Such reports highlight strategies that work and those that do not. With such an understanding, you will focus your efforts on channels and approaches that work as you find solutions for those that are not as effective.

Improve internal communication

Your CRM systems also help improve internal communication where all teams focus on the same objectives. For example, the sales department can collaborate with customer support to ensure customers are always happy with the brand. This collaboration leads to more sales, thus better overall company performance.

Facilitates automation for improved overall performance

CRM systems enable the automation of repetitive tasks. Automation frees up time and resources across all departments to focus on human-centric duties in delighting and retaining customers. Automation also minimises customer grievances, which in turn helps keep them loyal. An example is when automated reminders, notifications, and such messages never fail to reach customers.


Customer relationship management aims to keep customers happy, customise their experience and entice them to buy more. Happy customers remain loyal and confidently recommend your brand to people they know. Therefore, your business can rely on its CRM systems to improve customer retention, enhancing business performance.

Customer retention is a vital component of your business, especially if it runs under the subscription model. We understand how to improve its ability to retain customers and ways to deal with subscription churn. You can book a demo with us, and let us show you how we can improve your customer retention efforts.

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