Technology businesses that can increase customer retention and decrease churn will significantly increase their profit margins.
According to research conducted by OutboundEngine, increasing customer retention by 5% can increase profits between 25% and 95%. The problem is that many businesses do not have an adequate view of their data to know who of their customers are happy, who is dissatisfied, and who is already in discussions with a competitor brand.
“This problem is magnified for technology businesses who rely largely on subscription-based models,” says Matt Brown, founder and CEO of Digital Kungfu, a niche lead generation business for technology companies.
“We work exclusively with technology businesses and we’ve found that most technology businesses have a similar problem. They work in niche markets and so marketing to the masses doesn’t work for them. Unfortunately, this means they need to rely on their existing data and networks to increase market share, but we’ve seen that most Technology businesses have a CRM system that data goes into, but no real insights come out of it.”
The result is what Brown and his team at Digital Kungfu call ‘dumb data’, which refers to data that is sitting in a system without adding any value to the business.
“When we engage with our customers, it soon becomes apparent that no one in the organisation knows how many subscriptions are about to lapse, even though that data is available,” says Brown.
“No one can identify the state of existing customer relationships or predict churn based on current solutions available to clients. Experience has taught us that the best customer is an existing customer, and the easiest, most cost-effective sale is to customers you already have. Yet very few technology businesses are nurturing their customers based on the data they have available to them.”
Enter CRM Zen
Digital Kungfu is a data company that qualifies sales leads and predicts customer behaviour, sales churn and referrals based on customer data.
“We developed CRM Zen as an internal solution to assist our teams,” says Brown. “CRMs only house data. That data needs to be managed, or it decays. Even worse, you aren’t using it to grow your business. We’ve realised that we now need to offer this solution to our customers.
“Technology businesses have everything they need at their fingertips, from the ability to predict churn, to connecting with customers before subscriptions lapse, to mining customer advocates and referral business from companies that are extremely satisfied with the services they are receiving – and yet no one knows who any of these businesses are. How do you upsell and cross-sell when you don’t know who your customers are and what they need from you? And remember, it’s far more profitable to keep the customer you have than it is to find new customers.
“The right data doesn’t only help you maintain your existing customers and find referral business, though; it also gives you the insights you need for product development to ensure you are ahead of your competitors.”
Ultimately, this solution is simple. Mine the data you have, instead of letting it decay inside a CRM system that is not managed correctly.
Digital Kungfu is a storytelling production company that helps technology businesses market their software products/services, generate new business and build their brands. Digital Kungfu combines branded content and agile marketing to take new or existing products and services to market quickly and, in the process, maximise market share and generate leads to address the pace of the technology sector.
Visit digitalkungfu.com to find out more.