Hang on to your seats, folks, and take in these startling statistics on customer loyalty, pulled together by our friends at Access.

  • 45% of millennials acknowledge they’re less loyal to retailers than they were a year ago.
  • A loyalty increase of 7% can boost lifetime profits per customer by as much as 85%, and a loyalty increase of 3% can correlate to a 10% cost reduction.
  • 75% of consumers say if a brand understands them at a personal level, they are likely to be more loyal.

Customer loyalty should matter to your business. And customer relationship management (CRM) systems help local businesses do a lot of things more efficiently. Think about some of the more obvious pluses to implementing a CRM for small business. They help businesses like yours:

  • Keep track of customer information.
  • Nurture leads so they become paying, loyal clients.
  • Stay in touch with customers so you’re top of mind.

Those are all great reasons to have a CRM. But these days, CRMs are much more powerful than most local business owners know.

How Does a CRM Help Business to Grow? 9 Surprising Ways

1. Manage your team’s activity.

No one likes a micromanager. So hopefully you’re not one of them. But when it comes to your business, leaving your team members to their own devices isn’t the smartest decision either, even if you’ve done your best to hire top talent.

Do you know exactly who did what in the last week, or even the last month? How many appointments did your team book? Who made the most outbound prospecting calls to try to get you more business? Who was best at upselling at the point of sale? Without a CRM, it’d be nearly impossible to answer any of those questions. Even the best leaders are left putting processes in place and blindly hoping they work.

With a true CRM, local business owners can set clear goals and measure how each member of the team is tracking toward them. Not only can this align teams to a common mission, it could help you get better visibility into who’s knocking it out of the park and who could use a bit more batting practice.

2. Better define your target customer.

Businesses big and small have two types of ideal customers: 1) consumers they think want their products or services, and 2) the people actually inclined to buy their products or services. Which are you targeting with your best converting marketing activities?

First, you need to know who’s reeeally most likely to convert into a loyal, lifelong customer. Without a CRM, one of the best ways to figure this out is with extensive analysis of your online advertising and any demographics data available. But for most local businesses, online advertising isn’t necessarily that easy or accessible, and finding time to analyze the results…? Give me a break.

That’s where a CRM comes into play. CRMs offer one place to store and organize information on all of your contacts and customers. The better systems have dashboards that break down sales by customer and by their individual attributes. So if you’re a salon or spa wondering who’s buying the most fall facials, simply take a look at the data. Then, you can plan ahead to successfully target your next seasonal promotion.

3. Improve customer satisfaction.

Customer satisfaction is a pretty fluffy topic, because it’s hard to draw quantitative conclusions on exactly how satisfied (like, on a scale of 1-10) your customers are with your business. Aside from exhausting surveys, online reviews and verbatim feedback, putting actual metrics around customer satisfaction can seem like mission impossible.

CRMs offer increased visibility into each customer you have, and how they’ve interacted with your business over a certain period of time. You can watch their buying habits and even record custom notes about each individual. Should any of their buying habits change, a CRM would give you a means to reach out with a personalized message and see what’s up.

4. Boost customer retention.

Aside from helping you repair and nurture relationships with customers who might be becoming less active with your business, CRMs also help automate communications with happy customers so they stay that way.

What types of communications boost retention?

  • Regular appointment reminders
  • Weekly or monthly specials and promotions
  • Personalized holiday and birthday messages
  • Post-purchase customer surveys

5. Make communicating with contacts much easier.

As we mentioned, communication is a key ingredient for baking up some sweet customer retention. And since communication is one of the main functions of a CRM, ignoring those functions would be a big waste.

The best part? CRMs combine the many piece-part software solutions you likely are already putting to use (or creating workarounds for). The best systems will help you draft and schedule text messages and emails you create days, even weeks or months, in advance.

6. Spot market trends.

How do you keep up with changes in your industry? Hopefully you follow industry blogs and news sites (like ours, for example). These will keep you pretty up-to-date with industry influences so you stay relevant.

But your business is local, and most of these publications are focused on data from a broader geographic area. Chances are your area of operation differs from the larger population in one way or another. A CRM could be the best way to get to know the specific trends with customers in your immediate location.

7. Test new marketing tactics.

Most CRMs have customer segmentation capabilities. This means they can find commonalities you specify among those on your list. Then, they can help group individuals into segments that are most likely to respond to specific campaigns.

Landscapers, for example, might segment clients into those who take advantage of basic maintenance services and those who you were able to upsell into advanced lawn treatment services, like weed control. Relators, on the other hand, can segment clients by location, home preferences, price range and more — so you can easily market to several clients at once when new homes appear on the market. (Thryv is actually a top CRM used by real estate professionals. See why Thryv’s a Top Software Development Company here.)

Once you have segments defined, it can become much easier to see how each segment responds to marketing campaigns, and optimize your promotions based on those results.

8. Improve data security, and increase consumer confidence.

If you’re currently managing customer information in an outdated, dinosaur-age address book or other free online program, you’re putting customer and contact information at risk. That’s because this data could easily be lost, and it may be susceptible to hackers or other online predators.

If you’ve ever sent manual emails to your contact list, you may have already made some fatal errors. Is there a chance you put client email addresses into a “To” line instead of blind copying your contacts via the “BCC” option? That’s not cool at all, because in doing so, you exposed consumer contact information without their permission. (Yikes!)

A quality CRM can protect you from making manual errors like that one. It can also keep you out of trouble by protecting sensitive information that could otherwise be lost or stolen. Pro tip: Once you have a CRM in place, include badges on your website that broadcast your ability to keep customer information safe. An increase in consumer confidence can lead to increased profits.

9. De-Frankenstein your business.

We’re talking software. Think about every app or piece of business software you’ve downloaded for any business purpose. Once you take into account the systems you’ve put in place to manage payments, invoicing, emails, text messaging, appointment scheduling, sales activity tracking and more, your computer and your business are probably overwhelmed by anywhere from 5-10 programs, unique logins and monthly payments.

When you try to make multiple solutions work together that weren’t necessarily meant to be integrated, the results aren’t likely to be very user- or consumer-friendly. Products aren’t likely to have consistent branding or functionality, causing confusion and frustration. That’s scarier than Dr. Frankenstein himself.

It’s smart to let a CRM or other type of business automation solution solve this problem. They’ll bring many of these functions under one roof, ditching the multiple logins and hours spent changing between systems trying to keep track of everything at once.

Editor’s note: This article was originally published in August 2017 but is periodically updated for the most current statistics on customer loyalty and CRM capabilities.