CRM Talks #2 with Mikhail Dadov

Mikhail Dadov, an expert in CRM & Loyalty and a Customer Strategy Advisor, discusses retention marketing, the symbiotic relationship between CRM & Loyalty, and the Retention Rate as the primary key performance indicators (KPIs).

The upcoming guest in our CRM Talks Series is Mikhail Dadov, a Customer Relationship Management (CRM) and Loyalty expert and a Customer Strategy Advisor with extensive experience working with grocery, consumer electronics, and hospitality giant companies.

During the discussion, Mikhail will delve into retention marketing, the interdependent relationship between CRM and Loyalty, and the significance of Retention Rate as a key performance indicator (KPI).

Could you provide your definition of CRM?

In the beginning, I would like to separate the concepts of CRM systems and CRM as a marketing area, and today we are talking about the second definition.

Generally, I am closer to CRM as a Retention term, which includes tools, IT systems, analytical tools and predictive models, and loyalty programs for customer retention goals.

Why is it necessary for companies to implement CRM?

Without a doubt, in numerous industries, companies engage in fierce competition to acquire new customers, often investing substantial budgets.

However, in the long term, the organization that can swiftly and effectively develop customer retention emerges victorious. This is because such a company can collect more comprehensive customer contact information, maintain effective communication, continually experiment to identify the optimal strategy, rapidly analyze changes, and generate fresh hypotheses.

Which CRM key metrics do you use?

The first metric that follows immediately from the Retention name is the Retention Rate metric (a metric that shows the extent to which customers recruited in past periods continue to buy in the current period).

Among the next level metrics, I highlight the volume of available communication customer database, open rates in main communication channels, and conversions to orders.

However, this set of metrics is not universal for all projects I’ve worked with.

To enhance the Retention Rate metric, it is advisable to identify and emphasize one to two crucial metrics developed in the upcoming period. Improving these metrics makes achieving the primary objective of boosting the Retention Rate easier.

My conclusions correlate with the last Loyalty Trends 2023 Report from Open Loyalty, where the main goals and metrics to follow in 2023 are:

• Improving overall Customer Lifetime Value (61%)
• Lowering customer churn (43%)
• Increasing purchase frequency (40%)
• Acquiring more new customers (33%)
• Generating more revenue (26%)

What are common mistakes made when working with CRM?

In my opinion, one of the primary errors that management can commit is to bifurcate the domains of CRM and loyalty programs and develop them independently. To achieve a considerable improvement in overall customer retention, it is imperative to fully synchronize the strategies for loyalty program development and subsequent customer communications.

How do you envision the future of CRM?

There will likely be a more profound convergence of retention and performance marketing in the near future.

When a client enters one segment or the other, it should trigger an instant communication response in traditional channels such as email, SMS, mobile push notifications, and media advertising.

The symbiosis between conventional and media channels could boost the return on investment (ROI) by a significant margin.

Author: Anna Ambrozevich