Week Eleven - CRM & BI

1. What is your understanding of CRM?

Customer relationship management (CRM) – involves managing all aspects of a customer’s relationship with an organisation to increase customer loyalty and retention and an organisation's profitability. CRM helps companies make the their interactions with customers seem friendlier through individualisation

2. Compare operational and analytical customer relationship management.

Operational CRM - supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers. Focuses on organising and simplifying the management of customer information. It uses a database to provide consistent information about a company’s interaction with a customer.

Analytical CRM -supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. Analytical CRM uses data mining to provide strategic data about customers. Data mining uses various modelling and analysis techniques to find patterns and relationships to make accurate predictions .

Predictions might include;

}  Which customers to market to

}  Up selling / Cross selling

}  Retaining good customers

1. Describe and differentiate the CRM technologies used by marketing departments and sales departments

Marketing and operational CRM-Marketing departments are able to transform to this new way of doing business by using CRM technologies that allow them gather and analyse customer information to deploy successful marketing campaigns.In fact, a marketing campaigns success is directly proportional to the organisations ability to gather and analyse the right information.The three primary operational CRM technologies a marketing department can implement to increase customer satisfaction are;

-list generator-compile customer information from a variety of sources and segment the information for different marketing campaigns.

-Campaign management systems- guide users through marketing campaign performing such tasks as campaign definition, planning, scheduling, segmentation and success analysis.

-Cross selling-is selling additional products or services to a customer. Up-selling is increasing the value of the sale.

Sales and operational CRM is big business.Salesforce.com is the worldwide leader in on demand customer relationship management services, with over 50 000 customers worldwide – including companies covering many products and services to ‘wow’ customers. The three primary operational CRM technologies a sales department can implement so increase customer satisfaction are;

Sales management CRM systems-automate each phase of the sales process, helping individual sales representatives co-ordinate and organise all of their accounts.

Contact management CRM systems-maintains customer contact information and identifies prospective customers for future sales.

Opportunity management CRM systems- target sales opportunities by finding new customers or companies for future sales.

3.How does CRM help businesses find and retain their most valuable customers?

Analytical CRM data can help businesses find and retain their most valuable customers. Analytical CRM enhances and supports decision making by identifying patterns in customer behaviour that has been collated from various operational CRM systems. Analytic CRM systems aggregate, analysis and disseminate customer information that a organisation can capitalise thereby acquire new customers, improve customer service, and therefore increase customer satisfaction.

Analytical CRM information can assist in:

➢ Giving customers what they want.

➢ Expanding its customer base with new clients.

➢ Finding out what the organisation does best.

➢ Giving the organisation a competitive advantage.

➢ Reactivating inactive customers.

➢ Improving customer service.

4. Describe business intelligence and its value to businesses

Business intelligence (BI) –applications and technologies used to gather, provide access to, and analyze data and information to support decision-making efforts. With the successful implementation of BI systems and organization can expect to receive the following; single point of access to information for all users, bi across organizational departments, up-to-the-minute information for everyone.

Many Businesses are finding that they must identify and meet the fast-changing needs and wants of different customer segments in order to stay competitive in today’s consumer-centric market. BI can tell companies things like;

} Determine who are the best and worst customers thereby gaining insight into where it needs to concentrate more for its future sales

} Identify exceptional sales people

} Determine whether or not campaigns have been successful

} Determine in which activity they are making or losing money.

5. Explain the problem associated with business intelligence. Describe the solution to this business problem

Companies can have a lot of data, however they are not able to benefit from levering this information and turning it into useful data for analytical and strategic decision making.

The issue most organisations are facing today is that it is next to impossible to understand their own strengths and weaknesses, let alone their enemies, because the enormous amount of organisational data is inaccessible to all but the IT department. The problem: data rich, information poor

6.What are two possible outcomes a company could get from using data mining?

Data Mining is the process of analysing data to extract information not offered by the raw data alone. Data mining and also begin at a summary information level and progress through increasing levels to detail (drilling down) or the reverse (drilling up). Two possible outcomes a company could get from using data mining are:

Cluster Analysis - a technique used to divide information set into mutually exclusive groups such that the members of each group are as close together as possible to one another and the different groups are as far apart as possible. Data mining tools that 'understand' human language are finding unexpected applications in medicine.

Association detection - reveals the degree to which variables are related and the nature and frequency of these relationships in the information. One of the most common forms of association detection analysis is market based analysis, which analyses such items as websites and checkout scanner information to detect customers' buying behaviour and predict future behaviour.