Sei sulla pagina 1di 96

Customer Relationship Management

Lesson 08

Sales Force Automation, Data


Mining, Data Bases and
Considerations While Choosing
CRM Technology
CRM by Shainesh and Sheth
Chapter 7

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 1/96
CRM Technology Choice
Sales Force Automation (SFA)

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 2/76
CRM Technology Choice
Sales Force Automation
• CRM’s metamorphosis from a focused
application to an enterprise-wide business
initiative has everything to do with its beginning
in sales force automation (SFA).
• SFA products were originally meant to improve
sales force productivity and encourage
salespeople to document and communicate their
field activity. However, SFA products are
increasingly becoming focussed on customer
relationship and improving customer
satisfaction.
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 3/76
CRM Technology Choice
Evolution of Sales Force
Automation – (1/3)
• The more business the field sales force closed,
the more information they had to record and
track about their customers. This made software
vendors understand that salespeople needed
help. That is how SFA started.
• In non-SFA organisations salespeople kept on
recording their information on their own
notebooks. And, if they left the organisation, they
took away all the information too with them
forcing the company to start anew.
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 4/76
CRM Technology Choice
Evolution of Sales Force
Automation – (2/3)
• Meanwhile salespeople needed better tools to
help them manage their accounts, track
opportunities, establish and monitor sales
pipeline and organise their contact lists.
• Moreover, the headquarters had all the account
information that had to be passed on to the sales
force, making them more accountable and more
productive. SFA provided the necessary data to
the salesmen when they needed.

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 5/76
CRM Technology Choice
Evolution of Sales Force
Automation – (3/3)
• SFA also helped managers in both front-
end and back-end offices, who lacked
timely sales forecast and failed to keep up
with demand. Organisations needed up-to-
date sales data and sales forecast that
could be communicated throughout the
organisation easily and automatically.
Management considered potential of SFA
as a competitive tool.
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 6/76
CRM Technology Choice
Today’s SFA – (1/6)
• SFA vendors try to automate the answers
of some of the questions that salespeople
always ask. Thus, SFA run the full gamut
from rudimentary calendar support and
scheduling to real-time alerts about
customer events. Irrespective of the
vendor or product, most SFA tools fall into
one or more of the following categories:

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 7/76
CRM Technology Choice
Today’s SFA – (2/6)
– (1/6) Process/Activity Management.
– (2/6) Sales and territory management
including account management.
– (3/6) Contact management (data about
company’s clients)
– (4/6) Lead management (also known as
‘opportunity management’ or ‘pipeline
management’) #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 8/76
CRM Technology Choice
Today’s SFA – (3/6)
– (5/6) Configuration support (that is the
product configuration most suitable for a
customer and decide price automatically)
– (6/6) Knowledge management #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 9/76
CRM Technology Choice
Today’s SFA – (4/6)
– (6/6) Knowledge management (1/2): Selling
requires more than just customer data.
Information available in the company are
helpful and salesmen should be able to
access information like:
• Corporate policy handbook,
• Sales presentation slides / PPTs / video
presentations
• Company phone list #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 10/76
CRM Technology Choice
Today’s SFA – (5/6)
• Proposal and contract templates
• Expense statement / tour report formats
• Historical sales and revenue report
• Partner and supplier profile
• Transcripts of sales meetings.
• Industry and competitor data
• New product releases
• Trade show and event schedules. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 11/76
CRM Technology Choice
Today’s SFA – (6/6)
• How effectively salespeople can use
these disparate information depends on
how easily they can access it.
• Systems that can locate and store such
information and provide users with a
means of communicating and adding to
its contents from a single application are
known as knowledge management (KM)
systems.
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 12/76
CRM Technology Choice
Data Warehousing

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 13/76
CRM Technology Choice
Data Warehousing – (1/9)
• Data warehouse is an important
component of Analytical CRM effort. Data-
warehouse is the infrastructure in which
Analytical CRM resides and on which it
runs.
• Data warehouse is not same as database,
although data warehouse is not physically
different from traditional databases, but
they are maintained primarily for the
purpose of decision support. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 14/76
CRM Technology Choice
Data Warehousing – (2/9)
• Data warehousing is a collection of
decision support technologies, aimed at
helping the decision-maker make better
and faster decisions.
• A data warehouse is a subject-oriented,
integrated, time-varying, non-volatile
collection of data that are primarily used in
organisational decision-making. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 15/76
CRM Technology Choice
Data Warehousing – (3/9)
• Data warehouses are maintained
separately from the organisation’s
operational databases.
• Operational databases are optimised for
day-to-day transactions that are repetitive
and structured, for example, an ATM
operation. Redundancy is minimised to
increase speed of operation by keeping
only relevant data available. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 16/76
CRM Technology Choice
Data Warehousing – (4/9)
• Data warehouse on the other hand, contains
historical data collected and collated from all
parts of the organisation and over long period of
time. Redundancy is acceptable as data
warehouses are optimised for decision-support
and not for transaction speed. The data
warehouse may be as large as hundreds of
gigabytes and often in terabytes in size.
• Query throughput time and response throughput
time are more important in analytical CRM than
transaction throughput time. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 17/76
CRM Technology Choice
Data Warehousing – (5/9)
• Decision support requires data from:
– (1/3) heterogeneous (sales, marketing,
accounting etc.) sources,
– (2/3) external sources,
– (3/3) different sources of varying quality or
using inconsistent representation, codes and
formats.
• Hence, data warehouses are constructed
separately from standard company
databases. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 18/76
CRM Technology Choice
Data Warehousing – (6/9)
• This approach for analysis of data warehouses
called Online Analytical Processing (OLAP) was
named for a set of principles and was proposed
by Codd (1993). OLAP tools focus on providing
multidimensional data analysis, which is superior
to SQL (Structured Query Language) in
computing summaries and breakdowns along
many dimensions. OLAP tools are targeted
towards simplifying and supporting interactive
data analysis. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 19/76
CRM Technology Choice
Data Warehousing – (7/9)

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 20/76
CRM Technology Choice
Data Warehousing – (8/9)
• Process of using data warehouse:
– (1/5) Data warehouse includes tools for
extracting data from multiple operational
databases and external sources.
– (2/5) These data are then cleaned and made
consistent by transformation tools as well as
integrate data from various sources.
– (3/5) There are tools for loading the data into
the warehouse, periodically refresh them and
also removing some unnecessary data. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 21/76
CRM Technology Choice
Data Warehousing – (9/9)
• Process of using data warehouse:
– (4/5) Data in the warehouse are stored and
managed by one or more servers, which offer
multi-dimensional data to various front-end
tools (for example, visualising data in desired
form). These front-end tools can be for query,
reporting, operational CRM, data mining and
so on.
– (5/5) Finally, of course, there are tools for
monitoring and administering the warehouse.

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 22/76
CRM Technology Choice
Advantages of Data Warehouse for
CRM Application – (1/6)
• Better information integration for decision-
maker:
– (1/3) Customer-centric firms use many
channels for effective dialogue with
customers. As the number of channels
increases data integration becomes
increasingly difficult. A data warehouse
provides much better information integration
to the decision-maker than normal database.
#
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 23/76
CRM Technology Choice
Advantages of Data Warehouse for
CRM Application – (2/6)
– (2/3) In web based transactions with
customers, it is often found that customers
drop off halfway through and finally do not
buy. Capturing the information of how
customers access websites and what do they
do when they get there is an important
information for mounting effective CRM. This
can be done by integrating the data
warehouse with the web servers as it will
collect huge click-stream data as the
customer accesses the company website. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 24/76
CRM Technology Choice
Advantages of Data Warehouse for
CRM Application – (3/6)
– (3/3) For successful CRM application, it is
important to capture customer’s buying
behaviour and steps, even in cases where a
customer finally aborts the purchasing
process. Data captured in data warehouse
can assist marketers to tailor their offers for
individual customer to suit customer’s
personal preferences looking into the
customer’s past history. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 25/76
CRM Technology Choice
Advantages of Data Warehouse for
CRM Application – (4/6)
• Campaign benefit (1/2):
– (1/3) Data warehouses provide support in
campaigns. Campaign management is the
process of planning, executing and assessing
outbound campaigns. As a company
undertakes many campaigns, it collects
considerable volume of data about
prospective customers, targeted segment and
people, and how they responded to various
forms of communication used and so on. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 26/76
CRM Technology Choice
Advantages of Data Warehouse for
CRM Application – (5/6)
• Campaign benefit (2/2):
– (2/3) Historical data in conjunction with
campaign management tool makes it possible
for the company to determine ideal size of
campaign market, identify prospective
customers, and evaluate the success of
campaigns vis-à-vis the inputs.
– (3/3) It permits a company to plan better for
future campaigns. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 27/76
CRM Technology Choice
Advantages of Data Warehouse for
CRM Application – (6/6)
• Summarising, it can be said:
– Data warehouse is an important constituent of
a balanced CRM ecosystem. It aids in critical
decision-support by consolidating and
integrating crucial customer information along
with other information, (such as,
demographics, competitor information, market
condition and so on) from various sections of
the company. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 28/76
CRM Technology Choice
Data Mining and CRM

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 29/76
CRM Technology Choice
Data Mining and CRM – (1/15)
• Aided by technology, companies daily
generate huge data measuring gigabytes,
which do not lend themselves to traditional
analysis like those used in say, statistics.
This has given birth to a special field of
data hunting and analysis technology
called Knowledge Discovery in Databases
(KDD). Data Mining (DM) is a step in
KDD.#
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 30/76
CRM Technology Choice
Data Mining and CRM – (2/15)
KDD Sequence

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 31/76
CRM Technology Choice
Data Mining and CRM – (3/15)
• Definition of KDD and DM (1/3):
– (1/4) Knowledge Discovery in Databases
(KDD) is a non-trivial process of identifying
valid, novel, potentially useful and ultimately
understandable patterns in data. By non-
trivial, it is meant that some search or
inference is involved; that is, it is not a
straightforward computation of predefined
quantities like computing the average value of
a set of numbers.#
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 32/76
CRM Technology Choice
Data Mining and CRM – (4/15)
– (2/4) Knowledge Discovery in
Databases (KDD) is a set of tools and
techniques that operate on and extract
implicit patterns from data. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 33/76
CRM Technology Choice
Data Mining and CRM – (5/15)
– (3/4) KDD is the overall process of
discovering knowledge from data and
Data Mining is a particular step in it.
Data mining is a step in the KDD
process that consists of applying data
analysis and discovery algorithms that
produce a particular enumeration of
patterns (or models) over the data.#

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 34/76
CRM Technology Choice
Data Mining and CRM – (6/15)
– (4/4) Data mining is the principle of
sorting through large amounts of data
and picking out relevant information.
The term data mining is based on the
idea that very large databases are
mountains “of information that can be
mined” for “nuggets” of great value if
right technology can be used. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 35/76
CRM Technology Choice
Data Mining and CRM – (7/15)
• The term data mining is often used to apply to
the two separate processes of knowledge
discovery and prediction. Knowledge discovery
provides explicit information that has a readable
form and can be understood by a user.
Forecasting, or predictive modelling provides
predictions of future events and may be
transparent and readable in some approaches
(e.g. rule based systems) and opaque in others
such as neural networks. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 36/76
CRM Technology Choice
Data Mining and CRM – (8/15)
• What will it (DM) do?
– Automated predictions of trends and
behaviours.
– Automated discovery of previously unknown
patterns.
• Data mining can tell things that you didn’t
even know that you were looking for. *** #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 37/76
CRM Technology Choice
Data Mining and CRM – (9/15)
• What will it (DM) not do?
– No pattern search without clear instruction.
– You still have to know your business and its
data.
– It cannot find why a correlation exists; it can
only fish out a correlation.
– It is an assisting analytical tool only.
– Patterns found must be verified in real life.
– Results will vary depending upon input and
software.#
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 38/76
CRM Technology Choice
Data Mining and CRM – (10/15)
• How does it work?
– DM uses models to discover unknown
patterns.
• DM and Business intelligence (BI):
– BI is the superordinate concept.
– DM is a central aspect of BI.
– Technologies and tools used in BI are: OLAP,
MIS, DSS (Decision Support System), EIS
(Executive Information System), KDD. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 39/76
CRM Technology Choice
Data Mining and CRM – (11/15)
• Common goals of data mining in CRM
applications are to predict which people
are most likely to:
– a) Be Acquired
– b) Be Cross-Sold or Up-Sold
– c) Leave / Churn
– d) Be Retained, Saved, or Won back #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 40/76
CRM Technology Choice
Data Mining and CRM – (12/15)
• These applications can contribute
significantly to the bottom line:
– (1/3) Rather than contacting all prospects or
customers through a call centre or sending
mails, only prospects that are predicted to
have a high likelihood of responding to an
offer are contacted. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 41/76
CRM Technology Choice
Data Mining and CRM – (13/15)
– (2/3) More sophisticated methods may be
used to optimise across campaigns so that we
can predict which channel and which offer an
individual is most likely to respond to - across
all potential offers.
– (3/3) Finally, in cases where many people will
take an action without an offer, uplift
modelling can be used to determine which
people will have the greatest chance in
responding if given an offer. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 42/76
CRM Technology Choice
Data Mining and CRM – (14/15)
• Another example of data mining, often
called the Market Basket Analysis, relates
to its use in retail sales. If a clothing store
records the purchases of customers, a
data mining system could identify those
customers who favour silk shirts over
cotton ones. (... Continued) #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 43/76
CRM Technology Choice
Data Mining and CRM – (15/15)
• (.. Continued from last slide) Although
some explanations of relationships may be
difficult, taking advantage of it is easier.
The example deals with association rules
within transaction-based data. Not all data
are transaction based and logical or
inexact rules may also be present within a
database. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 44/76
CRM Technology Choice
OLAP, ROLAP and MOLAP

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 45/76
CRM Technology Choice
OLAP – (1/5)
• OLAP is part of the broader category
of business intelligence, which also
encompasses relational database, report
writing and data mining. OLAP tools
enable users to analyse multidimensional
data interactively from multiple
perspectives.

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 46/20
CRM Technology Choice
OLAP – (2/5)
• At the core of any OLAP system is
an OLAP cube (also called a
'multidimensional cube' or a hypercube). It
consists of numeric facts
called measures that are categorised
by dimensions.
• The measures are placed at the
intersections of the hypercube.

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 47/20
CRM Technology Choice
Example of OLAP Cube

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 48/76
CRM Technology Choice
Querying an OLAP Cube

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 49/76
CRM Technology Choice
OLAP – (3/5)
• The usual interface to manipulate an
OLAP cube is a matrix interface, like Pivot
tables in a spreadsheet program, which
performs projection operations along the
dimensions, such as aggregation or
averaging. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 50/20
CRM Technology Choice
OLAP – (4/5)
• The cube metadata is typically created
from a star schema or snowflake
schema or fact constellation of tables in
a relational database. Measures are
derived from the records in the fact
table and dimensions are derived from
the dimension tables. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 51/20
CRM Technology Choice
OLAP – (5/5)
• Each measure can be thought of as having a set
of labels, or meta-data associated with it.
A dimension is what describes these labels; it
provides information about the measure.
• A simple example would be a cube that contains
a store's sales as a measure, and Date/Time as
a dimension. Each Sale has a
Date/Time label that describes more about that
sale.

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 52/20
CRM Technology Choice
MOLAP – (1/2)
• MOLAP (multi-dimensional online
analytical processing) is the classic form of
OLAP and is sometimes referred to as just
OLAP. MOLAP stores this data in an
optimized multi-dimensional array storage,
rather than in a relational database. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 53/20
CRM Technology Choice
MOLAP – (2/2)
• Some MOLAP tools require the pre-
computation and storage of derived data,
such as consolidations – the operation
known as processing. Such MOLAP tools
generally utilise a pre-calculated data set
referred to as a data cube. The data cube
contains all the possible answers to a
given range of questions. As a result, they
have a very fast response to queries.
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 54/20
CRM Technology Choice
ROLAP –(1/4)
• Relational OLAP (ROLAP) works directly
with relational databases and does not
require pre-computation. The base data
and the dimension tables are stored as
relational tables and new tables are
created to hold the aggregated
information. It depends on a specialised
schema design.

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 55/20
CRM Technology Choice
ROLAP –(2/4)
• This methodology relies on manipulating
the data stored in the relational database
to give the appearance of traditional
OLAP's slicing and dicing functionality.
• In essence, each action of slicing and
dicing is equivalent to adding a "WHERE"
clause* in the SQL statement.

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 56/20
CRM Technology Choice
ROLAP –(3/4)
• ROLAP tools do not use pre-calculated
data cubes but instead pose the query to
the standard relational database and its
tables in order to bring back the data
required to answer the question. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 57/20
CRM Technology Choice
ROLAP –(4/4)
• ROLAP tools feature the ability to ask any
question because the methodology does
not limit to the contents of a cube. ROLAP
also has the ability to drill down to the
lowest level of detail in the database.
• In contrast with MOLAP, ROLAP is slower.
• Databases are to be designed for specific
tool. They are not interchangeable.
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 58/20
CRM Technology Choice
Data Mining

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 59/76
CRM Technology Choice
Business Opportunities in Using
DM in CRM – (1/4)
• Business employing data mining quickly
see a return on investment, but also they
recognise that the number of predictive
models can quickly become very large.
Rather than one model to predict which
customers will churn, we could build a
separate model for each region and
customer type. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 60/76
CRM Technology Choice
Business Opportunities in Using
DM in CRM – (2/4)
• Then, instead of sending an offer to all people
that are likely to churn, we may only want to
send offers to customers that will likely take the
offer. And finally, we may also want to determine
which customers are going to be profitable over
a window of time and only send the offers to
those that are likely to be profitable. In order to
maintain this quantity of models, they need to
first manage model versions and then move to
automated data mining. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 61/76
CRM Technology Choice
Business Opportunities in Using
DM in CRM – (3/4)
• Understanding customer behaviour and
refine CRM:
– Implementing activities that reach the right
customers with right messages (direct
marketing).
– Understanding what benefits customers want
from products.
– Refining customer segments into profitability
segments to enable use of effective CRM. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 62/76
CRM Technology Choice
Business Opportunities in Using
DM in CRM – (4/4)
• Product demand:
– Forecast the right product demand
– Facilitate mass customisation.
– Determine the most effective or feasible sales
channel for new products and services.
• Related market dynamics:
– Knowing what segments are price sensitive to
enable price discrimination. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 63/76
CRM Technology Choice
Characteristics of Data Mining –
(1/4)
• Differences in characteristics between
data mining and traditional data analysis:
– (1/5) Firstly, data mining is an inter-
disciplinary field taking inputs from such
disciplines as statistics, artificial intelligence,
machine learning and many others.
– (2/5) Data mining tools and techniques
operate with large data bases. Earlier tools for
normal database analysis are not suitable. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 64/76
CRM Technology Choice
Characteristics of Data Mining –
(2/4)
– (3/5) Data mining techniques give the search
methods some degree of search autonomy
resulting in automated or semi-automated
nature of discovery.
– (4/5) Data mining data are collected from
everyday transaction and have less bias than
data collected specifically for some analysis.
– (5/5) Lastly, non-technical end-users can use
it without the help of experts in discovery
journey. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 65/76
CRM Technology Choice
Characteristics of Data Mining –
(3/4)
• Challenges facing data mining:
– The grand challenge in knowledge discovery
in databases is to automatically process large
quantities of raw data, identify the most
significant and meaningful patterns, and
present these as knowledge appropriate for
achieving the user’s goals. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 66/76
CRM Technology Choice
Characteristics of Data Mining –
(4/4)
• The algorithm used in extracting knowledge by
using data mining are of two types:
– Descriptive, and
– Predictive
• Descriptive involves finding out the properties
that describe the data under consideration, for
example SEC of customer groups.
• Predictive is finding future state of a variable,
say, default in payment of a particular
customer.#

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 67/76
CRM Technology Choice
Data Mining Tasks – (1/8)
• (1/5) Classification – behaviour prediction,
product and customer categorisation etc.
• (2/5) Regression – for finding out correlation
between independent and dependent variables.
• (3/5) Link analysis for market basket analysis
• (4/5) Segmentation (of data – naturally occurring
clusters to describe data, say market segments)
using clustering algorithms.
• (5/5) Deviation detection – detecting most
significant changes from previously measured
data or expected values. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 68/76
CRM Technology Choice
Data Mining Tasks – (2/8)
• (1/5) Classification – Classification is a
process that maps a given data item into
one of the several predefined classes. In
CRM, classification is used for a variety of
purposes like behaviour prediction,
product and customer categorisation, and
in campaign management to identify
prospective customers for new product
from a database of old customers.
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 69/76
CRM Technology Choice
Data Mining Tasks – (3/8)
• (2/5) Regression – (1/2) It is an operation
of learning a function that predicts the
value of a dependent variable based on
values of other independent variables.
Suppose the effectiveness of an
advertisement campaign is measured in
terms of brand recall…. (contd.)

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 70/76
CRM Technology Choice
Data Mining Tasks – (4/8)
• (2/5) Regression – (2/2) If the marketing
manager has an a priori feeling that the ad
effectiveness is dependent on the total
advertisement budget and other related
variables that might be important, and if a new
campaign is proposed to be launched, the
manager can estimate its effectiveness based
on the above regression equation that he has
estimated. The campaign management budget
and other parameters can then be finetuned to
achieve the required degree of effectiveness. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 71/76
CRM Technology Choice
Data Mining Tasks – (5/8)
• (3/5) Link analysis – Link analysis seeks to
establish relationship between items or variables
in a database record to expose patterns and
trends. Link analysis can also trace connections
between items of records over time. The most
important link analysis application in CRM,
called market basket analysis, is an operation
that seeks relationship between product items
characterising product affinities or buyer
preferences. As an example, display can be
organised on items that sell together. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 72/76
CRM Technology Choice
Data Mining Tasks – (6/8)
• (4/5) Segmentation – Segmentation aims to
identify a finite set of naturally occurring clusters
or categories to describe data. This is done in
such a way that cases belonging to a segment
or cluster are more similar with respect to the
clustering criterion while they differ significantly
from the cases belonging to other segments.
This is done using clustering algorithms that
segment database based on the required
criterion. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 73/76
CRM Technology Choice
Data Mining Tasks – (7/8)
• (5/5) Deviation detection – Deviation
detection focuses on discovering the most
significant changes in the data from
previously measured, expected or
normative values. Many of the CRM
packages routinely keep checking critical
parameters as they change with market
scenario.

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 74/76
CRM Technology Choice
Data Mining Tasks – (8/8)
• Data mining tasks are exploratory in
nature and hints at possible relationships
between variables which otherwise would
be impossible to link. They, however,
cannot ascertain reasons of a correlation.
Knowing that a link exists, and knowing
the correlation coefficient are the leads for
the manager to find reasons. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 75/76
CRM Technology Choice
Data Mining Tools and Techniques
– (1/10)
• Data mining tools and techniques are
algorithms and methods to carry out the
data mining tasks. They differ from one
another in the type of data handled,
assumptions made about data, scope and
interpretation of the output. A single tool
can carry out several tasks and a task can
be carried out by many tools. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 76/76
CRM Technology Choice
Data Mining Tools and Techniques
– (2/10)
• Various data mining tools and techniques
are:
– Decision trees
– Rule induction
– Case-based reasoning (CBR)
– Visualisation techniques
– Nearest neighbour techniques
– Clustering algorithms #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 77/76
CRM Technology Choice
Data Mining Tools and Techniques
– (3/10)
• Decision Trees: (1/2) A decision tree is a
predictive model; that is, a mapping from
observations about an item to conclusions
about its target value. More descriptive
names for such tree models are
classification tree (discrete outcome) or
regression tree (continuous outcome).

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 78/76
CRM Technology Choice
Data Mining Tools and Techniques
– (4/10)
• Decision Trees: (2/2) In these tree
structures, leaves represent classifications
and branches represent conjunctions of
features that lead to those classifications.
The machine learning technique for
inducing a decision tree from data is called
decision tree learning, or (colloquially)
decision trees. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 79/76
CRM Technology Choice
Data Mining Tools and Techniques
– (5/10)
• Nearest neighbour method: A technique that
classifies each record in a dataset based on a
combination of the classes most similar to it in a
historical dataset .
• Rule induction: The extraction of useful ‘if-then’
rules from data based on statistical significance.
• Data visualisation: The visual interpretation of
complex relationships in multidimensional data.
Graphics tools are used to illustrate data
relationships. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 80/76
CRM Technology Choice
Data Mining Tools and Techniques
– (6/10)
• Case-based reasoning (CBR): CBR tries
to simulate logical thinking process of a
human being. When an example is
presented to CBR solution, it tries to
match the current example with other
examples in its warehouse and retrieves
the case that is the most similar to the
current one. Decision can then be taken
by extrapolation. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 81/76
CRM Technology Choice
Data Mining Tools and Techniques
– (7/10)
• Clustering Algorithm: Clustering Algorithm
divide databases into different groups
called clusters such that intra-cluster
similarity is maximum and inter-cluster
similarity is minimum. As an example,
market segmentation is done by this
clustering algorithm. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 82/76
CRM Technology Choice
Data Mining Tools and Techniques
– (8/10)
• Data mining packages come with many different
kinds of tools (that is algorithm)
• The algorithm to be run on the data depends not
only on the data that one has but also on the
answers to the questions one asks.
• Thus, algorithm to find out risk of payment
default would be to run classification algorithm
and the algorithm to find link between sales of
two products would require to run an association
rule algorithm. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 83/76
CRM Technology Choice
Data Mining Tools and Techniques
– (9/10)
• With every fresh transaction, fresh data
come to the data warehouse, sometimes
adding to and other times updating data.
Data mining solution must be capable of
addressing itself to such dynamic state.
• Thus, tools should be able handle
incremental data, as running algorithm all
the time for total data is expensive in
terms of time and resources. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 84/76
CRM Technology Choice
Data Mining Tools and Techniques
– (10/10)
• Finally, integration between front-end
CRM solution like a campaign
management solution and backend data
mining solution helps to ensure
consistency in and timely dissemination of
information throughout the company. This
can be leveraged to make more informed
and better decisions. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 85/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 86/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (1/10)
• CRM vendors offer a wide variety and
range of products and they come with
various functionalities and they support
different operations of the firm. Moreover,
they use different terminologies to mean
the same thing. As IT and telecom
technologies evolve, CRM vendors are
offering new and more interactive
solutions based on Java, CGI*, ASP etc. in
place of the earlier ones based on HTML.
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 87/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (2/10)
• Some of the functional and technical
requirements of CRM solutions are:
– Business intelligence and analytical abilities
– Unified channels of customer interaction
– Support for web-based functionality
– Centralised repository for both customer and other
enterprise information
– Integrated workflow* for business rules and
procedures
– Integrated with ERP and other enterprise-wide
applications #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 88/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (3/10)
• Functionally CRM application can be
categorised into three main segments:
– Sales application – Sales Force Automation
(SFA) solutions
– Marketing applications – Campaign
Management (CMA)
– Customer Service and Support (CSS)
applications #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 89/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (4/10)
• Almost all CRM suites in the market
provide the following capabilities: (1/2)
– Category management
– Promotion management
– Demand planning
– Interactive selling
– Sales and service contact centre
– Analytics capability #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 90/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (5/10)
• Almost all CRM suites in the market
provide the following capabilities: (2/2)
– Contract management
– Account management
– Campaign management
– Automatic routing capability
– Workflow management
– Mobile sales and service support with access
support to mobile devices. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 91/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (6/10)
• Criteria for evaluating technological solutions of
CRM: (1/4)
– Functionality supported by the package
– Catering to multiple channels of interaction: phone,
internet, VoIP, fax etc.
– Compatibility with existing infrastructure like data
warehouse, supply chain management and so on: If
the solutions use open source code and the
compatibility is high, the integration expenses are
lower. On the other hand there will be times when
advantage of software outweighs added expenses of
integration. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 92/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (7/10)
• Criteria for evaluating technological
solutions of CRM: (2/4)
– Scalability: A CRM solution should be highly
scalable as business is expected to grow.
There should be no deterioration of
performance with increased load.
– Integration: It is better to choose products that
provide tight integration with existing systems.
Buying CRM solutions from a single vendor
usually is helpful in this respect. #
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 93/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (8/10)
• Criteria for evaluating technological
solutions of CRM: (3/4)
– Choice of framework: A product that can
serve as a framework, i.e. a solution, around
which the other solutions can fit and integrate,
will increase the level of integration within a
system and with other systems. #

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 94/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (9/10)
• Criteria for evaluating technological solutions of
CRM: (4/4)
– Flexibility in incorporating changes and
upgradeability: As technology changes and new
requirements come up, the CRM solution should be
flexible enough in upgrading.
– Experience in implementation: Does the vendor have
capable and experienced system integrators? This is
a crucial requirement.
– Checking references
– Price
Lesson 08 - Sales Force Automation,Data
Management for Data Mining and Data Warehousing, 95/76
CRM Technology Choice
Evaluating Technological Solutions
for CRM – (10/10)

Global CRM Product Market


Main Target Server Centric Web Centric
Siebel, Oracle / Siebel CRM on
Large enterprises Peoplesoft, MySAP demand,
CRM Saleforce.com
Talisma, SalesLogix,
Small and medium SalesNotes.net,
Microsoft, Onyx,
enterprises NetCRM
SalesNotes

Lesson 08 - Sales Force Automation,Data


Management for Data Mining and Data Warehousing, 96/96
CRM Technology Choice

Potrebbero piacerti anche