Analytical CRM

Module 5
Types of CRM
Types of CRM Dominant Characteristic
Strategic Strategic CRM is a core customer centric business strategy
that aims at winning and keeping profitable customers
Operational Operational CRM focuses on the automation of customer
facing processes to facilitate like selling, marketing and
customer service
Analytical Analytical CRM focuses on intelligent mining of customer
related data for strategic and tactical purposes
Collaborative Collaborative CRM applies technology across organizational
boundaries with a view to optimizing company, partner and
customer value
Gathering Customer Information
Sources Data Gathered
Direct Sales Interactions 60%
Email 50%
Call Centre interactions 43%
Web site visits 40%
Focus Groups 28%
Interviews 28%
Events /Trade Shows 27%

• Multiple Overlapping Tools – duplicate effort in technology acquisition, systems integration,

installation, deployment and training
• Different customer data
• Local database
One Company Multiple Databases
Sales Force Marketing Contact Centre – CR team
Customer Contacts Sales Revenues Customer Contacts
Corporate Contacts Customer Segments Trouble Ticket History
Product Lists Promotion History Survey Responses
Sales Revenue Campaign Responses Payment Plan
Payment Data Customer Value Scores Payment History

DATA WAREHOUSING FOR STORAGE OF ALL INFORMATION

Need a single version of the truth
360 Degree View
• From Systems Across the Company
• Data – Both Current and Historic
• Includes
• Billing Systems
• Order and Provisioning Systems
• Enterprise resource Planning (ERP) Systems
• Human Resource (HR) Systems
• Point of Sale (POS)
• Web Servers
• Marketing Databases,
• Call Centre Systems
• Corporate Financial Packages
• External Data Providers
Integrated Customer Data in a Data Warehouse
• Demographics • Compare Customer Behaviour
• Purchase Data Over Time
• Campaign Responses • Whether a sales/marketing
• Billing and Payments campaign was successful
• Web Activity • Defect data
• Returns • Customer service issues
• Call Center Contacts • HR – Salary, Welfare, Bonus and
• Survey Responses Criminal Records
• Etc
Business Realities
• Potential and Important Facts are often missed if systems within an
organization are not talking to each other

• The ability to leverage customer data for analysis is directly

proportional to a company’s success in enhancing customer loyalty
Potentially Critical Facts
• How valuable is a customer and what level of service should be provided? –
CSR follow-up
• To whom do you cross sell a product? Sales Manager
• Who is a late paying customer that we don’t want to solicit additional
business from? – Marketing Manager
• Does the same/similar complaint come for various products from the same
customer? CSR Manager
• How does one measure complaint history with specific product groups?
• How to get a regular report on CSS scores for eac customer segment - CSE
Customer Centric - Key Decisions
• Customer Treatment
• Sales Techniques
• Upcoming Promotional Strategies
Analytical CRM
• The ability to perform key CRM business processes but also to apply
business intelligence to these CRM functions to make them more accurate
and valuable
• The ability to be able to track a range of customer actions and events over
time using data from operational CRM and other ERP systems

• Predictive modelling – eg lists of customers most likely to respond to a

marketing campaign
• Purchase pattern recognition – compare customers with like behaviours –
for positioning products
• Move from broad-brushing to one on one communication
The Business Requirements (BRD)
• Business Intelligence …?
• Which business processes to improve and integrate
• Who are the stakeholders to input and likely to use the output
• How will the data be required by all stakeholders
• How will it drive actionable response
• What is the data available
• Is it possible to integrate disparate systems
• How will historical data be integrated
• How will the organization be trained
Different Suites
• Single vendor solutions offering a range of functionalities
• Seamless user interface so CRM users can share data and run the same
CRM modules
• Integrates into existing ERP platforms to provide a comprehensive view
• Customization to suit organizational needs
• Examples
• SAP - CRM
• SFDC – Sales Force Dot Com
• Microsoft Dynamics
• Oracle Database Powerhouse
• Siebel handheld Organisation
Data Analysis
• Online Analytical Processing – OLAP
• Decision support analysis
• Generating an online report, analyzing the results, submitting a more detailed
query to understand result data
• Data attributes organized around certain dimensions – TIME & LOCATION

• Reports generated would be like revenues generated in a month of sale or

revenues generated in a particular region
• Would recognize similar category of products
Data Mining
• Data Mining involves identification of meaningful patterns and rules
from large amounts of detailed data
• OLAP requires the analyst to have a hypothesis or query whereas
Data mining can identify clusters of customers
• Sometimes patterns present themselves, hence guesswork is limited

• For eg A home office worker would buy similar products e.g PC,
printer, toner, office supplies, wastepaper basket and coffee
Data Mining in CRM
• Uses different types of algorithms, regression models – specialist
creations
• Types of Data Mining
1. Prediction – Based on historical purchase data and a predictive
model – what is likely to be the next purchase
2. Sequence – Combines activities that occur in a particular order –
service calls made after the purchase of a product
3. Association – Detects groups of similar events – applied to market
basket analysis
Data Mining
Created and often done by specialists and used by decision makers
• Understanding the customer lifetime value
• Understanding patterns of behavior
• Avoiding high risk prospects
• Ability to look at alternate pricing plans
• Testing new campaigns
• Doing what-if analysis
Clickstream Analysis
• Clickstream – how a user arrived at the site, how long he stayed, what
he did during the visit – did he buy or not - and when he returned
• Stored in a data webhouse – growing with e-commerce activities
• Understand website stickiness
• Understand why he might leave prematurely
• Why carts have been abandoned
• What are other products that can be considered
• How to lure a customer back eg - glasses

• Combine multiple data sources to define and predict customer behaviour

Personalization and Collaborative Filtering
• BY collecting sufficient customer data a company can market to a
customers individual needs
• Convince customers the company understands them
• Deliver accurate product recommendations geared to individual preferences
• Real time targeted web promotions
• Maintaining customer loyalty
• Driving higher purchases
Types of Personalization
• Rule Based Personalisation – establishes rules that dictate behaviors –
often hard coded into the software
• Which products might be purchased together
• Which web page should precede or follow another
• Adaptive Personalization of Collaborative Filtering
• Observes customer behavior and applies to new circumstances
• Example – Understanding buying behavior of book lovers and recommending
similar ones
• Dynamic Pricing
Analysis Checklist
• Don’t underestimate data integration – how to integrate disparate
data within a company
• Beware of “dirty data” – has to be cleansed – data origins to be
checked
• Reinvest in your data warehouse – bolster data quality
• Know who’s analyzing the data – occasional versus statistician – who’s
accessing what, security controls, appropriate analysis tools
• Translate analysis to action – don’t rely on offline files and records –
allow analysts to recommend business decisions
Analysis Checklist (2)
• Consider your customer data a corporate asset – recognizing data
management as an organizational core competency
• Don’t forget business processes – how is the customer data and
analysis is used to refine business, streamline workflows, establish
sound policies and accelerate customer purchases
Business Intelligence