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Customer data analysis and

customer relationship management

Class 1: Intro to Database management

Instructor: Ge Song
March 30, 2020
8:40-11:55 14:00-17:15

Course information
• Database: creating, modifying, analyzing data.
• Customer Data management：Theories, cases, lab sessions.
• Practical skills.
• Tools: Excel, Access, SQL language, Stata.
• In-class quizzes and Exams (data analysis skills), cases, final
project.
• Participation(15%),homework(20%),Exam(30%),Project(35%)

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Reference Books
Access:
• https://support.office.com/en-us/article/database-design-basics-eb2159cf-
1e30-401a-8084-bd4f9c9ca1f5
• Introductory Relational Database Design for Business, with Microsoft
Access. By Jonathan Eckstein, Bonnie R. Schultz
• Problem-solving cases in Microsoft Access and Excel by Ellen F Monk,
Joseph A Brady, Gerard S Cook
Stata:
• An Introduction to Modern Econometrics Using Stata, by Christopher Baum
• Microeconometrics Using Stata: Revised Edition by A .Colin Cameron
Customer Relationship Management
• Customer Relationship Management by V. Kumar, Werner Reinartz

Utilize the “Help”

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Data-based Customer Relationship Management

Case: County Drain’s Enhancement Database
County Drains is a rapidly
expanding drainage services
company that has built its business
model around the strengths of its
customer relationships and looks to
strengthen those relationships,
providing the bedrock of growth for
future growth.
While County Drains has always
prided its self on its exemplary
customer service, its customer base
was expanding at such a rate that its
system of spreadsheets and manual
processes were beginning to be
squeezed into antiquity.
County Drain needed an adaptive
database that would allow it to
continue its premium customer
service even with the tremendous
growth the firm was experiencing.
The objectives for the database
system were:
 Creation of a centralized source of
data.
 An easy, logical system that the
staff would quickly adopt.
 Improvement of all data; historic,
current and new.
The CRM program chosen for the
project allowed them to accomplish
each of their three stated goals. The
system not only allowed County
Drain to continue with its premium
customer service, it allowed the firm
to be more proactive with its
customers providing even more
relevant services while also
increasing their revenues; a win-win
for the customer and the firm.
Source: Concentrix (2017).

Tradition: the file system

• The business information systems in the 1960s, 1970s, and early
1980s used file systems to store, retrieve, and manipulate data.
• Excel: spreadsheet
• Easy to use, convenient
• Excel exercise 1:
• Spreadsheet basics
(spsheet1.ppt)

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Disadvantages of the File system

• Data redundancy: The same data appear in many different files
or in many fields within a file.
• Errors in data entry
• Data inconsistency
• Data integrity, which is the assurance that data are accurate and consistent
throughout their entire life cycle.
• e.g. the addition of sale amount to the total sales of a salesperson when a
new sale record is entered.
• Repeating fields: multivalued fields like the telephone number of a
salesperson.
• Problem: what happens if the business requirement defines unlimited
numbers for telephone numbers for each salesperson?
• Problem: unfixed number of products within an sales order

Benefits of Data-based Customer Relationship Management

• Company could use this data to:

• Better idea of consumer behavior,
• better target its advertising and marketing campaigns,
• expand brand reach,
• improve acquisition and retention rates, and
• increase profitability.

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Database Introduction

Definition: Database
• A database is an organized collection of structured information, or
data, typically stored electronically in a computer system.
• The data can then be easily accessed, managed, modified, updated,
controlled, and organized.
• There are many different types of databases.
• Relational databases. Relational databases became dominant in the
1980s.
• Source:
• https://www.oracle.com/database/what-is-database.html

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Relational databases
• Items in a relational database are organized as a set of tables with
columns and rows.
• Relational database technology provides the most efficient and flexible
way to access structured information.
• Databases like Oracle, SQL Server, and Microsoft Access are all relational
databases
• this flexibility also means the speed of processing is somewhat slower.
• Oracle and SQL Server are capable of handling medium to large-sized
companywide marketing programs, while Microsoft Access is used for
smaller-sized database marketing initiatives.

Microsoft Access Database: Specifications

• In most cases when a database exceeds the following limits, it might
be an indication of a design issue.
https://support.office.com/en-us/article/database-design-basics-eb2159cf-1e30-401a-8084-bd4f9c9ca1f5

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What Is Structured Query Language (SQL)?

• SQL is a programming language used by nearly all relational
databases to query, manipulate, and define data, and to provide
access control.
• SQL was first developed at IBM in the 1970s with Oracle as a major
contributor.
• SQL is still widely used today, although new programming languages
are beginning to appear.

Sample Data Presenting Superstore Sales

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Data Management

•Create Can I insert a new sales record with Order ID equal to 890?
•Read What is the sale amount for the Order with ID equal to 998?
•Update Can I change quantity from 22 to 18 for sale with Order
ID equal to 613?
•Delete Can I cancel sale with Order ID equal to 1761?
•Analysis What is the total sales amount in 2009?
Which customer is the biggest client?

Data processing -> management decisions

• Transforming data to information

The most important managerial benefit takes place when data is
processed appropriately to support the decision-making process.

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Summary: database vs.. spreadsheet

• Databases and spreadsheets (such as Excel) are both convenient ways
to store information.
• Databases have external similarities with spreadsheets since they
both allow the creation of multiple tables.
• The primary differences between the two are:
• How the data is stored and manipulated
• Who can access the data
• How much data can be stored

Summary: database v.s. spreadsheet

• A spreadsheet is not meeting the technical specifications of
databases.
• For example, the unique identification of rows, the relationships
between tables or the delete, and the insert and update integrity
validation are not included in spreadsheet applications.
• Spreadsheets were originally designed for one user. They’re great for
a single user or small number of users who don’t need to do a lot of
incredibly complicated data manipulation.
• Databases, on the other hand, are designed to hold much larger
collections of organized information—massive amounts, sometimes.
• Databases allow multiple users.

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Database Information Systems

• Data as input, which are processed to produce information
• Customer, sales, finance, production, and all functional units of a
business
• used across various industrial or service business sectors.
• A simplified database structure is a collection of interrelated two-
dimensional tables.
• Each table represents a business entity like a salesperson, a
department, a product, or an employee.
• Go to slides: Database Design Basics

Query
• “Relating” Two or More Tables by the Join Operation
• To complete the query, you must join the tables by linking the
common fields
• The names of the join fields are irrelevant; the names of the tables or
fields to be joined may be the same, but it is not required for an
effective join.
• Make a join by bringing in (adding) the tables needed. Next, decide
which fields you will join.
• Click-and-drag operation. Access inserts a line to signify the join.

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Query: Calculations
• Using Calculated Fields in Queries
• A calculated field is an output field made up of other field values.
• A calculated field is not a field in a table; it is created in the query
generator.
• The calculated field does not become part of the table—it is just part
of the query output.
• Understand this process by an example (lab session).

Final project: 8 case studies

1. Airline company
2. Credit Card Company
3. Online education company (Children’s English Education)
4. Travel Agent company
5. IT service company (providing software for hospitals)
6. Telecommunication Service Company (Cellphone service, internet)
7. Department store (with a loyalty program)
8. Logistic trucking company ( providing services for companies, rent
trucks and drivers transport goods between cities)

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Case: Best Buy’s Athena Database
Best Buy is constantly updating its
in-house customer database called
Athena, named after the Greek
goddess of Wisdom. As with all well-
designed databases, the upgrades
were focused on making them
relevant, so that targeted and
customized messages can be sent to
its customers, as opposed to mass
mailers. The targeted messaging was
made possible by an accurate
tracking of prior purchase behavior/
browsing history of their customers.
The impact of the Athena database
was witnessed during the 2015 back-
to-school season.
Traditionally, the retailer had sent out
a generic message that promoted
everything from blankets to
stationeries to refrigerators for the
American Express and its
Database
entire customer database. Athena,
however, helped Best Buy identify
students, likely-to-be-students, and
the parents of likely-to-be-students
based on online and offline
interactions. These identified
customer segments were then sent
back-to-school promotion emails
with items that had been identified
for promotions. In other words,
customers that did not fall into any of
the three groups did not receive these
customized promotion emails, or
were not likely to even know of a
back-to-school sale. Similar
promotional campaigns were
implemented for the back-to-college
and Labor Day periods for distinctly
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targeted customer groups. In essence,
campaigns were being run in parallel,
as opposed to running one single
mass campaign.
Thanks to the well thought-out
campaigns, the retailer realized a
17% increase in online comparable
store sales during the second quarter
of 2015. Further, the company did
not spend money that they would
have on TV or print ads and
reinvested it into managing and
upgrading Athena. The savings and
upgrades have enabled them to use
Athena for their future plans that
includes redesigning their wedding
registry program.
Source: Berg (2015).
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Class project:
Table relations

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