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Services Management

Notes this uncertainty the risk of failure of a CRM program, and you get an idea of the managerial
trepidation involved in the process, till it starts manifesting tangible returns.
The problem is that almost half of all planned CRM implementations are based on technology
initiatives alone, and fail to address metrics, behaviours and processes. While many of today’s
database and CRM systems do a good job of capturing customer data, they can’t make the data
meaningful or enhance customer relationships by themselves.

Bringing Knowledge into the Equation

Customer relationship analytics – sometimes also called analytical CRM – makes sense of the
mounds of data collected in CRM systems, databases and transactions. In many cases, if the data
is available, no CRM system is even needed to develop a robust analysis of one’s customers.
Customer relationship analytical tools can provide a 360-degree view of customers, helping a
marketer understand what customers are telling him, who they are, what they need, and more
importantly, what they may do in the future.
These systems enable fact-based decision-making based on hard data, rather than on anecdotal
evidence.

Business Drivers

How can a business benefit from customer analytics? Simply put, and as seen earlier, it is far
cheaper to retain and satisfy one’s current customers than to acquire new ones.

However, it is not profitable to try to hang on to every customer. Some customer segments buy
in low volumes, while others have high service requirements or high return rates. Customer-
relationship analytics will help distinguish whether customers are part of high-profit or high-
maintenance segments.

Customer-relationship analytics take on the role of a highly sophisticated marketing department.
These tools identify your most valuable customers, group these customers based on purchasing
behaviour and other attributes, and target them with promotions and sales efforts designed to
increase customer loyalty and sales revenue. By understanding the relative value of each customer,
you can then focus sales and marketing efforts on the most profitable segments. Customer
relationship analytics can impact the company’s overall bottom line as well.

Recent research by accenture finds a direct correlation between customer relationship analytics
and business revenues. More the increase in CRM performance more is the incremental revenue
to the business. Accenture’s research examined specific CRM initiatives that can directly enhance
revenues. They discovered that the top three initiatives having the greatest impact on the bottom
line include fostering high levels of customer service, encouraging strong employee motivation,
and turning customer information into insight, i.e. analytics. The highest-performing companies
give their frontline employees quick, easy access to critical data – purchases, contact history and
product inquiries, as well as demographic and lifestyle data. They also observed that successful
companies share this same analytic information with trading partners across the supply chain.

Significantly, these successful CRM companies did not view CRM as an IT project relegated to a
specific department. Rather, they viewed CRM as an enterprise-wide initiative. Most CRM
implementations have been fragmented, implemented within departments without a cross-
organisational perspective.

Customer-relationship analytics need to be shared at all levels across the organisation. Inside
and in the field, sales personnel could then see higher levels of qualified customers, lower costs
of sales, and more sales closed. Marketing can then be able to track responses and predict results

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