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Services Marketing
Notes 12. In a customer-focused world, product and channel development have to follow the
customers lead.
5.5 Customer Relationship Analytics
The Bottom Line of CRM: Know Your Customer
CRM itself is not a technology, but a process of gathering and retaining information about
customers and their interactions with your company. CRM was practiced by businesses long
before CRM technology came along.
Companies now rely on databases and automated tracking tools to track needs of customers.
Operational and collaborative CRM covers the nuts and bolts of this process - interacting with
customers, managing the process and sharing actions with various channels and trading partners.
Analytical CRM integrates customer data coming in from various channels into a single system
to provide a decision-making platform. Such channels include the various components of CRM
systems - call centres, customer service automation, marketing automation and sales automation.
The new model focuses on an integrative approach with one single program that covers ERP
functions, sales automation, service management and marketing automation capabilities rather
than using individual systems as was done in the past.
Returns
Implementing CRM systems tends to be a complicated and expensive endeavour. While money
is being spent on CRM initiatives, many companies have not been able to figure out what kind
of return on investment they are getting with their systems, beyond anecdotal evidence. Add to
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 todays
database and CRM systems do a good job of capturing customer data, they cant 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 ones 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 ones 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-
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