Introducing CRM Management Cycle in CRM
At the end of this lesson, readers should be able to:
- Define CRM intelligence management Cycle
- Identify the four steps in the CRM intelligence Management cycle
- Benefits of Analysis in CRM
- Measurement indicators in CRM
A four process illustrates the CRM Intelligence Management Cycle which is the collection of data, analysis, action and effective Management of the process.
- COLLECTION AS PART OF CRM MANAGEMENT CYCLE
As an Organisation formulates the data warehouse in order to cater for customer data, the Organisation must be able to evaluate and establish a mechanism that will cater to all customer data throughout the entire Organisation
The Organisation must be able to cater for all operational and financial data of the customers in order to enable the Organisation to meet customers’ demands and understand the financial implication of current and future behaviour of the customers. The Organisation needs to gather as much as possible about the customers in order to have an insight into their behaviours and most importantly how to make their purchase decisions.
After you have gathered all the data that you need, you must be able to analyse it. You should know that CRM analysis is different from ordinary analysis. This is because the CRM analysis is more specific and complex in nature. The purpose of analyzing data include:
- Customer Behaviour and Preferences: You should know that the more an Organisation can have a complete view of customers, the better the relationship can be conducted and fortified. Understanding customer behaviour will enable the Organisation to come up with customers based strategies that will meet customers’ needs.
OPERATIONAL FACTORS AS PART OF CRM MANAGEMENT CYCLE: Analysis will enable channel capacity and design, sales effectiveness across multiple channels and channels effectiveness. It will enable the Organisation to know how their touch points are points and things that can be done in order to boost their effectiveness.
- FINANCIAL FACTORS: This includes the study of customer profitability, cost allocation, consumption of resources to sell/service the customer e.t.c. In order to determine the key opportunities for improving profitability, and relate them to customer-related activities or operational activities.
In order to achieve this, there is a need for the Organisation to embark on a set of analysis and modelling tools. Analysis tools can provide the ability to evaluate customer profiles and behaviour, and identify communication potentials. In most cases, they also enable the evaluation of customer response and behaviour.
- ACTION: After analysis of customer data, there is a need for action on the part of the Organisation. The Organisation must be able to plan and execute communication-based on analytical intelligence. The Organisation must be able to automate all types of customer communications from prospecting to multi-channel interactions over time.
In doing this, the Organisation must consider the uniqueness of every customer and the need for personalization of services for customers. The main thing that will determine this is the past behaviour of the customers.
Optimization capabilities can prioritize communications across all channels and ensure effective communications.
Optimization should be based on the priority of the message and the availability of resources to act within a particular time window. This should encompass all touch points such as direct mail, kiosks, a point of sale, call centre, web, E-mail, ATM, Store/branch and sales contacts. Optimization is intended to reduce the conflicts that may occur in channels.
MEASUREMENT OF RESULTS:
The Organisation must measure the effectiveness and impact of its CRM activities on a regular basis to ensure the meeting of its objectives.
There are different ways by which performances of CRM analytics can be measured which includes Campaign costs, Marketing campaign gross margin and Revenue, total customers in database showing real profitability, Revenue and gross margins per customer in the database, revenue and gross margin from targeted customers and the percent change in CRM-related revenue and cost year to year.
The real value of CRM Management cycle is its ability to identify customers at the point of their needs. They must be able to know what their customers want and give them exactly what they want. This will help greatly in reducing attrition in the Organisation.
As part of the CRM Management cycle, you should note that If the Organisation can identify their customers at the point of their needs, they will be able to render personalized services to their customers. If the Organisation is able to meet its customers through the appropriate channel, it will enhance customer relationships which will ultimately lead to an increase in marketing success and customer loyalty.
Above all, with analytical CRM, an enterprise-class data warehouse and a well-formulated knowledge of the customer base, an Organisation will be able to satisfy the interest of its shareholders and stakeholders.
Introducing Analytical CRM Environment in a CCE
Analytical CRM environment is a group of applications that utilize the data gathered from core CRM systems to enhance understanding of customer behaviour. It uses the information gathered from customer-facing applications to know more about customers and their purchase behaviours, which is later used to segment the customers and come up with products that can satisfy their needs. CRM analytics is a set of programs that come up with information that helps the organization to solidify their relationship with their customers and come up with a mutually satisfying relationship which allows the organization to make quick and reasonable decisions about their customers.
Analytical CRM is very much different form of operational CRM in that, it focuses on creating relevant content to customers. It takes time to study customers in order to know what they want and pull all resources together in order to ensure that the organization is able to meet customers at the right place with the right products and services.
There are some things that are unique to CRM analytics. Some of it is segmentation studies, customer migration analysis, cross-sell/up-sell analysis, new + customer model, customer contact optimization, customer attrition and Lifetime value.
When we talk about segmentation studies as part of an analytical CRM environment, we are talking of grouping your customers together based on a certain characteristic that they share. So that you can come up with products that meet their needs. Etisalat, for example, came up with “Etisalat Elite” to meet the needs of the rich on their network.
We can talk of customer migration analysis which has much to do with the customer chose in between the different product that the organization have to offer for sale.
We have cross-selling and up-sell which talks about the opportunity to introduce new products to existing customers or getting to new leads to your lifecycle based on how far you have been able to satisfy your loyal customers.
We can also talk of new customer model as part of analytical CRM environment which talks about packages that you can introduce, or what your eligible leads are likely to see in your product before they can decide that they want to join your lifecycle. You can come up with models that will attract them to join your lifecycle.
We have customer contact optimization, which has much to do with getting the best of the act of your customer contact. Many organizations believe that having customer contact is all about having your customer residential address and next of kin details. They don’t know that it can be an avenue for the organization to retain such customers for life.
CRM analytics you should know must have a data warehouse and a well planned data structure that allow the organization to have a customized reporting, analysis and data mining may allow extracting of data from operational CRM into a complex database where the organization is able to segment and profile their customers based on facts that they are to draw out from their data warehouse. In that case, the analytics might draw its data from multiple sources as well as call centres.
One of the sources of CRM analytics is Business intelligence applications which consist of tools that include query and reporting tools, business graphics, online Analytical Processing (OLAP), statistical analysis, forecasting and data mining. All these tools often package to become one comprehensive tool for analysis purpose.
Some of the software available for CRM analytics did more than analysis, they also provide support and perform campaign management functions such as:
- Mailing, faxing or email offers to targeted customers.
- Initiating and managing a program to reacquire former customers.
CRM analytics is quite different from a data warehouse as it feeds the result of analytical processes into operational management tools. This allows the organization to continue to evolve policies that will ensure the actualization of total customer experience.
One after reasons why organizations invest in analytical CRM environment vis based on its ability to manage customer value. It has the capability of making sure that the organization is able to serve its customer across multiple channels.
Above all, Customer Value Management (CRM) is a process that refines and leverages the benefits of customer relationship management. In a broad context, it encompasses customer identification, contact management, campaign management, advanced data modelling and customer scoring.
Examining the Analytical Cycle for CRM
Analytical CRM for CRM plays an important role in CRM. They are used in segmenting and targeting customers. Most importantly analytical CRM is used in justifying, planning and measuring CRM initiatives. In this chapter, we are going to look at how analytical CRM is been to achieve these objectives.
Justify as part of the Analytical Cycle for CRM
Analytical CRM can be used to justify the introduction of an initiative or to drum support for an initiative by the executives. In formulating a CRM initiative, you should be able to determine the initiative by which you will be able to determine your success. If one particular initiative meets up with the standard that you have set for your program, you can gather support for such initiative.
Such metrics that you can use include assessing customer satisfaction, customer profitability customer retention, and sales and service delivery efficiency and effectiveness. You must also think of the benefits that are accrued to such programs. This must be presented to the executive management for approval.
Plan as part of the Analytical Cycle for CRM
CRM initiatives should be prioritized based on an evaluation of the organization’s biggest problem and greatest opportunities. You must be able to analyze your profitability based on product, channel and customers which is an essential part of the planning process. This xviii help you in making decisions regarding resource allocation, product development and identifying your opportunities too.
Planning must also take budgetary provision into consideration. This will give room for a trade-off. For instance, you can sacrifice a product that is not moving well in the market for the ones that are well accepted by the people. It will also help the organization to establish priorities and allocate resources appropriately for specific initiatives.
Drive as part of the Analytical Cycle for CRM
Analytics drive CRM initiatives as it allows the organization to have a better insight into its customer’s life. This knowledge helps the organization to segment its customers; the segmentation is done based on certain characteristics such as life stage, profitability products, demographics and information on customer behaviour gathered from each segment can be analyzed as this will allow the organization to come up with a model and predict customer behaviour.
Predictive modelling is essential to effectively target customers. Many campaign management vendors are combining segmentation and predictive modelling into a single solution, which Gartner has termed as “Relationship optimization”. Profitability systems can also be placed into the marketing system so that it becomes a dimension for segmentation and analysis. As a marketing CRM executive, you have to continue to carry out analysis of your customers in real-time and this must be compared customers profile in order to be sure of its authenticity
- Measurement as part of the Analytical Cycle for CRM
CRM initiatives must be measured on a regular basis in order to refine initiatives and to justify adoption. Organizations have to measure it in line with what was agreed upon in the beginning in order to be sure that the initiative is still relevant.
Such measurements will enable decision managers to make business decisions that will enable them to understand customer behaviour, guide business strategy better manage resources, optimize channels, improve a product and maximize customer profitability. In order to do this effectively, it will require query reporting and group comparison capabilities.
At the end of this lesson, we have been able to discover that:
- Analytical CRM is a group of application that uses data gathered from operational CRM to analyze and under customer behaviour.
- Analytical CRM environment studied customers in order to know what they wand and mobilized resources together in order to give customers exactly what they want.
- CRM analytics make use of data warehouse and business intelligence.
- Business intelligence includes Query and reporting, Business graphics, Online Analytical Processing, Statistical Analysis, Forecasting and data mining.
- CRM includes customer identification, contact management, campaign management, advanced data modelling, and customer scoring.
- Organizations need data about their customers in order to understand their behaviours and serve them better. Also, the organization needs to protect its customer’s information. How can an organization ensure that security of customers” information does not affect the achievement of CRM goals?
- Many organizations have been selective in the way they approach CRM strategies. Some limits CRM application to call centre development and online relations. What are some of the reasons why many organizations are afraid of embracing CRM (doing business from a customer perspective) in full?
At the end of this lesson, we have been able to discover that:
- CRM intelligence Management cycle has four steps which include: collection, Analysis, Action and Measurement of results.
- Analysis has to do with a logical sequence to any data
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