ROLE OF ANALYTICAL CRM IN CRM SYSTEMS:
IMPORTANCE AND BENEFITS
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Jayanthi Ranjan
This paper aims to examine how customer relationship
management (CRM) systems are in place in firms in practice
with a focus on the customer needs and requirements, i.e. how
analytical CRM systems are used to support organizational
decision making and how such a system can be integrated with
CRM systems. The current practice of CRM application is based
on research literature review on CRM, a-CRM and their
applications. A conceptual analysis of an analytical CRM system
in organization where CRM systems are already in place is
developed based on the findings and literature review. The
latest findings on CRM systems and a-ACRM systems and its
application are reported, and an innovative analytical CRM
system is proposed integrating with already existing CRM
systems in organizations.
Key words: Customer Relationship Management (CRM),
Analytical Customer Relationship Management
(a-CRM), Customer, Marketing, customer behavior.
INTRODUCTION
Innovation in Information Technology (IT) and data storage technology is now
significantly outpacing progress in computer processing power, heralding a new
era where creating vast pools of digital data is becoming the preferred solution.
As a result, big companies with superior tools offer a complete suite of analytic
applications and data models that enable organizations to tap into the virtual
treasure trove of information they already possess, and enable effective
performance management on a scale broader than one can imagine. The tools
provide easy access to corporate and enterprise wide data and also convert
that data into useful and actionable information that is consistent across the
organization-one coherent version of the truth.
The term 'market verticals', is the buzz over the last 5 years. The market
has been evolving from wanting just business intelligence tools to wanting
complete solutions. This includes customizable horizontal solutions that apply
Management & Change, Volume 13, Number 1 (2009)
Management
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170 Role of Analytical CRM in CRM Systems ....
across all as well as industry-specific solutions for industries such as retail,
banking, health care, insurance, or manufacturing. These are referred to as
vertical solutions.
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Today for any company the mistakes will be more costly and the margin
for error is slimmer. Without knowing what generates sustained growth in
sales, market share, and profitability, the marketing function relies on imperfect
metrics, anecdotes, and history that may have been a result of unusual
occurrences unlikely to be repeated. Analytical CRM will address this problem.
Companies are under constant pressure to boost profits, reduce costs, and
increase revenues. At the same time, high pressures require organizations to
achieve competitive advantage to react faster to solve business issues and
meet customer requirements. To satisfy these demands firms around the world
must work smarter and be more to survive in this tough business climate. Working
smarter means providing easy access to the business processes and information
they need to make informed business decisions. Becoming more agile requires
business information be delivered to customers in a timely manner, so that
customers can react rapidly to business needs and requirements.
The objectives of this paper are to explain the importance of an integration
of customer relationship management (CRM) and analytical CRM (a-CRM).
This integration helps sharing information among business users, customers,
processes, and information in a cost-effective and timely manner, and to show
how new and evolving technologies contained within such a integration enable
an organization to work smarter and become more agile.
The first section of the paper provides an overview of why CRM is essential
for enabling the smart business. The second section explains the related research
in CRM and a-CRM. The third section looks at requirements for smarter decision
making through a-CRM and reviews recent innovations in information and
collaboration technologies that support those requirements. The fourth section
looks at how business process, information and collaboration technologies can
be integrated through a-CRM. The fifth section explains the expected benefits
of a-CRM in any firm. The sixth section concludes the paper.
Research Methodology
The purpose of the paper is to provide roles of CRM and aCRM in firms
and also to establish a framework for integrating both. The theoretical scope of
the paper is to distinguish between CRM and aCRM to clarify the role and
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Jayanthi Ranjan 171
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importance of each in business development environment. The mail aim is to
share how aCRM can be integrated into CRM systems to achieve business
excellence. The paper developed aCRM framework, aCRM patterns in
customer database which basically may be used as guidelines/templates to
create successful aCRM systems. Where ever data was discrepant and
inadequate, logical justification is provided.
This paper is based on focused and dedicated study of the literature present
on the aCRM, CRM systems. The author has contacted the organizations
executives for informal discussions to gain an insight into the above said systems.
Based on the reflection of the above discussions, meeting with pellet developers,
management educators, management consultants and management students
the paper had come to a decision to provide the integration of aCRM with
CRM and also provide effective framework for aCRM. The author had informal
talks with the various key notes speakers of various international and national
conferences, seminars and symposiums on aCRM and CRM systems and had
collected various feedbacks from them.
Since the research goal was to demonstrate the importance of aCRM
integration with CRM systems, the paper studied and followed the design science
approach. A questionnaire based study was conducted for understanding the
need of in aCRM in organizations. This led to formulate the understanding of
aCRM systems in firms.
The research strategy adopted can be classified into four stages:
• The importance of CRM was felt and realized through study of various
literature and discussions.
• The importance of aCRM in current business scenario was realized
through study of various literature and discussions.
RELATED WORK ON ANALYTICAL CRM
Customer Databases are mounting in organizations like call centers and other
customer management systems and are overflowing with details about
customers and contacts. The challenge is that raw data does not have value per
se; it needs to be turned into useful information. That is where analytical
technology comes into play. The term 'analytics', finds patterns in the randomness
of data so that one can discover valuable information and gain useful business
insights.
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Analytical CRM (a-CRM) is a customer database marketing method that
accomplishes in identifying, getting, keeping, and growing right and relevant
customers. The main application of a-CRM is to maintain constant communication
with customers, and also promote offers to targeted sales prospects. The other
application is to place the customer or target prospect experience at the center
of the organization's priorities and to ensure that incentive systems, processes,
and information resources leverage the relationship by enhancing the experience.
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a-CRM helps attract new customers by first profiling existing customers
and testing their responses to promotions, and then identifying sales prospects
with similar characteristics.
Ahmed (2004) provided a model to use prediction and classification to
discover the characteristics of customers who are likely to leave. (Ahn, et.al,
2003) developed the design of CRM model and examined analytical CRM on
distributed data warehouse. (Bose and Sugumaran, 2003) stressed on the
application of knowledge management in CRM. (Bose, 2002) examined CRM
and found it as a key component for information technology success. (Cambell,
2003) explained customer knowledge creation and CRM.
(Leverin and Liljander, 2006) emphasized on improving customer relationship,
satisfaction and loyalty.Marcus (2001) showed segmentation as the effective
way to achieve CRM in any firm. (Mukhopadhyay and Nath, 2001) proposed a
model for measuring the efficiency of CRM systems
(Payne and Frow, 2005) defined strategic framework for CRM for taking
effective business decisions. (Qiaohong, et.al, 2007), showed Analytical CRM
design based on distributed data warehouse. (Rigby and Ledingham, 2004)
suggested a model to calculate the cost of CRM in an organization. Rowley
(2002) explained the importance of eight factors for customer knowledge
management in e-business. Sap.com (2003) discussed the importance of analytical
CRM in the business. (Smith, 2006) discussed whether CRM and customer
service be viewed as strategic asset or corporate overhead. Thearling (1998)
recommended a simple method to evaluate the benefit of a Data mining model
for CRM applications. (Xu and Walton, 2005) explained the importance of
customer knowledge through analytical CRM.
Analytical CRM is the process of gathering, analyzing and exploiting
information of a company's customer base. Information is typically obtained
about customer existing and future needs, customer decision making processes,
customer behavior and trends as well as using data about the competition,
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Jayanthi Ranjan 173
conditions in the industry, and general economic, technological, and cultural
trends. This reveals the compelling strategies and practices behind today's
success stories and provides a dynamic forum where thought leaders, business
innovators and customer-focused executives can identify valuable opportunities.
Drawing on the perspectives and experiences of leading lights in the customer
intelligence community, a-CRM demonstrates how intelligent analysis and action
is setting the stage for the next economy.
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TRANSFORMING FROM CRM TO A-CRM
As already mentioned, the management strategists all agree that differentiation
is a key to competitive advantage. The implication is clear: Profit growth for
suppliers and service-providers will come from building intimate relationships
with customers, and from providing more products and services to one's existing
customer base. The works by Sweet (2001), Sweet (2002), and Sweet (2003),
Sweet (2004) strongly emphasizes the new vistas in CRM and urges the firms
to explore the need to do paradigm shift to CRM.
All the firms have recognized one truth. That is earning customer loyalty,
not just buying the loyalty; rather now for firms earning customer loyalty is
now mandatory.
Consider the following business scenario. Not all companies will be able to
give answers for this with their CRM systems along working in their
organizations.
"A sales executive wants to see all the sales for the past five years where
profitability has been greater than say x percent. He wishes to see it monthly.
Further, he wants to see whether the sales team has been in place during
this period or whether there has been personnel turnover where the
profitability percentages have been greater than y percent. He also wishes
to see trends in profitability, where all sales by year have steadily increased
for z percent at least two years in a row, he wishes to see the top five
products ranked by profitability".
Let us consider again the some business scenarios where in CRM systems
alone can't help.
• How much does the company spends in marketing to retain customers
• Which type of customers should it spend more?
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• Which marketing channel capacity or marketing activity should the firm
spend more or less on?
• What tailored offer can it up-sell or cross-sell to a customer on an inbound
call?
• How can it prioritize which customers should get which type of
communication?
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Not all organizations can answer the above questions. Estimating the return
on investment (ROI) of purchasing equipment is near science. In contrast,
determining the ROI of marketing is a wing and a prayer. Here where a-CRM
plays safe.
The authors are not emphasizing that all firms around the world should
implement a-CRM systems. But if the organization is growing and expanding,
like banks, telecom, retail and insurance and if the numbers of customers are
bundling to millions, then there is a need to understand the reports to keep track
of the patterns, growth segments, market potentials and customer behavior
changes. For forecasting and creating strategies, analysis of cross tabulated
massive data is essential. Any strategy map visually aid in understanding a
business to take from present (from present capability, organization and focus
of the company) to future (the desired state of capabilities, organization and
focus as laid out in the firm's mission, vision and strategy plan.
One thing is sure: Customers are always present in a world of uncertainty
and changes. Firms should focus on creating value, not only for customers in
the form of customer satisfaction but also for an organization's investors and
owners in financial terms of economic value. However, the unchallenged belief
that increasing sales volume is the only key can lead companies to depressed
profitability just to sustain sales growth. Some customers are unprofitable to
conduct business with. What matters is to shift mind-sets and thinking from
sales volume at any cost to profitable sales volume.
The works by (chien et.al, 2003), Phelon, P. (2004) and (chien et.al, 2003a)
strongly focus on implementing customer satisfaction. Hence customers really
matter to organizations. A way for investors, shareholders, and a management
team to think about measuring a company's promise for long-term economic
value growth performance is to measure its customers. How many customers
does it have? How much profit is it earning from each customer today and in
the future? What types of customers are the best to up-sell? What kind of new
customers are being added and what is the growth rate of additions? Here only
comes the measurement of customer's life time value analysis. Since changes
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in customer behavior are usually not volatile, customer's life time value analysis
may be useful to understand profit momentum. Customer's life time value analysis
measures are not interrupted by one-time charges and other short-term but
substantial financial statement surprises. Let's be clear that customers will
always exist. However, customers have widely varying demands and their
demands are increasing. Ideally, the cost-to-serve component of each customer's
profit contribution should therefore be measured to provide economic visibility.
Internet-enabled e-commerce is irreversibly shifting power from the seller
to the buyer. This power shift results from the buyer's access to so much more
information for product education and comparison shopping. The result is the
consumer will become king or queen. Customers have an abundance of options;
and now they can get information about products or services that interest them
in a much shorter amount of time than what today appear as the antiquated
ways of the past. The customer is in control more than ever before. Consequently,
from a supplier's perspective, customer retention becomes even more critical,
and treating customers as a lifetime stream of revenues becomes paramount.
As pointed out by Roscoe (2003) that the future of CRM definitely lies in
customer demands, requirements, needs and most importantly business
strategies. For instance, Zineldin (2000) suggests that IT tools should be used
not only to provide relationship building credibility and opportunities but also to
enable marketers to keep their fingers on the customer's pulse and respond to
changing needs. Again, a-CRM comes here to rescue.
With e-commerce, each customer can express his or her unique desires
and will increasingly search for customized goods and services. Technology is
making this possible. As widely varying customization and tailoring for individuals
becomes widespread, how will supply chain manufacturers and distributors
distinguish their profitable customers from their unprofitable ones? However,
the level of profitability is only one variable or factor for formulating a personalized
marketing strategy. a-CRM involves as many variables as are relevant to keep
buyers buying from firms. Other examples of variables may be geo-demographic
or behavioral. Geo-demographic variables include gender, age, income level,
family status (single, married with young children, empty nesters, retired, etc.),
recent purchase history, or where they live. Behavioral variables may include
customers being loyal, cautious, early adopters, and spendthrift, sophisticated,
and so on. Analytic CRM examines combinations of these to maximize offer
response rates.
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a-CRM
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Analytical CRM is not same as direct marketing. Direct marketing refers to
circumventing retailers or distributors and directly contacting customers by mail,
telephone, or e-mail. Database marketing, which can include direct marketing
as a channel, differs in that it requires an understanding of unique customer
needs and then tailoring products and marketing campaigns to reach them.
Greenberg (2004) defined analytical CRM to capture, store, extract,
process, interpret and report customer data to end-user. (Jones and
Ranchhod, 2007) argued on building marketing strategies in firms through
customer interactions. (Kim and Hawamdeh, 2008) explored on leveraging
customer knowledge in e-commerce based websites. (Kotorov, 2002)
examined CRM efficiency on a 100 percent scale on customers in any
business firm. (Kwok, et.al, 2007) examined the design of a generic customer
relationship strategy management system.
As a matter of fact Swift (2001) rightly pointed out the need for relationship
technologies in CRM. Hicks (2004) went a step further to explore business
agility with CRM and service orientation. Zineldin (2000) gave a new dimension
to relationship marketing as technologicalship marketing.
Choy, et.al, (2003) developed CRM based supplier relation system. Minna
and Aino (2005) discussed competence based customer knowledge management.
Campbell (2003) discussed the importance of managing and creating customer
knowledge for effective CRM. Hence the key to a-CRM is segmenting
customers into logical groupings. a-CRM addresses the following issues.
•
•
•
•
•
•
•
Definition of segments and their key differences
Predicting the characteristics of certain segments
Customers movements from segment to segment
Management of customer's migration proactively
Identifying most profitable segments
Identifying the difficult segments for longer term retaining.
Identifying the segments that respond to certain communication channels
and types of marketing messages.
The firms should understand that the message from a-CRM is that the best
way to outperform competitors is to focus on customers. Furthermore, it is
generally accepted that it is substantially more expensive to acquire a new
customer than to retain an existing one. The satisfied existing customers are not
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Jayanthi Ranjan 177
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only likely to buy more but also to spread the word to others like a referral
service. A company's interactions with a customer or sales target are the allimportant currency of a-CRM. Here the question is what does each interaction
truly cost and what is its payback it any firm? Questions related to the ROI
from marketing can be answered by integrating the performance management.
a-CRM systems evolved as a result of advanced information technology
and large databases used to refine marketing and sales efforts. The a-CRM
tools enable companies to target individual customers or micro market segments
with pinpoint accuracy and manage the dialogue and interactions. Early
operational CRM focused on cost savings by automating business process work
flows or lowering transaction costs, such as in call centers. Much has changed
now. The emphasis since then is on growing revenues, not simply lowering
costs. And today mainframes have migrated to the desk top. The concept of
front offices and back offices has emerged. The Internet has taken customers
a step further by blending computing and communications into a platformindependent, globally accessible, and universally usable medium to them.
a-CRM, based on customer database marketing systems, has evolved as
an important companion to operational CRM. For example, call center CRM
tools may guide the telemarketer to make shorter calls to increase the number
of calls, whereas a-CRM can increase the likelihood of acceptance of an offer
during a call. A factor in deploying a-CRM is the marketing strategy that may
be requiring a shift from increasing market share via more sales to increasing
profit by better understanding customer profiles.
Rowley (2002) defined customer knowledge as the knowledge that includes
knowledge about potential customers, customer segments and individual
customers and knowledge possessed by customers. Minna and Aino (2005)
differentiated customer knowledge from customer data and customer information,
and suggested that customer knowledge can be explicit, the structured customer
information in databases, or in tacit customer knowledge - knowledge in mind
of employees and customers
Increasingly companies are realizing that improving their profitability requires
more and better customer contact and more intimate customer relationships.
And indiscriminate mass marketing techniques are shifting to database marketing,
this sometimes called relationship marketing. Although the marketing and sales
functions clearly see the links between increasing customer satisfaction and
generating higher revenues, the accountants have traditionally focused on
encouraging cost reduction as a road to higher profits. The wise managers in
firms must recognize that some of the best profit generating opportunities come
Management & Change, Volume 13, Number 1 (2009)
178 Role of Analytical CRM in CRM Systems ....
from improvements, such as attaining higher quality, that achieve both lower
costs and higher revenues from increased customer satisfaction.
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Today it is nearly impossible for a company to manage the growing number
of communication channels in which a customer can and will interact with a
business. These can include by phone, Internet web site, e-mail, letter mail,
news letters, blogs, or in person.
What is even more problematic is ensuring consistent customer-facing
behavior among all of the employees in an enterprise. The customer's interactions
with the business are typically handled by a variety of employees in different
roles and situations responding to the different channels. The employees may
be unaware of tailored strategies or desired service levels for handling particular
customer groups. Inconsistent experiences are likely being created for customers,
who are acutely aware of them and will behave accordingly.
One lesson learned from the supply chain management discipline, at least
from a materials management and new product development point of view, is
'companies should need to better know their customer's customers.' The
objective of a-CRM is to offer and deliver the right product or service via the
right channel to the right customer at the right time and to do this in a pleasurable
way from the customer's point of view.
An emerging trend in a-CRM is the emphasis on maximizing the response
from an inbound interaction, such as where the customer initiates calls to a
customer service center, rather than scripting an outbound call intended to sell
as much standard product as possible. Customers are getting saturated from a
bombardment of outbound sales solicitations, and they have pain threshold limits.
A more profitable impact may come from a tailored up-sell or cross-sell offer at
the moment a customer calls in based on what you know about them. This is a
non-intrusive solution where an increased response rate is more likely. The
higher impact results from having current and relevant customer data combined
with a-CRM about which type of customer may be receptive to which type of
offer. a-CRM provides understanding of customer preferences that can translate
into purchases.
Alexander and Turner (2001) suggested that all customers are not equal in
their future value to an organization and some customers may even affect a
loss. Thus, organizations need to calculate and predict customer lifetime value
and analyze the churn rate. Not all high volume customers are necessarily high
lifetime value, and as such it is the high life value customers that must be the
focus of customer retention efforts. Here a-CRM again comes into rescue.
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Jayanthi Ranjan 179
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Figure 1 helps illustrate the differences between CRM and a-CRM. The author
strongly feels that in organizations a-CRM has been referenced but not yet
differentiated from customer relationship management. The organizations feel
that if they have incorporated CRM systems then they will have miracle down
the line.
a-CRM is the internal, company-facing repository of data used to determine
and analyze customer segments and then used to formulate strategies in order
to satisfy and retain each customer segment. Analysis is the key word. a-CRM
is an internal process for truly understanding who your customers are and what
they want from you. a-CRM anticipates their needs. The results of a-CRM are
then put into action by CRM. a-CRM leverages data warehousing and data
mining tools for data extraction, reorganizing, and analysis. Operational CRM
generates data that go as input to a-CRM as well as do other systems. a-CRM
then converts this data into actionable business information that becomes the
input to operational CRM for further customer interactions or communications.
An objective for operational CRM is to ensure that customers enjoy
consistently good experiences to increase their loyalty and the likelihood that
they will purchase again from the firms and possibly refers the business to
others. That is, the goal is to forge long-term relationships with customers by
consistently delivering exceptional service and tailored products for repeat
business and referrals. Consistent treatment of customers is a key descriptor
because customers can become finicky and impatient with one poor experience
(i.e., below their ever-rising expectations), causing them to explore alternative
providers that is competitors.
SERVICE BEST SPIRITUAL PRACTICE
I feel that the essence of spiritual practice is your attitude towards others.
When you have a pure, sincere motivation, then you have right attitude
towards others based on kindness, compassion, love and respect.
- His Holiness, The Dalai Lama
NO GAINS WITHOUT PAINS
Nothing is achieved without hard labour
(Shramapi bina na kimapi saadhyam).
- Nitya Niti
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180 Role of Analytical CRM in CRM Systems ....
Fig. 1 helps illustrate the differences between CRM and a-CRM.
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In fig. 1 the process starts with analyzing customer data to synthesize and
distill patterns. After that, marketing analysts formulate strategies that are tailored
to the various micro segments of customers and are obviously intended to
motivate customers to continue purchasing the supplier's goods and services.
The next steps involve mobilizing the organization to execute the strategies; this
can range from new product development programs to new value-added services
that support existing products and service lines.
The process cycle next crosses into the CRM domain, where the customer
data and feedback about their responses are collected. Powerful sales force
automation, marketing automation, and customer service tools are applied. Sales
automation helps manage the life cycle of every sales opportunity to its successful
conclusion. It allows for managing the sales pipeline and funnels to better forecast
when actual sales events will occur, remove administrative work by automating
routine tasks, and empower a sales team with call-tracking history and relevant
intelligence about prospects and customers. (Paiva et al, 2002) found that
customers' information is the type of information that is most frequently updated,
and the company focuses on specific customer information instead of general
market information.
Again refer Fig 1. Marketing automation tools aid in profiling customers
based on dozens of characteristics like preferences, buying behavior, purchasing
frequency, recency of purchase, demographics etc. The tools are not based on
marketing theory but rather on actual customer behavior, as research has
demonstrated that good indicators of a customer's future behavior is their past
behavior and their profile.
The enterprises collect enormous amount of data from various verticals
like sales, marketing, inventory, service, etc. One may ask why to collect and
store this as historical data. Historical data helps to make better decisions in the
current scenario. The historical data could be in the form of charts, spreadsheets,
graphs-to sum it up, that tells about the kind of decisions taken in the past. Each
and every decision taken by the company is tossed for negative or positive
outcome. For example, whenever there is any change in marketing strategy of
any company, the sales are affected either by raising or falling stating market
reaction for changed decision.
After a-CRM's formulated data has been collected, marketing automation
tools then push out each campaign, survey, or contest to customers and prospects,
as well as receive and analyze the responses. With advanced marketing
automation tools, customer responses can be anticipated. Personalized messages,
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potentially with offers or incentives to purchase or act, can be immediately
pushed back to the customer. Marketing automation tools go a step further by
maximizing profit by balancing the customer's likeliness to purchase with the
organization's ability to deliver, including its channel's capacity constraints or its
operation's capacity or planned offer inventories. These tools are also
foundational to customer loyalty programs in any service sector.
Call centers are today's factories for servicing customers. Everyone has
received unsolicited marketing phone calls or toggled through an automated
answering system to receive online help service from a person. With the addition
analytical CRM tool, call center employees are enabled to not only interact
more effectively with a customer, but to also expand their service call into a
sales call raising the top line. As mentioned earlier, leveraging and finessing a
customer-initiated inbound interaction to push a campaign message has been
recognized by marketers as being substantially more effective than traditional
outbound marketing campaign solicitations.
These tools, when combined, provide for interactions through all
communication channels like e-mail, call centers, mailing brochures,
advertisements, newsletters, and so on. These are all touch points with customers
and prospects. Every channel can engage the customer with a dynamically
personalized and compelling experience by leveraging marketing, sales, and
customer support. Each interaction is an opportunity to gain knowledge about
customer preferences and to strengthen the relationship. The problem is that
each of the communication channels may unknowingly use their own customer
intelligence data to interact with a customer without realizing that a different
message may be being delivered to the same customer via another
communication channel. A common a-CRM system provides the foundation to
integrate with and feed all of an organization's different communication channels.
This then provides a consistent personalized message from the receiver's view
consistent across all channels. The information and knowledge acquired from
the analytical CRM will help develop appropriate marketing and promotion
strategies. This type of CRM is referred by Kotorov (2002) as a 360° view of
the customer. Technologies underpinning the analytical CRM system include
CRM portals, data warehouses, predictive and analytical engines (Eckerson
and Watson, 2001);
With the analytical/operational CRM tools working in harmony, customers'
responses triggered from marketing campaigns can be individually tracked and
compared against their anticipated reactions. With e-mail or call center
campaigns, the analysis of customer responses can be timely and so sophisticated
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that the marketing campaign itself, with all customer response traffic monitored
on the supplier's computer servers or Web site, can be modified within hours or
days following the start of the campaign.
By monitoring and analyzing customer behaviors, it becomes immediately
apparent when any statistically sensitive deviations or changes from normal
behavior take place. An example would be, customer inactivity which may
signal attrition. When this event trigger technology is combined with intelligence
derived from data mining, a company has powerful intelligence to use when
interacting with a customer to re-alter their shopping behavior. The
communication may be in real time, or it may be right time where a delay is
more appropriate; and the customer interaction can be via any communication
channel, possibly inbound or outbound. Additional event triggers may include
lifetime events, such as marriages or school graduations that may be anticipated
or reported from other sources. In short, a-CRM tools provide a single, unified
view a comprehensive, cohesive, and centralized view of a customer that can
dynamically adjust based on feedback. Good a-CRM tools help organizations
make smarter decisions faster. In sum, a-CRM allows end-to-end functionality
from sales lead management to order tracking potentially seamlessly. a-CRM
includes data warehouses that are used by analytical applications that dissect
the data and present it in a form that is useful.
EXPECTED BENEFITS WITH a-CRM.
As suggested by (Ahn et al, 2003) the main concern in CRM systems is to
understand and make practical use of customer information, and argue that
with an enormous amount of data stored in databases and data warehouses, it
is increasingly important to develop powerful tools for the analysis of such data
and mining interesting knowledge from it. The biggest threat to CRM, as
suggested by Bose (2002), is managements' focus on short-run profits rather
than long-term vision.
Managing customers with a gut-feel based on intuition can lead toward
assuming that increasing sales volume equates to success. Having a way to
value different types of customers is a powerful tool to develop customercentric strategies and subsequently determine with what level of priority and
effort to engage each customer segment. Based on customer analysis, CI/
CRM transforms customer expectations into personalized experiences to acquire,
retain, and service customers and on a large scale. Real-time automated customer
response analysis, regardless of the touch points, means quick yet tailored
adjustments to marketing campaigns.
Management & Change, Volume 13, Number 1 (2009)
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184 Role of Analytical CRM in CRM Systems ....
• Information on the level of absolute and relative profit contribution that
the customer provides today and potentially in the future.
• Information on the actionable steps that can economically increase each
customer's profit contribution margin layer for high payback
• Information on what the companies are doing and what is important to
companies.
• Information on deciding factors for direct marketing and customer planning
worth it or not.
• Information on good customer profitability that leads to clearer thinking
about where to allocate one's limited resources.
• To analyze the right kind of increased total revenues.
• Information on profitability measured by each customer or customer
segments regardless of increase/decrease in sales and costs. By using
customer profitability data, the demarcation lines for ROI cutoffs can be
drawn, and the a-CRM systems can stop wasting employee time and the
company's scarce resources on types of customers that are not worth
the effort it takes to pursue them. This means, the analytical systems
should be designed to send into the CRM systems from a-CRM the
information derived from the profitability data.
• CRM systems are extremely customer-centric, whereas a-CRM is work
and process -centric. CRM cares about customer feelings and
preferences. A-CRM pays attention to how product and customer diversity
both require and consume greater resources. The information available
from these methods is essential to attain corporate goals and strategies
and to increase profitability. The company can diagnose, understand, and
alter its programs' costs. As a bonus from analyzing customer profitability,
the costs of poorly designed internal processes can be highlighted with
the likelihood of removing profit-harming effects otherwise undetected.
• a-CRM accomplishes in identifying, getting, keeping, and growing right
and relevant customers.
• It maintains constant communication with customers, and also promotes
offers to targeted sales prospects.
• It places the customer or target prospect experience at the center of the
organization's priorities and to ensure that incentive systems, processes,
and information resources leverage the relationship by enhancing the
experience.
• a-CRM helps attract new customers by first profiling existing customers
and testing their responses to promotions, and then identifying sales
prospects with similar characteristics.
Management & Change, Volume 13, Number 1 (2009)
Jayanthi Ranjan 185
CONCLUSION
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As mentioned in introduction, the economic boom from 2000 in the world was
fueled by a steady supply of relatively cheap capital. The economy was then
investment-driven. However, going forward, the future economics will be
demand-driven. It is for sure that customers, not capital, will generate the next
wave of dynamic economic growth in the world. This paper aimed to examine
how customer relationship management (CRM) systems are in place in firms
in practice with a focus on the customer needs and requirements, i.e. how
analytical CRM systems are used to support organizational decision making
and how such a system can be integrated with CRM systems.
In short, a-CRM tools provide a single, unified view a comprehensive,
cohesive, and centralized view of a customer that can dynamically adjust based
on feedback. Good a-CRM tools help organizations make smarter decisions
faster. In sum, a-CRM allows end-to-end functionality from sales lead
management to order tracking potentially seamlessly. a-CRM includes data
warehouses that are used by analytical applications that dissect the data and
present it in a form that is useful.
The paper explained with a aim to examine the CRM systems in practice
explored the ways of embracing CRM systems with a-CRM systems for
strategic customer information provision. The significance of this investigation
is to explore the potential of a-CRM systems and the ways that organizations
can better use the system to unlock the wealth of customer information and
deliver it, enterprise wide, to both internal and external users.
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