1. What is your understanding of CRM?
Customer relationship management involves managing all aspects of a customer’s relationship with an organisation to increase customer loyalty and retention and an organisation’s profitability.
Organisations implement CRM systems to gain a better understanding of customer needs and behaviours, and information technology provides companies with a new channel to communicate with customers beyond those traditionally used by organisations such as face-to-face or paper-based methods.
2. Compare operational and analytical customer relationship management.
Operational CRM: supports tradtional transactional processing for day-to-day front-office operations or systems that deal directly with the customers. One of the main benefits of this contact history is that customers can interact with different people or different contact “channels” in a company over time without having to repeat the history of their interaction each time.Consequently, many call centers use some kind of CRM software to support their call centre agents.
Analytical CRM: supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers.
Analytical CRM analyses customer data for a variety of purposes including:
1-design and execution of targeted marketing campaigns to optimise marketing effectiveness
2-design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention
3-analysis of customer behaviour to aid product and service decision making (e.g. pricing, new product development etc.)
4-management decisions, e.g. financial forecasting and customer profitability analysis
5-prediction of the probability of customer defection (churn).
3. Describe and differentiate the CRM technologies used by marketing departments and sales departments
There are three marketing operational CRM technologies:
1-List generator: compiles customer information from a variety of sources and segment the information for different marketing campaigns
2-Campaign management system – guides users through marketing campaigns
3-Cross-selling and up-selling:
-Cross-selling – selling additional products or services
-Up-selling – increasing the value of the sale
4. How could a sales department use operational CRM technologies?
There are 3 sales operational CRM technologies:
- sales management CRM system: automates each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts
- Contact management CRM system: maintains customer contact information and identifies prospective customers for future sales
- Opportunity management CRM system: target sales opportunities by finding new customers or companies for future sales
5. Describe business intelligence and its value to businesses
Business intelligence: applications and technologies used to gather, provide access to, and analyse data and information to support decison making efforts. Includes simple MS Excel Pivot tables to highly sophisticate software that fetches data from the different front- and back-office systems.
Business intelligence can tell businesses things like;
- Determine who are the best and worst customers thereby gaining insight into where it needs to concentrate more for its future sales
- Identify exceptional sales people
- Determine whether or not campaigns have been successful
- Determine in which activity they are making or losing money
6. Explain the problem associated with business intelligence. Describe the solution to this business problem
If there is too much data an organisation may have limited knowledge on where data is or who their competitors may be. Hence may not be unable to make the best strategic implementation due to insufficient tools to back up data and support decision making to their strategic goals. The solution approach that they could take is business intelligence where it helps an organisation make decisions. Functional areas of an organisation can make decisions where they can be able to see more data analysis and reduce the latency of information in making good decisions.
7. What are two possible outcomes a company could get from using data mining?
The two possible outcomes a company could get from data mining is that it can increase profits and allow an organisation to have better sales and confined resources. Another two outcomes include cluster and statistical analysis. Cluster analysis is the searching of equal or non equal but alike data in the many types of databases. However to undertake the cluster analysis, behavioural traits need to be clearly identified through physically partitioning the individual information into set groups. Statistical analysis assesses the data trends through the assistance of a regression analysis and statistics. Statistical analysis gives opportunity to workers in an organisation a large variety of statistical capabilities in order to construct things such as statistical models, the examination of model’s assumptions and validity and the comparison and contrasting the number of models to identify which is the better alternative for an issue within an organisation.
