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Marianne Cotter Five Reasons Why CRM Analytics are Essential for Success

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 By Marianne Cotter

CRM Analytics Deliver Customer Insight For Improved Customer Experience

Your Customer Relationship Management software implementation represented a major technology investment as well as a substantial overhaul of your business processes. As soon as you successfully implemented your CRM solution you began to slowly but steadily experience efficiencies in your sales, marketing and call center operations. While some of these efficiencies are easily observed and measured, the more profound insights will go unnoticed and unexploited until you integrate a powerful analytics component.

Analytics with its data mining abilities will find correlations, isolate patterns and track trends among volumes of customers, serving up the kind of information that will allow your organization to tailor the customer experience for improved engagement, incremental business and better profits. At the same time analytics can empower you to make forward-looking decisions such as where best to make your next major capital investment and how to further optimize your CRM system for even greater efficiencies.

"Your investment in CRM might have great value without analytics," says Chris Selland, CRM analyst with Focus Research, "but you wouldn't know what it is and you'd have a hard time explaining it to your CFO. Without analytics it's harder to justify the investment and make the case for the next investment."

Below are five powerful reasons why you will want to integrate analytics into your CRM software solution.

  1. Better Customer Understanding
    Customers are at the heart of the modern enterprise and understanding their preferences, their values and their histories is the cornerstone of guiding your company toward greater success. By analyzing all customer data points (call center, Internet, email, social media), CRM analytics can group customers according to their behavior allowing you to identify your best customers for special treatment to maximize their lifetime value. Customers at all levels can be segmented for targeted marketing efforts. Customer trends can be extracted from large amounts of data and used to anticipate needs, guiding product development, marketing efforts and promotions.

  2. Better Understanding of the Customer-Facing Operations
    Analytics will help you understand how well the company is performing in terms of service, sales and marketing. Getting the CFO to sign off on a CRM software investment in the first place required assurance that you will recoup that investment. Without analytics demonstrating the value of the investment is difficult. With analytics you can predict and establish ROI and use it to justify further investments. "This is the CFO view of everything," says Selland. "You can throw more dollars at your operations but where's the value?" The reason for Customer Relationship Management programs in the first place was to take the cost of sales, the cost of marketing and the cost of service and be sure you're getting a return on what you're spending. "You can put the entire company on Twitter," says Selland, "but does it make economic sense?" Business intelligence (BI) and CRM analytics can answer these questions.

  3. Decision Support
    This is the more tactical side of #2 above. Once you understand where you're getting or not getting value in your customer-facing operations, you can make begin making course corrections and new decisions toward operational investments; where to invest money, where to divest, where to insource, where to outsource. Should we open a new call center? "While decision support is related to understanding customer-facing operations," says Selland, "it is actually a macro view as it provides the big picture numbers necessary to make operational decisions. Should we run our own call center or should we outsource?"

  4. Predictive Modeling
    Through BI and analytics you gain the ability to better forecast how your customers are going to respond in the future based on their past behavior as well as their segmented demographics. For instance, wireless companies want to know if a customer is at risk when their contract runs out. If an AT&T customer is up for renewal, what are the chances he's going to jump to Sprint and how much money should the company spend on preventing that customer from switching? Analytics can isolate large numbers of customers who are up for renewal and segment them according to how they're expected to behave at renewal time. If they haven't made complaints in the past and have upgraded their service and bought additional products, chances are they are satisfied and will renew without coaxing. You may want to target them with future marketing campaigns but no additional investment need be made to retain them. If, on the other hand, a customer has several complaints on record he may be part of a group that is shopping for a new wireless company. Retaining that group will take extra effort, justifying the allocation of additional marketing dollars for that purpose.

  5. Benchmarking
    A powerful customer analytics component provides the data to perform detailed benchmarking over time. Generally, benchmarking is the ability to determine how well you are or are not performing compared to your plan or similar organizations in your industry as well as companies in other industries. Benchmarking analytics focuses on defined key indicators such as customer satisfaction, retention, cost per customer service call and revenue per call. You can see the operational areas in which you're lagging behind, and bring them up to (or above) industry standards.

"CRM benchmarking changes with added complexity and new channels such as social media," says Selland, "but it's always a matter of determining how are we doing compared to industry norms and the competition."

Customer analytics, in the end, may be the key to not only optimizing your CRM software investment, but to moving your company to the next level with greater call center efficiencies, more targeted marketing campaigns and increased sales revenue. End

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Comments (5) — Comments for this page are closed —

Guest VinayR
  Big data technology solutions and analytics are finding new ways to influence or all together change product R&D, marketing spend, sales effectiveness and customer service. As storage becomes even more commoditized, ETL tools become simpler to use and cloud-based analytics products decrease in price, they will begin to penetrate the SMB marketplace and realize even more opportunity.

Guest Colleen Petri
  I'm a bit fuzzy on this new term "big data", maybe somebody could add some color to help me understand what big data technology solutions really mean.
  Denise Denise Holland
    Definitions vary significantly, but purists might agree that big data solutions use massively parallel systems to extract customer or other intelligence from large volumes of distributed structured and unstructured data. Big data analytics are not actually new, but with cloud deployments and commodity-class storage big data technology solutions are now more plentiful and even within reach of SMB organizations.

Guest Sanjay Peduhimil
  There are many strong CRM analytics tools to link up with customer relationship management software. Business Objects, Cognos, Hyperion and others all offer semi-packaged integration to CRM software systems, however, fall short in delivering cost-effective and seamless solutions, and being implemented and maintained without IT support. Cloud CRM systems are getting closer, but for CRM analytics to really take off, the solutions must be delivered with and as an integral component of the CRM software and deliver analytics in context of CRM data. Further benefit will be realized when CRM analytics are then delivered for vertical markets with pre-defined industry specific metrics and offer an ability to compare your operating results with benchmarks of similarly profiled companies, possibly even competitors.

Guest Chris Nichols
  The vast majority of companies have CRM software systems, but continue to sit on large amounts of customer data, usually residing in multiple locations, and are doing little to nothing with it. The customer data simply deteriorates with only a minority of companies really leveraging this data to better serve their customers and gain competitive advantage. CRM analytics may be the tool to finally harness this data IF they are tightly integrated to CRM systems, provide easy methods to consolidate customer data, unify the data, personalize the data and make it accessible to users at the point of customer interaction.
 

 

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Customer analytics, with its data-mining capabilities, will discover correlations, isolate patterns and track trends among volumes of customers, serving up the kind of information that will allow your business to tailor the customer experience for improved engagement, incremental business and better profits.

 

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