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David Sims Two And A Half Steps To ROI With CRM Analytics

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 By David Sims

Using CRM Analytics to Acquire More Customers and ROI

Let's start by scaring you: According to Dr. Marc Teerlink, Global Strategist and Subject Matter Expert in Business Analytics and Optimization for the IBM Global Center of Competence, "Every day consumers and enterprises create 2.5 quintillion bytes of data. In fact, 90 percent of data in the world today has been created in the last two years."

Boom. Analyze that.​

As part of your CRM system you've got oodles of customer data safely stashed away, and you're analyzing the heck out of it to wring the most value you can out of your customer data. Could you be doing it better? Is there something you're missing that could turn out to be profitable? Maybe.

Let's look at two and a half steps you could be taking to improve the ROI you're getting out of your share of that 2.5 quintillion.

First, try analyzing data to look for more horizontal marketing opportunities. Sure, one way to approach your customer is to throw everything you can think of in her face -- "How about this? Want this? Lookit these!" -- in the hopes that she'll see something she likes.

But people tune out a steady stream of uninteresting, irrelevant blather. Customers are human, too. If you don't pay attention to blizzard marketing why would you think they do?

Instead, as Teerlink says, use analytics scoring models to find the customer's purchase patterns, then "simulate the customer reading each planned promotion, one promotion at a time." What you're doing here is trying to discern how the customer would react to each one, based on analyzing everything you already know about her.

This costs less, and she doesn't tune you out, but comes to realize your communications are actually pretty relevant. It's looking at what your customer actually needs instead of your campaign goals, to how you can serve a customer better over time, Teerlink explains, and requires a bit of a shift in focus, as well as increased sharing of information.

Secondly, try offering the rewards your loyalty club members get to first-time customers to get the data from them that you do from your members. That's what John Lucas, Director of Operations at the Cincinnati Zoo, one of the most popular tourist attractions in the United States, did.

As he explains in a recent customer analysis study, "The number one thing we want to know is: who is coming to the Zoo? How often do they come? What do they do and what do they buy?"

But they were only getting this information from half of their daily visitors, the members with loyalty cards they scan around the park for food discounts or free rides. They weren't learning anything about the spending and park use of first-time visitors and other non-members, the whole other half of their daily visitation.

So the Zoo decided heck, we'll give everybody a loyalty card. All non-members have to do is give their name, address, email and number of kids at the gate and bam, the Zoo hands them a card good for discounts that day. No waiting. "As a result, a very large proportion of visitors sign up," Lucas notes, and the Zoo gets a lot more data.

For one thing, Lucas learned, somewhat to his chagrin, what slackers Zoo members are: "In the first quarter of 2011, the average non-member spent $3.48 on food service and $2.67 on retail per visit to the Zoo. Members only spent $1.03 on food service and $0.77 on retail."

But there's your ROI: The Zoo learned that directing more marketing towards attracting one-time visitors could have a higher ROI than previously suspected. And that members need to be prodded with different incentives to spend a bit more. Marketing priorities and budgets can now be adjusted more profitably.

Now, the half: What is required for both of these approaches, trying horizontal marketing and giving first-time visitors the privileges normally reserved for members, is greater integration and sharing of data than may currently characterize your organization. As one intelligent CRM analyst remarked, departments don't want the data to benefit the company, they want it to benefit the department. That's often true for individuals with their little fiefdoms as well, to whom information is their value in the organization.

Which is where you as the C-level executive must step in. A project manager can't force departments or individuals to share information they don't want to share, that's your job. If your CRM analytics investment is to yield the ROI you want, you have to ensure that you're getting the cooperation across the board you need. End

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Comments (3) — Comments for this page are closed —

Guest JB Russell
  I think the volume of data is forcing business managers to apply a more scientific approach to decision making. The old guard that still wants to make decisions based on subjective criteria such as intuition, experience and judgment is increasingly confronted with more objective data and the tools to make timely sense of the data. Business leaders are increasingly asking for the facts that back up recommendations or decisions before those decisions are approved. These types of behaviors are steadily transitionign more and more business to fact based decision making, and ultimately better corporate decisions.

Guest Blake Vincent
  Analytics only produce ROI if the right information is delivered to the right decision maker at the right time, and that information is actionable and acted upon on timely. Integrating data flow with the normal course of a decision makers daily activities is both the challenge and key to getting that information noticed and acted upon.

Guest Gil Hod
  So true... CRM is a strategic tool and the sooner the organization will understand that fact - the better Read my thoghts in my blog -


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As one intelligent CRM analyst remarked, departments don't want the data to benefit the company, they want it to benefit the department.


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