As its name suggests, customer relationship management (CRM) focuses on building enterprise profitability through the service and management of customer behavior and processes. It centers on the collection and analyses of customer-derived information to exploit this knowledge to better meet customer needs and business objectives. The APICS Dictionary describes CRM as a marketing philosophy where information is analyzed to provide marketing and sales with the necessary information to service customers' existing and potential needs. Thus, along with account management, catalog, and order entry, major commercial CRM software application areas include customer service and support (CSS), call centers, sales force automation (SFA), and marketing automation (MA). Of these, that latter two areas, SFA and MA best illustrate the interconnection between CRM and analytics.
With each new advance in technology, especially the proliferation of self-service channels like the Internet and wireless application protocol (WAP) phones, more elements of the customer service relationship is being managed electronically. Organizations are therefore looking for ways to personalize on-line experiences through tools such as help desk software, e-mail organizers, and Web development applications. For more information on other aspects of CRM, see CRM is Busting Out of Its Britches: Operational, Analytical, and Collaborative CRM Is Born.
Many CRM software vendors focused their first marketing modules to generate and convey leads to the sales force. SFA thus refers to the application of technology that enables selling through all channels, including field sales, telesales, selling partners, Web selling, and retail. The goal is to integrate technology with optimal processes providing continuous improvement in sales effectiveness, as well as providing balance and optimization to each enterprise sales channel.
But, while SFA was designed to equip a sales force to close deals, it typically does not influence customer adoption, which is the tenet at the heart of CRM. SFA is about acquiring new customers, but the CRM is also concerned with identifying, servicing, retaining, and increasing profitable customer relationships. The technologies that CRM harnesses should enable greater customer insight, increase customer access, create more effective interactions with customers and trading partners, and be integrated throughout customer channels and back-office enterprise functions
Thus to enable an organization to become more customer-centric, marketing departments must lead by example and improve the management of their operations, including better allocation of marketing resources with the highest value opportunities. This feat is only possible through the improved orchestration of the marketing function—marketing automation (MA). MA eventually leads to customer relationship optimization by applying customer insight and intelligence to plan the execution of customer interactions.
Building a better understanding of customer preferences to better serve their needs and increase their loyalty is certainly the motto for the new generation of MA systems. MA involves analyzing and automating the marketing process through information technology (IT) tools to allocate marketing resources to activities, channels, and media that will best meet customer needs while delivering profitability to the company. Its functional components include customer data cleansing, analysis tools, and campaign management systems. MA also enables new metrics, such as customer profitability, lifetime value, and wallet share to supplement the traditional metrics of market share and penetration.
All of these tools focus on determining what an enterprise's strategy should be during each customer interaction and these interactions fall within the following three categories: outbound campaigns, event-triggered interactions, and inbound interactions. For example, target marketing focuses marketing activities specifically on those people who are most likely to buy a company's products and services. Data gathered on people who use the Internet enables companies to identify and focus on more likely candidates. Retention efficiency is a measurement of how well a company creates repeat customers. Marketing cost analysis is the study and evaluation of the relative profitability or costs of different marketing operations in terms of customers, marketing units, commodities, territories, or marketing activities. Cost accounting is also typically used.
These tools are used to replace or enhance human intelligence by scanning through massive storehouses of data to discover meaningful new correlations, patterns and trends by using pattern recognition technologies and statistics. Likewise, predictive analytics drills even deeper. It is a statistical method that includes all analytics to predict the probable future outcome of an event and falls under data mining, a class of database applications that look for hidden patterns and support decision-making by forecasting the outcomes of different scenarios.
Ultimately, given the depth of information MA processes can pull out, MA is an integral part of a sound CRM strategy that can help drive organizational alignment through its analysis of markets, customers, and segments. For example, it can help guide marketing campaigns and identify segments of the customer base that is likely to cancel their subscription. For more info, see Marketing Automation: Coming of Age Slowly.
Campaign Management
Once patterns and trends are discerned, the next step is to apply what has been learned. Overall, basic campaign management provides capabilities such as planning campaigns targeted at segmented audiences; keeping a history of all the campaigns that have been run; tracking and analyzing the response to various products and target segments; and executing and tracking responses, which help in generating leads for sales.
Campaign management and e-mail marketing functions were among the first modules for CRM vendors to include in their product offerings. Siebel Systems, E.piphany, Pivotal (now part of chinadotcom/CDC), DoubleClick, and Aprimo are some of the providers of such functionality. By using a campaign management tool, marketers can design multilayered marketing campaigns filtered by customer segments, and use the contact center capability to reach their target through multiple channels such as phone, portals, e-mail, direct mail, and personal digital assistant (PDA). Another functional category that falls within this realm and is also widely provided for is electronic marketing, which offers a web-accessible, enterprise resource that manages and delivers essential information to marketing's customers, both internal (sales, customer support, etc.) and external (prospects, media, partners, etc.). Integrated content management and customization have added value to the basic features of e-mail marketing by avoiding the pitfalls of traditional mass marketing.
Marketing analytics adds a new dimension to basic campaign management. With marketing analytics, marketers can conduct customer behavioral analysis and understand key issues such as propensity to buy. Traditional CRM vendors such as Pivotal, PeopleSoft (now part of Oracle), and Siebel have been offering marketing analytics mostly through former acquisitions. Marketing analytics is also offered by other pure MA players such as Chordiant, E.piphany, SAS Institute, and Unica.
SOURCE:
http://www.technologyevaluation.com/research/articles/why-are-crm-and-analytics-intrinsically-connected-18114/
With each new advance in technology, especially the proliferation of self-service channels like the Internet and wireless application protocol (WAP) phones, more elements of the customer service relationship is being managed electronically. Organizations are therefore looking for ways to personalize on-line experiences through tools such as help desk software, e-mail organizers, and Web development applications. For more information on other aspects of CRM, see CRM is Busting Out of Its Britches: Operational, Analytical, and Collaborative CRM Is Born.
Many CRM software vendors focused their first marketing modules to generate and convey leads to the sales force. SFA thus refers to the application of technology that enables selling through all channels, including field sales, telesales, selling partners, Web selling, and retail. The goal is to integrate technology with optimal processes providing continuous improvement in sales effectiveness, as well as providing balance and optimization to each enterprise sales channel.
But, while SFA was designed to equip a sales force to close deals, it typically does not influence customer adoption, which is the tenet at the heart of CRM. SFA is about acquiring new customers, but the CRM is also concerned with identifying, servicing, retaining, and increasing profitable customer relationships. The technologies that CRM harnesses should enable greater customer insight, increase customer access, create more effective interactions with customers and trading partners, and be integrated throughout customer channels and back-office enterprise functions
Thus to enable an organization to become more customer-centric, marketing departments must lead by example and improve the management of their operations, including better allocation of marketing resources with the highest value opportunities. This feat is only possible through the improved orchestration of the marketing function—marketing automation (MA). MA eventually leads to customer relationship optimization by applying customer insight and intelligence to plan the execution of customer interactions.
Building a better understanding of customer preferences to better serve their needs and increase their loyalty is certainly the motto for the new generation of MA systems. MA involves analyzing and automating the marketing process through information technology (IT) tools to allocate marketing resources to activities, channels, and media that will best meet customer needs while delivering profitability to the company. Its functional components include customer data cleansing, analysis tools, and campaign management systems. MA also enables new metrics, such as customer profitability, lifetime value, and wallet share to supplement the traditional metrics of market share and penetration.
All of these tools focus on determining what an enterprise's strategy should be during each customer interaction and these interactions fall within the following three categories: outbound campaigns, event-triggered interactions, and inbound interactions. For example, target marketing focuses marketing activities specifically on those people who are most likely to buy a company's products and services. Data gathered on people who use the Internet enables companies to identify and focus on more likely candidates. Retention efficiency is a measurement of how well a company creates repeat customers. Marketing cost analysis is the study and evaluation of the relative profitability or costs of different marketing operations in terms of customers, marketing units, commodities, territories, or marketing activities. Cost accounting is also typically used.
These tools are used to replace or enhance human intelligence by scanning through massive storehouses of data to discover meaningful new correlations, patterns and trends by using pattern recognition technologies and statistics. Likewise, predictive analytics drills even deeper. It is a statistical method that includes all analytics to predict the probable future outcome of an event and falls under data mining, a class of database applications that look for hidden patterns and support decision-making by forecasting the outcomes of different scenarios.
Ultimately, given the depth of information MA processes can pull out, MA is an integral part of a sound CRM strategy that can help drive organizational alignment through its analysis of markets, customers, and segments. For example, it can help guide marketing campaigns and identify segments of the customer base that is likely to cancel their subscription. For more info, see Marketing Automation: Coming of Age Slowly.
Campaign Management
Once patterns and trends are discerned, the next step is to apply what has been learned. Overall, basic campaign management provides capabilities such as planning campaigns targeted at segmented audiences; keeping a history of all the campaigns that have been run; tracking and analyzing the response to various products and target segments; and executing and tracking responses, which help in generating leads for sales.
Campaign management and e-mail marketing functions were among the first modules for CRM vendors to include in their product offerings. Siebel Systems, E.piphany, Pivotal (now part of chinadotcom/CDC), DoubleClick, and Aprimo are some of the providers of such functionality. By using a campaign management tool, marketers can design multilayered marketing campaigns filtered by customer segments, and use the contact center capability to reach their target through multiple channels such as phone, portals, e-mail, direct mail, and personal digital assistant (PDA). Another functional category that falls within this realm and is also widely provided for is electronic marketing, which offers a web-accessible, enterprise resource that manages and delivers essential information to marketing's customers, both internal (sales, customer support, etc.) and external (prospects, media, partners, etc.). Integrated content management and customization have added value to the basic features of e-mail marketing by avoiding the pitfalls of traditional mass marketing.
Marketing analytics adds a new dimension to basic campaign management. With marketing analytics, marketers can conduct customer behavioral analysis and understand key issues such as propensity to buy. Traditional CRM vendors such as Pivotal, PeopleSoft (now part of Oracle), and Siebel have been offering marketing analytics mostly through former acquisitions. Marketing analytics is also offered by other pure MA players such as Chordiant, E.piphany, SAS Institute, and Unica.
SOURCE:
http://www.technologyevaluation.com/research/articles/why-are-crm-and-analytics-intrinsically-connected-18114/
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