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CRM Analytics Brings More Profitability

Written By: Kevin Ramesan
Published On: December 21 2002

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Business Process Automation Requires a Well-established Strategy.

Targeting your best customers and personalizing your relationship with them, implies an in-depth understanding of their behavior.

Today, analytical tools combined with existing CRM technologies open the door to improved customer knowledge and help designing the right target marketing activities. This may be missing puzzle piece that would help you reach the expected ROI on those major CRM investments.

Five years ago in Europe, CRM began as Sales Force Automation tools designed to improve customer relationship processes through the sales force channel. Two years later, with the development of Call Centers, sales forces benefited from a new sales channel favoring low cost interaction with customers.

While phone and e-mail interactions have surely decreased operating costs, they have created higher costs for implementing CRM technology and software licenses acquisition.

The perfect example is with "Societe Generale" a leading French bank, carrying one of the biggest CRM projects in Europe (a 260 M Euros project), intending to consolidate their customer and prospect databases in order to serve their 21, 000 users through out 2000 various sites with a unique multi-channel CRM tool.

In Europe, the ROI for CRM projects are still hazy. CRM euphoria is now behind us. Up to 75% of implemented CRM solutions have provided a fairly poor improvement and almost no return on investment. The missing part is in providing companies with instant analysis and knowledge on customer behavior and trends.

CRM analytics can help companies better and faster target their customers and create "one to one" relationships. Prior to CRM analytics, companies were relying on complex and sophisticated analytical tools. Access to data analysis were delayed and outdated.

Datamarts Play an Essential Role

Datamarts represent the first evolution that simplifies access to statistics and predictive modeling.

Together with datawarehouses, datamarts are specialized and structured to render a specific service using OLAP engines (On Line Analytical Processing).

Designed to be smaller than datawarehouses but faster in response time, datamarts are deployed as needed, thus helping companies reach their full analytical capabilities at their own pace.

Through a predefined data model and broad analytical capabilities, CRM analytics are turn-key applications providing companies with user friendly tools that fulfill their customer's knowledge needs.

Datamarts Rely on Two Different OLAP Tools

Reporting Tools
Aiming at responding to questions such as "who are my customers that spent the most in 2001?" Offered by, Business Objects and Cognos two major players, but also by new comers such as Brio, Crystal Decisions, Hyperion, MicroStrategy, IBM, Oracle, and SAS.

Datamining Tools
This second category of OLAP tools is designed to automate the detection of relevant patterns in a database. For example, a pattern might indicate that married males with children are twice as likely to drive a particular sports car than married males with no children. In this category major key players are Data Distilleries, Kxen, Isoft, but also IBM and Oracle.

Get the Customer Data

Datamining or reporting, datamart or datawarehouse all come with empty database tables and it is up to companies to load their customer data. The real difficulty is when the data is all spread around. Therefore, the unification of customer data represents the first step to a CRM analytics project.

This step is achieved through ETL tools (Extraction, Transformation, Load) by extracting data from accounting software, ERP, Call Centers, prospect databases, etc., and loading it in a datawarehouse or datamart.

Three companies dominate this market Ascential with Datastage, Informatica with Power Center and Acta with ActaWorks.

 
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