Companies are striving to understand their customer better through analysing various patterns and trends. This sort of technique call analytical CRM.
In the SAS-analytical CRM white paper, it shows why companies changes the management from product-focus to customer focus. It also explains some of the techniques that apply in analytical CRM. These consist of data warehousing, data mining, OLAP and various decision support tools.
However, does analytical CRM really live up to the expectation of the company or the user? Do they provide on-going value to the company in this ever-changing environment. According to some case studies such as the one written by Arnott about the financial services. The cost involved in the project was enormous yet the benefits that it finally realized wasn't that great. Other cases also suggested that the cost of using analytical CRM does not always enable the manager to better off manage the company and on-going value is usually non-existence.
I believe in terms of analytical CRM, it might provide value only to the large companies where understanding individual customer is hard. For medium to small size companies, the cost of having one analytical CRM will usually outstripped the benefits it provides. The fund invested in the infrastructures and technologies are better off invested in other initiatives that consequently increase the customer satisfaction
Likewise, for small company, it is easier to understand the customer as the company will usually have small customer base and the customer behaviour can be understand through routine communication. Reflecting back to previous week where we were discussing getting to know customer in CRM article, I believe it is not always analytical CRM is not always the best method but it can be one of the input. Nevertheless, the cost of getting one such infrastructure should be deeply consider.
This blog mainly focus on the research within customer relationship management. All post are strictly my opinion only and does not constitute to others view
Thursday, July 26, 2007
Wednesday, July 18, 2007
Scenario Marketing
This week we will look into the technique that some company applied in their attempt to secure customer loyalty.
Getting a customer meaning expanding the market share of the company. It is important for any company to secure as many customers as possible because it will eventually translate into net profits of the company.
Scenario customer relationship management technique or in a shorter term scenario marketing is to develop possible scenarios that the potential user/customer that will go through when performing a certain task. These scenario will then be use as a basis for innovation for the company. Companies can employ initiatives in supporting those scenarios thus, increase the efficiency of the user/customer in performing their tasks. However, is scenario marketing can enables the company to extend their understanding in their user/customer ?
The first case we are looking at is the National Semiconductor Manufacturer. They have developed a system that support the user/customer in making decision particularly in what type of product will be best suited in user/customer's design. By doing so, it enable the user/customer to save enourmous amount of efforts in developing a new product. This savings translate into loyalty for the user/customer because they will continuosly revisiting the website and make purchase through the manufacturer.
The second case is the Tesco case where their understanding on how customer would like to obtain their groceries through local stores enable them to rip profits from high-profit customers. Their tools also enable the customer to continue revisiting their website thus, contribute to customer loyalty.
The third case is the Buzzsaw.com where they create collaborative environment to enable different parties in construction development to interact. This initiatives directly support the user/customer in their efforts in undergoing their individual task.
All these initiatives has granted them customer loyalty because of their understanding of the customer needs. Nevertheless, in developing scenarios are usually tedious and dangerous because we have to consider the risk of omitting important details during the development.
In my opinion, the key to success in scenario marketing strategy is the ability to gather users opinion and incorporate them into a process that aim to support the users/customers. Once the users/customers have uses the support the company has to offer, it will create a switching cost for the customer to switch products because of their familiarity of the company's exisiting line of products. This switching cost ultimately translates into customer loyalty because customer will become hesitant to switch between manufacturers because they will need to put additional efforts in learning the pros and cons of the new product.
Although scenario marketing seems to be very effective in earning customer loyalty, building a precise scenario is extremely difficult because of multiple contingencies involve. Getting the contingency right is I believed to be the critical issue to success.
Getting a customer meaning expanding the market share of the company. It is important for any company to secure as many customers as possible because it will eventually translate into net profits of the company.
Scenario customer relationship management technique or in a shorter term scenario marketing is to develop possible scenarios that the potential user/customer that will go through when performing a certain task. These scenario will then be use as a basis for innovation for the company. Companies can employ initiatives in supporting those scenarios thus, increase the efficiency of the user/customer in performing their tasks. However, is scenario marketing can enables the company to extend their understanding in their user/customer ?
The first case we are looking at is the National Semiconductor Manufacturer. They have developed a system that support the user/customer in making decision particularly in what type of product will be best suited in user/customer's design. By doing so, it enable the user/customer to save enourmous amount of efforts in developing a new product. This savings translate into loyalty for the user/customer because they will continuosly revisiting the website and make purchase through the manufacturer.
The second case is the Tesco case where their understanding on how customer would like to obtain their groceries through local stores enable them to rip profits from high-profit customers. Their tools also enable the customer to continue revisiting their website thus, contribute to customer loyalty.
The third case is the Buzzsaw.com where they create collaborative environment to enable different parties in construction development to interact. This initiatives directly support the user/customer in their efforts in undergoing their individual task.
All these initiatives has granted them customer loyalty because of their understanding of the customer needs. Nevertheless, in developing scenarios are usually tedious and dangerous because we have to consider the risk of omitting important details during the development.
In my opinion, the key to success in scenario marketing strategy is the ability to gather users opinion and incorporate them into a process that aim to support the users/customers. Once the users/customers have uses the support the company has to offer, it will create a switching cost for the customer to switch products because of their familiarity of the company's exisiting line of products. This switching cost ultimately translates into customer loyalty because customer will become hesitant to switch between manufacturers because they will need to put additional efforts in learning the pros and cons of the new product.
Although scenario marketing seems to be very effective in earning customer loyalty, building a precise scenario is extremely difficult because of multiple contingencies involve. Getting the contingency right is I believed to be the critical issue to success.
Tuesday, July 17, 2007
july 18
Customer Relationship Management
A broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer information.
Operational CRM- automation or support of customer processes that include a company’s sales or service representative
Collaborative CRM- direct communication with customers that does not include a company’s sales or service representative (“self service”)
Analytical CRM- analysis of customer data for a broad range of purposes
In Australia, NAB with their Leads System is the prominent leader in CRM initiatives.
Sources are cited from wikipedia
A broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer information.
Operational CRM- automation or support of customer processes that include a company’s sales or service representative
Collaborative CRM- direct communication with customers that does not include a company’s sales or service representative (“self service”)
Analytical CRM- analysis of customer data for a broad range of purposes
In Australia, NAB with their Leads System is the prominent leader in CRM initiatives.
Sources are cited from wikipedia