Post on 01-Nov-2014
description
Analytical CRM: The Fusion of Data and Intelligence
Mihir Pandit [PC-09]Vipul Patil [PA-20]
ANALYTICAL CRM
• The Fusion of Data and Intelligence• The system associated with this customer discovery • Revolutionary Change• Product Focused Enterprise Customer Centric Enterprise
REQUIREMENTS FOR ANALYTICAL CRM
Learning relationship with customers
Notice: What its customer are doing Remember: What it and its customer have done over time Learn: From what it has remembered Act: on what it has learned to make customer more profitable
HOW IT WORKS???
Transaction Processing System
Data Warehouse
Data Mining
Discovery of hidden
information
EXAMPLE:
Transaction Processing System
Frequent Buyer of Books
Customer touch point
Continue…….
Data Warehouse
Track Customer behavior over time
…………..Visit: 1 Visit: 199
Visit: 199
Continue……
Data Mining
1. Give customers more of what they want2. Value their time3. Over delivery4. Contact frequently (SMS/ Email)5. Generate a trustworthy mailing list6. Follow up
Continue……
Ultimately Building Profitable Business around the customer
WHAT IS DATA MINING??
Data mining is the exploration and analysis of large quantities of data in order to discover meaningful patterns and rule.
Data warehouse provides the enterprise with a memory Data mining provides the enterprise with an intelligence Central idea: data from the past will be useful in future Goal: to allow enterprise to improve its marketing, sales and customer support operation through better understanding of customer
WHAT TASKS CAN BE PERFORMED WITH DATA MINING?
Directed and undirected data mining Classification Estimation Prediction Affinity grouping Clustering
CLASSIFICATION
In order to understand customer and communicate about world, we are constantly classifying, categorizing and grading.
NMIMS
SBM SPP SPTM
M.Pharm+ MBA B.Pharm+ MBA
Pharmaceutics Pharma analysisQuality assurance
ESTIMATION
Deals with continuously valued outcomes It comes up with a value for some unknown continuous variable such as income, height or credit card balance. E.g.: Regression analysis
Estimating numbers of children in family Estimating the lifetime value of customer
PREDICTION
Prediction is same as classification or estimation except that the records are classify according to some predicted future behavior.E.G. Predicting which customer will leave within six months?
AFFINITY GROUPING
To determine which things go together e.g.: What things go together in a super market?
Market-Basket analysis
CASE STUDY: DIPERS AND BEER
CLUSTERING
Task of segmenting a heterogeneous population into a number of more homogenous subgroups or clusters. Records are grouped together on the basis of self similarity.
Helpful in ‘Market Segmentation’
VIRTUOUS CYCLE OF DATA MINING
? !
Social CRMConcept, Benefits and Approach to adopt
Who is our “SOCIAL” CUSTOMER?
Consumes information and learns about breaking news through sites like Twitter, Facebook , Linkedin etc.
Learns about new products through social channels.
Is wise to unsolicited promotions and trusts only relevant information.
Desires to converse with the brand rather than 1-way ad messages.
Expects brand to be active in same social media where he/she hangs out in.
Wants brand to listen engage and respond quickly.
WHAT IS SOCIAL CRM?
It is companies strategy to overseeing clients and sales prospect.
• More as philosophy with bussiness strategy
• Engages customer with mutually beneficial relationship
• Supported by social technology, bussiness rules and processes.
It is based on around information that companies could collect on their customers and then input into crm system that allows them to target various customer.
OLD GUARD:TRADITIONAL CRM
NEW GUARD:SOCIAL CRM
PR department: bigger role by taking charge of brands social presence while handling customer engagement online.
Advocacy and experience:No active message but active engaging.
How CRM evolved into social CRM
According to Wikipedia - Web 2.0 is a term describing changing trends in the use of World Wide Web technology and web design that aims to enhance creativity, secure information sharing, collaboration and functionality of the web.
Web 2.0 is enabling:• Collaboration• Community creation• Conversation• Creativity
Image source:http://web2.socialcomputingmagazine.com/all_we_got_was_web_10_when_tim_bernerslee_actually_gave_us_w.htm
It all started with the web 2.0 revolution and its 4C’s
Web 2.0 stimulated fundamental changes in consumer behavior
Interactions between customer and brands starting earlier and never ending
New behavior patterns demand a new strategy, better segmentation, new channels and targeted messages and review of current customer facing business processes
Being connected, customers realized that they could ask more from companies and share opinions about products and services
The new Social
Customer
Uses new online
channels and new
communication tools Trusts in
advices made by online
acquaintances and strangers
Tends to buy more online than offline
Wants to provide
feedback about the
product and customer service
Expects better customer
experience
Reads and creates product reviews, product
rankings and blog posts
Seeks support to connect with like-
minded peers
New CR means more than just mere on demand attention or mass customized products and services
Web 2.0 provoked an
expansion of the “R” in the CRM acronym
Company / CustomerCompany / PartnerCompany / CompetitorCompany / CompanyCustomer / PartnerCustomer / CompetitorCustomer / CustomerPartner / Competitor
Technology
Lets take a look at the fundamental changes that Social CRM is introducing to the current, traditional CRM in terms of…
Landscape Channels Processes
Mindset
Your company
Competitor Supplier / Partner
Customer Customer
CustomerCustomer
Customer Customer
Customer
Customer Customer
Customer Customer
Customer Customer
• Phone• Fax• Email• Service• Letters• Personal contact• Company’s website• SMS• Instant Messenger• Chat• Media
• Phone• Fax• Email• Service• Letters• Personal contact• Company’s website• SMS• Instant Messenger• Chat• Media
• Blogs
+
• Social Bookmarking
• Microblogs
• RSS
• Wikis
• Social Networks
• Widgets
• Podcast
• Video sharing
• Forums
• Wish lists
• Price comparison website
• Reviews and ratings in retail sites
• Photo sharing
• Slides sharing
• Auction website
Evolution of the CRM landscape
•Focus on individual relationship (company to customer, company to partner, etc.)
•Limited view of the customer and his community preferences, habits, etc.
•Targeted messages generate value
Your company
Competitor Supplier / Partner
Customer Customer
CustomerCustomer
Customer Customer
Customer
Your company
Competitor Supplier / Partner
Customer Customer
CustomerCustomer
Customer Customer
Customer
Customer Customer
Customer Customer
Customer Customer
•Focus on collaborative relationship (engaging a more complex relationship network)
•Multiple connections allow better understanding of the customer and his community
•Conversation generates value
CRM 1.0 CRM 2.0
Evolution of Customer Touch Points
•Single view of the customer based on the interactions history, customer profile data residing in the company’s base and data integration with internal systems
•Company owns the data but it is limited to previous interactions
• Phone• Fax• Email• Service• Letters• Personal contact• Company’s website• SMS• Instant Messenger• Chat• Media
• Phone• Fax• Email• Service• Letters• Personal contact• Company’s website• SMS• Instant Messenger• Chat• Media
• Blogs
+
•Single view of the customer is far more complex to achieve. Besides internal information, the company must rely on external information such as customer profiles in social networks and his behavior when participating in a community.
•Customer and other web 2.0 sites own part of the precious data
• Social Bookmarking
• Microblogs
• RSS• Wikis
• Social Networks
• Widgets
• Podcast
• Video sharing
• Forums
• Wish lists
• Price comparison website
• Reviews and ratings in retail sites
• Photo sharing
• Slides sharing
• Auction website
CRM 2.0CRM 1.0
Evolution of Business Processes Modeling
•Customer processes developed from the company standpoint (customer life cycle for the company).
•Process centric – adapt and optimize processes to support better customer interaction
•Focused on CRM processes
•Company processes developed from the customer standpoint (company life cycle for the customer.
•Conversation centric –to establish brand community, enable idea capturing and better segmentation
•Focused on the evolution of CRM processes and resulting impacts in the value chain
Establishing need
Experience
Shar
ing
impr
essi
ons
Decision
Marketing Sales Customer Service
Support processes
Operation processesValue
Expa
nsio
n
Targeting
Retention
Acquisition
Expa
nsio
n
Targeting
Retention
Acquisition
CRM 2.0CRM 1.0
Evolution of Organizational Mindset
•Innovation comes from one specialized source within the company (innovation group)
•Frontline employees communicate targeted messages for transactional operations
•Innovation is gathered from all employees as they are closely connected to the final customer and to each other via internal web 2.0 tools. Customers are in the center of the innovation cycle.
•Frontline and non frontline employees engage conversations including new customers in the context and rerouting conversations. New set of employee skills needed.
!!
!!
InteractionConversationContributionTransaction
Feedback
Employee Customer Employees Customers
CRM 2.0CRM 1.0
Evolution of Technology
•CRM Solutions focused in automating and supporting internal business processes
•CRM Solutions focused in community creation internal and externally
Process Support
Account ManagementContact ManagementActivity Management
Lead / Opp ManagementCampaign Management
Sales ManagementService Management…
Conversation tools
Process Support
Account ManagementContact ManagementActivity Management
Lead / Opp ManagementCampaign Management
Sales ManagementService Management…
Monitoring / Interconnecting tools
RSS
Blogs
Wikis
Social Networks
Widgets
Forums
Podcast
Brand monitoringservices
Datamining
APIsOpen Id
CustomerOwnedData
Cloud Computing
CRM 2.0CRM 1.0
Bottom line• Social CRM does not replace traditional CRM. It extends current CRM 1.0
capabilities to engage conversations with customers and the market,
• Social CRM humanize the company so the customer can see it as a trusted peer (customers trust people like themselves),
• Social CRM puts the customer in the core of the company’s strategy. It affects thoroughly operations, its value chain and organizational structure and culture,
• Social CRM introduces new value drivers into the company’s strategy thanks to customers engaged with the brand,
• Social CRM needs a new organizational mindset supported by web 2.0 empowered employees.
Putting Social CRM to work: Understand Social Influence in CRM Building Blocks and transform it...
Strategy
Operations
Organization
SocialInfluence
The Social Influence changes the traditional CRM building blocks and requires companies to work towards a Social CRM concept composed by Social Strategy, Social Operations and Social Organization
To support this transformation, go deeper in the ‘Company life cycle’ from the customer point of
view…Establishing need
Consumption needs
Need by influence
Buying
Paying
Experience
Searching
SelectingDecision
Comparing
Sharing
Sharing impressions
Deciding
Receiving
Using
Co
mp
any
Lif
e C
ycle
Customer behavior
...and apply findings into your current CRM foundations following a consistent roadmap.
Social Strategy
Social Operations
Social Organization
ImplementationStrategy
Redesign Building Blocks
Design and Develop tools
Monitor and Adapt
• Understand your public and current customer behavior
• Decide how you will engage with the market (monitor buzz, react to comments, supply social platform, etc.)
• Find out which tools will be deployed
• Build a business case
• Review current CRM building blocks (as is)
• Realign Social CRM Strategy with current CRM Strategy (touch points, segmentation, customer value, etc.)
• Review Processes to operate Social CRM
• Establish Social CRM mindset throughout the company
• Design and develop tools which will support the company in engaging with Social Customers
• Train employees and close the recognition and reward loop
• Measure results and adapt current Social CRM to meet changes in customer needs and/or market dynamics
Some foreseen benefits of Social CRM Raise Marketing ROI better targeting, better product solution, customer experience and word-
of-mouth.
Gain insights to explore new market segments and improve marketing effectiveness
Identify new business opportunities and improve cross/up-sell abilities through increasing contact with existing and potential customers
Cut sales commissions costs by building community around the brand
Increase R&D capabilities and innovation through tapping into the collective intelligence of your target audience
Increase customer loyalty by promoting transparent dialogue and improving employee/customer interaction efficiency
Decrease customer service costs through self-helping communities
Example of Social CRM
Advantages
There are a couple of things that these accounts have in common that make them great examples:
• Fast response times
• Follow-up support (you can’t fix everything via Twitter, so sometimes it’s necessary to move the conversation elsewhere)
• If a quick solution is possible, it’s given immediately (see Best Buy’s San Antonio example)
• Fast access to company information (these aren’t CEOs or CCOs, but they’re definitely experts)
• They respond to both compliments and complaints
Application in data miningSuper market becomes a info broker:Point of sale scannerRecord every item purchased.Aggregate pattern is known.(what sells well together wat should be shelved together).Eg. Safeaway,Walmart
Cross Selling:Detailed record of customer & uses data mining to predict were are they in their life cycle &what product they likely need. Eg.ICICI,Fidelity investmentWallet share and Customer share
Holding to a good customer:New Customer> Old customer to retain.Incentive is expensive hence data mining.
Weeding out bad Customer:Some customer cost more than they are worth.Consumes more resources without buying much.
Revolutionizing an industry :Eg.Wachnova
References
• Data mining techniques,2nd Edition for Sales Marketing,Customer relationship management.
• Gartner Report.• Harvard bussiness review.• DATAQUEST, A Cyber Media Publication