Facilitating Robust Customer Retention and Cross Selling Capabilities with Data Mining and a CRM Software

CRM systems were once thought of as a customer relationship platform. Today, however, these systems have transformed into an intelligent system which can give valuable insights into customer retention and cross selling strategies. A CRM solution encompasses the entire organisation - people, systems, and corporate attitude.

Customers can no longer be viewed as just an individual entity, they must be seen as the unique collection of idioms and idiosyncrasies which control the buying behavior. CRM solutions available today allow a company to collect multiple points of data regarding their customers and prospects allowing an analysis of purchasing patterns and buying behavior using data marts and data mining.

Danger lurks, however, behind the analysis of the data provided by a CRM system - misinterpretation of customer data can lead to the phasing out of a profitable product, a misdirection of advertising and marketing dollars as well as the most critical - losing customers.

CRM solution is only as effective as the analytic interpretation of the data it takes in. Without structured analytical tools, the reports produced are no more than volumes of paper on an executive’s desk. With proper analysis the data can, however, be the strongest force in customer retention and corporate profitability.

Basic analysis should begin with a demographic synoptic of the customer base. By looking at the demographic pockets of profitability potential can be determined. Is this the right market for the product or should valuable dollars and time be spent elsewhere? Knowing the demographic applications for the product are key elements in the design of the marketing strategy and the CRM system can help identify those areas.

Census data and local government publications are often excellent resources for the demographic and economic data an analyst can use. This data should be entered into the CRM system. By understanding the current customer base the ability to increase market size is exponentially increased.

Repetition of purchase should be analyzed based on the demography and economic strata of the current customer base. Purchasing patterns can assist in a product moving along the life cycle from inception to maturity. It can also assist in identifying those products which require some alterations to bring them back to prior sales levels.

When a company understands its current customer base, they can begin to mine data of the overall population to increase sales. Increased sales are driven by knowing when and where to market the product. For example, the Chicago Illinois phonebook contains almost one and a half million names. Are all of these potential customers? Of course not! But, by using data mining to understand the demographic, economic and purchasing profile of the current customer base, the management can analyze who are most likely to purchase and become repeat customers.
A flexible and adaptable CRM solution can ensure new business strategies run smoothly using assignments, escalations, enforcement rules and more, to help increase customer retention and cross selling capabilities.



No comments:

Post a Comment