Customer relationship management involves managing all aspects of a customer’s interactions with a business. It aims at increasing customer loyalty and retaining customers, as well as maintaining or increasing the profitability of an organisation.
Customer relationship model
http://www.marketingteacher.com/IMAGES/crm_model.gif2. Compare operational and analytical customer relationship management.
The two primary components of a CRM strategy are:
· Operational - this supports the traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers.
· Analytical – supports the back-office operations and strategic analysis and includes all systems that do not deal directly with the customers.
3. Describe and differentiate the CRM technologies used by marketing departments and sales departments.
· Marketing Department – Marketing department looks at selling multiple products to one customer. CRM technologies allow them to gather information to ensure successful marketing campaigns.
o List generators: gather customer information from multiple sources and segment the information for different marketing campaigns, e.g. Questionnaires, surveys, website visits. Provides the marketing department with a solid understanding of the type of customer it needs to target for its campaigns.
o Campaign Management System: guide users through marketing campaigns for performing such tasks such as campaign definition, planning, scheduling, segmentation and success analysis. Can calculate quantifiable results for return on investment.
o Cross-selling: Cross-selling is selling additional products or services, up-selling is increasing the value of a sale. CRM technologies help companies to better understand their products to be able to cross-sell and up-sell.
· Sales Department – Sales force automation (SFA) is a system that tracks all the steps of the sales process and focus on increasing customer satisfaction, building customer relationships and improving product sales.
4. How could a sales department use operational CRM technologies?
· Sales Management CRM Systems: automates each phase of the sales process which helps sales representative co-ordinate all of their accounts. Features include calendars and alarm reminders, customisable media presentations and document generation. It provides an analysis of the sales cycle and how each sales representative is performing.
· Contact management CRM: maintains customer contact information and identifies potential customers for future sales. Features include maintaining organisational charts, detailed customer notes and supplemental sales information.
· Opportunity Management CRM Systems: target sales opportunities by finding new customers or companies for future sales. Determines potential customers and competitors and defines selling efforts, including budgets and schedules. It is also able to calculate the probability of a sale.
5. Describe business intelligence and its value to businesses.
Business Intellogence DiagramBusiness intelligence refers to technologies that are used to gather, provide access to and analyse data and information to support decision-making efforts. It is the tools and analysis that provide access to data for strategic decision making for analysis that support strategic decision making to align with the company’s goals.
- BI can enable organisations to unlock information held in their database by giving authorised users a single point of access to the data where reports can be prepared to understand what best drives their business.
- BI can be used at every step in the value chain and can be used within every department.
- BI provides users with up-to-the-minute information
6. Explain the problem associated with business intelligence. Describe the solution to this business problem.
One of the problems with business intelligence is that businesses are becoming data rich and information poor. With their reliance on CRM systems they are rapidly gathering vast amounts of data with every transaction made between departments or the outside world being entered into these systems for future use and access. The amount of data being generated is doubling each year and in the future it may double each month. Although organizations have large amounts of data, they are not able to use this data to produce clear information and do not have a clear understanding of where the business is at, what their competitors are doing and their data is not aligning to their strategic goals.
The solution to this problem is business intelligence. A business makes many decisions each day which are normally based on experience, knowledge and the rule of thumb, which poses a problem as it takes many years to gain experience and knowledge, which some employees never gain. To ensure that the business is making informed decisions that will benefit the business, the employer should provide them with BI systems and tools.
7. What are two possible outcomes a company could get from using data mining?
Data mining is the process of analysing data to extract data that is not offered by the raw data alone. It is the primary tool used to uncover business intelligence in vast amounts of data.
Two outcomes that a company can get from using data mining are:
- Increased profits
- More efficient sales
Two outcomes that a company can get from using data mining are:
- Increased profits
- More efficient sales
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