Analytical CRM

Analytical CRM is a subset of CRM in which data is collected by a company about their
customer interactions, with the goal of increasing customer satisfaction and
their customer retention rate. Analytical CRM is a behind-the-scenes process; the
customer is not aware that his or her actions and interactions with the company are
being captured and analyzed. Based on the information gathered about customer
practices, interactions and the end results of these interactions, companies can predict
customer trends and suggest products towards which the customer is most likely to
gravitate.
In the above example, when Sandy first purchased the coffee maker the information
about what she purchased would be printed out on the receipt from the store and stored
in the store database. The next time she purchases from the same brand, the store's
database would indicate that she is a customer who has shown a preference for Brand
A. This information will be used by the store to send brand specific coupons to Sandy by
mail or email. And when Sandy registers the product, the brand manufacturer may send
her promotions and information about the other products they carry. They may also
send surveys to Sandy so they can learn the strengths and weakness of their product
directly from the customer. This helps the stores and the manufacturer to learn about
the preferences, likes and dislikes of their customers so that they can provide better
products to satisfy the needs of the customer and improve their market share.
A company like Amazon might use technology to capture data about customer
preferences, including what the customer purchased, the length of time he or she
reviewed an item, and how much favorability he or she expressed towards the items.
This would help Amazon identify customer trends, likes and dislikes. Then based on this
information, the company can create targeted customer marketing strategies, such as
offering promotions on items the customer has previously purchased, and presenting
the customer with items similar to things that he or she has recently browsed on their
website.

Applications of Analytical CRM

Analytical CRM is an essential part of customer relationship management. Analytical
CRM accumulates and analyses different kinds of customer data, including:

 Sales data: example purchase and return history, brand preferences etc.
 Financial data: payment and credit history, including payment type, credit
scores, etc.
 Marketing data: customer response rates to marketing campaigns, customer
satisfaction data and retention data, etc.

Key features of Analytical CRM:

1. Gathers all relevant information about customers from various channels/sources and
builds a knowledge base for an organization
2. Analyzes customer data based on rules and methods set by business and prepares
report to improve customer relationship and interaction
3. Helps business to segment customers and run more customer centric marketing
campaign to increase sales
4. Decides what if scenarios – probability of a customer that purchases one product could
buy another product
5. Monitors events like customer may purchase gifts on his marriage anniversary
6. Helps business to predict the probability of customer defection and take necessary
steps
7. Assists top management to do better financial forecasting and planning

Benefits of using Analytical CRM:

1. Higher lead conversation rate

2. Better customer experience by addressing their needs more effectively and efficiently
3. Better market analysis before running a campaign
4. Increase customer loyalty and satisfaction
5. More accurate financial forecasting and planning

Analytical CRM analyzes data coming from every aspect of business and
generates reports.

1. Customer Analysis Report:

This is the basic report based on analysis of customer knowledge base. This gives 360
degree view of a customer that helps a company to gain further insights about
customer’s needs and preferences.
2. Sales Analysis Report:
This type of reports shows the organization’s sales trend for a specified period –
monthly, quarterly, yearly or any time frame that is significant for business. It provides
support to streamline all sales opportunities by improving sales cycle. This helps
managers to identify market opportunity, predict sales volumes and profit by analyzing
historical sales data.
3. Marketing Analysis Report:
This kind of reports helps to discover new marketing opportunities and improve
marketing performance by maximizing Return On Investment (ROI). It decides
marketing performance based on various parameters like region, channels, political
influence. It also focuses on campaign planning and execution, product analysis.
4. Service Analysis Report:
Service Analytics is a major area in Analytical CRM. It provides the insight about
customer satisfaction, quality of service and areas of improvement in service. It finds out
opportunities to cross sell or up sell products. It helps to track employee performance
and productivity, tells management to conduct required training for employees.
5. Channel Analysis Report:
Channel Analysis report helps business to understand customers’ behavior across
channels like email, phone call, social media or face to face interaction. This kind of
knowledge can be used to interact with customers more effectively and efficiently.
For an organization, collection of customer data and its analysis is a continuous and
iterative process. Decisions based on customer data and feedback become better and
more accurate over the time.
Analytical CRM uses various data mining techniques like predictive modelling,
supervised modelling.