1. What is your understanding of CRM?
Customer relationship management is the managing of ones customer’s relationships within a company in a way to enhance and increase the customer loyalty whilst also retaining the customer and the company’s profitability.
Definintion of CRM
2. Compare operational and analytical customer relationship management.
Operational customer relationship management ‘supports traditional transactional processing for day-to-day front office operations or systems that deal directly with the customers.’ (Baltzan et al, 2010)
Analytical customer relationship management ‘supports back office operations and strategic analysis and includes all systems that do not deal directly with the customers.’ (Baltzan et al, 2010)
Analytical customer relationship deals with the back office operations such as accounting, HR and database warehousing, whilst operational customer relationship management deals with the front office operations systems including sales, customer service and billing.
3. Describe and differentiate the CRM technologies used by marketing departments and sales departments
Source: Lecture Slides, C.Maker 2011
Marketing departments use customer relationship marketing technologies such as a list generator, campaign management and cross-selling and up-selling.
§ List generator: A list generator ‘compiles customer information from a variety of sources and segments the information.’ (Baltzan et al, 2010)
§ Campaign management: Campaign management ‘guides users through marketing campaigns.’ (Baltzan et al, 2010)
§ Cross-selling and up-selling: Cross selling involves ‘selling additional products or services’ whereas up-selling involves ‘increasing the value of the sale’ (Baltzan et al, 2010)
Marketing departments and the CRM technology they use differentiate from that of the sales department because they use different technologies within the broader customer relationship marketing and utilise them to their respective goals.
Sales customer relationship management technologies include sales management, contact management and opportunity management. Where:
§ Sales management is the ‘automation of each phase of the sales process helping individual sales representatives coordinate and organise all of their accounts.’ (Baltzan et al 2010, adapted from www.csulb.edu/~paustin/is300/ch9.ppt)
§ Contact management ‘maintains customer contact information and identifies prospective customers for future sales.’ (Baltzan et al 2010, adapted from www.csulb.edu/~paustin/is300/ch9.ppt)
§ Opportunity management ‘targets sales opportunities by finding new customers or companies for future sales.’ (Baltzan et al 2010, adapted from www.csulb.edu/~paustin/is300/ch9.ppt)
4. How could a sales department use operational CRM technologies?
A sales department could use operational customer relationship management technolog to enhance its sales, customer and opportunity management techniques and the way in which it undertakes its operation. The operational customer relationship technologies could be used by sales representatives to help combat the overwhelming amounts of customer account information that they need to maintain. Operational management can also be used with struggling companies and the issue that has arisen of the vital customer and sales information required to be known and understood by their sales representatives.
CRM in sales
5. Describe business intelligence and its value to businesses
What is Business Intelligence?
Business intelligence is the ‘applications and technologies used to gather, provide access to, and analyse data and information to support decision making efforts.’ (Baltzan et al 2010). Business intelligence is a valuable decision making process application that can be used by businesses.
The Value Of Business Intelligence
As many businesses struggle to meet the needs and wants of different customer segments, business intelligence will then provide valuable information, such as:
§ ‘Determine who are the best and worst customers thereby gaining insight into where it needs to concentrate more for its future sales.
§ Identify exceptional sales people
§ Determine whether or not campaigns have been successful
§ Determine in which activity they are making or losing money.’ (Baltzan et al, 2010)
Business intelligence also has operational value in which it ‘shortens the latencies so that the time frame for opportunistic influences on customers, suppliers and others is faster, more interactive, and better positioned.’ (Baltzan et al 2010)
Source: Lecture Slides, C. Maker 2011
6. Explain the problem associated with business intelligence. Describe the solution to this business problem
The problems associated with business intelligence include the fact that many businesses are data rich and information poor. That is, businesses do not understand their strengths and weaknesses which then leads to business intelligence issues.
A solution for this can be seen in this video clip:
7. What are two possible outcomes a company could get from using data mining?
Data mining is simply ‘the application of statistical techniques to find patterns and relationships among data and to classify and predict’ (Baltzan et al 2010)
Using data mining can allow a business to use cluster analysis and statistical analysis giving them two possible outcomes that could be used.
§ Cluster analysis is a ‘technique used to divide an information set into mutually exclusive groups such that the members of each group are as close together as possible to one another and the different groups are as far apart as possible’ (Baltzan et al, 2010). The outcome this gives businesses is that they can clearly identify and see the different groups and the mutually exclusive groups.
§ Statistical analysis allows business to ‘perform such functions as information correlations, distributions, calculations and variance analysis.’ (Baltzan et al 2010). By using forecasts and time-series information, statistical analysis gives a positive outcome to business as they can clearly see all the statistics that are used within their business.
References
Anonymous c2011, Customer relationship management, <www.csulb.edu/~paustin/is300/ch9.ppt > Accessed on 25 October 2011
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