Analytics plays a important role in customer relationship management. CRM is area which includes a whole host of activities which involves using the CRM software to campaign management tool to call tracking tool to database marketing tool etc. Each tool holds a customer information and in some way has a touch point with the customer. For building a good business it is important to deal with customer individually, rather than deal with competitor.
Focus for many companies such as Banks, Insurance companies, Telecommunication companies is to track customer end to end, from the time money spent on the customer acquisition to the time revenue is generated from the consumer for product/service until the customer attrites from the firm. Every activity in the chain must be closely observed to evaluate the true value of customer. Companies worldwide are creating process to deal with customers individually. This can help them devout more attention to customers who are more valuable to the business and let go customers not valuable to business.
Data Mining requires a lot of effort/techniques and focus to centre their business around the customer than a product. Companies have to constantly keep a watch on what their customers are doing, keep in mind their past actions, discover knowledge from their actions (gain knowledge) and finally use the knowledge cleverly to make decisions to make profit.
However data mining is not always beneficial for the user, consider the fact a model recommends a service to a user instead of the product A. however if the business makes more profit on product and very negligible amount on service. Model recommendations may not be implemented. However it helps in understanding such customers.
Good question to ask is how can a consumer company with large base of customers can individually deal with each consumer. This can be accomplished intelligently by deploying effective technology solutions which is customisable based on data mining models and techniques. Nowadays the customer is the data entry operator who enters data into the system at various points and these are captured by the system. Consider your bank, your touch points are ATM, Bank Branch, customer care who responds on phone, mail, hard mail & lastly your account /loan/credit card that you hold of the bank. Each transaction records your behaviour which can be an additional knowledge that bank is made aware of, this knowledge can be used by the bank to learn more about you and customise the next interaction or next touch point instance with you.
The transaction system records every instance of transaction of the user enabling the bank to analyse the nature of every transaction and update your profile with rich insights. The knowledge discovery doesnt end here. It needs support of data warehousing system along with extremely good data mining models to be able to take action / make decisions and deal with each customer. More on this will be written in more detail in coming articles.
The blog http://www.praveenkodur.com/blog/ will be updated with more such analytics, online marketing articles.