Analytical crm and social crm

Analytical CRM: The Fusion of Data and Intelligence

Mihir Pandit [PC-09]Vipul Patil [PA-20]

ANALYTICAL CRM

• The Fusion of Data and Intelligence• The system associated with this customer discovery • Revolutionary Change• Product Focused Enterprise Customer Centric Enterprise

REQUIREMENTS FOR ANALYTICAL CRM

Learning relationship with customers

Notice: What its customer are doing Remember: What it and its customer have done over time Learn: From what it has remembered Act: on what it has learned to make customer more profitable

HOW IT WORKS???

Transaction Processing System

Data Warehouse

Data Mining

Discovery of hidden

information

EXAMPLE:

Transaction Processing System

Frequent Buyer of Books

Customer touch point

Continue…….

Data Warehouse

Track Customer behavior over time

…………..Visit: 1 Visit: 199

Visit: 199

Continue……

Data Mining

1. Give customers more of what they want2. Value their time3. Over delivery4. Contact frequently (SMS/ Email)5. Generate a trustworthy mailing list6. Follow up

Continue……

Ultimately Building Profitable Business around the customer

WHAT IS DATA MINING??

Data mining is the exploration and analysis of large quantities of data in order to discover meaningful patterns and rule.

Data warehouse provides the enterprise with a memory Data mining provides the enterprise with an intelligence Central idea: data from the past will be useful in future Goal: to allow enterprise to improve its marketing, sales and customer support operation through better understanding of customer

WHAT TASKS CAN BE PERFORMED WITH DATA MINING?

Directed and undirected data mining Classification Estimation Prediction Affinity grouping Clustering

CLASSIFICATION

In order to understand customer and communicate about world, we are constantly classifying, categorizing and grading.

NMIMS

SBM SPP SPTM

M.Pharm+ MBA B.Pharm+ MBA

Pharmaceutics Pharma analysisQuality assurance

ESTIMATION

Deals with continuously valued outcomes It comes up with a value for some unknown continuous variable such as income, height or credit card balance. E.g.: Regression analysis

Estimating numbers of children in family Estimating the lifetime value of customer

PREDICTION

Prediction is same as classification or estimation except that the records are classify according to some predicted future behavior.E.G. Predicting which customer will leave within six months?

AFFINITY GROUPING

To determine which things go together e.g.: What things go together in a super market?

Market-Basket analysis

CASE STUDY: DIPERS AND BEER

CLUSTERING

Task of segmenting a heterogeneous population into a number of more homogenous subgroups or clusters. Records are grouped together on the basis of self similarity.

Helpful in ‘Market Segmentation’

VIRTUOUS CYCLE OF DATA MINING

? !

Social CRMConcept, Benefits and Approach to adopt

Who is our “SOCIAL” CUSTOMER?

Consumes information and learns about breaking news through sites like Twitter, Facebook , Linkedin etc.

Learns about new products through social channels.

Is wise to unsolicited promotions and trusts only relevant information.

Desires to converse with the brand rather than 1-way ad messages.

Expects brand to be active in same social media where he/she hangs out in.

Wants brand to listen engage and respond quickly.

WHAT IS SOCIAL CRM?

It is companies strategy to overseeing clients and sales prospect.

• More as philosophy with bussiness strategy

• Engages customer with mutually beneficial relationship

• Supported by social technology, bussiness rules and processes.

It is based on around information that companies could collect on their customers and then input into crm system that allows them to target various customer.

OLD GUARD:TRADITIONAL CRM

NEW GUARD:SOCIAL CRM

PR department: bigger role by taking charge of brands social presence while handling customer engagement online.

Advocacy and experience:No active message but active engaging.

How CRM evolved into social CRM

According to Wikipedia - Web 2.0 is a term describing changing trends in the use of World Wide Web technology and web design that aims to enhance creativity, secure information sharing, collaboration and functionality of the web.

Web 2.0 is enabling:• Collaboration• Community creation• Conversation• Creativity

Image source:http://web2.socialcomputingmagazine.com/all_we_got_was_web_10_when_tim_bernerslee_actually_gave_us_w.htm

It all started with the web 2.0 revolution and its 4C’s

Web 2.0 stimulated fundamental changes in consumer behavior

Interactions between customer and brands starting earlier and never ending

New behavior patterns demand a new strategy, better segmentation, new channels and targeted messages and review of current customer facing business processes

Being connected, customers realized that they could ask more from companies and share opinions about products and services

The new Social

Customer

Uses new online

channels and new

communication tools Trusts in

advices made by online

acquaintances and strangers

Tends to buy more online than offline

Wants to provide

feedback about the

product and customer service

Expects better customer

experience

Reads and creates product reviews, product

rankings and blog posts

Seeks support to connect with like-

minded peers

New CR means more than just mere on demand attention or mass customized products and services

Web 2.0 provoked an

expansion of the “R” in the CRM acronym

Company / CustomerCompany / PartnerCompany / CompetitorCompany / CompanyCustomer / PartnerCustomer / CompetitorCustomer / CustomerPartner / Competitor

Technology

Lets take a look at the fundamental changes that Social CRM is introducing to the current, traditional CRM in terms of…

Landscape Channels Processes

Mindset

Your company

Competitor Supplier / Partner

Customer Customer

CustomerCustomer

Customer Customer

Customer

Customer Customer

Customer Customer

Customer Customer

• Phone• Fax• Email• Service• Letters• Personal contact• Company’s website• SMS• Instant Messenger• Chat• Media

• Phone• Fax• Email• Service• Letters• Personal contact• Company’s website• SMS• Instant Messenger• Chat• Media

• Blogs

+

• Social Bookmarking

• Microblogs

• RSS

• Wikis

• Social Networks

• Widgets

• Podcast

• Video sharing

• Forums

• Wish lists

• Price comparison website

• Reviews and ratings in retail sites

• Photo sharing

• Slides sharing

• Auction website

Evolution of the CRM landscape

•Focus on individual relationship (company to customer, company to partner, etc.)

•Limited view of the customer and his community preferences, habits, etc.

•Targeted messages generate value

Your company

Competitor Supplier / Partner

Customer Customer

CustomerCustomer

Customer Customer

Customer

Your company

Competitor Supplier / Partner

Customer Customer

CustomerCustomer

Customer Customer

Customer

Customer Customer

Customer Customer

Customer Customer

•Focus on collaborative relationship (engaging a more complex relationship network)

•Multiple connections allow better understanding of the customer and his community

•Conversation generates value

CRM 1.0 CRM 2.0

Evolution of Customer Touch Points

•Single view of the customer based on the interactions history, customer profile data residing in the company’s base and data integration with internal systems

•Company owns the data but it is limited to previous interactions

• Phone• Fax• Email• Service• Letters• Personal contact• Company’s website• SMS• Instant Messenger• Chat• Media

• Phone• Fax• Email• Service• Letters• Personal contact• Company’s website• SMS• Instant Messenger• Chat• Media

• Blogs

+

•Single view of the customer is far more complex to achieve. Besides internal information, the company must rely on external information such as customer profiles in social networks and his behavior when participating in a community.

•Customer and other web 2.0 sites own part of the precious data

• Social Bookmarking

• Microblogs

• RSS• Wikis

• Social Networks

• Widgets

• Podcast

• Video sharing

• Forums

• Wish lists

• Price comparison website

• Reviews and ratings in retail sites

• Photo sharing

• Slides sharing

• Auction website

CRM 2.0CRM 1.0

Evolution of Business Processes Modeling

•Customer processes developed from the company standpoint (customer life cycle for the company).

•Process centric – adapt and optimize processes to support better customer interaction

•Focused on CRM processes

•Company processes developed from the customer standpoint (company life cycle for the customer.

•Conversation centric –to establish brand community, enable idea capturing and better segmentation

•Focused on the evolution of CRM processes and resulting impacts in the value chain

Establishing need

Experience

Shar

ing

impr

essi

ons

Decision

Marketing Sales Customer Service

Support processes

Operation processesValue

Expa

nsio

n

Targeting

Retention

Acquisition

Expa

nsio

n

Targeting

Retention

Acquisition

CRM 2.0CRM 1.0

Evolution of Organizational Mindset

•Innovation comes from one specialized source within the company (innovation group)

•Frontline employees communicate targeted messages for transactional operations

•Innovation is gathered from all employees as they are closely connected to the final customer and to each other via internal web 2.0 tools. Customers are in the center of the innovation cycle.

•Frontline and non frontline employees engage conversations including new customers in the context and rerouting conversations. New set of employee skills needed.

!!

!!

InteractionConversationContributionTransaction

Feedback

Employee Customer Employees Customers

CRM 2.0CRM 1.0

Evolution of Technology

•CRM Solutions focused in automating and supporting internal business processes

•CRM Solutions focused in community creation internal and externally

Process Support

Account ManagementContact ManagementActivity Management

Lead / Opp ManagementCampaign Management

Sales ManagementService Management…

Conversation tools

Process Support

Account ManagementContact ManagementActivity Management

Lead / Opp ManagementCampaign Management

Sales ManagementService Management…

Monitoring / Interconnecting tools

RSS

Blogs

Wikis

Social Networks

Widgets

Forums

Podcast

Brand monitoringservices

Datamining

APIsOpen Id

CustomerOwnedData

Cloud Computing

CRM 2.0CRM 1.0

Bottom line• Social CRM does not replace traditional CRM. It extends current CRM 1.0

capabilities to engage conversations with customers and the market,

• Social CRM humanize the company so the customer can see it as a trusted peer (customers trust people like themselves),

• Social CRM puts the customer in the core of the company’s strategy. It affects thoroughly operations, its value chain and organizational structure and culture,

• Social CRM introduces new value drivers into the company’s strategy thanks to customers engaged with the brand,

• Social CRM needs a new organizational mindset supported by web 2.0 empowered employees.

Putting Social CRM to work: Understand Social Influence in CRM Building Blocks and transform it...

Strategy

Operations

Organization

SocialInfluence

The Social Influence changes the traditional CRM building blocks and requires companies to work towards a Social CRM concept composed by Social Strategy, Social Operations and Social Organization

To support this transformation, go deeper in the ‘Company life cycle’ from the customer point of

view…Establishing need

Consumption needs

Need by influence

Buying

Paying

Experience

Searching

SelectingDecision

Comparing

Sharing

Sharing impressions

Deciding

Receiving

Using

Co

mp

any

Lif

e C

ycle

Customer behavior

...and apply findings into your current CRM foundations following a consistent roadmap.

Social Strategy

Social Operations

Social Organization

ImplementationStrategy

Redesign Building Blocks

Design and Develop tools

Monitor and Adapt

• Understand your public and current customer behavior

• Decide how you will engage with the market (monitor buzz, react to comments, supply social platform, etc.)

• Find out which tools will be deployed

• Build a business case

• Review current CRM building blocks (as is)

• Realign Social CRM Strategy with current CRM Strategy (touch points, segmentation, customer value, etc.)

• Review Processes to operate Social CRM

• Establish Social CRM mindset throughout the company

• Design and develop tools which will support the company in engaging with Social Customers

• Train employees and close the recognition and reward loop

• Measure results and adapt current Social CRM to meet changes in customer needs and/or market dynamics

Some foreseen benefits of Social CRM Raise Marketing ROI better targeting, better product solution, customer experience and word-

of-mouth.

Gain insights to explore new market segments and improve marketing effectiveness

Identify new business opportunities and improve cross/up-sell abilities through increasing contact with existing and potential customers

Cut sales commissions costs by building community around the brand

Increase R&D capabilities and innovation through tapping into the collective intelligence of your target audience

Increase customer loyalty by promoting transparent dialogue and improving employee/customer interaction efficiency

Decrease customer service costs through self-helping communities

Example of Social CRM

Advantages

There are a couple of things that these accounts have in common that make them great examples:

• Fast response times

• Follow-up support (you can’t fix everything via Twitter, so sometimes it’s necessary to move the conversation elsewhere)

• If a quick solution is possible, it’s given immediately (see Best Buy’s San Antonio example)

• Fast access to company information (these aren’t CEOs or CCOs, but they’re definitely experts)

• They respond to both compliments and complaints

Application in data miningSuper market becomes a info broker:Point of sale scannerRecord every item purchased.Aggregate pattern is known.(what sells well together wat should be shelved together).Eg. Safeaway,Walmart

Cross Selling:Detailed record of customer & uses data mining to predict were are they in their life cycle &what product they likely need. Eg.ICICI,Fidelity investmentWallet share and Customer share

Holding to a good customer:New Customer> Old customer to retain.Incentive is expensive hence data mining.

Weeding out bad Customer:Some customer cost more than they are worth.Consumes more resources without buying much.

Revolutionizing an industry :Eg.Wachnova

References

• Data mining techniques,2nd Edition for Sales Marketing,Customer relationship management.

• Gartner Report.• Harvard bussiness review.• DATAQUEST, A Cyber Media Publication