Week 11 Blog Questions

Week 11 Blog Questions: Customer Relationship Management & Business Intelligence

 1. What is your understanding of CRM?

CRM is a model used to manage a company's interactions with a company's customers and clients. It includes the use of methodologies, software, and the Internet and allows a business to: 

• Understand the customer
• Retain customers through better customer experience
• Attract new customer
• Win new clients and contractsIncrease profitably
• Decrease customer management costs

2. Compare operational and analytical customer relationship management

Operational CRM:  focuses on the transactional processing for the day-to-day front office operations. It also deals directly with the customers.

Analytical CRM: focuses on the back-office operations and strategic analysis. It includes all systems that do not deal directly with the customers. It is an automated method of processing  data about a customer in order to make better business decisions.

3. Describe and differentiate the CRM technologies used by marketing departments and sales departments

The CRM technologies used by marketing departments are:

    List Generator- Compiles all customer data from a range of sources, then segments the information into different areas accordingly.

    Campaign Management System- Helps users throughout their marketing campaigns.

    Cross-selling & Up-selling- Cross-selling is selling additional products and/or services, whereas up-selling is increasing the value of the sale.

The CRM technologies used by sales departments are:

    Sales Force Automation (SFA)- A function that provides data for sales prospects, contact information, product information, product configurations and sales quotes.

    Bundling- Is a type of cross-selling In which a vendor sells a combination of products together, offering them at a lower price than the combined costs of the individual products.

4. How does CRM help businesses find and retain their most valuable customers?

Customer relationship management (CRM) helps businesses to gain an insight into the 
behaviour of their customers and modify their business operations to ensure that customers 
are served in the best possible way.

CRM can be achieved by:
   a) finding out about your customers' purchasing habits, opinions and preferences
   b) profiling individuals and groups to market more effectively and increase sales
   c) changing the way you operate to improve customer service and marketing

A major benefits of finding and retaining the most valuable customers are:
a) enhanced customer satisfaction and retention, ensuring that your good reputation in the marketplace continues to grow
b) increased value from your existing customers and reduced cost associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of sales
c) improved profitability by focusing on the most profitable customers and dealing with the unprofitable in more cost effective ways

5. Describe business intelligence and its value to businesses

Business intelligence:  the technologies and applications used to find, access and analyse 

data and information to support decision-making efforts.

Business intelligence is highly values by business becuase it helps companies meet the ever

changing needs of different markets, and helps them stay competitive. It also helps by

creating a single point of access to information for all users, creating systems that stretch

across many organizational departments within a business and allowing everyone access to

up-to-the minute information.

6. Explain the problem associated with business intelligence. Describe the solution to this business problem

The problem with business intelligence is that is can be  ‘data rich, information poor’.

The data which a business has increases every year.  Organisation’s are realizing that they
are generating an abundance of data. From this they can gather some information, but in
order to do that they need to analyse all the data, some of which may be unusable. 

Businesses have a lot of data (‘data rich’) and not much information (‘information poor’).
The solution to this business problem is for managers to provide their employees with
business intelligence systems and tools. These will assist the employees in making better,
more informed decisions.

7. What are two possible outcomes a company could get from using data mining

Two possible outcomes a company could get from using data mining are:

1. Cluster Analysis: A technique used to divide an information set into mutually exclusive groups 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. It is used to segment customer information for CRM systems. It can also uncover naturally occurring patterns in information.

2. Statistical Analysis: Performs such functions as information correlations, distributions, calculations and variance analysis. It offers knowledge workers a wide range of powerful statistical capabilities so they can quickly build a variety of statistical models, examine the model’s assumptions and validity, and compare and contrast the various models to determine the best one for a particular business issue.