Category: CRM

What is Analytical CRM

Analytical CRMWe know that there are three types of CRM applications – Operational CRM, Analytical CRM and Collaborative CRM. In our previous post we have discussed about Operational CRM. Here we will talk about what is Analytical CRM, its key features and benefits.

Let’s start our discussion with an example. Imagine a scenario where a company knows what customers want to buy even before launching the product. Though this happens only in ideal scenario but almost similar kind of result can be achieved using Analytical CRM.

So what is Analytical CRM?

It is a systematic approach to analyze customer data and interactions to improve various business processes in Sales, Marketing and Service. The main purpose of Analytical CRM is to gather customer information from various channels and gain knowledge about customers’ behaviors and buying pattern as much as possible. It helps an organization to develop new marketing strategy, campaign management, customer acquisition and retention.

Difference between Operational CRM and Analytical CRM:

Operational CRM deals with automation of Sales, Marketing and Difference between Operational CRM and Analytical CRMService processes that involve direct interaction of customers’ requirements. Whereas Analytical CRM handles those operations that do not have direct dealing with customers. It analyzes customer data to enhance decision making capability of an organization.

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. We will discuss about data mining in CRM in another article.

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What is Operational CRM

Operational crmCRM or Customer Relationship Management software enables organizations to manage their relationships with customers. It helps to retain existing customers, acquire new customers and analyze customer data. There are mainly three types of CRM applications – Operational CRM, Analytical CRM and Collaborative CRM. Here we will discuss about what is Operational CRM.

What is Operational CRM?

Operational CRM streamlines the business process of an organization. It mainly focuses on automation and improvement of customer facing and customer touching business processes. It includes Sales automation, Marketing automation and Service automation. Main purpose of Operational CRM system is to generate leads, convert them into contacts, capture all required details and provide support throughout customer lifecycle.

Sales Force Automation:

Operational CRM - Sales AutomationSales Force Automation (SFA) helps an organization to automate sales process from lead generation to closing sale. Main purpose of sales automation is to set business standard within the organization to acquire new customers and deal with existing customers. It includes various CRM sales modules like

  • Lead Management
  • Contact Management
  • Account Management
  • Tracking Customer Preferences
  • Performance Management
  • Quote-to-Order management
  • Sales Forecasting

Marketing Automation:

Operational CRM - Marketing AutomationMarketing Automation helps the organization to streamline marketing process, automate and measure marketing task to increase sales and earn revenue faster. It includes various CRM marketing modules like Campaign Management, Event Based Marketing.

Campaign Management helps business to design campaign, decide communication channels (like email, call, website, social media, TV ads), segment contacts, allocate budget and analyze effectiveness or quality of the campaign.

Event based marketing helps to reach out customers with more relevant products or services based upon what’s going on in their lives at that moment, like first job or buying new car or getting married.

Marketing Automation can automate response to customer queries, inform sales team about new opportunities.

Service Automation:

Operational CRM - Service AutomationService Automation enables business to provide best quality of customer service by automating the service process. It includes various service modules like call management, case or incident management, knowledge management, service level management.

Call Management automation helps to route customer call to the most appropriate help desk person and retrieve all required information related to the call.

Case/Incident Management helps the organization to assign customers’ problems to the right person, provide solution within the time limit, capture customer response and analyze effectiveness.

Knowledge Management captures information from various sources and makes a pro active approach to give value addition to customers.

Service Level Management enables business to analyze quality of service based on key performance indicators.

Increase sales and improve customers’ loyalty are two main purposes of Operational CRM. There are lots of Operational CRM applications with different features and platforms (SaaS, On Premise, Hybrid). So before choosing any Customer Relationship Management application, organization should have defined goal and strategy to ensure success. You could read our article on ‘How to choose the best CRM software for your business’.

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Types of CRM – Operational, Analytical, Collaborative

Types of CRMIn continuously growing competitive market, it is very much important for a business to share right information to the right person at the right time, otherwise business will lose its opportunities to sale products or services. Customer Relationship Management software is the only solution that can help business to communicate with prospects or customers properly. For any CRM application, primary goal is to enable an organization to understand customers’ need and behaviour and provide better quality of service. It helps to retain existing customers and capture new opportunities by building a strong relationship between an organization and customers. CRM can analyze data and generate reports whenever required. There are mainly three types of CRM applications – Operational, Analytical and Collaborative to perform all these activities.

Types of CRM:

1. Operational CRM

Operational CRM streamlines the business process that includes Sales automation, Marketing automation and Service automation. Main purpose of this type of CRM is to generate leads, convert them into contacts, capture all required details and provide service throughout customer lifecycle.

Sales Automation:

Sales automation helps an organization to automate sales process. Main purpose of sales automation is to set standard within organization to acquire new customers and deal with existing customers. It organizes information in such a way that the business can meet customers’ needs and increase sales more efficiently and effectively. It includes various CRM sales modules like lead management, contact management, Quote-to-Order management, sales forecasting.

Marketing Automation:

Main purpose of marketing automation is to find out the best way to offer products and approach potential customers. Major module in marketing automation is campaign management. It enables business to decide effective channel/s (like emails, phone calls, face to face meeting, ads on social media) to reach up to potentials customers.

Service Automation:

Service automation enables business to retain customers by providing best quality of service and building strong relationship. It includes issue management to fix customers’ problems, customer call management to handle incoming/outgoing calls, service label management to monitor quality of service based on key performance indicators.

2. Analytical CRM

Analytical CRM helps top management, marketing, sales and support personnel to determine the better way to serve customers. Data analysis is the main function of this type of CRM application. It analyzes customer data, coming from various touch points, to get better insights about current status of an organization. It helps top management to take better decision, marketing executives to understand the campaign effectiveness, sales executives to increase sales and support personnel to improve quality of support and build strong customer relationship.

Features of Analytical CRM:

  • Gather customer’s information, coming from different channels and analyze data in a structured way
  • Help organization to set business methodology in Sales, Marketing and Support to improve customer relationship and loyalty
  • Improve the CRM system effectiveness and analyze key performance indicators, set by business

3. Collaborative CRM

Collaborative CRM, sometimes called as Strategic CRM, enables an organization to share customers’ information among various business units like sales team, marketing team, technical and support team. For example, feedback from a support team could be useful for marketing team to approach targeted customers with specific products or services. In real world, each business unit works as an independent group and rarely shares customers’ data with other teams that often causes business losses. Collaborative CRM helps to unite all groups to aim only one goal – use all information to improve the quality of customer service to gain loyalty and acquire new customers to increase sales.

Different types of CRM applications have different features and advantages. So before implementing CRM system, it is very much important for a business to decide future goal and strategy. If you want to choose the best CRM for your business, read our article onHow to choose the best CRM software for your business‘.

Do you have any question? Please feel free to comment below.

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Watch our YouTube video on ‘what is CRM and types of CRM’: