We 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 Service 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:
- Gathers all relevant information about customers from various channels/sources and builds a knowledge base for an organization
- Analyzes customer data based on rules and methods set by business and prepares report to improve customer relationship and interaction
- Helps business to segment customers and run more customer centric marketing campaign to increase sales
- Decides what if scenarios – probability of a customer that purchases one product could buy another product
- Monitors events like customer may purchase gifts on his marriage anniversary
- Helps business to predict the probability of customer defection and take necessary steps
- Assists top management to do better financial forecasting and planning
Benefits of using Analytical CRM:
- Higher lead conversation rate
- Better customer experience by addressing their needs more effectively and efficiently
- Better market analysis before running a campaign
- Increase customer loyalty and satisfaction
- More accurate financial forecasting and planning
Analytical CRM analyzes data coming from every aspect of business and generates reports.
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.
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.
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.
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.
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.
Do you have any question? Please feel free to comment below.
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