The application of data analytics in customer relations management is an emerging trend in the global economy. Understanding and analyzing customer behavior and characteristics by analyzing customer data generated by POS (Point of Sale) transactions, website transactions, third-party data providers, etc can be used for acquiring and retaining potential customers and to maximize customer value. Data analytics helps in deep understanding of customer expectations, attitude and behavior with a well-organized customer database and customer strategies.
Building an Effective CRM Model
An effective CRM model can be built in various stages.
Understanding the Business Problem: Each CRM application will have a certain number of business objectives for which a suitable model is to be built. The CRM model should be built on the basis of those objectives.
Building a Marketing Database: Building a marketing database is the next step. Data captured may be structured or unstructured and can contain data related to sales, customer purchasing history, goods transportation, and consumption. Raw data should be cleansed and integrated to make it meaningful.
Data Extraction: Understanding data is essential to build an effective CRM model. Crunched data should be processed to extract knowledge and insights, which can be used while strategizing the CRM model.
Make Data Suitable for Modeling: This is the final step before creating a CRM model. The stage involves the selection of variables on which the model is to be built, constructing new predictors, selecting a subset of data to build data model, and transforming the variables in accordance with the requirements of the algorithm chosen for building the business model.
Data Analytics Model Building: In this section, alternative models are explored to find the most suitable one for solving a business problem.
Deploy Model and Results: Though data analytics has a small part to play in creating a CRM model, its role is very critical. The nature of customer interaction actually determines how data analytics is built into the application. Customer interactions can be accomplished in both ways, business contacting customers or vice versa.
The retail industry will be really benefited, if they can effectively use the information about customers and their dynamic needs. Companies should learn how to make effective use of customer data to make their business as profitable as possible.
