204 6.2 Strategies for managing customer information
current technologies, and additional training of staff may be required to ensure
the transition to a complete CRM solution.
6.2 Strategies for managing customer information
Large organizations routinely collect vast amounts of personal information
about their customers through the transactions they conduct. Organizations
such as financial institutions, health care providers, travel agencies, retailers,
automotive manufacturers, and communication companies, among others,
use this data in a variety of ways and for several reasons:
For targeted marketing based on individual preferences
To analyze customers for profitability
To evaluate their own service levels
Simply gathering information and storing it will not produce measur-
able business results; many CRM strategies have failed to achieve objectives
because of difficulties in developing a strong understanding of who custom-
ers are and what they really want and applying this knowledge to customer
relationship strategies and processes. (see Figure 6.2) Some companies build
Figure 6.2 Corporate functions and customer interactions.
Customer interactions
Front office
Back office
Customer data
Marketing
Direct Center Web Bricks
Customer Interaction Data
Data warehouse
Marketing
Sales
Manufacturing
Distribution
Customer data
Customer service
Product data
Accounting
Inventory
Contact data
Category management
Campaign management
Customer modeling
Response analysis
6.2 Strategies for managing customer information 205
Chapter 6
large multiterabyte (1000 gigabytes equals 1 terabyte) data warehouses to
crunch information about their customers in an effort to determine their
buying habits or product preferences. Oftentimes, correlating customer pur-
chasing habits is not properly done—just because data can be correlated
doesn’t mean the relationship between one set of data and another is signifi-
cant from a business viewpoint. Obviously, technology and business pro-
cesses must be applied in a logical context to ensure that customer data are
applied in a way to meet CRM objectives. (see Figure 6.3)
CRM brings technology to bear on business processes to enable organiza-
tions to use historical customer transaction data to manage customer rela-
tionships better. CRM is based on a set of technology tools that allows
organizations to capture, analyze, and apply large volumes of detailed cus-
tomer data to achieve a fuller understanding of their customers and to make
more informed business decisions. Informed business decisions are the ulti-
mate beneficial result of successful corporate CRM strategies. Those compa-
nies that adopted formalized CRM strategies early in their corporate
histories have been achieving measurable business results through CRM ini-
tiatives, but, as noted previously, others may have to totally revise their cor-
porate cultures, even completely do away with their traditional ways of
dealing with customers in their sales and marketing programs. Organizations
that do not have a formal process for managing customers by monitoring
and gathering historical transaction data and then analyzing this data to
determine how to respond to each customer’s needs will have to put major
efforts and budgets into developing CRM strategies. (see Figure 6.4)
Figure 6.3
Enhancing
customer service
with technology.
Using technology
Without technology
Answer queries
Customer data
Proactive
Direct
Degree
of
enhancement

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