Data Mining in CRM
THE CRM STRATEGY
Customers are the most important asset of an organization. There cannot be any business prospects without satisfied customers who remain loyal and develop their relationship with the organization. That is why an organization should plan and employ a clear strategy for treating customers. CRM (Customer Relationship Management) is the strategy for building, managing, and strengthening loyal and long-lasting customer relationships. CRM should be a customer-centric approach based on customer insight. Its scope should be the “personalized” handling of customers as distinct entities through the identification and understanding of their differentiated needs, preferences, and behaviors.
In order to make the CRM objectives and benefits clearer, let us consider the following real-life example of two clothing stores with different selling approaches. Employees of the first store try to sell everything to everyone. In the second store, employees try to identify each customer’s needs and wants and make appropriate suggestions. Which store will finally look more reliable in the eyes of customers? Certainly the second one seems more trustworthy for a long-term relationship, since it aims for customer satisfaction by taking into account the specific customer needs.
CRM has two main objectives:
1. Customer retention through customer satisfaction.
2. Customer development through customer insight.
The importance ...