Beruflich Dokumente
Kultur Dokumente
Customer Knowledge
Contents
Introduction ........................................................................................................................... 3
What is the Data For? ........................................................................................................... 4
Is the Data Reliable? .............................................................................................................. 8
Compliance .......................................................................................................................... 10
Summary .............................................................................................................................. 10
References ........................................................................................................................... 12
Introduction
Customer relationship management (CRM) systems offer a wealth of data for
organizations to access. One of the challenges that organizations face is how to really get
the most out of that data so that it offers customer insights that are meaningful and which
can utilized to increase customer loyalty towards
the company by developing real customer
knowledge. With customers able to interact with
By the end of 2013,
the business in more ways than ever before and
via an increased number of different channels,
81percent of
understanding CRM data can be difficult.
Evidencing this, the Aberdeen Group (2013)
organizations will be
found that 65 percent of businesses already use
using 10 channels to
six different channels to engage their customers,
but by the end of 2013, 81 percent of
engage their
organizations will be using 10 channels.
customers
Understanding the customer data that results
from all these different channels and converting
it into useful customer knowledge has become a
factor that will lead to competitive advantage, for those companies that are able to
leverage the data. Simply having customer data is not enough to transform your
organization.
Without paying attention to how to really turn CRM data into customer knowledge
organizations can easily find themselves overwhelmed with data and unable to
understand what it means or how to change the business to benefit from the data.
Customer data does have to be converted to customer knowledge for that data to be of
any real use to the organization. In many cases, CRM systems offer a very wide variety of
different reports, some of which will not really add any value to the organization. Before
generating reports randomly and reviewing them for what you think they are telling you, it
is better to understand what you need and why you need it. In this way CRM data can be
used to build helpful customer knowledge that can drive business decisions to increase
profitability.
The questions above are just an idea of some that can be used to investigate customer
data and turn it into knowledge. Specific businesses may also have certain interests
regarding their customers that they want to uncover, and asking the right questions with
the data in front of you is essential to revealing helpful customer knowledge. Reviewing
these types of questions with the raw customer data can be helpful in identifying important
trends and patterns that provide solid knowledge of groups of customers as well as
individual customers for personalization purposes.
Improve Sales
Customer data can be used to understand
customers in such a way that it is possible to
build up a depth of knowledge of how to sell
There is a better
more efficiently and effectively to customers.
This can be done in a variety of different ways.
chance of a repeat
One of the most basic is that some
sale if you know
organizations ask their customers, When do
you think you might be ready to upgrade/buy
when customers may
again? Patterns of purchasing activities can be
want to purchase
seen between different kinds of customers by
reviewing this data. By understanding when
again.
customers think they might purchase again,
sales people have the knowledge and the dates
to be able to contact customers with a better chance of a repeat sale. In addition,
customers can be asked what their needs are, and this data can be stored in the
system ready to assist the sales people.
Cross selling is also possible by sales people targeting those that fit the same
demographics and characteristics as others that bought additional products and
services from the organization. By reviewing the data on types of purchasing behavior
among the most profitable customers, sales people can use that knowledge to identify
other customers that might be more likely to buy upgrades or additional products.
Trends specific to certain customers can also be used by sales people for targeting.
Customer data stored in the CRM system about customers can be used to drive sales.
For example, if it shows in the system that a customer makes a repeat purchase of a
product every January, reminders can sometimes be set that prompt sales people to
contact that person before the time when they would normally buy.
Target Marketing
Customer data can tell organizations how marketing can be better carried out to be more
attractive to the customers. By understanding when customers are more likely to buy it is
possible to schedule marketing campaigns to time precisely with when customers may be
thinking of purchasing, placing the organizations
products and services in the number one spot in
the customers mind. The customer data can be
developed into customer knowledge that can be
Customer data and
utilized to raise the response rates from a variety
customer knowledge
of different types of marketing campaigns, such
as those carried out by email, telephone, direct
can be used to drive
mail and the internet. Additionally, different kinds
ROI of marketing
of customers can be targeted for different types
of promotions depending on their purchasing
campaigns.
needs and patterns. Increased attention can also
be paid to the most profitable customers, so that
energy is focused on customers that are more
likely to spend their money with the organization. This is when customer data and
corresponding customer knowledge is used to really drive return on investment of
marketing campaigns for the company. Ultimately marketing decision making is
transformed from customer knowledge.
In addition to reviewing existing customer data and building knowledge about current
customers, the knowledge built can be applied to potential future customers. Reviewing
the data that the CRM system can provide about customers can help you to understand
just exactly who your real customer segments are, not who you think they are which
may sometimes be two different things entirely. It is quite likely that reviewing the
demographics of actual customers from the CRM data that you are provided from the
system can be used to develop new customer segments that are distinguished from one
another in ways that you may not have realized before. Analyzing this depth of customer
data can provide extremely helpful knowledge that can assist with producing different
Reviewing customer
data may provide
knowledge about
new customer
segments to target.
the product development department to review so that amendments can be made that will
keep customers happier and reduce the number of complaints received. This is a good
example of where customer data can be transformed into knowledge about customers
that can help the organization to better meet customer needs.
Additionally, customer data that is stored in the system based on information about
complaints can also be used to steer the organization away from certain types of
customers. For example, it might be determined from reviewing complaints that male
customers in their forties that live in a certain geographic area are considerably more
likely to complain than other customers, and are not likely to repeat purchase the
organizations products or services, while women in their twenties living in the same
geographical area are frequently repeat purchasers. This allows the organization to adapt
what it is doing to better meet the needs of its customers. In the case of products it can
offer them in physical locations that are likely to be frequented by the interested
customers, and stop putting them in places where customers that are more likely to be
unhappy will purchase them. After all, it is more important to have happy customers than
unhappy ones that spread a negative message about the product or service.
data, and CRM systems do not always fulfill this important purpose for which they were
intended. Indeed, in 2013, Minkara reported that only 7 percent of companies were
extremely satisfied with their ability to utilize customer information to manage
interactions with customers. There are a number of factors that cause this as can be seen
in the diagram below.
Figure: Challenges Impacting Data Use (Source: Minkara, 2013)
As can be seen, one of the biggest challenges with customer data reported by businesses
is often the quality of the data that is captured. Only 21 percent of respondents to the
survey carried out by Minkara found that the quality of their data was not an issue. This is
a disturbing trend. Other major issues were found to be the timeliness of the data, the
accuracy of the data and the validity of the data. It is reported that 52 percent of those
organizations surveyed have problems with all four of the areas shown in the graph
above. This severely impacts the integrity of the data, and also the trustworthiness of the
data for the business.
Clearly organizations need to understand how to avoid these types of issues so that
customer data can be of the highest quality. This is important to make sure that business
decisions are being taken on the basis of solid evidence rather than data that is unreliable.
Here is a checklist of questions to ask to help to improve the overall usefulness of the data
collected. These include
If these questions are reviewed and changes made then the chances are the integrity and
usefulness of the data will increase considerably.
Compliance
It is worth remembering that whatever the data collected about the customer there are
usually rules about the storage and use of such data. Adhering to compliance and
regulatory issues is essential to avoid the organization from falling foul of the law. Also,
customers do not tend to like it very much if you use their data in a way that is different to
that which you say you will. Customers do not usually like their data being sold to third
party organizations, for example. It is well worth spending some time reviewing the
legislation as well as thinking through what your customers might want with regard to their
data before making damaging decisions in this area and which actually sabotage the
purposes of a customer relationship management system in the first place.
Summary
It has been reported that the good use of customer data can lead to a greater degree of
customer engagement that can raise sales between two percent and five percent
annually. This demonstrates that turning CRM data into customer knowledge is definitely
a worthwhile business activity, as the return on investment can be high. Not only that but
the customers that are retained as a result of improved customer knowledge will be more
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likely to be happier and more loyal. Remember to focus on what the organization wants
from the data to be able to get the best from it. It is also important to make sure that the
data is accurate and consequently providing real customer knowledge, since bad data will
not lead to customer knowledge and could lead to some bad business decisions being
taken based on a poor quality of data.
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References
Aberdeen Group (2013) Customer Analytics: Converting Data into Insight for Superior
Customer Experiences, Aberdeen Group, June 2013.
Baker, P. (2009) Its not the Data Its how you use it, CRM Buyer, accessed 12/02/13:
http://www.crmbuyer.com/story/66017.html
Compton, J. (2003) The 10 best things to do with your data, Destination CRM, accessed
02/12/13:
http://www.destinationcrm.com/Articles/Editorial/Magazine-Features/The-10Best-Things-to-Do-With-Your-Data-45124.aspx
Connors, B. (2013) Use CRM data to build relevance and avoid message overload,
Adage, accessed 12/03/13: http://adage.com/article/datadriven-marketing/making-crmdata-work-avoiding-offer-overload/243441/
Gallo, M. (2013) Nine tips to improve data quality and improve your decision making,
Valerisys, accessed 12/02/13: http://blog.valerisys.com/tlt/9-tips-to-improve-data-quality/
Hughes, A.M. (2013) How lifetime value is used to evaluate customer relationship
management,
Database
Marketing
Institute,
accessed
12/03/13:
http://www.dbmarketing.com/articles/Art194.htm
Info Entrepreneurs (n.d.) Customer Relationship Management, Info Entrepreneurs,
accessed 12/03/13: http://www.infoentrepreneurs.org/en/guides/customer-relationshipmanagement/
Minkara, O. (2013) Catching up with the best in class through customer analytics,
Aberdeen Group, accessed 12/03/13: http://blogs.aberdeen.com/contact-center-customerexperience-management/catching-up-with-the-best-in-class-through-customer-analytics/
Mohamed, A. (2009) CRM Solutions Essential Guide, Computer Weekly, accessed
12/02/13: http://www.computerweekly.com/feature/CRM-solutions-Essential-Guide
Ranjan, J. and Bhatnagar, V. (2011) "Role of knowledge management and analytical
CRM in business: data mining based framework", Learning Organization, The, Vol. 18 Iss:
2, pp.131 - 148
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