CRM (customer relationship management) analytics comprises all programming that analyzes data about customers and presents it to help facilitate and streamline better business decisions.
CRM analytics can be considered a form of online analytical processing (OLAP) and may employ data mining. As companies have added new and often faster ways to interact with customers, the opportunity and the need to turn data collected about customers into useful information has become increasingly important. As a result, a number of software companies have developed products that perform customer data analysis, and analytics is a component of many CRM systems.
Applications of CRM analytics
After implementation, CRM analytics offers insights to understand and use the data that is mined. Organizations use CRM analytics in the following ways:
- Customer segmentation groupings: Dividing customers into those most and least likely to repurchase a product;
- Profitability analysis and customer value: Learning which customers contribute to the highest profits over time. This involves understanding not just how much a customer spends, but how many resources you dedicate to that customer in return;
- Personalization: The ability to market to individual customers based on the data collected about them. This requires obtaining a 360-degree customer view;
- Measuring and tracking escalation: The ability to measure how often problems arise with a product or service to eliminate that issue and quickly achieve customer satisfaction; and
- Predictive modeling: Comparing various product development plans in terms of likely future success given the customer knowledge base by measuring engagement levels through customer shares.
Data collection and analysis are viewed as a continuing and iterative process. And over time, business decisions are refined based on feedback from earlier analysis and consequent decisions.
Benefits and challenges of CRM analytics
CRM analytics can lead to better and more productive customer relationships through the evaluation of the organization's customer service, analyzing the customers and verifying user data. CRM analytics can lead to improvement in supply chain management -- lower inventory and speedier delivery -- and thus lower costs and more competitive pricing. One of the biggest benefits of CRM analytics is the ability to create target marketing campaigns from customer analysis.
A major challenge that accompanies CRM analytics is the integration of analytical software with existing systems, as well as new systems. If the software does not integrate, the collected data becomes difficult to utilize.
Should your company invest in CRM tools?
Infusionsoft CRM platform: Is it right for you?
Understanding the value of Microsoft Dynamics CRM 2015
Factors to keep in mind when buying a CRM tool