What to Do with the Data


There is a fundamental disconnection between the goals of CRM and the results. If you have invested millions of dollars and you have a wonderful data warehouse and analytic software, then what? How do the data warehouse and software increase the retention rate? Somehow, you are supposed to take the software and change customers’ behavior. The CRM Forum (www.crm-forum.com) lists three reasons why CRM usually fails:

  1. Problems with organizational change and internal politics

  2. Lack of the right skills and enterprisewide understanding of the initiatives

  3. Poor initiative planning

Unfortunately, many CRM analysts write a type of dense prose that is almost impossible for normal people to understand. Take this example from a Gartner Group report on the CRM Forum:

Enterprises struggling with lack of coordination across departments should consider the needs of individual groups and work on a top-down/bottom-up strategy. Because department-level CRM deployments may be more cost-effectively supported by a Tier 2 system integrator with domain-specific skill sets and software relationships, the enterprise should identify a master list of approved smaller service providers to work on individual projects.

It really should not be so complicated. The goal of CRM is to select the right prospects and to get customers to be more loyal and buy more. Software is of only marginal help in doing this. The goals can be achieved only by coming up with products, services, tactics, strategies, and communications that the customers will like and respond to. The CRM warehouse and software do none of these things. The goal can be realized, however, in many other ways, which are outlined in this book.

So, what should you do? Sungmi Chung and Mike Sherman suggested in the McKinsey Quarterly that the two most essential resources in any CRM program are a wealth of hypotheses about the composition of possible target segments and a variety of offers to test these hypotheses. They point out that

Less is more if it makes it possible for the process of testing and refining offers to start sooner rather than later. It will be more than enough to begin with some demographic details about customers and information about the products they currently own, such as their account balances, and the kinds of transactions they have undertaken during the course of the previous 12 months.




The Customer Loyalty Solution. What Works (and What Doesn't in Customer Loyalty Programs)
The Customer Loyalty Solution : What Works (and What Doesnt) in Customer Loyalty Programs
ISBN: 0071363661
EAN: 2147483647
Year: 2002
Pages: 226

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