5 Reasons Why CRM Analytics are Essential
CRM Analytics Deliver Customer Insights For Improved Experiences
Your Customer Relationship Management software implementation represented a major technology investment as well as a substantial overhaul of your business processes. As soon as you successfully implemented your CRM solution you began to slowly but steadily experience efficiencies in your sales, marketing and call center operations. While some of these efficiencies are easily observed and measured, the more profound insights will go unnoticed and unexploited until you integrate a powerful analytics component.
Analytics with its big data and data mining abilities will find correlations, isolate patterns and track trends among volumes of customers, serving up the kind of information that will allow your organization to tailor the customer experience for improved engagement, incremental business and better profits. At the same time analytics can empower you to make forward-looking decisions such as where best to make your next major capital investment and how to further optimize your CRM system for even greater efficiencies.
"Your investment in CRM might have great value without analytics," says Chris Selland, CRM analyst with Focus Research, "but you wouldn't know what it is and you'd have a hard time explaining it to your CFO. Without analytics it's harder to justify the investment and make the case for the next investment."
Below are five powerful reasons why you will want to integrate analytics into your CRM software solution.
- Better Customer Understanding
Customers are at the heart of the modern enterprise and understanding their preferences, their values and their histories is the cornerstone of guiding your company toward greater success. By analyzing all customer data points (call center, Internet, email, social media), CRM analytics can group customers according to their behavior allowing you to identify your best customers for special treatment to maximize their lifetime value. Customers at all levels can be segmented for targeted marketing efforts. Customer trends can be extracted from large amounts of data and used to anticipate needs, guiding product development, marketing efforts and promotions.
- Better Understanding of the Customer-Facing Operations
Analytics will help you understand how well the company is performing in terms of service, sales and marketing. Getting the CFO to sign off on a CRM software investment in the first place required assurance that you will recoup that investment. Without analytics demonstrating the value of the investment is difficult. With analytics you can predict and establish ROI and use it to justify further investments. "This is the CFO view of everything," says Selland. "You can throw more dollars at your operations but where's the value?" The reason for Customer Relationship Management programs in the first place was to take the cost of sales, the cost of marketing and the cost of service and be sure you're getting a return on what you're spending. "You can put the entire company on Twitter," says Selland, "but does it make economic sense?" Business intelligence (BI) and CRM analytics can answer these questions.
- Decision Support
This is the more tactical side of #2 above. Once you understand where you're getting or not getting value in your customer-facing operations, you can make begin making course corrections and new decisions toward operational investments; where to invest money, where to divest, where to insource, where to outsource. Should we open a new call center? "While decision support is related to understanding customer-facing operations," says Selland, "it is actually a macro view as it provides the big picture numbers necessary to make operational decisions. Should we run our own call center or should we outsource?"
- Predictive Modeling
Through BI and analytics you gain the ability to better forecast how your customers are going to respond in the future based on their past behavior as well as their segmented demographics. For instance, wireless companies want to know if a customer is at risk when their contract runs out. If an AT&T customer is up for renewal, what are the chances he's going to jump to Sprint and how much money should the company spend on preventing that customer from switching? Analytics can isolate large numbers of customers who are up for renewal and segment them according to how they're expected to behave at renewal time. If they haven't made complaints in the past and have upgraded their service and bought additional products, chances are they are satisfied and will renew without coaxing. You may want to target them with future marketing campaigns but no additional investment need be made to retain them. If, on the other hand, a customer has several complaints on record he may be part of a group that is shopping for a new wireless company. Retaining that group will take extra effort, justifying the allocation of additional marketing dollars for that purpose.
A powerful customer analytics component provides the data to perform detailed benchmarking over time. Generally, benchmarking is the ability to determine how well you are or are not performing compared to your plan or similar organizations in your industry as well as companies in other industries. Benchmarking analytics focuses on defined key indicators such as customer satisfaction, retention, cost per customer service call and revenue per call. You can see the operational areas in which you're lagging behind, and bring them up to (or above) industry standards.
"CRM benchmarking changes with added complexity and new channels such as social media," says Selland, "but it's always a matter of determining how are we doing compared to industry norms and the competition."
Customer analytics, in the end, may be the key to not only optimizing your CRM software investment, but to moving your company to the next level with greater call center efficiencies, more targeted marketing campaigns and increased sales revenue.