MKT 2227 Lesson 3: Forms of CRM

Questions and Answers

What is an example of data mining in the given content?

WalMart's supplier relationships (correct)

Fraudulent credit card use

Branch network product sales

Loyalty analysis

What is a challenge of relying on databases for data mining?

Insufficient storage capacity

Data is always complete and accurate

Data is dynamic, incomplete, noisy, and large (correct)

Data is always up-to-date

What is NOT a common misconception about CRM?

CRM is about customer interactions (correct)

CRM can be implemented by any organisation

CRM is a marketing process

CRM is database marketing

What issue can occur when relying on database information?

Measurement judgements can cause errors Signup and view all the answers

Why might Eric's service station benefit from data mining?

To better understand his declining regular clientele Signup and view all the answers

What is an example of a product penetration analysis?

Analyzing customer buying patterns at the store display level Signup and view all the answers

What issue can occur when dealing with large databases?

Size updates and irrelevant fields Signup and view all the answers

What is a benefit of WalMart's data mining approach?

Suppliers can identify customer buying patterns at the store display level Signup and view all the answers

Why might data be incomplete in a database?

Data collection systems may fail or be incomplete Signup and view all the answers

What is a type of analysis that involves understanding customer purchasing habits?

Spending and cross correlation to classes of customers Signup and view all the answers

Study Notes

Customer Relationship Management (CRM)

Customer satisfaction is the fulfillment of customer needs, desires, and expectations, resulting in a positive emotional state.
Satisfied customers are less likely to switch to competitors, leading to sustainable advantages, reduced failure costs, and increased loyalty and positive word-of-mouth.

CRM Software

CRM software helps manage interactions and relationships with current and potential customers.
Features include centralizing customer data, tracking interactions across various channels, and streamlining sales, marketing, and customer service processes.
Popular CRM software includes Salesforce, HubSpot CRM, Zoho CRM, and Microsoft Dynamics 365.

Types of CRM Software

On-premise CRM: installed locally, giving businesses full control over security and customization, but requiring significant upfront investment and IT infrastructure.
Cloud-based CRM (SaaS): hosted on remote servers, offering flexibility, scalability, and subscription-based pricing models, with maintenance and updates handled by the CRM provider.

Factors to Consider when Selecting CRM Software

Budget, IT infrastructure, scalability, data security, and industry-specific requirements.
The right CRM solution depends on the organization's size, industry, business objectives, and IT capabilities.

Operational CRM

Focuses on automating tasks related to customer-facing levels, collecting customer data through various touchpoints, and using data for efficient and effective interactions.
Software solutions include marketing automation, sales force automation, and service automation.

Data Warehousing and Mining

Data warehousing: a process of centralized data management and retrieval, integrating various databases into a single repository.
Data mining: extracting implicit, previously unknown, and potentially useful information from data, using techniques such as clustering, classification, and anomaly detection.
Data mining enables organizations to determine relationships between internal and external factors, predict customer behavior, and identify patterns and regularities.

Examples of Data Mining

Identifying buying patterns, associating buying behavior with customer segments, analyzing responses to advertising, and identifying fraudulent activities.
Walmart's use of data mining to transform supplier relationships, capturing point-of-sale transactions and allowing suppliers to access data and perform analyses.

Issues with Data Mining

Reliance on dynamic, incomplete, and noisy databases, limited information, and adequacy and relevance of stored information.
Errors and inconsistencies in databases, subjective judgments, and missing data.

Misunderstandings about CRM

CRM is not just database marketing, a marketing process, an IT issue, or only about loyalty schemes.
CRM can be implemented by any organization, but requires a thorough understanding of its concepts and applications.

Case Study: Eric's Service Station

Eric's service station has seen a decline in regular clientele over 12 years, highlighting the need for effective CRM strategies to retain customers and build loyalty.