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CRM Analytics in Action
CRM analytics solutions are helping companies learn more about the value of customers in an effort to plan processes and strategies.
Posted Jul 30, 2000
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As dot com investors grow more savvy, they are looking more closely at figures like revenue and earnings gain in searching for a good lead, not just which company has the dominant market share. In this competitive environment, companies are finding an increasing need to put a value on their customers. Customer relationship management (CRM) analytics solutions can help.

The analysis of customer data can yield results which can help you set pricing and come up with customer retention and targeting strategies. You can also use analytics to figure out staffing needs for your call center, detect fraud and troubleshoot Web-site problems.

Analytics Evolution

In the early 1980s, retailers and catalog companies started collecting customer information at various contact points that went to data warehouses for storage, but the information quickly became obsolete and was of only marginal use by the time companies' marketing departments could sort through and analyze it. The analytics systems were often technically difficult to operate.

Today, with the advent of the Internet and e-commerce, companies' analysis needs have changed, and a new class of CRM analytics software has emerged to meet these needs.

Companies now want to incorporate information from diverse sources, collected over separate time frames. Weekly and monthly data must be integrated, and click stream information has to be gathered in addition to data from call centers and brick-and-mortar stores. According to Bob Chatham, senior analyst at Forrester Research, Cambridge, Mass, the primary reason for the rise in CRM analytics is the growth in customer touch points and the trend toward customer self service.

The Internet is also speeding things up. Previous data warehouse and knowledge management tools took two to three years to develop, compared to four to 20 weeks for CRM analytics solutions, according to Vince Bowey, vice president of E.piphany, San Mateo, Calif., one of several CRM analytics vendors. Even after the data warehouse was operational, it could take four months or more to develop reports. CRM analytics tools, on the other hand, can provide some information in real time and complex, detailed reports within an hour.

The newer systems are also designed for the non-technical. They include wizards, intuitive interfaces, tool suites and even some intelligence to help marketing professionals with little technical expertise analyze increasingly complex customer information.

Merger Mania

Several companies that provided the knowledge management and business intelligence tools of the past, such as IBM, NCR and Hyperion, are moving into the CRM analytics arena. There are several newer companies as well, including E.piphany, Digital Archeology, Customer Analytics and NetGenesis, to name a few.

Firms providing CRM analytics have been aggressive in their acquisitions in an attempt to provide one-stop shopping solutions for their customers. In early 2000, E.piphany bought Octane Software and RightPoint, enabling the company to combine real-time personalized offers and multi-channel sales, service and support.

Most CRM analytics solutions are still evolving in an attempt to replace batch-processed information with real-time data, according to Scott Nelson, vice president and research director for Gartner Group, stamford, Conn. The acquisitions have allowed some of these firms to provide real-time data, which is becoming more critical as e-commerce continues to grow.

Real-time information allows a call center agent to immediately tailor an offer based on a customer's current preferences and purchase behavior or provide a higher level of service to a more valuable customer.

Bowey stresses that marketing and sales are no longer separate. "Analytics can no longer be separated from taking action," he says. "You have to proactively do something for the customer and give them what they want."

Nissan North America is using E.piphany's E.4 product to track all customer relationships. Visitors to the Nissan or Infiniti Web site can obtain all of the information they want on the first visit. The company uses the E.piphany system to monitor and analyze click streams. On the second visit, the system will push out a query to ask if the consumer wants a brochure on the model he or she has been researching. On a later visit, the system will push out a similar query on pricing information.

The company can also analyze the information to alter its marketing, Bowie says. "If... customers buying a certain product are single males, we know we're better off advertising in Gentleman's Quarterly rather than in Homes and Gardens."

New Guy on the Block

New CRM analytics vendors will be entering the quickly evolving market as well.
One of the newest vendors is thinkAnalytics, Boston, which was expected to launch its thinkCRA CRM analytics product in June. "Our product sits behind CRM solutions and provides extreme analytics," says Tim Jones, thinkAnalytics president and chief technical officer.

Unlike traditional OLAP and other types of querying tools that require preset, fixed categories (such as the 18 to 24 age group), CRM analytics tools instead can define the information along "natural" categories rather than forced categories, according to Jones. For example, a company may discover from the use of CRM analytics that there are distinct preferences among the 18 to 30 (rather than 18 to 24) age group. So the company can target those customers differently.

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