If you are running a business or thinking about starting a new business, then this article is just for you. Every business has a lot of data to save. Each iota of that data contains key information which can help in smart and real-time decision making. That’s why you need to buy an analytical CRM for your company.
So, before starting the discussion on analytical CRM, let us first understand what CRM is.
CRM stands for Customer Relationship Management. As the name suggests, CRM is a process of analyzing the interactions between a company and its customers. Every company or firm uses different types of CRM in order to fulfill various purposes. Some of them are to know the products their customers are interested in buying and to provide improved services. Also, the company tries to ensure that their trusted customers will stick only to their company and don’t go anywhere else.
A customer goes through three stages namely considering, purchasing, and evaluating in the process of becoming a trusted customer of a company. We are going to understand all these stages with the help of an example.
Example: Suppose Ella requires a new toaster. In the considering stage, she looks at no. of different toasters in the market and narrows her choice to one of two manufacturers, I and II. In the purchasing stage, after comparing the prices and features of the two, she decides to purchase the first one i.e., While using the toaster, she continuously evaluates it – this is evaluating stage. If she finds the functioning of the product smooth and good, she will recommend it to her family and friends. In the future, if she needs another kitchen electrical appliance like a juicer she would tend to approach the manufacturer. The reason being she now trusts in the brand.
Analytical CRM is one of the three types of CRM. It collects data about customer interactions with a company. It works behind the scenes instead of handling front-line operations. Meaning is that the customer does not know that his actions and interactions with the company are captured and analyzed.
The aim of analytical CRM is to increase customer satisfaction and retention rate. Companies try to predict customer choices and trends. Then it offers similar products to buy.
For example: In the above example, when Ella purchased the brand I item for the first time, the information of the item would be printed on the receipt and stored in the database. When she buys the same brand product next time, the database stored shows that she has preferred this brand product the second time. The store uses this information to send brand promotions, coupons, offers, sales details, and information about other products of the brand. Also, the company requests the customer to write feedback about the product and the services offered by the company. On this basis, the company gets an idea of Ella’s likes, dislikes, and expectations from the company.
This is how any company can improve its customer-oriented sales and marketing.
Purpose of Using Analytical CRM
As we have already talked about, analytical CRM plays a very crucial role in managing customer relations. The main purpose of using it is to collect and analyze the three types of customers’ data: sales data, financial data, and marketing data. The sales data covers the consumers’ history related to purchase and return of items like the type of items i.e. category, the brand of which items are purchased, their price, etc.
Under financial data, it accumulates payment and credit history which includes the mode of payment, credit scores, etc. Last but not least marketing data covers customers’ response to different campaigns and their satisfaction & retention data, etc.
Use of Analytical CRM
The analytical CRM is widely used in companies. Some of its main uses are highlighted below:
- To Predict Trends – The analytical CRM is used to analyze the sales metric of previous days or years and the trends going on in the current time. It helps a company to predict its consumers’ taste of their products.
- To Securely Store the Data – It stores the collected data in a data warehouse with high security. This is the data that is used for analytical purposes. Also, the data stored in the database in the form of feedback forms, billing, e-mails, etc make it easier to know the customer preferences.
- To Understand Customer Life Cycle – By the life cycle of a customer, we mean the multiple stages through which a customer goes while considering, purchasing, evaluating, and at last becoming a loyal customer. The analytical CRM analyzes important data from each stage of the life cycle of the customer. It helps in improving the sales and marketing of the company’s items.
- To Predict Consumer Behaviour – Every organization is keen to enhance its marketing and sales. For this, it requires to know the consumer behavior. This provides a clear-cut idea to the firm which works best for it.
- To Allow Online Analytical Processing – OLAP tools, one of the three important components of analytical CRM, is used to validate the hypothesis. These hypotheses are the predictions or guesses that are made on the basis of the previously gathered information.
Benefits of Using Analytical CRM
Analytical CRM accumulates data and provides a clear picture of each customer’s life cycle. This enables the company to address their needs and offers services in an effective manner. As a result, the consumers receive a better experience and gradually become loyal customers of the organization.
CRM recognizes consumers’ preferences, trends, and behaviors. This allows the company to plan a result-oriented strategy like market campaigns. It leads to increased customers and obviously the sales. Quick decision-making gives organizations a great lead in the market. Also, it allows room for other initiatives.
Best Analytical Software Tools
Some of the best analytical CRM software tools are as follows:
- Zoho Analytics
- Salesforce Einstein
- Zendesk Explore
- HubSpot Marketing