The difficult part of CRM is not gathering the data on when they click on your website, visit your shop or contact your call centre, but turning this information into insights that can be used to create an appropriate response.
“There’s no point in gathering these analytics unless you make them actionable by processing them and feeding relevant alerts into your CRM system,” says Andrew Stevenson, head of centres of excellence at IT services company, Atos Origin.
Systems for tracking customer behaviour on websites or mobile phone networks vary in sophistication. Some web analytics, for example, merely record click-through from page to page. Others provide a deeper view, such as software from UK-based Speed-Trap. If, for example, a would-be customer hesitates over the buy button, their system enables the web page to display further information on the product – as in a real shop – to try and secure the purchase. “It’s like the web equivalent of taking a video in a bricks and mortar shop,” explains Mr Stevenson. “If someone hovers near a sofa, a sales rep can go over and interact and help make a sale. You can now do the same on websites.”
Data gathered by analytics software can also be used to inform off-line activities such as targeting direct mail more precisely. But according to Gareth Herschel, research director at the market analysts Gartner, the real power comes from integrating the data to CRM, enabling companies to make the shift to a real-time business. “When a customer calls with a service query, the agent could look and see what [he or she] viewed on the last visit to the company’s website and tell them about relevant offers.”
In many ways, the craze for analytics sounds as if it does little more than add to the burden of storing the information in the data warehouse, for analysis by business intelligence applications and subsequent deployment by CRM systems. In fact, the leading exponents are arguing that it is a new stage in the ongoing quest to understand and, thus, manage, the customer. “Once you make the link between analytics and CRM, it is possible to keep individual customer profiles and keep them updated, for use any time the customer gets in contact,” says Mr Herschel. “We are not just talking about more data being analysed more quickly; we are talking about analysing it in more ways and for more reasons.”
While the effort involved in implementing such tight integration between analytics from different types of contact is just beginning to demonstrate its value, the information needs to be used appropriately. So, if someone is ringing up to complain, it’s probably not a good idea to push an offer of further goods at them.
This, in turn, leads to another important insight that CRM systems can offer: showing whether the individual receptive. “It means you can work out which customers like a simple life and don’t like to change, and leave them alone,” says Mr Herschel.
Indeed, many of these finely honed tools are currently being used defensively, to avoid churn. This is particularly the case in the mobile phone industry, where there is a high level of switching between networks. “The power of analytics is that it gives you the means to work out what you want to do with each customer to make your relationship profitable,” says Mr Hertschel.
While many companies are tussling with web analytics, software is becoming available for exploiting mobile phone network metrics. A leader in the field is Xtract based in Helsinki.
“Obviously, privacy and security are prime concerns but our analyses can be used to enrich existing customer data in the data warehouse or CRM system. We have different ways of scoring that can, for example, pick out communities and social networks, and predict who the opinion leaders are ,” says Jouko Ahvenainen, founder and chairman of Xtract.
To date, the major application is managing churn, but Mr Ahvenainen aruges the intelligence Xtract’s software delivers is opening up the mobile phone market for third party advertisers, too.
“Customer understanding is the key to developing the market for mobile advertising,” he says. “One mobile virtual network operator already offers text messaging as a free service to users who are prepared to receive advertising, and this will have an influence on the whole industry. I think we will see the big network operators going down the same route.”
While targeted advertising has established itself on the internet, Mr Ahvenainen says in the mobile environment it is possible to identify more about a customer than what web pages they look at. “Our targeting is not based on ad hoc searching they carry out, but on what people are,” he explains.
The market for analytics is growing rapidly, but it is still very fragmented. Oracle and Microsoft have acquired analytics companies, and there is a range of loose alliances between analytics vendors and enterprise software vendors such as SAS and SAP.
One of the largest markets is selling analytics as an add-on to the installed base of CRM users. The challenge in doing this is not so much in the CRM system itself, as in the way it was implemented. “It is not a huge upheaval in terms of the existing system,” says Mr Herschel, “but it implies changes to the way people think about the processes.”
An example would be the need to change the scripts that agents use in the call centres, away from one size fits all to a more spontaneous (though directed) approach.
The move to apply analytics also requires different skills and competencies. Most organisations have business analysts who spend time looking at data and tracking changes. Now, the kind of backgrounds these people come from is becoming more diverse. “To make sense of the data,” says Mr Herschel, “companies are looking to bring in different expertise, such as neurobiologists and cultural sociologists.”
Traditionally, business analysts were based in the IT department. But lines of business are now creating teams to do this work.
The challenge is to take the data that is available, select the most appropriate tools to analyse it, and then deploy the insights. The secret is not to be driven by the available data, but to work backwards from the required decision, and to balance to depth of the analysis against the ability to apply the insights.
