CRM analytics: The fuel for the engine. METHODS continue

Step 3: Actions/Tactics and campaigns

This is really the ‘doing’ stage where actions are taken to implement what has been learnt from the previous stages and quantifiable results start to come through in a short space of time.

Often the tactics here take the form of producing pen portraits of customers, which give a company a visual indication of what their customer base looks like. These portraits are descriptive rather than predictive and can be extremely useful when briefing a creative agency to produce marketing materials.

During this stage, analysis is carried out at a one-to-one level and the information about customers is taken to produce manageable clusters, often of between seven and 15. This smaller number actually allows companies to implement the information from the analysis into their organisations. Once the clients understand their key customer groups, they can start to build a customer contact strategy. They can make sure that they communicate with each group in the way it wants to be communicated with, and offer products to suit their lifestyle and lifestage at a price attractive to them; this does not always mean the cheapest prices. Some groups prefer to pay more as they can be suspicious of too cheap an offer.

In addition to the descriptive portraits described above, the main thrust of this stage revolves around acquisition, retention, cross-sell and lifetime value modelling. By using a variety of statistical techniques, companies start to gain an understanding of their customers’ likelihood to react in a certain way. This in turn, allows them to focus their marketing and aim the right products at the right clusters, through the right channels, at the right times.

Too often companies are under the impression that they are helpless without having made a significant investment in either data or hardware; this simply is not the case. The majority of businesses can start to implement tactical solutions almost immediately. More often than not there is sufficient data within an organisation to gain a significant amount of learning in a short space of time. The issue is getting the data off the legacy systems in the first place. This does not have to be difficult, however; in some instances, read only access to files is sufficient to be able to commence analysis. Often there are problems here with IT where they are happy to assist, and say it is a fairly simple task but they cannot fit it in for another nine months as they are busy on other projects. It is amazing how this resource becomes readily available when a company asks for systems access to do it themselves — business people messing around with their systems, heaven forbid!

In a similar vein, there are businesses that are happy to purchase significant amounts of external data to profile their customers rather than having to use their own. The most powerful data they have is the data already on their own systems. External data can assist and enhance their existing knowledge but this should always be in addition to, and not instead of, their own source data which after all have been provided directly by their own customers.

Step 4: Learning

In the author’s view this is one of the most important stages but is, more often than not, the one at which companies are not very good. This is the actual communication, where all the information learnt from the previous stages has to be spread throughout the organisation, especially to those at the front line who are the ones who actually talk to customers.

How often do market research departments carry out excellent customer research but nothing is ever done with it? Many companies review the work and are full of good intentions but then it sits in a filing cabinet in a head office just gathering dust, waiting to be used. The same could be said for analysis. As mentioned earlier, if the information from the previous stages, ie what a typical customer looks like, can be used in a real situation, imagine how powerful this could be. If the telesales person knew a perfectly matched customer to a target group was on the phone, they would be encouraged to try every possible ploy to make sure that they converted this client. If it takes twice as long to convince them, then so be it. In addition, if they knew the cluster to which the individual belonged, they could adapt the way that they talked to them, what offers they made to fit their profile etc.

As time goes on, by nature of the fact that the company is targeting certain groups to convert, the portfolio will change. This means that this type of analysis cannot be performed just once, it has to be an iterative process and the continual learning from it will feed back again and again into the customer strategy and the business planning process.

One project worked on demonstrated this point well. PS were asked to look at the customer clusters to provide business rules to drive a modular motor insurance product. At the core of the offer, everyone had to be offered at least Road Traffic Act cover. Then, dependent upon the profile of the individual, as questions were being asked during the scripting process, a modular motor product was forming in the background. For example, if the individual were in Cluster 1 they might be more likely to desire a Comprehensive product with higher excess and an increased limit on personal effects. Whereas a Cluster 3 person might want a stripped-down offering of Third Party Fire and Theft cover with the flexibility to pay on interest-free credit. Although the actual changes to the product revolved around only a few adjustments to cover and payment method, the client was left with the feeling that he had been given a bespoke product based around his lifestyle and needs as an individual.
At last telesales had something more than price to offer the customer on the end of the phone and were able to move away from commodity selling.


Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

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