A guide to analytical CRM

11 August 2005

Analytical CRM, (a sub section of the wider business intelligence [BI] market), enables businesses to gain a fuller understanding of their customers in order to serve them better, thus increasing customer longevity and generating more profit.

In a report titled, Analytical CRM, independent market analyst Datamonitor finds that analytical customer relationship management (aCRM) technology, considered the logical evolution of the CRM lifecycle, is being adopted by enterprises on a broader global scale. Tom Pringle, the author of the report explains what aCRM involves. A domain-b exclusive.

Analytical CRM is the active collection, concentration and analysis of data gathered about customers and their interaction with businesses. It represents the next, logical step through utilisation of customer data held within the enterprise. This analysis is then used to generate value, both for the enterprise and the enterprise's customers. It encompasses cultural change at every level as part of the wider CRM project — the creation of a customer- focused business.

aCRM is a technology and a concept
Analytical CRM (aCRM) is both a technology and a concept. As such, it requires a multifaceted definition to encompass its different uses. The question remains 'How will businesses adopt aCRM — as part of a wider enterprise business intelligence (BI) initiative, or, as an independent customer-focused solution?' The answer is both.

aCRM can be considered in terms of the technology which enables the concept. For a definition of these technologies we must look to the business intelligence (BI) market.

Extract, transform and load (ETL) tools: These solutions are concerned with the collection of data from disparate systems (enterprise solutions across the business), the standardisation of data, and then population of the data warehouse (DW).
Data quality (DQ) tools: The usefulness of analysis of data from the DW depends on its quality. So-called 'dirty' data can significantly reduce the value of aCRM, problems include duplicate records, incomplete records and issues relating to the formatting of data from different sources. DQ tools are focused on addressing these issues.
Data warehouses (DW): Acting as an enterprise-wide data depository, the DW should enable what has become widely referred to as the 'single customer view'. The single customer view represents the full range of information a business holds on its customers and their interactions with the company. It should be held in a standardised format, and refreshed as appropriate for that company's needs
Business intelligence tools: Rather than attempt to create an exhaustive list of the different types of tool used to analyse data, Datamonitor defines the broad range as business intelligence tools. These may include online analytical processing (OLAP), data mining, reporting, dashboards, ad-hoc reporting and numerous other tools.