Unit 4
Analytical CRM
• Managing and Sharing customer Data
• Customer Information Databases – Ethics and legalities of
Data use
• Data warehousing and Data Mining Concepts
• Data Analysis- Market Basket Analysis ( MBA)
• Click stream analysis
• Personalizing and collaborative Filtering
Introduction
• A customer database is an organized collection of customer data which is
used to analyse and create the appropriate marketing plan for a product
or service
• Firms maintain a record of all their present and potential customers using
customer database
• The customer database stores information like personal details, buying
habits, last interaction with the firm, contact information etc.
• Such databases help the firms to understand the customers buying pattern
which is used to design products and decide on prices
• The companies use the available list of potential customers to generate
higher sales.
• Database marketing helps target the right customers at the right time
Characteristics of customer Database
• Customer Information
• Accuracy
• Relevance
• Systematic
• Timely
• Convenient to use
• Facilitates Decision making
• Sharable
• Secure
Benefits of a Customer Database
• Create Brand Affinity
• Develop Customer Loyalty
• Provide Better Customer Service
• Launching New Products
• Organized and Meaningful Information
• Real Time information
Types or classification of Customer Database
Prospect
Basic Data Database
Cluster Attitudinal
Database Database
Process of creating a Customer Database
• Determining the Nature of Database
• Identifying Information Requirements
• Data Collection
• Data Storage
• Developing Database
• Database Management
• Data Security
• Data Availability
Ethics and Legalities in Data use
• Big Data ethics also known as data ethics refer to systemizing,
defending and recommending concepts of right and wrong conduct
in relation to data, in particular personal data
• Protection of customers data is mandatory in India and is covered
under Information Technology (IT) 2000.
• Section 43: Penalty for damaging or tempering the source of
information or computer system
• Section 65: Computer Hacking issues
• Section 72: Penalty for breaching the confidentially of the collected
Data
Principles of Data Ethics
The Human
Individual
Being at the Transparency
Data Control
centre
Accountability Equality
Guidelines for Customer Database
• Training to CRM Team
• Right Technology
• Backup
• Third Party Dealing
• Regulations
Rights of customer
Data Protection Act 1988 has given various rights to customers,
which are as follows
• Validity
• Authorized Use
• Compliant Filling
Data Mining
• Data mining is defined as a process used to extract usable data from
a larger set of any raw data
• Different presentation tool and techniques such as Bar charts, pie
charts ,line diagrams, trend lines etc. are used to calculate facts and
figures from collected data
• Data mining it is a process of investigating , cleaning, modelling the
raw data so that it can it can be converted into useful information
• Data mining helps in understanding the existing customers well by
knowing their needs, expectations, Tastes & preferences
• It leads to checking the quality of Data
Business Application Of Data Mining
• Market Segmentation
• Customer Scrutiny
• Analysis
• Knowing the Customers
• Purchasing Behaviour
• Pricing Decisions
• Estimating Customer Cost
Data Mining Process
• Business Understanding
• Data Understanding
• Data Preparation
• Data Transformation
• Modelling
• Evaluation
• Deployment
Data Warehousing
• Data warehousing is the secure electronic storage of information by a business
or other organization.
• A Data Warehousing (DW) is process for collecting and managing data from
varied sources to provide meaningful business insights
• Data warehousing is the storage of information over time by a business or
other organization
• Data warehouses offer the unique benefit of allowing organizations to analyse
large amounts of variant data and extract significant value from it, as well as
to keep a historical record.
Features of Data Warehousing
• Data Storage
• Customer Information
• Data Analysis
• Objective
• Outcome
• Sources
Essential of a Good Data Warehouse
• Up-to-Date
• Safe and Secure
• Privacy
• Data Availability
Data Mining Data Warehousing
Data mining is generally considered as the process of Data warehousing is the process of combining all the
extracting useful data from a large set of data. relevant data.
In data mining, data is analysed repeatedly. In data warehousing, data is stored periodically.
One of the most amazing data mining technique is the One of the advantages of the data warehouse is its ability
detection and identification of the unwanted errors that to update frequently. That is the reason why it is ideal for
occur in the system. business entrepreneurs who want up to date with the
latest stuff.
The data mining techniques are cost-efficient as compared The responsibility of the data warehouse is to simplify
to other statistical data applications. every type of business data.
Companies can benefit from this analytical tool by Data warehouse stores a huge amount of historical data
equipping suitable and accessible knowledge-based data. that helps users to analyse different periods and trends to
make future predictions.
Market Basket Analysis
• Market basket analysis is a Data mining technique used by retailers to increase
sales by better understanding customer purchasing patterns.
• It involves analysing large data sets, such as purchase history, to reveal product
groupings, as well as products that are likely to be purchased together.
• The Idea behind Market Basket Exercise is to analyse the purchases that
commonly happen together
• It works by looking for combinations of items that occur together frequently in
transactions.
• This information can lead to increased sales by helping retailers do selective
marketing and plan their shelf space.
Example
Objective of Market Basket Analysis
Customer Behaviour Analysis
Cross selling and Upselling
Store Layout
Creating Demand
Promote Profitable Items
Marketing Messages
Enhancing Sales and Revenue
Click Stream Analysis
• Click stream Analysis is a Technique of Data analysis use by the organisation to know
the no of clicks made by potential or existing customer on organisation website
information
• A form of Web analytics (see separate entry), clickstream analysis is the tracking and
analysis of visits to websites.
• Clickstream analytics is the process of collecting, analysing and reporting aggregate
data regarding pages a user visits on a website and the order in which they visit them
• The path a user takes through a website is called the click stream.
• Clickstream data contains information such as the URL of each page visited by the
customer, the date and time when the page was visited, as well as how long it took for
the page to load. In the event of negative customer feedback related to the website or
the app – such insight into the customer’s site navigation can be of immense help in
identifying potential causes of dissatisfaction
Benefits Of Click Stream Analysis
• Modification in Website
• Customer Offers
• Identifying customer trends
• Different pathways lead to the same destination
• Preventing abandonment
Personalizing and Collaborative Filtering
• Personalized customer service is one of the keys to a successful business.
• To attract customers and maintain a unique relationship with them
personalization plays a key role.
• A happy and satisfied customer will not only repurchase from you, but will
also market your product to their friends and family, ultimately benefiting
your business.
• When the customer service is personalized the customer feels more
connected to your company
• Hence, it’s important to personalize communication for improved customer
relations.
Characteristics of Personalization
• Know your Customer
• Customer Data
• Behaviour Prediction
• Personalized Experience
• Making the customer Realize
Collaborative Filtering
• Collaborative Filtering is a method of recommending products or services to
visitors are recorded on the basis of online purchases made by them
• Collaborative filtering allows the company to customize offers, products
and services offered to the customers based on their connection with
certain classes
• Collaborative filtering uses algorithms to filter data from user reviews to
make personalized recommendations for users with similar preferences.
• Collaborative Filtering Involves The following Three Steps
I. Buying behaviour of customers
II. Classification of customers
III. Based on the Information product suggestion are made to the visitor
CRM