Magazine article CRM Magazine

Making Use of Analytics: Gartner Analysts Offer Tips on How to Use Business Intelligence

Magazine article CRM Magazine

Making Use of Analytics: Gartner Analysts Offer Tips on How to Use Business Intelligence

Article excerpt

Analysis is an increasingly important part of CRM, yet it's misunderstood by many executives, according to Gartner analysts at a recent Gartner BI conference. Companies often fall short in their analysis attempts because they're unsure how to start, how to determine what should be measured, or whether or not data mining is required. Part of the problem is that the growing number of automated channels provides exponentially more data. The data is growing faster than the ability to analyze it--and the ability to analyze it is growing nearly twice as fast as the ability to use that analysis to aid CRM efforts.

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"What is needed is a bottom-up approach to analytics, which begins by identifying the desired decision and then works back to the analysis that will drive the decision and the decision that will drive the analysis," said Gareth Herschel, an analyst at the conference. Herschel recommends that companies look first at analysis that helps with reporting on various areas of profitability (e.g., customers, products, channels) before adding management analytics, then predictive analytics. The top of what Herschel calls the hierarchy of CRM analysis comprises surveys, customer experience management tools, and focus groups.

A small amount of customers (25 percent) will continue to account for more than 75 percent of business profitability, according to Herschel. Therefore, businesses should consider the different types of customer value, which should influence the corporate strategy and tactics used for managing customer relationships. If the business strategy is more focused on current customer values, the company should focus on the value of the existing relationship and on market value (total spending in a specific category), according to Lee Geishecker, an analyst at Gartner. …

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