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1/5/2015 10:47 AM

Customer Relationship
Management (CRM)
Rahma Anisa

© copyright 2014. R Anisa. All rights reserved.

2 1/5/2015 10:47 AM What is CRM? CRM is the strategic process of selecting customers that a firm can most profitably serve and shaping interactions between a company and these customers. R Anisa. All rights reserved. 2012) © copyright 2014. . (Kumar & Reinartz.

. R Anisa.3 1/5/2015 10:47 AM The Concept of CRM Knowledge: Customer intelligence Firm/Company interaction understanding Customers Behaviors Services Sales/Marketing R&D CRM Finance Logistics Share holder management All Departments End users Desires Preferences Intermediate users Development (Customization) Experiences Needs Characteristics Approach / Offer © copyright 2014. All rights reserved.

.4 1/5/2015 10:47 AM The Importance of CRM Product Performance Service Performance Customer Satisfaction Retention / Loyalty Revenue / Profit Employee Performance CRM plays an important role in the satisfaction-loyalty-profit chain above Source: Anderson & Mital (2000) in Kumar & Reinartz (2012) © copyright 2014. All rights reserved. R Anisa.

5 1/5/2015 10:47 AM Analytical Process Business Understanding Data Understanding • Defining the goal • Select the data Data Processing Evaluation / Validation Data preparation • Data cleansing. select & transform variables Deployment • Implementation and maintaining the model © copyright 2014. R Anisa. All rights reserved. .

. (Rud. All rights reserved.6 1/5/2015 10:47 AM Bussiness Understanding Define the goals In general Attract and retain profitable customers Bussiness goals Translate Analytical Term Descriptive Predictive Targeting models (Methodology) Establish a clear goal and develop a process to achieve that goal. 2001) © copyright 2014. R Anisa.

All rights reserved. .7 1/5/2015 10:47 AM Common Analytic Goals Profile Analysis Segmentation Response Models Risk Models Activation Models Cross-Sell & Up-Sell Models Churn Analysis © copyright 2014. R Anisa.

All rights reserved.8 1/5/2015 10:47 AM Data Understanding • Type of data – Numerical (continous) / categorical (discrete) – Demographic / behavioral / phsycographic • Source of data – Internal: customer database. data warehouse. . offer historical database. © copyright 2014. R Anisa. – External Selecting the best data for targeting model development requires a thorough understanding of the market and the objective. transaction database.

All rights reserved. . R Anisa.9 1/5/2015 10:47 AM Data Preparation • Accessing the data – Classifying data – Reading raw data • Creating the modeling data set – Sampling • Cleaning the data • Selecting and transforming variables – – – Defining the objective function Deriving variables Variable reduction © copyright 2014.

. etc. R Anisa. Clustering Principal Component Analysis (PCA) Segmentation Factor Analysis Artificial Neural Network (ANN) Decision Tree: CRT. etc. Regression Path Analysis Modeling Time series analysis etc. © copyright 2014.10 1/5/2015 10:47 AM Data Processing Summarization Description Data visualization etc. All rights reserved. CHAID.

11 1/5/2015 10:47 AM Deployment • Applying the most efficient and powerful methodology • Building an automated system of the chosen method which can follow latest information • Building integrated information system as a part of CRM process for every stake holders © copyright 2014. . R Anisa. All rights reserved.

All rights reserved.12 1/5/2015 10:47 AM CRM in Retailing Customer-Driven Marketing Fraud Detection and Prevention Integrated Forecasting Localization and Clustering Marketing Mix Modeling Pricing Optimization Product Recommendation Supply Chain Analytics Multi-Channel Analytics & Data Integration Emerging Analytical Trends in Retail (Davenport. R Anisa. Frequensy. Monetary) © copyright 2014. . 2009) Sentiment Analysis RFM Method (Recency.

R Anisa. All rights reserved.13 1/5/2015 10:47 AM Case Study: TESCO vs Sainsbury’s Tesco Sainsbury’s © copyright 2014. .

14 1/5/2015 10:47 AM Tesco’s Campaign Strategy encourage the trade of e-commerce through company website “The First Class Service” “One on Front” service to reduce waiting time at the check-out The Club Card loyalty program Customer Championship “Learn Thinking” concept “Me Time” program for women Magazine which highlights company products © copyright 2014. . All rights reserved. R Anisa.

. R Anisa. All rights reserved.15 1/5/2015 10:47 AM Sainsbury’s Campaign Strategy The Nectar Card Scheme Nectar partnership with strategic alliance strong presence in the social networking websites Company magazine © copyright 2014.

All rights reserved. R Anisa. . customer communications and market research • utilized recent technological innovations • remain attentive to their customers’ demands (Hassan & Parves. pricing. customer acquisitions. customer services. media effectiveness. 2013) © copyright 2014.16 1/5/2015 10:47 AM Recent Trend of CRM by Tesco & Sainsbury’s • initiated loyalty card schemes  generate information on areas: merchandizing. promotions.

. Y-S. Database Marketing & Customer Strategy Management 19 (3) :197-208. Tsiptsis. © copyright 2014. A Comparative Case Study Investigating the Adoption of Customer Relationship Management (CRM) The Case of Tesco and Sainsbury’s. (2009). L. (2012). and Parves. M. . All rights reserved. (2009). and Chorianopoulos. New York: John Wiley & Sons. T. and Customer Relationship Management. Data Mining Cookbook: Modeling Data for Marketing. A.. R Anisa. Cheng. Hassan. and Reinartz. Babson Executive Education. (2001). Berlin: Springer-Verlag. and Guo. Sain. (2009). New York: John Wiley & Sons. Data Mining Techniques in CRM: Inside Customer Segmentation. K. S. Davenport. Customer Relationship Management: Concept. (2013). C-H. Strategy. Classifying The Segmentation of Customer Value Via RFM Model and RS Theory. Rud. Realizing the Potential of Retail Analytics: Plenty of Food for Those with the Appetite. K. and Tools. V. International Journal of Managing Value and Supply Chains 4(1): 1-10. and Chen.17 1/5/2015 10:47 AM References Chen. W. Risk. Kumar. Working knowledge research report.P. D. O. Data Mining for The Online Retail Industry: A Case Study of RFM Model-Based Customer Segmentation Using Data Mining. A. (2012).H. . Expert System with Application 36: 4176-4184.