Week 9 Strategic Relationships and CRM Strategies

Hi friends, I am sorry as I could not post posts timely as I promised. "No excuses". Its been long time since we talked last time. Today's topic is Strategic Relationships and CRM strategies. Understanding of both.

Relationship involving Strategies:

Business is all about relationship and adopting and developing different strategies to maintain and enhance those relationships. But this is business so the main focus to have strategies is to increase profits and growth. There are many theories by which we can learn about business strategies. But I think most important theories are social/relational exchange theory and interaction theory among other theories such as Agency, Transaction Cost theory, Resource Dependency theory.

1) Social-Relational Exchange Theory
Main Base Thinking: Relationship is the social exchange. We are human beings, organizations are run by us. We do business. and thus we create social structure which is very dynamic and complex. Both parties are involving in business because they have some interest and something to exchange and its not just money or transaction. We act as actors, agents and perform some actions to change the social structure. It is both way interaction and influence is imposed on both parties. Effect can be negative or positive in terms of whole social interaction. There are number of examples we can take.

I) eBay product review forum, blog, feedback community: Today eBay is becoming more popular among online buyers/shoppers. With the help of Blog technology, customers having same interest in some products leave feedback for that products on forum, leave feedback for the seller, and it is available to every registered person. and thus the e-commerce strcutre has been changed. Between customers relationships (base: common interest) is basis for forming the business strcutre. while with seller they form both transaction and relationship based strcture. Thus if seller having positive ratings have potential to do more profitable business than negative rating. and remember these ratings are given by users not by eBay company. so sellers main focus is to get higher positive ratings rather than just focusing on profits. Thus it helps in understanding and in improvement in customer relationships.

2) The negative effect can be seen of having community, social, culture relationship structures. Think about a new company wants to sell (gay, lesbian toys, sexual pleasure toys) in Indian (Gujarat state local market). Here customers are different, they have their unique background, culture (i.e. not to accept such gay, lesbian structure and toys). Here there will change from both side. Company might totally fail in first attempt and lost the business. but it creates new relationship structure, change the old relationships with such business. Those consumers might start accepting such things and in long term companies can do long term profitable business. Thus in that environment transaction (money) is not very much important but relationships, cultural exchange is more important and in long term it can benefit company.

Thus those theories are very important to understand business strategies. But question is do companies really follow or adopt such strategy to implement CRM strategies or CRM systems? If they would have followed the path, many CRM projects could have been saved. Those theories help companies to understand their business strategies, explore their CRM strategies based on their Business strategies and gain profits. I think without considering from initial phase, companies can never follow such theory and successfully implement CRM.
In the second example, if companies do market surveys, culture understanding, in understanding customers needs using social-relational exchange theory, they might start with campaign which first change the social structure of Indian consumers, set specific target marketing campaign and then start selling those products. Thus in that case CRM and Business strategies are aligned and beneficial to both customer and company. But today most companies are following other three theories specially agency and resource theory.

Please do leave comments as they are my lifeline for my posts.

Cheers,

"Anki"

Impact Video by Bill Clinton

Hi friends, Its been 4 weeks we are meeting on this beautiful CRM Journey. I hope you are liking this journey.

Today I am posting a video which is not related to CRM or directly related to our study. But I think this is related to real purpose of our education, applying our learning really where needed area, creating systems to help, to create a real 21 centuary universe.

In this video from youtube, as a Winner of Ted 2007, Mr Bill Clinton is talking about Top most problems world is facing like Global Environment, Health, Systems creations, and many more.

The other video is from Algore film. An Inconvenient Truth Trailer

I hope you will learn something from it because it is us who are creating world for our children.

I will post my concern and my learnings from these videos after understanding it very well.

Bill Clinton: Winner of TED 2007.



Algore: An Inconvenient Truth Trailer


Thanks,

Enjoy.......... and Save This Beautiful World....by at least using Public Transport and Not using Plastics... 1 cent can save life.

Anki

Week 4 Data Mining Lecture

Hi friends! I am sure you like my last post about survey done by Oracle and ITtoolbox. I had forgotten to post "The URL link for actual survey" in HTML. So it could not appear but Now I have made it correct.

Yeah I have just finished my lecture and now I am writing post about it. Today's post is very basic and deals with my concern about some terms used in lecture notes.

My concerns:

1) "Data Mining is the process of exploration and analysis, by automatic or semiautomatic means, of large quantities of data in order to discover meaningful patterns and rules" (Berry & Linoff 2000)

2) what is after discovering meaningful patterns and rules? Do we sit back and stop? in regards to Berry and Linoff defintion.

3) Data Sampling is very important for Data Mining...but how to do sampling?

4) Who will "Decide" the success and validity of "the" Model.

5) Will "Automation" replace Human Involvement.? Is it a risk? Who will take responsibility?

My Views/Opinions

1) What Can you understand by reading the definition given by Berry and Linoff. I have some questions regarding this definition. Data Mining is Automatic process? Is it Semiautomatic? Do we have to have Large Quantities of data to do Data Mining? Do we sit back and stop after discovering Meaningful Patterns and Rules?
I think Data Mining is not the only automatic process. It can not be only automatic process. It is mixer of "Automatic" and "Manual (Human Involvement)" process. And thats why I used Red color for that term. Yeah you can say semiautomatic because it involves both "automatic" and "Human-Manual". If any one of you find or have come across Fully "Automatic" Data Mining Process please contact me.
Large Quantities of data? I think they wanted to say it differently but some how had put words differently. Based on their definition I interpret that they are saying that we are doing data mining on Large volume of data. It might be that I am wrong in interpretation. But if I was correct then I think we are not using Large Quantities of data for data mining. Because we are performing data mining on "Selected" (sampled) data sets. and this sampled data must be small compared to whole (full) organizational data you have relevant to your business problem. So I think what they wanted to say is that Organizations have large quantities of data and then they perform data based on selected data relevant to their problem. But again they have not used the word "Selected" "Sampled" "relevant" in their definition any where.
I asked the same Question to our lecturer and He said same thing that yeah there is debate going on whether it is "Automated" or "Semiautomated".

I my opinion Data Mining definition should be:
It is the circled process of going through data (whatever we have everything), finding relevant data (adding some relevant data during process), taking out most relevant data (sampling) (human + machine), discovering patterns and rules and based on that, predicting "future" patterns and rules which will add positive value(Money or service) to business. Whole process is relevant to our business problem.
It is time to explain my definition. Take a example of "Predicting sales of televisions for Next Cricket World Cup four countries India-Pakistan-Australia" for a company called "TV4you". Now this company might have data from all sources like ICC(-International Cricket Council), internal data (Data warehouse+Employee views) , external data. They should go through each data and find relevant data, then they will do sampling and discovering pattern and rules for sales during cricket world cup in those countries and they can predict "future trends and patterns" for the TV sales in those countries. It might be at Individual customer level or may be general at country specific. If Data Mining is used for CRM purpose it should be at Individual Customer Level.

2) Berry and Linoff said about discovering rules and patterns. But What is then? They have not said about Predicting future rules and patterns. I think The main purpose of doing Data Mining is Predicting Future based on what we have now. In what area we can step in or increase our business value.

3) Sampling is very Important in data mining. But how we are going to do it? Is it fully Automatic process. Is it involving Humans? What are meta data for sampling process? I think sampling should involve both Humans and Machines. It can not be only statistical or automatic machine based process. Business must have "at least" good statistics and business employee skills for sampling. And thus it suggests overall organizations success depends on person who does sampling for data.

4) Validating model is very important. But who will decide that "The" model is "valid" and "successful" now. Is it only automatic process based on previous models? or Does it involve Humans? I think without human support validation is not possible. It is a subjective area.

5) Will "Automation" replace "Humans"? Is it risk? Responsibility? Now a days many data mining organizations are taking about fully automatic data mining. I concern that is it possible to do fully automatic data mining? I think no it is not possible. In case it is done then I think it will be very risky to do that. Data Mining is done for businesses and after all businesses are running by ourselves, for humans (customers) , to make money (value, service: Subjective to us). So how "Machine" "Automatic Processes" "Rules and Patterns" only three will decide about future trends and patterns and customers. Yeah certainly they can help us (Humans") to look where we can not look or discovered yet by our eyes so far but certainly they can not predict alone. And in case we got "automated" data mining tools then who will take responsibility if business looses value based on its prediction? will it be "developer" "client (at a business level) " "vendors". Here I said at Business Level because no employee is directly adding any thing into data mining. And thus business can not blame your marketing statistics person for sales drop or business loss in cricket world cup match if he has not given his opinion or any input during any stage of data mining process. .......oh I remembered, Managers (business) can blame Indian Cricket team for TV sales drop in India during Cricket World Cup 2007. And by the way from decision support systems (About Managers, Managerial Decisions, How they take decisions) I can say Managers trust Employees Gossip about Sales Prediction rather than Computer generated data. If employees are confident enough while saying predictions to their managers (management), they understand yeah their business will sure earn money or will increase their value or services. If they are not, then they will consider both (Employees and Machines) plus their experience and then will develop prediction satisfying all three sourcing all together. (Middle solution)

Any ways I have been talking too much now.....I think I should stop now and you should take rest now...

Catch you later sure..Cheers!

Thanks,

Anki

CRM business Impact Survey

Hi friends, Sorry for no post in last couple of days....yeah busy with my Girl Friends..no one else but "Assignments".

By the way I was looking for Information on CRM business impact and I found this interesting survey done by ITtoolbox sponsored by ORACLE. Thanks to both of them I put some of results and describe them in my words.

Survey Time Duration: 28 February- 18 March 2007.
"This survey included specific questions such as:

• Has implementing a CRM solution improved your organization's overall business performance?
• How has CRM improved your overall sales / marketing / service / analytic performance?
• What kind of CRM deployment option does your organization use?
• If your organization has plans to expand CRM, which area(s) of the business does your organization plan to expand to?"

38% have implemented a CRM solution for over 5 years; over 68% have implemented a CRM company wide and over 69% have indicated the CRM solution has improved their organizations� overall business performance

Other findings include:

• The most commonly implemented CRM solution amongst partints in the survey is an Oracle-Siebel solution
• The top two sales drivers behind CRM implementation are improving sales pipeline visibility and improving cross sell/up sell.
• The top two responses as to how marketing performance was improved by CRM are improved lead tracking and lead follow up.
• The majority of respondents use an on-premise CRM solution.

How long has your organization been using CRM?

Figure 1: Length of CRM use

Is CRM used at the departmental level or company wide?

Figure2: Scope of CRM

Has implementing a CRM solution improved your organization's overall business performance?

Figure 3: CRM Impact

What was the key sales driver behind your organization's decision to implement a CRM solution?

Figure 4: "Reasons to have CRM"


Does your organization have plans to expand CRM to other areas of the business?

Figure 5: Future Expansion in CRM?"

If yes, which area(s) of the business does your organization have plans to expand CRM? (Choose all that apply)

Figure 6: "Where to expand CRM?"

Reflection:

Figure1: If you observe figure 1 very well, You must have noticed that Only 38% companies are using CRM more than 5 years. Rest of companies are still less than 5 years of CRM use. What I can intrepret is A) Either companies fail to recognize the fact of customer centeric approach in initial phase when over technology was growing. CRM coined in 1990. Internet and other technology was growing then after. But now it is 2007. After 17 Years of still 38% companies. Middle 3 graphs shows many companies are now 2 to 3 years of CRM use. That means in future they are going to develop more into CRM. What about 2.7% companies? Will be they still at Dont Know Approach..even if they have implemented CRM somewhere in their company structure.? Where will be OLD CRM companies after 15 or 20 years of CRM use?

Figure2:
68% companies said they have implemented CRM company wide..that means They understand to be successful in CRM area, You need to be focussed as a whole company wide. But still 3.4% companies still do not know which level they are after 17 years and Huge Technology development, awareness. There should be possibly three answers: Companywide, Deptwide or No Implementation At all. I am not sure whether survey used "Right" or "Wrong" word saying companies response as "Don't Know".

Figure3:
Surprised figure of 69.70%. Its amazing, isn't it? I doubt whether this much success factors are possible..Think about your last experience of Customer Service from "Well Known" "Big" "More than 5 years CRM use" company and look at figure again..and analyze it. I think as it is shown 22.1% companies do not know their improvement, many companies are still under such situation. Companies can not say we are successful after 2 to 4 years of CRM use (20.5+19.9 = 40.4 %) . The Surprised Figure should be less or near to 50%.

Figure4:

I think these graphs are pretty consistent and I think results are based on "Particular" organization's business and business precesses.

Figure5:

Wow 25.7% organizations do not know whether they are going to expand their CRM to other areas of business? True reality of business. Initially business thought yeah, CRM is very Important for our business..they started out CRM implementation as department wide (that means within 28.30% companies) and then either they have lost their path to go along with CRM, or Tired of CRM, Got burned by implementing CRM (but think about CRM success result 69.7%) (see very doubtful). 23.6% said No they will not..why? Might be same reasons as I said in last couple of sentences.

Figure 6:
Here they are good and I think thinking in right direction...First and Most Important they want to improve their Customer Service and Call Center Service..then they will improve their Marketing area and make it more strong and then it will bring sales to company. But what about Others 28.20 %...will it be.....I can not think about areas now..but will find it our sure..

Above are just my analysis and reflection to the survey..I really appreciate their work and looking for more research..You can read whole article on ITtoolbox site but you have to register your self..and its free...so far..May be their are More than enough "Customer Centric". The Article is here on: ITtoolbox CRM Business Impact Survey

Any way guys I will miss second train for writing this Post...now will do some newspaper reading till the next train which is about Half Hours later.

If you want to read and if you can read my mother tongue (Gujarati) newspaper then this is the site www.gujaratsamachar.com It works better in Internet Explorer..I think no need to install Gujarati Fonts in IE.

Thanks....and.......Enjoy

Anki

CRM Process

Hi friends, in last post we talked about areas where we can use CRM. In this post we will see how the CRM process works. Now CRM process means getting raw customer data from source....processing it...converting it into desired format....and use it for analysis and decision...finally to make profit.

1) Customer Data Collection:
It looks simple task but actually it is very hard task...like data warehousing data collection process. Here you have many source systems like touch points (Customer-Business Unit Interaction Points), external source like (Government, marketing, research companies), Business Operational Systems, Forms and other reports. all sorts of customer data source.

2) Integration:
Integrate sourced data for your special purposes,,,in a single, central repository system--Customer data warehouse..integration will be very hard and time consuming. I am not going in depth of Integration and properties of integration.

3) Analysis
Careful and meaningful Analysis of customer database is very important, If we have customer database,,,but do not have "Specific"purpose on which we analyze customer than there is no point of having Analytical CRM. There are certain OLAP tools are available which make little bit easier for us to Analyze and interact with customer data...in a multidimensional views.

4) Actions
What will be actions? Marketing..not just blind marketing but Spot on Goal based marketing campaigns. Better strategic decision making..for the long term customer relationships, new products for each customers (We learned that each customer is unique and have unique needs after careful OLAP analysis. ) and most important action..we might develop "Closed-Loop"CRM.

It sounds like very simple and theoretical but actually it is very hard to do actually in the business.

I love comments....yeah BAD or GOOD....

Anki

Analytical CRM where to use?

Hi friends, well come again in the Analytical CRM Journey.

In last to last post: Analytical CRM we saw little about Analytical CRM. Some of you feel little strange but I am learning to make my self clear and I will come up with my views.

Meanwhile while looking for CRM use, I was looking where we can apply Analytical CRM?

DM Review Magazine article by Ron swift explores area where we can use Analytical CRM.

1) Value Segmentation of Customers:

Yeah business is all about making money. Now your customers are valuable to your business. so Analytical CRM is very helpful in finding out those valuable customers, Analise their buying pattern, their behavior for products and services, their end requirements, customers who are not more valuable and reasons why they are not valuable to company? These are some basic questions which can provide in depth analysis for value segmentation of customers.

2) Pin-Point (Spot-On)Direction

After reaching to value segmentation it is our job to show them pin-point (Spot-on) direction (this is the direction where we want our High Value Customers or Potential High value customer should be directed to) (i.e. In Hotel Resort Business To current limited area service taking potential high profit customers: offer them luxurious service by which in long term they become our High Profitable customers) to our business where business can make more profit and increase profitable customer base. For that we need to create target based marketing campaign which can attract profitable customers in accurate direction. Now choosing this direction is very difficult but not impossible with the help of knowledgeable marketing people.

Above are some of areas where we can apply Analytical CRM. It provides Unique Version of customer data thus Unique view of customer and like Data warehouse Unique truth of customer database for the business.

My Birthday

Hi, Friends. Below is my 23th Birthday celebration. Yeah first time in Melbourne. Last birthday celebration was in India, in Plane, as I came here in Melbourne on my Birthday. So great thing is Today I completed my 1 year in Melbourne. Yeah I enjoyed in Melbourne. Studying at Monash University is great experience and I am currently enjoying it. Its been beautiful time since I came here. Its my home where I live with my friends. We celebrated at 12 AM. Yeah sorry for my dress, I was in Pajama and T Shirt. You can see and come to the party for my Birthday celebration by clicking the below link.
http://www.youtube.com/watch?v=0yr9lq60Wdc

Or Below is embedded Video of my Birthday Celebration.



Thanks,

Anki

Analytical CRM

In the last post I talked about Q "What is CRM?" In this post I am talking about Analytical CRM. I was shocked when I saw Three general types of CRM. Analytical, Operational and Collaborative CRM. I gave you reason for my shock at the end of talk. Analytical CRM: Analytical: It is the thing which requires our thinking to find the required status. Now Analytical CRM analyze the customers, customer data, what they like and dont like, it adds more analysis and then create a virtual wall which creates partitions in customers...now customers become segmented customers for company...these segment can be based on age, gender, living location, profitability, income of customers..To be more successful in it, we use different tools to use customer data base and find the solutions.

Now answer for my shock...as we have seen analytical CRM differentiat customer base but as we have seen the main philosophy behind CRM, no different in customer base. Thus analytical CRM is breaking underline pillars of CRM.

What is CRM?

As part of my course I have taken unit called CRM Systems. I am totally new in this area from technological aspect and deep understanding of CRM. so I started reading from scratch.

First of all I went through different websites, wiki, vendors like SAP, and forum such as ITtoolbox and my unit lecture slide. Now I could not find a single most comprehensive ans for the Q like What is CRM?

My Lecture slide says it is a strategy for getting and retaining "Profitable" customers. But when I looked at the case study: Get Inside the lives of your customers from Harvard Business Review I think three companies (they have taken case studies for three different companies) understand CRM as a tool to manage relationship with customers, They have developed customer based scenario to make their CRM philosophy successful. And based on reading I think to be more successful in Customer Relationships and Management of it; Company's Superiors must put their best efforts. In all cases CEO or superior level was behind the success of CRM. From SAP AG, 2001 Analytical CRM: White Paper I also discovered companies not see CRM as a strategy for getting and retaining "Profitable" customers. But actually see it as a fundamental philosophy to provide successful management in customer relationships.

From my point of view: CRM: Customer Relationship Management: It involves main three pillars; Customer; Now here we are considering customer as a whole customer; There are no categories, levels of customers like Profitable; Unprofitable, bad or good customers. Relationships. Now Being in a business sometimes company becomes customer (service receiver) or Provider. So relationships are much more important, not only for business but at personal and social level also. Management: You as a person and Company as a whole have to manage relationships while performing role of Customers or providers. In short CRM means it is the reaction of company (company's goal, aim and future direction) in response to customers preferences and opinions. Company which learns and adopts it quickly will be at higher level.

I do not know whether you agree or not with my views but please feel free to refine or guide me at any stage of this lovely CRM journey.