BEST THINGS YOU CAN DO WITH YOUR DATA

THE 10 BEST THINGS YOU CAN DO WITH YOUR DATA

Follow these 10 steps and you will have information 8. Model and predict profitable loyalty and motiva- that really means something:

tions. Understand your customers. 1. Ensure data quality.

9. Make the right call. Contact each customer, poten- tial customer, and lost customer in appropriate

2. Measure success on metrics that matter.

ways.

3. Enable users to get the insight they need. 10. Keep the data secure from harm, misuse, and theft. 4. Unify data across channels. Eliminate stovepipes.

5. Establish meaningful customer segments. 6. Encourage customer growth.

Source: Adapted from Jason Compton, "The 10 Best Things to 7. Take the bad with the good. Study customer losses

Do With Your Data," Customer Relationship Management,

and bad experiences.

April 2003, pp. 44^7.

485 P A R T 111 ' COLLABORATION, COMMUNICATION, ENTERPRISE DECISION SUPPORT SYSTEMS, AND KNOWLEDGE MANAGEMENT

w h i c h o n e s are ripe for cross selling and what will h a p p e n if prices change. Predictive m o d e l i n g can i d e n t i f y t h e range of products and services that best suit particular cus-

t o m e r s (Sabri, 2 0 0 3 ) . D a t a m i n i n g m e t h o d s ( C h a p t e r 5 ) are o f t e n u s e d ( s e e A n t h e s , 2003; Betts, 2003). Of course, real-time data analysis and reporting applications require accurate data ( s e e R e i m e r s , 2003).

BankFinancial Corp. ( C h i c a g o ) u s e s the S P S S C l e m e n t i n e data m i n i n g workbench

t o predict c u s t o m e r b e h a v i o r s o a s t o accurately target p r o m o t i o n s t o e x i s t i n g a n d potential customers. A n a l y t i c a l f r a m e w o r k s are discussed b y A n t h e s (2003). A l s o s e e

B e t t s (2003). U s i n g d a t a m i n i n g t o o l s i n t e g r a t e d with GIS, o n e c a n e s t a b l i s h c u s t o m e r s ' g e o -

graphical preferences. For e x a m p l e , B e t t s (2003) describes h o w C o g n o s business intel- l i g e n c e t o o l s identified national p r e f e r e n c e s f o r c h i c k e n burgers versus b e e f burgers at R e d R o b i n G o u r m e t Burgers franchises i n t h e U n i t e d States.

Revenue (management) optimization software automates the process of calculat- ing t h e prices b u s i n e s s e s n e e d t o c h a r g e t o m a x i m i z e profits. I t adjusts prices using o p t i m i z a t i o n algorithms ( s e e C h a p t e r 4) that factor in variables like d e m a n d forecasts, inventory, and the economic elasticity of supply and demand. Harrah's usesa Manugistics r e v e n u e m a n a g e m e n t application to adjust r o o m prices in its c a s i n o h o t e l s ( s e e Songini, 2003c).

CRM SOFTWARE O n average, firms s p e n d 2.5 percent o f their annual r e v e n u e o n c u s t o m e r technologies,

half of their overall IT s p e n d i n g ( s e e Guptill, 2003). M y r o n ( 2 0 0 3 ) indicates that the

C R M s o f t w a r e and s e r v i c e s m a r k e t s h a r e i n 2 0 0 3 w a s a $6.7 b i l l i o n g l o b a l m a r k e t . Siebel, SAP, and Oracle are the big three, capturing 59 p e r c e n t of the global market.

C u s t o m e r r e l a t i o n s h i p m a n a g e m e n t s y s t e m s are p r o l i f e r a t i n g a r o u n d t h e w o r l d .

G l o b a l m a r k e t e s t i m a t e s range f r o m a b o u t $ 1 0 billion t o $30 billion b y 2006, w i t h c o m - p o u n d a n n u a l g r o w t h s o f u p t o 9 p e r c e n t . T h e largest m a r k e t p e n e t r a t i o n i s i n t h e U n i t e d States, which will c o n t i n u e t o l e a d t h e global C R M m a r k e t i n overall r e v e n u e and m a r k e t size. A n a l y s t s e x p e c t other regions to h a v e higher p e r c e n t a g e g r o w t h rates than the U n i t e d States. S e e Picarille ( 2 0 0 3 ) f o r details.

T h e t h r e e m a j o r C R M s o f t w a r e v e n d o r s are S i e b e l S y s t e m s Inc., S A P A G , and O r a c l e . O t h e r s i n c l u d e A C C P A C I n t e r n a t i o n a l , Inc., A m d o c s , B r o a d v i s i o n , A s p e c t Communications, E.piphany, GoldMine Software Corp., i2 Technologies, Interact

C o m m e r c e , K a n a Software, M i c r o s o f t Corp., N o r t e l N e t w o r k s , O n y x , P e o p l e S o f t Inc., Pivotal Corp., S a l e s f o r c e . c o m Inc., S a l e s n e t Inc., and S u p p o r t W i z a r d Inc. C R M t o o l s for small- to m e d i u m - s i z e d b u s i n e s s e s are p r o v i d e d by Pivotal Corp., Salesnet Inc., and SupportWizard Inc. ( s e e Callaghan, 2 0 0 3 a ) . For i n f o r m a t i o n a b o u t s p e c i f i c products, s e e the C R M B u y e r s G u i d e a t w w w . d e s t i n a t i o n c r m . c o m , and C R M g u r u . c o m (2002a).

S e e D y c h e (2002) for m e t h o d s o f c h o o s i n g appropriate C R M t e c h n o l o g i e s f o r a n orga- nization. S o m e firms, rather than m a k e major m o d i f i c a t i o n s t o vendors' products, h a v e o p t e d t o d e v e l o p their C R M s y s t e m s in-house. S e e P e n d e r ( 2 0 0 0 ) for details.