Analytical CRM – term definition

Analytical CRM (Customer Relationship Management) denotes the systematic electronic analysis of collated customer data. Customer data is defined as contact data, customer properties and information derived from both online and offline behavior. Market research data is collected and analyzed just as customer behavior is analyzed with respect to the shops they enter and the purchases they make. Contrary to operative CRM, analytical CRM focuses on the exact analysis and enrichment of all data. This means that data is not just collected, but runs through various processes to glean valuable information.

The most important components of analytical CRM

As a rule, analytical CRM consists of the following components: the data warehouse, a data mining module and OLAP tools (online analytical processing). The data warehouse is a type of database which is used for collecting, integrating and preparing customer data. In addition to this basic component, there are a number of tools which are used for data analysis, also know as data mining. Data mining is a collective term used for different tools which analyze large amounts of data automatically resulting in information and correlations. You can form hypotheses from customer requirements and activities using this tool. OLAP represents a complex analytical tool that is used to validate hypotheses derived from previously gathered information.

Goals and advantages of analytical CRM

With the help of analytical CRM, companies can derive recommended actions from large quantities of customer data which would be too much for one person to process. Data becomes information once it has been processed, large amounts of data only carry value for companies when they have been through this analytical process. For example, automatic processes enable analytical CRM to draw conclusions about future customer behavior, customer purchasing power or the customer requirements. As a result, analytical CRM helps you to understand your customers better and improve how sales are controlled. In conjunction with an operative CRM solution, the knowledge gained from the analytical CRM can be used to better target your sales efforts by using exactly those products and communication strategies that suit the group you want to sell to.

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