15- Customer Loyalty

Introduction:

By failing to make that crucial second phone contact or house call, the service provider loses many potential consumers right at the start of the client acquisition process. Suppose customer acquisition is more expensive than customer retention. In that case, the service provider should make an all-out attempt to reduce the cost, expense, and effort of customer development to develop a profitable customer base.

More information on the target market: This is a list of current and future customers for a service company. They are unquestionably the primary cause of the company’s existence. They consume and experience the firm’s many service offerings while generating the necessary income to make it profitable. The service firm’s communication, service method, and delivery are all aimed at them.

The consumer is the most appealing attribute for focusing the service marketer’s activity. The service marketer should focus on the service transaction process, not on hooking the consumer and turning the encounter into a successful sales transaction, but on entirely satisfying his demand. Long-term connections should be built by the service marketer, resulting in repeat interactions and successful customer retention. When an insurance salesperson (or ‘advisor,’ as the current nomenclature goes) makes his ‘pitch,’ he wants to sell the products that will pay him the most commission. The advisor’s job is to conduct a critical need analysis of the customer and then give him options that fit his current and future budgets. The advisor should also remember that the customer’s demands will evolve, and there will always be opportunities to sell the consumer more items. As a result, he should adjust his focus from a single transaction sale to creating long-term relationships.

Many service organisations subjected to monopoly and control regimes lacked customer orientation and instead pursued transactional goals to meet short-term aims. This approach was more straightforward and required less effort on the service marketer’s part. However, many people realised that acquiring clients and acquiring more was becoming prohibitively expensive. It was less expensive to implement successful client retention methods.

Influencing Customer Perceptions and Expectations:

His impressions of the provider strongly influence a customer’s decision to acquire a service. As a result, service organisations must research to determine the factors influencing client views. Service organisations should build strategies to impact customer perceptions and attain higher levels of customer satisfaction based on these variables. The tactics listed below will assist service organisations in influencing client perceptions:

1. Service encounters: 

Service organisations must recognise that service encounters are critical in determining whether consumers are satisfied or dissatisfied. To increase customers’ satisfaction levels during service encounters, service organisations should innovate new ways to deliver their services. Furthermore, service organisations should train their personnel on how to recover from a service failure, provide flexibility in service delivery, offer ideas on being spontaneous, and aid them in dealing with tough consumers.

2. Reflect evidence of service:

Customers frequently try to examine the service evidence using concrete clues such as the service organization’s personnel, processes, and physical proof before purchasing. They assess the service organization’s employees’ friendliness, procedural understanding, and eagerness to assist consumers. Customers also consider the processes’ adaptability and the physical evidence regarding ambience and layout. Organizations should recognise these indicators’ importance and attempt to represent proof of their service regarding people, processes, and services supplied.

3. Communicate and create a realistic image:

A service organisation should correctly communicate its promises and follow through on them. This will give the company a positive image in the eyes of its customers. In the minds of current and potential clients, word-of-mouth publicity about a firm can build a positive or lousy picture of it. Customers who have had favourable experiences with the company will spread good word-of-mouth publicity. In contrast, those who have had negative experiences will spread bad word-of-mouth publicity to ruin the company’s image. As a result, it is critical for businesses to be realistic when making promises to their customers. They should refrain from making extravagant statements that could harm their company’s reputation in the future if they fail to deliver on their promises.

4. Quality and value through pricing:

Customers frequently use price as a criterion for determining the worth or quality of a service. Customers are unsatisfied when they believe the service they are receiving is not worth the money they are paying. These disgruntled clients will spread poor word-of-mouth, which can harm the service provider. As a result, service providers should use a pricing approach that reveals the genuine worth and quality of the service.

Relationship Marketing: Ladder of Customer Loyalty:

The long and short of it is that the secret to as intangible an offer as services is creating relationships with the consumer (who, incidentally, is NOT interested in having any extra bondage!) and marketing for it. As the following sections will demonstrate, various consumers require different types of partnerships.

From acquisition until retention, the customer’s relationship with the service provider changes. At first, the relationship is one of perspective, of mutual assessment. Once they choose each other, the service provider re-designates the prospect as a customer. He has a lot of promise, and there’s a lot of room for them to grow together in a symbiotic way. A more in-depth examination of the client’s needs is conducted, and the customer reciprocates in the provider’s strength-weakness study for his range of services.

The customer begins to trust the provider, and he is classified as a high-net-worth individual by the supplier. The customer transforms into a client. The service provider now owes him special and tailored attention. With a stronger relationship, he becomes an unpaid salesman for the service provider to varied degrees. He goes from being a supporter to becoming an advocate for the firm, recommending it to everyone looking for a reference. He frequently offers unsolicited eulogies to the service provider. In other words, he is so ecstatic about the service that he has transformed into a missionary! That’s what you’d call a successful service marketing campaign.

Transaction Marketing vs Relationship Marketing

Transaction Marketing	Relationship Marketing
Focus on single-sale	Focus on customer retention
Orientation on product features	Orientation on product benefits
Short timescale	Long timescale
No emphasis on customer service	High customer service emphasis
Limited customer commitment	High customer commitment
Moderate customer contact	High customer contact
Quality is primarily concerned with production and not marketing	Quality is the concern of all

The figure illustrates a flow of relationship factors affecting business performance in a very large number of service sector firms

Simultaneous with the development of solid relationships, the expectations of customers and all stakeholders start rising rapidly, and the service firm is expected to come up to their soaring expectations to vindicate their promises to all customers. Each of the stakeholders and each of the customers of the six-market model have expectations that are different from each other. The firm is now six times challenged – to build and hype up expectations, bond relationships, and retain customer loyalty by meeting those expectations to the maximum extent possible.

Customer Retention through Relationship Marketing:

For a service firm, its marketing philosophy should be:

• To acquire customers
• To retain customers
• To do business with only profitable customers

Getting new clients is more expensive than keeping old ones. However, in a period of increased competition and declining client loyalty, customer retention becomes a difficulty. According to several studies, client acquisition is five to ten times more expensive than customer retention.

The leaking bucket theory states that if all other factors remain constant (firm size, service offering, pace of customer acquisition, etc. ), a company with half the customer leakage of a competitor will have double the market base in fourteen years. In other words, if two service organisations want to serve the same market but have differing client retention capacities, they’ll need to acquire customers at different rates or in different volumes. Customer retention will need the service firm with superior customer retention to recruit fewer customers than its competitor, incurring lower costs while fine-tuning to focus on high transaction, high profitability, and low-maintenance cost clients. It emphasises the significance of relationship marketing in an intangible industry like services.

It would be difficult and impractical for a service company to be all things to all people; instead, it should focus on the customers who generate the most revenues by providing the highest levels of customer satisfaction. This segmentation will assist the service firm in making the most of its limited resources and achieving a higher Return on Capital Employed (ROCE). To survive and thrive in the service industry, the company must identify its strengths and capabilities, identify profitable customers, and work hard to keep them.

Customer retention is a wise business decision. Various studies have shown a strong link between customer happiness and profitability, just as between client retention (also known as customer loyalty) and profitability. The service-profit chain is a model that explains this.

The Service-profit Chain Model:

The ‘service-profit chain’ model is based on the following seven theorems.

1. Profit and growth are linked to customer loyalty.
2. Customer loyalty is linked to customer satisfaction.
3. Customer satisfaction is linked to service value.
4. Service value is linked to employee productivity.
5. Employee productivity is linked to employee loyalty.
6. Employee loyalty is linked to employee satisfaction.
7. Employee satisfaction is linked to internal quality of work life (internalising the firm’s brand).

The service-profit chain model has limitations that must be considered before adopting it wholeheartedly. The limitations of this model are:

• The relationship between satisfaction and loyalty is not always linear.
• The relationship depends on the type of industry. It is very strong in industries where the customer’s choices are very high and customer migration is possible; it is weak in industries with monopolistic competition (utilities, public transportation, government / public service, etc.).

Benefits of a successful customer retention programme:

1. Customer retention is cheaper than acquisition (see The Leaking Bucket Theory above).
2. Reduces communication costs for customer acquisitions like advertising and other promotions.
3. Loyal customers make repeat purchases, reducing marketing costs but increasing revenues.
4. Loyal customers avoid substitutes and other competition and perform repeat purchases even if the service’s price is higher, increasing revenue and profit.
5. Satisfied customers who metamorphose into ‘advocates’ or ‘apostles’ perform the role of unpaid salesmen, promoting the service of their own free will.
6. Repeat customers are less expensive to serve than first-time customers, as they are well aware of the offer and do not require customer support, education, guidance, or training.

The service firm tends to lose all future revenues from its banks of loyal customers (who are a profitable segment) if such loyal customers switch to a competitor. Research in the field has identified strong relationships between loyalty (retention) and increased customer net present value. An increase of 5 percent in retention rate by a service firm increases the net lifetime profits from the customer.

The Cycle of Capability:

Measuring and sustaining service quality reduces variability and increases consistency in service delivery and the firm’s overall competence. This has a significant and favourable impact on employee satisfaction, significantly reducing attrition. The higher the loyalty factor, the lower the training expenses and the greater the productivity and quality of the output. The last two contribute to increasing the bar for performance and maintaining and upgrading it, which will impact the company’s competitive advantages, positioning, brand value, and profitability.

Customer Loyalty:

“Customer satisfaction is worthless, customer loyalty is priceless”.

Service marketers have valued customers more than acquiring new ones. They have attempted to enhance consumer loyalty through trial and error—primarily the latter. The customer was one step ahead, forcing them to do additional second-guessing. He maintained a cussed demeanour, an enigmatic demeanour, and a never-ending demand.

Satisfaction gauges a customer’s sentiments, which are primarily transitory, passive, and benign and indicate a low level of connection with a company. True advocacy is achieved when customers believe one or more parts of a customer loyalty programme or other customer-focused actions and initiatives have provided the desired value.

The goal is to establish a relationship between performance-based attitudes and the activities and behaviours associated with future purchases and referrals.

The following are the three key metrics for every effective loyalty programme:

• Overall performance,
• Likelihood to repurchase,
• Likelihood to

What Affects Customer Loyalty?

The degree of customer loyalty depends on attitudinal loyalty and behavioural loyalty.

Factor Affecting Customer Loyalty

Features of a successful loyalty scheme:

1. Customers must perceive added value.
2. It must be mutually beneficial.
3. It must reward increased spending, e.g. British Airways ‘Executive Club’ programme, where more spending leads to more privileges.
4. Communication: it provides names and addresses of prime customers who can be targeted for future schemes/offers, etc.
5. Cost: The organisation should bear the cost, not the customer. However, entry barriers may exist, like initial purchases to enter the scheme.
6. Multi-site: the scheme/loyalty card must be usable at any branch/anywhere.
7. Multi-organisation: A card from one organisation is usable at another. For example, the British Airport Authority’s (BAA) loyalty scheme allows customers to collect points based on purchases at a wide range of retail and food outlets in the airports controlled by BAA.
8. Ease of redemption: Customers should be required to make minimal effort to redeem their rewards for goods. Technology, such as computer-readable loyalty cards, can aid this.

Components of CRM:

CRM consists of three discrete components:

1. Customer,
2. Relationship, and
3. Management

By wisely integrating these three aspects, CRM aims to establish a “one integrated perspective of customers” and a “customer-centric strategy.”

• Customer: The customer is the only source of the organisation’s profit and growth. On the other hand, an excellent client who generates more significant profit with fewer resources is constantly in short supply since customers are well-informed and competition is severe. Because buying decisions are typically a collaborative activity among participants in the decision-making process, it can be difficult to tell who is the genuine consumer. Customers can be distinguished and managed with the help of information technology. CRM stands for customer relationship management, a marketing strategy based on customer data.
• Relationship: A company’s customer relationship entails constant bi-directional communication and involvement. Short-term or long-term relationships, continuous or discrete relationships, and repeated or one-time relationships are all possibilities. Relationships can be behavioural or attitudinal. Customers’ buying behaviour is very situational, even if they have a favourable view of the company and its products. For instance, whether a person buys aeroplane tickets for a family holiday or a work trip affects their purchasing habit. CRM is the process of managing a relationship to make it profitable and mutually beneficial. CLV (Customer Lifetime Value) is a metric to assess this connection.

The Frequent Flyer Program is one-way airlines develop their connection with their customers and reward their loyal customers. A frequent flyer programme is an airline’s incentive scheme to reward passengers for their loyalty. You earn free miles as a traveller for the miles you fly on a specific airline. The idea behind frequent flyer programmes is that airlines want their passengers to stay with them for a long time. Getting new customers is far more expensive for airlines than keeping the ones they already have. So, how do you get rewarded? The more you fly with them, the better your rewards will be.

It all began in 1981 when American Airlines launched the Advantage programme. Their goal was simple: to thank passengers for flying with the airline and encourage future loyalty. The campaign was started with the help of America’s customer database. They tracked the number of kilometres flown by the members and devised a reward system based on “a mile earned for every mile travelled.” American also includes Hertz rental cars, and Hyatt hotel stays in the programme to round out the options available to travellers. It was a huge hit right away. United Airlines launched its Mileage Plus programme shortly afterwards and upped the ante by offering a 5,000-mile “enrollment incentive”! The other big domestic carriers quickly followed suit, as expected.

• Management: CRM is more than just a function of the marketing department. It entails a constant shift in organizational culture and practices. The gathered consumer data is translated into business knowledge, which leads to operations that capitalise on the data and market prospects. CRM necessitates a significant shift in the organization’s culture and personnel.

Customer relationship management (CRM) encompasses everything from customer acquisition to customer retention and delight. The following are crucial steps:

1. Determining who the right consumer is: The idea is to segment your customers correctly. Many marketers have failed to recognise that traditional segmentation strategies and theories must be drastically revised. The criteria for segmentation must shift away from traditional demographic/psychographic segmentation and toward need-based behavioural segmentation. As a result, the right target customer will be defined correctly. The traditional segmentation criteria are losing their relevance as the client evolves, necessitating this paradigm shift. Consumer behavioural variables are more relevant and actionable, allowing for more precise targeting. As a result, marketers can use high-level consumer behavioural characteristics to design viable business models and separate themselves from the competition.
2. Retaining the right customer: Measuring customer profitability is critical. Customers’ return on investment (ROC) should be measured on at least three dimensions: frequency of purchases, transaction value, and profitability. Customers who score low on all three dimensions require the most minor focus, whereas customers who score high on all three require the most. Customers who fall between the two extremes must be carefully examined to determine the level of emphasis required for each segment. Marketers must establish systems and processes to keep track of these dimensions (which can be very simple formats and do not require capital-intensive ERP systems). The identification and sizing of these clusters can aid in the development of appropriate customer-group strategies.
3. Customer delight: In their efforts to please the customer, many marketers lose sight of the bottom line and unknowingly destroy business profitability. Marketers must create compelling value propositions in the form of better products and services to ensure that their strategies are both customer-centric and profitable. Customers should not be served at the expense of the company’s bottom line.

Specific software to support the management process involves:

1. Field service,
2. E-commerce ordering,
3. Self-service applications,
4. Catalogue management,
5. Bill presentation,
6. Marketing programs
7. Analysis applications.

All these techniques, processes and procedures are designed to promote and facilitate the sales and marketing functions.

CRM Business Cycle:

Acquisition and Retaining: To create a customer connection, you must first acquire them. Prospects, inquiries, lapsed customers, past customers, competitor’s customer referrals, and existing purchasers are likely to be the focus of an organization’s customer acquisition efforts.

Recognize and Differentiate: Organisations cannot understand customers unless they learn what they value, what kind of services are important to them, how and when they like to connect, and what they wish to purchase. True comprehension requires a mixture of deep examination and interaction.

Several activities are essential:

• Profiling to learn about demographics, purchasing habits, and preferred channels.
• Segmentation is used to identify logically distinct groups of clients with similar appearances and behaviours. While one-on-one marketing sounds appealing, few businesses have perfected the skill of treating each customer as an individual. A good way to start is by identifying actionable segments.
• Conducting primary research to determine needs and attitudes.
• Understanding profitability, lifetime value, and long-term potential requires customer valuation. A customer’s ability or desire to recommend additional profitable clients can also be used to determine value.

Consumers need to see that the organisation distinguishes between service and communications based on what they’ve learnt on their own and what they’ve heard from customers.

Develop and Customise: Companies used to develop products and services and expect people to buy them in the product-focused world of yesterday. Product and channel development must follow the customer’s lead in a customer-focused world. Based on customer wants and service expectations, businesses are increasingly generating products and services and new channels.

The decision to order full-scale production and launch a product is taken during the commercialization stage of the product development process. The process or cycle of introducing a new product to the market is known as commercialisation.

Interact and Deliver: Interaction is also essential to a good CRM strategy. Customers connect with many different sections of the organisation, including distribution and shipping, customer support, and online, therefore it’s crucial to realise that contact doesn’t just happen through marketing and sales channels and media. Organizations will be equipped to steadily raise the value they give to clients if they have access to information and adequate training.

Customer Relationship Analytics:

The following are some of the analytical components of Customer Relationship Management:

CRM’s Bottom Line: Get to Know Your Customers:

CRM was used by companies even before CRM technology existed. Customers’ requirements are now tracked using databases and automated tracking techniques. Operational and collaborative CRM covers the nuts and bolts of this process: communicating with customers, managing the process, and exchanging activities with multiple channels and trading partners. Analytical CRM is a decision-making platform incorporating client data from numerous channels into a single system. The many components of CRM systems — call centres, customer service automation, marketing automation, and sales automation – are examples of such channels.

Rather than using multiple systems as in the past, the new model focuses on an integrated approach with a single program encompassing ERP operations, sales automation, service management, and marketing automation capabilities.

Returns:

CRM system implementation is typically a time-consuming and costly process. Despite spending money on CRM projects, many businesses have been unable to determine what type of return on investment they receive with their systems based on anecdotal data. When you add the possibility of a CRM programme failing, you can see why managers are apprehensive about the process until it starts yielding tangible results.

The issue is that over half of all planned CRM installations are centred solely on technology initiatives, leaving metrics, behaviours, and procedures unaddressed. While many database and CRM systems today can acquire client data, they cannot make it relevant or improve customer relationships.

Incorporating Knowledge into the Process:

Customer relationship analytics, often called analytical CRM, makes sense of the mountains of data generated in CRM systems, databases, and transactions. In many circumstances, if the data is accessible, no CRM system is required to generate a thorough customer study. Customer relationship analytics tools can give marketers a 360-degree perspective of their consumers, allowing them to comprehend better what they’re saying, who they are, what they want, and, most crucially, what they might do in the future.

Instead of relying on anecdotal evidence, these systems allow for fact-based decision-making based on verifiable data.

Business Driving forces:

What are the advantages of customer analytics for a business? As previously said, keeping and pleasing existing consumers is significantly less expensive than attracting new ones. On the other hand, trying to keep every customer is not profitable. Some consumer segments buy in small quantities, while others demand high service or high return rates. Customer relationship analytics will enable you to determine whether your clients belong to the high-profit or high-maintenance sectors.

Customer relationship analytics functions as a sophisticated marketing department. These technologies help you discover your most important consumers, classify them based on their purchase habits and other characteristics, and target them with promotions and sales activities to increase customer loyalty and income. After you understand the relative value of each customer, you may focus sales and marketing efforts on the most profitable areas. Customer relationship analytics can also impact the company’s overall profitability.

Accenture’s recent research discovered a direct link between customer relationship analytics and business revenue. The higher the CRM performance, the higher the business’s incremental revenue. Accenture’s research looked at specific CRM activities that can boost revenue directly. They discovered that promoting high levels of customer service, supporting strong staff motivation, and translating customer data into insight, i.e. analytics, are the top three efforts having the most significant influence on the bottom line. Frontline personnel at the highest-performing organisations have quick and simple access to essential data, such as purchases, contact history, product enquiries, and demographic and lifestyle data. They also discovered that successful businesses share the same analytic data with trading partners throughout the supply chain.

CRM was not seen as an IT effort restricted to a specific department by these successful CRM organisations. Instead, they saw CRM as a company-wide endeavour. Most CRM installations have been fragmented, with departments implementing within departments rather than from a cross-organizational standpoint. Customer relationship analytics must be communicated across the organisation at all levels. Salespeople could see more qualified consumers, lower sales costs, and more sales closed inside and outside the office. Consequently, marketing can track and forecast responses to specific promotions or campaigns among specified client segments. Customer service representatives would subsequently be able to provide customers with higher levels of support and happiness.

Customer-analysis Solutions:

Customer Relationship Analytics (CRA) should allow businesses to ensure that their most profitable customers are satisfied and that sales and marketing activities are focused on retaining existing customers and gaining new ones.

Customer-relationship analytics should encompass a variety of analytical perspectives that address the following topics:

• Customer value assessment looks at customer and channel value from various angles, including lifetime sales, gross margin contribution, and profitability variables, including discounts, freight and handling, and average selling price.
• By understanding each customer’s relative value, companies can begin to focus sales and marketing efforts on the most profitable customers and those with the most significant profit potential.
• Consumer acquisition and targeted selling are used for further customer profiling, segmentation, and ranking based on propensity to buy, order frequency, and total purchase behaviour.
• Businesses can use specialised data to segment customers and tailor marketing and sales activities to specific customer segments.
• Customer management includes determining the impact of order fulfilment, refunds, and call centre activities on actual sales results. This will enable businesses to examine year-to-date sales and revenue, as well as customer complaints, to find connections and gain a better understanding of how customer service issues affect earnings.

Additionally, analytics could also be used to measure:

• Sales Performance Management;
• Marketing Performance Management;
• Manufacturing Performance Management;
• Procurement Performance Management;
• e-Business Performance Management;
• Customer Relationships and
• Activity Cost Management.

Technology Drivers:

Implementing a customer-relationship analytics programme does not necessitate using a formal CRM technology solution. What’s needed is some connection between customer-facing applications and back-end systems, such as call centres or online platforms. Front-end financial systems that keep track of customer credit and bills can be matched with back-end financial systems that keep track of customer transactions and enquiries. Furthermore, many businesses already have CRM components, such as sales automation systems that track client contact information. Call centres, point-of-sale transactions, web click stream data, back-end databases, and even faxes and phone records can all provide data. Data from various channels is fed into a customer-oriented data mart or warehouse, a knowledge base that continually records client data. While some integrated CRM solutions have this capability, businesses still require tools to interpret the composite data and create a picture of their customers. CRM software is available from companies such as Siebel, PeopleSoft, SAP, Pivotal, Oracle, and Sales Logix.

A customer-relationship analytics system is a collection of tools used to execute business intelligence operations on this data, such as reporting, analysis, and data mining. Such technologies can assist marketers in seeing patterns and linkages in customer behaviour and trends using web graphics. This data analysis engine can track various metrics, including net profitability, return trends, and order fill rates.

Importance of Customer-relationship Analytics:

Customer-relationship analytics is part of a more significant endeavour to apply quantifiable and actionable analytics to critical business areas. Sales, marketing, finance, and manufacturing are just a few key performance indicators covered by business performance management software. Using analytics in customer relationship management brings new possibilities for drastically improving these connections. In today’s extremely competitive climate, firms must better understand their consumers, identify the most profitable ones, and figure out how to keep them. Even though firms spend millions of dollars on CRM systems, the systems generate data and do not tell the organisation what the data means. Customer-relationship analytics assists businesses in understanding their customers’ needs, managing these relationships more intelligently, and forecasting the future. Such expertise is a critical competitive differentiator for organisations looking to gain market share and save operating costs.

Lifetime Value of a Customer:

A fundamental concept of Customer-relationship Management is the lifetime value of a new customer. The core premise is that consumers should be rated based on how profitable they are to the company throughout their purchases. Profitability is commonly measured in terms of net value, which is the difference between the markups above cost and the cost of obtaining and keeping a client. Fixed costs are not considered because they are anticipated to be incurred regardless of whether the client is there.

This is a straightforward calculation technique. It is based on the average consumer and does not consider the time value of money or the benefits of marketing initiatives like loyalty and referral programmes.

Methodology:

The most straightforward method for calculating lifetime value is to multiply four quantities together:

Avg. sale * No. of purchases / year * Stay of customer * Average Profit %

Three ways can be used to raise the customer’s value:

1. Increase the average sales size (tie-ins, package multiple items).
2. Increase the amount of sales made (find other customer needs you can provide and satisfy them with).
3. Boost profit margins (reduces overhead costs, reduces the cost of goods and raises the price if the market will stand it).

Retention rates (percentage of customers who buy again), discount rates, the impact of loyalty programmes, average annual purchase per customer (including increasing the number of sales and increasing the amount per sale to retained customers), mark-up of goods, cost to acquire a new customer, cost per year to maintain a customer, and cost to acquire customers. Depending on the industry and firm where CRM is to be implemented, these factors need to be integrated into a lifetime value model.

Opportunities in CRM:

Previously, while large projects for service organisations focused on Mainframes, ERP, MRP, and SCM systems, excessive customer orientation shifted the attention to customers, culminating in the birth of Customer Relationship Management (CRM) applications. CRM aided service organisations in increasing efficiency and, as a result, providing better customer service. CRM has become one of the most essential instruments for surviving in a competitive market by focusing on the demands of customers. There were many CRM systems on the market to aid in this endeavour. These solutions ranged from essential CRM solutions focused on sales and services to industry-specific solutions incorporating best practices particular to specific industries. Such solutions aided software developers and vendors make significant revenue from application sales and implementation.

Most big companies have now chosen, implemented, and largely stabilised one or more applications with core and customised CRM features. This essay delves deeper into the possibilities accessible in the CRM market.

EAI (Enterprise Application Integration) is a term that refers to the integration process. The organisation must connect it with other systems after implementing a CRM solution. In a company, various applications and technologies must communicate with one another. Integrating such applications will aid in exchanging vital business data and increase business efficiency by lowering the time spent obtaining and sharing such data. This opens up the possibility of A2A and B2B integration using EAI techniques such as Point to Point, Hub and Spoke, and Distributed Messaging.

• Upgrade: Many significant organisations have heavily customised CRM solutions in place that they have been using for years. Such applications are accessible in new / updated versions. Many CRM solution providers still support older software versions, but how long is an issue? When those companies opt to update or move to newer software versions, a new market will open up.
• Hosted Solutions: Many small businesses lack the resources and infrastructure to purchase and implement CRM software. Small businesses will want to use hosted solutions and pay for what they use.
• Redesign the wheel instead of reinventing it: New technology architecture developments, such as Service-Oriented Architecture, necessitate a redesign of the CRM system architecture. This has created a new market for software providers and system integrators.
• Small and Medium Enterprise (SME): While most large organisations have deployed CRM solutions, the SME segment remains untapped and has much potential.

Data Mining and Technology:

Data mining is the process of analysing data from various angles and synthesising it into meaningful information — knowledge that can be utilised to boost income, lower costs, or do both. It’s also known as data or knowledge discovery. Users can use data mining tools to analyse data from various perspectives, categorise it, and summarise the links discovered. Data mining identifies patterns or connections between dozens of fields in huge relational databases. Although “data mining” is new, the technology is old. For years, businesses have relied on powerful computers to sift through massive amounts of grocery scanner data and analyse market research studies. On the other hand, continuous improvements in computer processing power, disc storage, and statistical software substantially improve analytical accuracy while lowering costs.

Data mining software is sweeping the industry. The primary database providers have already included data mining techniques in their platforms. Classification and regression trees, neural networks, k-nearest neighbours, regression analysis, and clustering algorithms are all implemented in Oracle’s Data Mining Suite (Darwin). Data mining is also available in Microsoft SQL Server through classification trees and clustering techniques. If you’ve worked in a statistics environment before, you’re undoubtedly familiar with the sophisticated statistical packages SPSS, SAS, and S-Plus, which provide data mining algorithm implementations.