Customer experience may seem like a simple concept – how your customers perceive their interactions with your company.
But Forrester Research Inc. argues that customer experience is a fundamental business driver, and it’s the only source of competitive advantage in an age where customers and potential customers have unprecedented access to reams of data about your company and competitors.
“Despite its economic power, customer experience remains the most misunderstood element of corporate strategy today,” says Forrester analyst Kerry Bodine. “You must manage your business from the outside in – bringing the perspective of your customers to every decision you make – and you must do it in a systematic and repeatable way.”
One of the best ways to bring the perspective of the customer to all business decisions is by using CRM analytics to find correlations, isolate patterns and track trends to serve up the information necessary to allow a company to tailor the customer experience for improved engagement and increase profits, according to Marianne Cotter at CRMSearch.
Here are five reasons to integrate analytics into your CRM system:
- Better Customer Understanding. CRM analytics can integrate all customer data points including call center, the Internet, email and social media and group customers according to their behaviors. This allows a company to identify the most profitable customers who should receive special offers or get preferential treatment to boost their lifetime value.
- Better Understanding of the Customer-Facing Operations. Analytics will provide proof of the company’s performance in terms of service, sales and marketing. Most CRM projects are launched to drive down costs in these areas but without analytics to demonstrate the ROI of CRM, moving into new areas, like linking CRM with social media, will be hard to justify.
- Decision Support. After defining the value of customer-facing operations, changes can be made to drive operational investments. A company can answer questions around building a new call center or outsourcing based on this analysis.
- Predictive Modeling. Analytics will allow a company to forecast customers’ future responses based on their past behaviors and their segmented demographics. For example, a telecommunications company could find out how likely customers are to turn to other carriers when their wireless contracts expire. Or, a consumer products company could predict how well a certain demographic will respond to a new marketing initiative based on past purchasing behaviors.
- Benchmarking. Using CRM analytics, a company can track its performance over time related to a particular strategy or to its competitors. Benchmarking analytics in areas including customer satisfaction, retention, cost per customer service call, and revenue per call will indicate which operational areas are lagging behind and those that are performing up to or above company and industry standards.