Abstract: Customer Relationship Management is not only a management concept, but also a new management mechanism designed to improve the relationship between enterprises and customers. It is also a management software and technology. Data mining can predict future trends and behaviors to better support decision-making. The success of CRM lies in the successful data warehouse and data mining.
Key words: E-commerce; customer relationship management; Data Mining
Summarization Of CRM And Data Mining
YAN Yan, HU Hengsheng, CHEN Yuexin
(School of Computer Science, National University of Defense Technology, Changsha410073) [Abstract] CRM is not only a concept of management, but also a new mechanic of management, using to improve the relationship between the organization and the MERs, as well as a software and technology of management. data Mining can forecast the trend and behaviors, thereby nicely support people's dears.
A successful CRM is due to the success of Data Warehousing, Data Mining.
[Keywords] E-business; CRM (Customer Relationship Management); Data Mining
1. Drive of e-commerce and introduction of Customer Relationship Management
The rapid development of the Internet has brought the whole world economy into an unprecedented period of rapid growth. With the maturity of network technology, the concept of e-commerce has gradually become deeply rooted in the hearts of the people, and e-commerce is rapidly emerging, the tide of e-commerce is rapidly changing traditional business models around the world. Online shopping, B2B, and B2C have become the focus of discussion. In the next 20 years, the expansion of e-commerce will form an exponential upward curve.
The e-commerce system provides a new way for sellers to communicate with customers. However, the impact of e-commerce is revolutionary and poses severe challenges to traditional enterprises: enterprise managers are required to look at future customers, future competitors, and future technical tools with new ideas, simply automating existing business processes for data processing does not mean that success can be achieved in the "new economy" era. E-commerce requires the updating and revolution of management thinking that matches it. This is not easy for traditional enterprises of a certain scale.
Traditional enterprise management focuses on the background. ERP systems help them automate such internal business processes and improve production efficiency. For the front-end, we often do not pay enough attention to the following issues: most companies can only rely on experience to speculate on the most popular products, what are the reasons, how many regular customers are there, who are the most profitable customers, and what are the problems with after-sales services.
Currently, the competition on the Internet is only one point between the mouse. How can we win in the e-commerce Competition? The Customer Relationship Management system (CRM) that provides Customer resources and relevant data analysis has become the focus. As a dedicated front-end customer relationship management system for enterprises to collect, analyze and use various customer information, help enterprises make full use of their customer management resources, it also provides scientific means and methods for enterprises to face their customers with ease in the e-commerce era.
A large number of surveys and industry analysts have clarified the fact that establishing and maintaining customer relationships is the only and most important basis for competitive advantages, this is the direct result of the network economy and e-commerce transformation to the traditional business model.
2. concepts and features of Customer Relationship Management
2.1 What is CRM )?
Although there is no uniform definition of Customer Relationship Management (CRM), as the name suggests, CRM refers to the communication between an enterprise and its customers, it is applied in marketing, sales, service and technical support of enterprises and other customer-related fields.
Customer Relationship Management (CRM) is a management concept first. It originated from western marketing theories and developed in the United States. The core idea is to take enterprise customers (including end customers, distributors and partners) as the most important enterprise resources, and meet customer needs through sound customer services and in-depth customer analysis, to ensure the customer's lifetime value.
Customer Relationship Management (CRM) is a new management mechanism designed to improve the relationship between enterprises and customers, it is implemented in customer-related fields such as marketing, sales, service and technical support of enterprises, enterprises are required to shift from the "product-centric" model to the "customer-centric" model. That is to say, the focus of enterprise attention should be shifted from internal operation to customer relationship.
CRM is also a management software and technology, it closely integrates best business practices with data mining, data warehousing, one-to-one marketing, sales automation, and other information technologies, it provides a business automation solution for the enterprise's sales, customer service, and decision-making support fields, enabling the enterprise to face the customer's frontier Based on e-commerce, in this way, the transformation from the traditional enterprise model to the modern enterprise model based on e-commerce can be smoothly realized.
The goal of CRM is to attract and maintain more customers by providing faster and more considerate services, and to reduce the cost of enterprises by comprehensively managing business processes. A well-designed CRM solution can help enterprises improve their communication with existing customers while expanding new revenue sources. According to statistics from the International CRM Forum, successful international CRM implementation can increase the annual market share of corresponding enterprises by 6% ~ 10% of basic services are charged, and the development speed of enterprises with lower service levels is doubled.
2.2. Why is CRM solution implemented?
Today, sales, marketing, and customer service/support departments in many enterprises work as independent entities. Due to the existence of departmental boundaries, these different business functions are often difficult to coordinate and focus on the customer. For example, if a salesperson blindly calls a customer and promotes a product, but does not know that the customer is angry with several unsolved service problems, what will happen? However, by providing a customer communication and communication platform shared by various business departments, the situation is very different. The CRM solution will eliminate such problems.
2.3. Characteristics of CRM
① One-to-one marketing
"One-to-one marketing" means that enterprises can adjust their business behaviors according to their special needs. One-to-one marketing requires enterprises to establish a learning relationship with each customer. The so-called learning relationship refers to the fact that every interaction between an enterprise and a customer enables an enterprise to gain an understanding of the customer's growth, and the customer constantly puts forward demands, enterprises continuously improve products and services as needed, so that enterprises can continuously improve the customer's satisfaction.
Amazon online bookstore (Amazon.com) uses the Global Internet and advanced CRM System Software for "one-to-one marketing. In the face of tens of thousands of customers, Amazon online bookstore has a "Amazing memory" and "high intelligence", thus establishing a wide "one-to-one" learning relationship with customers, this makes the bookstore's customer retention rate as high as 65%.
② Highly integrated communication channels
CRM integrates various communication channels with customers, such as face-to-face, telephone contact, E-mail, Fax, letters, and Web access, enterprises can use appropriate channels to communicate with customers based on their preferences. However, no matter which channel is used, the communication between the customer and the enterprise must be seamless, consistent, and efficient.
③ Unified shared information resources
All data of the CRM solution should be stored and managed in a centralized manner, and the experience of different departments should be immediately shared with other departments after they contact customers, the current customer information can be used by all employees facing the customer in real time, so that the customer does not ask about Solution A by phone, but the company recommends solution B when the customer accesses the internet. Centralized customer information library ensures data consistency between different business departments and different application software functional modules.
④ Business intelligence data analysis and processing
In the face of the vast volumes of customer and enterprise marketing, sales and service information, if there is no highly bi-based data analysis and processing system is unimaginable. CRM closely integrates the best business practices with data mining, data warehousing, one-to-one marketing, sales automation, and other information technologies. By fully exploring the customer's business behavior personality and rules, to constantly find and expand the profit points and profit margins of customers. On the other hand, intelligent data analysis and processing are also an efficient process for enterprises to "Learn" from customers. As CRM software matures, future CRM software will not only help automate business processes, but also help managers make decisions.
⑤ Support for Web-based functions
Web is increasingly widely used in internal and external communications and transactions, making Web functions a key factor in CRM solutions. Web is not only indispensable for e-commerce channels, but also important in terms of infrastructure. CRM application software users, including customers and employees, can access enterprise applications anytime and anywhere. Such access should be implemented through a standard Web browser that can be easily used without too much training.
CRM allows enterprises to directly sell and serve customers through the Web, enterprises can also use the advantages of Web E-commerce for self-service, self-service sales, potential customer development, time registration, contract renewal, service requests, and telephone feedback. All of these have greatly expanded traditional marketing, sales and service channels in terms of time and space, enabling enterprises to provide 7 days a week, 24 hours a day (7X24) globally) to maximize the enterprise benefits.
The above features of CRM are not isolated from each other, but a whole that supports each other and is highly integrated, forming the powerful functions of CRM.
3. Implementation of CRM and Data Mining Technology
3.1. Composition of CRM solutions
As an enterprise management system software, CRM usually consists of the following three parts:
"Sales Distributor Management (SDM )"
This module is dominated by the market and sales business and manages the sales process in detail. It is an important tool for sales management personnel to manage and automate sales by sales personnel, this service enables centralized management and collaborative management of customers during the sales process. sales managers can analyze the sales situation at any time, features include customer reception management, quotation sheet processing, sales contract management, settlement ticket processing, comprehensive query, and comprehensive statistics. The goal is to improve sales effectiveness.
"Customer Service Management (CSM )"
This module manages after-sales services of enterprises, accelerates the response speed of after-sales services, improves customer satisfaction, assesses service personnel, and strengthens product quality supervision.
The most typical representative of the customer service system is the call center environment. Generally, the call center environment is deployed and self-service based on telephone and Web is implemented. They enable enterprises to meet their customers' unique needs at a faster speed and higher efficiency. In most cases, customer loyalty and profitability depend on whether the company can provide quality services. Therefore, customer service and support are critical to many enterprises.
"Executive Information System (EIS )"
With the advent of the e-commerce era, business operations in all walks of life are automated, and enterprises generate dozens or hundreds of GB of business data. These data and the resulting information are the wealth of the enterprise, which faithfully records the essential status of the enterprise's operations. However, in the face of such massive data volumes, it forces people to constantly find new tools, to explore the operational rules of enterprises and provide valuable knowledge for business decision-making, so that enterprises can make profits. A powerful tool that can meet enterprises' urgent needs is data mining.
3.2 What is data mining?
Specifically, Data Mining, also known as the Knowledge Discovery in Database (KDD ), it refers to extracting hidden, unknown, extraordinary, and potentially useful information or models from large databases or data warehouses, it is a new field of great application value in database research. It integrates theories and technologies in multiple fields such as database, artificial intelligence, machine learning, and statistics.
The data collected from CRM software is the most helpful for enterprises to understand the customer. The so-called "one-to-one" sales also focuses on understanding the customer's needs, so as to deliver what they want and facilitate transactions. Data is dead, but if we can use some mathematical or statistical models to discover the relationships and rules in the data, we can predict the future development trend based on the existing data, this can be a reference for managers to make decisions.
Data mining tools can predict future trends and behaviors to better support decision-making. For example, after analyzing the entire database system of the company, data mining tools can answer similar questions, such as "which customer is most likely to respond to our company's email promotions" and why. Some data mining tools can also solve some traditional problems that consume a lot of manual time, because they can quickly browse the entire database and find some extremely useful information that experts are not aware. Therefore, the success of CRM lies in successful data warehouses, data mining, and knowledge discovery.
3.3 application of data mining in CRM
Typical data mining methods include association analysis, sequence mode analysis, classification analysis, and cluster analysis. They can be applied to different fields and stages of customer-centric enterprise decision-making analysis and management.
① Association Analysis
Association analysis is to use association rules for data mining. The purpose of association analysis is to mine the relationships hidden between data, it can discover knowledge in the database, such as "90% of customers buy product A while purchasing product B" during A purchase activity.
② Sequence Mode Analysis
Sequence mode analysis is similar to association analysis, but focuses on the analysis of the sequence relationships between data. It can find that the database is like "in A certain period of time, the customer buys product A, then buys product B, and then buys product C, that is, knowledge such as the occurrence frequency of sequence A → B → C is high. The problem described in sequence mode analysis is: in A given transaction sequence database, each sequence is a set of transaction sets arranged according to the transaction time. The mining sequence function acts on the transaction sequence database and returns the frequently-occurring sequence in the database. In sequence mode analysis, the user also needs to input the minimum confidence level C and the minimum support level S.
③ Classification Analysis
There is a database and a group of categories (TAGS) with different features. Each record in the database is assigned a category tag. Such a database is called a sample database or a training set. Classification analysis is to analyze the data in the sample database to make an accurate description for each category or establish an analysis model or mine classification rules. Then, this classification rule is used to classify records in other databases.
④ Cluster Analysis
Clustering analysis inputs a group of unclassified records, and these records should be divided into several categories without prior knowledge. By analyzing the record data in the database, according to certain classification rules, rationally divide the record set and determine the category of each record. Its classification rules are determined by clustering analysis tools. Different clustering methods may have different results for the same set of records.
The ideal start point for applying data mining technology is to start from a data warehouse where contract information of all customers should be stored, in addition, there should be relevant data from competitors in the market. Data mining can directly track data and help users quickly make business decisions. In addition, users can constantly discover better behavior patterns when updating data, and apply it to future decisions.
4. Development Status and Prospects of CRM
4.1 CRM Development Status
More and more enterprises are attaching importance to the concept and value of CRM management. Since 1997, the global CRM market has been in explosive and rapid growth. Domestic CRM started late, but still showed a strong momentum of development. Its significant value improvement capability has been recognized by the industry, it is about to enter the flourishing period of development and will form a new tracing boom.
According to a recent study, more than 2/3 of the enterprises surveyed expect to change their customer relationship management models in the next five years, more than 3/4 of enterprises plan to integrate customer-facing information management systems and other components of their organizations.
4.2 prospects
Future Trend Prediction of CRM products: the information systems at the front and back ends of CRM products will be further integrated, and the functions of the call center will be greatly expanded, it truly integrates telephone, www, Email, fax, wireless communication, and direct contact, and becomes a contact center; network-based self-service will become an important way for enterprises to provide services to users ......
As an integrated concept of cross-knowledge management, business operations, and e-commerce systems, Customer Relationship Management is developing at an unprecedented speed and expanding the user base in the fierce market competition, CRM is gradually becoming the foundation of modern enterprise survival and the key to success.
References
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