Learning Objectives

By the end of this chapter, you will be able to:

  • Define Analytical CRM and its role in analyzing customer data.
  • Identify the key functions of Analytical CRM, such as customer segmentation and churn analysis.
  • Define Collaborative CRM and its purpose.
  • Explain how Collaborative CRM helps to manage customer interactions across different channels.

Beyond Operations: Analytical and Collaborative CRM

While Operational CRM focuses on the day-to-day, customer-facing processes, other types of CRM systems are designed to analyze customer data and coordinate interactions across all parts of the business. The two other major categories are Analytical CRM and Collaborative CRM.

Analytical and Collaborative CRM provide insights and coordination Figure 1: CRM Types Overview

flowchart LR
    subgraph COLLECT["Data Collection"]
        OCRM["🛠️ Operational CRM\n(Front-Office)"]
    end

    subgraph ANALYZE["Analysis"]
        ACRM["📊 Analytical CRM\n(Back-Office)"]
    end

    subgraph COORDINATE["Coordination"]
        CCRM["🤝 Collaborative CRM\n(All Channels)"]
    end

    OCRM -->|"Customer Data"| ACRM
    ACRM -->|"Insights"| CCRM
    CCRM -->|"Coordinated Actions"| OCRM

    style OCRM fill:#1565c0,color:#fff
    style ACRM fill:#6a1b9a,color:#fff
    style CCRM fill:#2e7d32,color:#fff

Figure 2: How the Three CRM Types Work Together

Analytical CRM

Analytical CRM is the back-office component of CRM. It focuses on analyzing the vast amounts of customer data collected by operational CRM systems and other sources to gain insights into customer behavior and guide business decisions. The primary goal of analytical CRM is to understand customers on a deeper level.

Purpose and Function:

  • Customer Segmentation: Grouping customers into segments based on shared characteristics (e.g., demographics, purchase history, profitability). This allows for more targeted marketing and service.
  • Profitability Analysis: Identifying the most and least profitable customers to help the company focus its resources effectively.
  • Predictive Analytics: Using data to predict future customer behavior. This includes:
    • Churn Analysis: Predicting which customers are at risk of leaving (churning) so that proactive retention efforts can be made.
    • Next Best Offer: Predicting the next product or service a customer is most likely to buy.
  • Customer Lifetime Value (CLV) Calculation: Estimating the total revenue a business can reasonably expect from a single customer account throughout the business relationship.

Key Technologies:

Analytical CRM relies heavily on technologies like data warehouses to store and integrate customer data, and data mining and Online Analytical Processing (OLAP) tools to perform the analysis.

Collaborative CRM (or Strategic CRM)

Collaborative CRM is the component that focuses on facilitating communication, cooperation, and collaboration between all stakeholders involved in the customer relationship. This includes not only the different departments within a company (e.g., sales, marketing, service, technical support) but also external stakeholders like suppliers, vendors, and distributors.

Purpose and Function:

The main goal of Collaborative CRM is to ensure that all parties have access to the same, complete customer information and can work together to provide a seamless and consistent customer experience across all touchpoints.

  • Interaction Management: Tracks all interactions with a customer, whether it happens via email, phone call, social media, or in person. This complete history is available to anyone who needs it.

  • Channel Management: Coordinates customer interactions across different communication channels. For example, a customer might start a support request on Twitter, continue it via email, and finish it on a phone call. Collaborative CRM ensures a smooth transition between these channels without the customer having to repeat themselves.

  • Partner Relationship Management (PRM): Provides tools, such as a partner portal, to help a company manage its relationships with its distribution partners and resellers, ensuring they have the information and support they need to sell effectively.

Summary

The three types of CRM work together as a cohesive whole: Operational CRM collects the customer data through daily interactions. Analytical CRM then analyzes that data to produce actionable insights. Finally, Collaborative CRM uses those insights and provides the communication tools to coordinate a better, more unified customer experience across all internal departments and external partners.

Key Takeaways

  • Analytical CRM analyzes customer data to provide strategic insights.
  • Key functions of Analytical CRM include segmentation, churn analysis, and calculating CLV.
  • Collaborative CRM focuses on sharing customer information to provide a seamless experience.
  • The three types of CRM (Operational, Analytical, Collaborative) work together to manage the entire customer relationship.

Discussion Questions

  1. Explain the relationship between Operational CRM and Analytical CRM. How do they depend on each other?
  2. Why is “channel management” so important for a good customer experience in today’s world?
  3. Provide an example of how a company might use the output of its Analytical CRM to change its marketing strategy.