Customer relationship management (CRM) is a multifaceted process, mediated by a set of information technologies, that focuses on creating two-way exchanges

with customers so that firms have an intimate knowledge of their needs, wants, and buying patterns. In this way, CRM is intended to help companies understand, as well as anticipate, the needs of current and potential customers. Functions that support this business purpose include sales, marketing, customer service, training, professional development, performance management, human resource development, and compensation. Many CRM initiatives have failed because implementation was limited to software installation without alignment to a customer-centric strategy.

Overview There are many aspects of CRM which were mistakenly thought to be capable of being implemented in isolation from each other. [ From the outside of the organization, a customer experiences the business as one entity operating over extended periods of time. Thus piecemeal CRM implementation can come across to the customer as unsynchronized where employees and web sites and services are acting independently of one another, yet together represent a common entity. CRM is a combination of philosophies, polices and strategies connecting different players within an organization so as to coordinate their efforts in creating an overall valuable series of experiences, products and services for the customer.

The different players within the organization are in identifiable groups: Customer Facing Operations - The people and the technology support of processes that affect a customer's experience at the frontline interface between the customer and the organization. This can include face to face, phone, IM, chat, email, web and combinations of all media. Self-service kiosk and web self-service are doing the job of vocals and they belong here.

Internal Collaborative Functional Operations The people and technology support of processes at the policy and back office which ultimately affect the activities of the Customer Facing Operations concerning the building and maintaining of customer relationships. This can include IT, billing, invoicing, maintenance, planning, marketing, advertising, finance, services planning and manufacturing.

External Collaboration functions - The people and technology support of processes supporting an organization and its cultivation of customer relationships that are affected by the organization's own relationship with suppliers/vendors and retail outlets/distributors. Some would also include industry cooperative networks, e.g. lobbying groups, trade associations. This is the external network foundation which supports the internal Operations and Customer facing Operations.

Customer Advocates and Experience Designers Creative designers of customer experience that meet customer relationship goals of delivering value to the customer and profit to the organization (or desired outcomes and achievement of goals for non-profit and government organization

Performance Managers and Marketing Analysts - Designers of Key Performance Indicators and collectors of metrics and data so as to execute/implement marketing campaigns, call campaigns, Web strategy and keep the customer relationship activities on track. This would be the milestones and data that allow activities to be coordinated, that determine if the CRM strategy is working in delivering ultimate outcomes of CRM activities: market share, numbers and types of customers, revenue, profitability, intellectual property concerning customers preferences.

Customer and Employee Surveyors and Analysts Customer Relationships are both fact driven and impression driven - the quality of an interaction is as important as the information and outcome achieved, in determining whether the relationship is growing or shrinking in value to the participants

Technology considerations The basic building blocks: A database for customer life cycle (time series) information about each customer and prospect and their interactions with the organization, including order information, support information, requests, complaints, interviews and survey responses.

Customer Intelligence - Translating customer needs and profitability projection into game plans for different segments or groups of customers, captured by customer interactions (Human, automated or combinations of both) into software that tracks whether that game plan is followed or not, and whether the desired outcomes are obtained.

Business Modeling Customer Relationship Strategy, Goals and outcomes: Numbers and description of whether goals were met and models of customer segments and game plans worked as hypothesized

Learning and Competency Management Systems Customer Capacity and Competency Development Training and improving processes and technology that enable the organization to get closer to achieving the desired results. Complex systems require practice in order to achieve desired outcomes, especially when humans and technology are interacting. Iteration is the key to refining, improving and innovating to stay ahead of the competition in Customer Relationship Management. (Successful tools, technology and practices will be copied by the competition as soon as they are proven successful

The building blocks can be implemented over time separately, but eventually need to be dynamically coordinated. The ongoing alignment of the basic building blocks distinguishes an elegant seamless CRM implementation which successfully builds mutually valuable relationships. [edit] Types / Variations of CRM There are several different approaches to CRM, and at present there is no one software package that allows all of these approaches to be applied. When companies consider implementing a CRM strategy, they usually talk about either Campaign Management or Sales Force Automation. Although CRM is much more than either of those parts, software packages are usually based around one or the other idea (with SFA being the most popular).

The building blocks can be implemented over time separately, but eventually need to be dynamically coordinated. The ongoing alignment of the basic building blocks distinguishes an elegant seamless CRM implementation which successfully builds mutually valuable relationships.

Types / Variations of CRM There are several different approaches to CRM, and at present there is no one software package that allows all of these approaches to be applied. When companies consider implementing a CRM strategy, they usually talk about either Campaign Management or Sales Force Automation. Although CRM is much more than either of those parts, software packages are usually based around one or the other idea (with SFA being the most popular

Operational CRM , including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database when necessary. One of the Operational CRM provides support to "front office" business processes main benefits of this contact history is that customers can interact with different people or different contact channels in a company over time without having to describe the history of their interaction each time. Consequently, many call centers use some kind of CRM software to support their call center agents. Operational CRM processes customer data for a variety of purposes: Managing Campaigns Enterprise Marketing Automation Sales Force Automation

Sales Force Automation (SFA) Sales Force Automation is a type of Operational CRM that is designed to automate sales-forcerelated activities, such as lead tracking. Software products perform such tasks as: Keeping lists of leads Assigning list segments to salespeople Allowing list contacts to be called or e-mailed Tracking responses Generating reports Creating leads for the team

Analytical CRM Analytical CRM analyzes customer data for a variety of purposes: Design and execution of targeted marketing campaigns to optimize marketing effectiveness Design and execution of specific customer campaigns, including customer acquisition, crossselling, up-selling, retention Analysis of customer behavior to aid product and service decision making (e.g. pricing, new product development etc.) Management decisions, e.g. financial forecasting and customer profitability analysis Prediction of the probability of customer defection (churn analysis) Analytical CRM generally makes heavy use of data

Sales Intelligence CRM Sales Intelligence CRM is very similar to Analytical CRM, but it is intended as a more direct sales tool. Features include the delivery of "alerts" to sales people based on analysis of such factors as: Cross-sell/Up-sell/Switch-sell opportunities Customer Drift Sales performance Customer trends Customer margins

Campaign Management Campaign management software is marketingoriented CRM software that combines elements of Operational and Analytical CRM and allows campaigns to be run on an existing client base. Campaign Management is used when you need to create personalized offers when it is prohibitively expensive to personally contact each client. Campaign management software functions include--------

Choosing campaign recipients from the client base according to selected criteria Development of a campaign offer (this is often done "out-of-the-system" and is not automated)

Assigning specific campaign offers to selected recipients Automatically sending offers to the selected clients via selected channels (either directly, via channels such as e-mail, or indirectly, by creating lists for use in channels such as direct mail) Gathering, storing, and analyzing campaign results (including tracking responses and analyzing propensities)

Collaborative CRM The function of the Customer Interaction System or Collaborative Customer Relationship Management is to coordinate the multi-channel service and support given to the customer by providing the infrastructure for responsive and effective support to customer issues, questions, complaints, etc.

Collaborative CRM aims to get various departments within a business, such as sales, technical support and marketing, to share the useful information that they collect from interactions with customers. Feedback from a technical support center, for example, could be used to inform marketing staffers about specific services and features requested by customers. Collaborative CRM's ultimate goal is to use information collected from all departments to improve the quality of customer service.[4] Inspired by the CRM relational process which places customer in the center of company, the XRM (eXtended Relationship Management) considers actors around the company (partners, co-workers, suppliers...) and deals with all types of relations with the same stakes and similar means.

Geographic CRM Geographic CRM (GCRM) is a customer relation management information system which collaborates geographic information system and traditional CRM. gCRM combines data collected from route of movement, types of residence, ambient trading areas and other customer and marketing information which are matched with relevant road conditions, building formations, and a floating population. Such data are conformed with a map and is regionally analyzed with OLAP(On-Line Analytical Processing) for visualization. This enables a company to examine potential customers and manage existing customers in the region.

Strategy Several commercial CRM software packages are available which vary in their approach to CRM. However, as mentioned above, CRM is not just a technology but rather a comprehensive customercentric approach to an organization's philosophy in dealing with its customers. This includes policies and processes, front-of-house customer service, employee training, marketing, systems and information management. Hence, it is important that any CRM implementation considerations stretch beyond technology, towards the broader organizational requirements

The objectives of a CRM strategy must consider a companys specific situation and its customers' needs and expectations. Information gained through CRM initiatives can support the development of marketing strategy by developing the organization's knowledge in areas such as identifying customer segments, improving customer retention, improving product offerings (by better understanding customer needs), and by identifying the organization's most profitable customers.

CRM strategies can vary in size, complexity and scope. Some companies consider a CRM strategy to only focus on the management of a team of salespeople. However, other CRM strategies can cover customer interaction across the entire organization. Many commercial CRM software packages that are available provide features that serve sales, marketing, event management, project management and finance

Successes
While there are numerous reports of "failed" implementations of various types of CRM projects, these are often the result of unrealistic high expectations and exaggerated claims by CRM vendors.

Many of these failures are related to data quality and availability. Data cleaning is a major issue. If the company CRM strategy is to track life-cycle revenues, costs, margins and interactions between individual customers, this must be reflected in all business processes. Data must be extracted from multiple sources (e.g., departmental/divisional databases, including sales, manufacturing, supply chain, logistics, finance, service, etc.), requiring an integrated, comprehensive business processing system to be in place with defined structures and data quality. If not, interfaces must be developed and implemented to extract data from different systems. This creates a demand far beyond customer satisfaction to understand the full business-tobusiness relationship. For this reason, CRM is more than a sales or customer interaction system.

The experience from many companies[who?] is that a clear CRM requirement with regard to reports (e.g., input and output requirements) is of vital importance before starting any implementation.[citation needed] With a proper demand specification, a great deal of time and money can be saved based on realistic expectations of systems capability.[citation needed] A well operating CRM system can be an extremely powerful tool for management and customer strategies.

Privacy and data security

One of the primary functions of CRM software is to collect information about customers. When gathering data as part of a CRM solution, a company must consider customer privacy and data security with respect to legal and cultural environments. Some customers prefer assurance that their data is not shared with third parties without their consent and that it cannot be illicitly accessed by third parties.

Market structure Given below is a list of top CRM software vendors in 2005 with figures in millions of United States Dollars published Global in a Gartner study.[7]
Vendo r
SAP Siebel Oracle Salesf orce.c om

Revenue (Million US$)

1,475 966 368 281

Amdoc s Others

276

2,233

Market structure Given below is a list of top CRM software vendors in 2005 with figures in millions of United States Dollars published in a Gartner study.[7] Global Revenue Vendor (Million US$) SAP 1,475 Siebel 966 Oracle 368 Salesforce. 281 com Amdocs 276 Others 2,233 Total 5,698

Business intelligence

The term business intelligence (BI) refers to technologies, applications and practices for the collection, integration, analysis, and presentation of business information and also sometimes to the information itself. The purpose of business intelligence is to support better business decision making. It dates to 1958. D. J. Power explains in "A Brief History of Decision Support Systems

B I describes a set of concepts and methods to improve business decision making by using fact-based support systems. BI is sometimes used interchangeably with briefing books, report and query tools and executive information systems. Business Intelligence systems are data-driven

BI systems provide historical, current, and predictive views of business operations, most often using data that has been gathered into a data warehouse or a data mart and occasionally working from operational data. Software elements support the use of this information by assisting in the extraction, analysis, and reporting of information. Applications tackle sales, production, financial, and many other sources of business data for purposes that include, notably, business performance management. Information may be gathered on comparable companies to produce benchmarks.

Customer experience
Customer experience is the sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship with that supplier. It can also be used to mean an individual experience over one transaction; the distinction is usually clear in context.

Customer
A customer refers to individuals or households that purchase goods and services generated within the economy. The word historically derives from "custom," meaning "habit"; a customer was someone who frequented a particular shop, who made it a habit to purchase goods there, and with whom the shopkeeper had to maintain a relationship to keep his or her "custom," meaning expected purchases in the future

Customer needs may be defined as the goods or services a customer requires to achieve specific goals. Different needs are of varying importance to the customer. Customer expectations are influenced by cultural values, advertising, marketing, and other communications, both with the supplier and with other sources.

Both customer needs and expectations may be determined through interviews, surveys, conversations, data mining or other methods of collecting information. Customers at times do not have a clear understanding of their needs. Assisting in determining needs can be a valuable service to the customer. In the process, expectations may be set or adjusted to correspond to known product capabilities or service.

Customer Intelligence is the process of gathering, analyzing and exploiting information of a company's customer base.

Process
Information can be obtained about customers' existing and future needs, how they reach decisions, about their behavior as well as about the competition, conditions in the industry, and general trends. To properly manage the relationship with the customer the business needs to collect the right information about its customers and organize that information for proper analysis and act

Tools Tools like Speech Analytics can be used to understand customer and prospect behavior. Some Customer Intelligence solutions analyze telephone conversations taking place between companies and customers and then deliver insights to the desktops of senior executives and managers. New is using click behavior on a website to drive the Customer Intelligence. It's sometimes called behavioral targeting for lead generation purposes. You can predict someones producti interest and buying intention based on the clicks and visits of a corporate website. There are 3 vendors in the field. Omniture; Netmining and Webtrends. Privacy is a hot item here. Some companies are using opt-in and refuse to collect IP addresses.

Result
Customer Intelligence enables senior level managers and executives responsible for the customer experience to: Define and measure the customer experience Understand the experience of their customers Identify the reasons why customers call Maximize loyalty and retention Gain market and competitive intelligence Increase sales effectiveness

Customer service
Customer service (also known as Client Service) is the provision of service to customers before, during and after a purchase. According to Turban et al, 2002, Customer service is a series of activities designed to enhance the level of customer satisfaction that is, the feeling that a product or service has met the customer expectation

Its importance varies by product, industry and customer. As an example, an expert customer might require less pre-purchase service (i.e., advice) than a novice. In many cases, customer service is more important if the purchase relates to a service as opposed to a product".

Customer service may be provided by a person (e.g., sales and service representative), or by automated means called self-service. Examples of self service are Internet sites. Customer service is normally an integral part of a companys customer value proposition.

Some argue that the quality and level of customer service has decreased in recent years, which can be attributed to a lack of support or understanding at the executive and middle management levels of a corporation.

Instant feedback Recently, many organizations have implemented feedback loops that allow them to capture feedback at the point of experience. For example, National Express, one of the UK's leading coach companies invites passengers to send text messages whilst riding the bus. This has been shown to be useful as it allows companies to improve their customer service before the customer defects, thus making it far more likely that the customer will return next time

Database marketing is a form of direct marketing using databases of customers or potential customers to generate personalized communications in order to promote a product or service for marketing purposes. The method of communication can be any addressable medium, as in direct marketing. 1\4

The distinction between direct and database marketing stems primarily from the attention paid to the analysis of data. Database marketing emphasizes gathering all available customer, lead, and prospect information into a central database and using statistical techniques to develop models of customer behavior, which are then used to select customers for communications. As a consequence, database marketers also tend to be heavy users of data warehouses, because having a greater amount of data about customers increases the likelihood that a more accurate model can be built. 2\4

The database" is usually name, address, and transaction history details from internal sales or delivery systems, or a bought-in compiled "list" from another organization, which has captured that information from its customers. Typical sources of compiled lists are charity donation forms, application forms for any free product or contest, product warranty cards, subscription forms, and credit application forms. 3\4

The communications generated by database marketing may be described as junk mail or spam, if it is unwanted by the addressee. Direct and database marketing organizations, on the other hand, argue that a targeted letter or e-mail to a customer, who wants to be contacted about offerings that may interest the customer, benefits both the customer and the marketer. Some countries and some organizations insist that individuals are able to prevent entry to or delete their name and address and details from database marketing lists. 4\4

Key concepts Product / Pricing / Promotion Distribution / Service / Retail Brand management Marketing effectiveness Market research Marketing strategy Marketing management Market dominance

Promotional content
Advertising / Branding Direct marketing / Personal Sales Product placement / Public relations Publicity / Sales promotion Underwriting

Promotional media
Printing / Publication / Broadcasting Out-of-home / Internet marketing Point of sale / Novelty items Digital marketing / In-game Word of mouth

Enterprise Feedback Management (EFM) is a class of software that enables centralized deployment and management of all feedback operations throughout an enterprise/organization. EFM can help an organization establish a dialogue with employees, partners, and customers regarding key issues and concerns. EFM consists of data collection, analysis and reporting. Prior to EFM, survey software was typically deployed in departments. EFM enables deployment across the enterprise, providing decision makers with important data for increasing customer satisfaction, loyalty and lifetime value.[1] EFM enables companies to look at customers "holistically" and to better respond to customer needs.

Background EFM is typically supported by software or software services for collecting and managing feedback from customers or employees. There are two main types: online survey software that solicits inputs to pre-defined questions, and new Web 2.0 two-way communication and community platform that solicits open-ended feedback and ideas from customers and have the customer community collectively rank the feedback and ideas.

Both types support advanced survey design with CRM integration and advanced reporting with statistical analysis, centralized panel management. EFM augments survey software by providing a workflow process that provides a means for organizations to ensure consistent survey quality and enforce respondent privacy and IT security policies

Web 2.0 based platforms may also incorporate natural language processing to organize, rank and tag the contents, and discover emerging topics and trends.

Applications of EFM vary widely from HR, IT, Marketing, Sales and continues to expand on its corporate implementation and scope. Departments within an organization can collaborate on feedback initiatives, sharing results and gaining insights that enable the organization to listen, learn, react and anticipate to the needs of their key stakeholders. Enterprise Feedback Management is helping organizations obtain and rank feedback, providing a means for customers

Enterprise relationship management or ERM is a business method in relationship management beyond customer relationship management. "ERM - Enterprise Relationship Management is basically a business strategy for value creation that is not based on cost containment, but rather on the leveraging of network-enabled processes and activities to transform the relationships between the organization and all its internal and external constituencies in order to maximize current and future opportunities."

Overview The art of relationship management is not an entirely new one. In fact, it has taken on many forms, addressing specific organizational constituencies (customers, channel partners, specialized service providers, employees, suppliers, etc). The most obvious being CRM (customer relationship management), that focuses on improving top-line growth by maximizing an organization's ability to identify sales and business opportunities with its customers. ,

CRM's little brother PRM (), focuses on optimizing opportunity and downstream order management for an organization's channel partners (e.g. CISCO and its partner lead and referral management process) On the back end, we have ERP (enterprise resource planning) to manage internal operations including manufacturing, finance, HR, sales and distribution, etc

Specialized HRM (human resource management) solutions exist to manage employee benefits, collective agreements, performance reviews and so forth. And lastly, SCM (supply chain management, either as an ERP module or as a standalone application) to manage the product flow, up and down a firm's value chain, with external partners/suppliers.

However, according to Galbreath (2002), "for the most part CRM, human resources management (HRM), enterprise resource planning (ERP), supply chain management (SCM), partner relationship management (PRM) and similar programs have paid very little attention to the relationships that underpin those processes, or to the intangible relationship assets embedded in them."

Norman and Ramirez (1993) state, "One of the chief strategic challenges of the new economy is to integrate knowledge and relationships devise a good fit between competencies (Competencies are the technologies, specialized expertise, business processes and techniques that a company has accumulated over time and packages in its offering) and customers and keep that fit current." Galbraeth (2002) adds that "success in the relationship age requires a deliberate process of creating intangible, relationship assets, growing

Galbreath (2002) suggests Enterprise Relationship Management as a process or approach to harmonize and synergize the different types of relationships that a firm engages in order to realize targeted business benefits, for significant benefits. Harbison did some research on the performance of alliances and came up with the following statistics

Strategic alliances have consistently produced a return on investment of nearly 17 percent among the top 2,000 companies in the world for nearly a decade. This return is 50 percent more than the average return on investment that the companies produced overall.

The 25 companies most active in alliances achieved a 17.2 percent return on equity 40 percent more than the average return on equity of the Fortune 500.[

The 25 companies least active in alliances lagged the Fortune 500, with an average return on equity of only 10.1 percent. Successful alliances recognize 20 percent profitability improvements as compared to only 11 percent for the less successful companies.

Revenue generation from highly successful alliances equates to 21 percent of overall firm sales as compared to 14 percent for less successful alliances.

a similar study conducted for the supplier side (results of efficiently run supply chains based on electronic integration and quality processes) by Solomon Smith Barney Analyst Report, Teagarden presents the following statistics for suppliers:

Inventory levels reduced by as much as 50 percent.[] Inventory turns doubled.[] Stock outs reduced ninefold.[On-time deliveries increased by as much as 40 percent.[Cycle times decreased by as much as 27 percent overall.[Supply chain costs reduced by as much as 20 percent.[Revenues increased by as much as 17 percent.[

When looking at these numbers, collaboration with outside firms becomes very attractive. But success in business, as in many other pursuits, is dependent on motivation, investment, trust, discipline and repeatability.

Tools and methodologies Why do we need an Enterprise Relationship Management framework? Simply put, because relationships are becoming more and more prevalent and more integral to an organization's success. Although establishing inter-enterprise links is far from a new science, Klambach and Roussel affirm that nearly 60% of business alliances do not deliver anticipated benefits while Lovallo & Kahneman(2003) and Selden & Colvin (2003) estimate M&A ( Mergers & Acquisitions) failures range between 70%

improve relationship success rates seems quite obvious. Many authors have addressed these issues from varying perspectives, including technology enabling a firm, reviewing or re-designing operational & administrative processes, and transforming the culture to one that is more adapted to collaboration. As Galbreath (2002) and Norman & Ramirez state, collaboration or rather the effective leveraging of relationship resources to create new sources of value, is a process of

ERM is still a relatively new field and few players stand-out with a complete ERM methodology and tools. Nevertheless a host of best of breed tools and methodologies exist to carry out an ERM implementation, unfortunately they are not integrated and focus on very specialized problem areas.

Fundamentally adopting ERM is a cultural and change management issue more than a technology or process one. Therefore regardless of the methodology or tools that one may elect to use when integrating with outside firms, they must maintain a focus on the human side of the equations. The figure below illustrates the benefits of focusing on the human, cultural and change aspect of a project, notably deploying ERM in this case.

Mystery shopping is a tool used by

market research companies to measure quality of retail service or gather specific information about products and services. Mystery shoppers posing as normal customers perform specific tasks -- such as purchasing a product, asking questions, registering complaints or behaving in a certain way -- and then provide detailed reports or feedback about their experiences

History Mystery shopping began in the 1940s and as a way to measure employee integrity. Tools used for mystery shopping assessments range from simple questionnaires to complete audio and video recordings. Many mystery shopping companies are completely administered through the Internet, allowing potential mystery shoppers to use the Internet to register for participation, find mystery shopping jobs and receive payment

The most common venues where mystery shopping is used are retail stores, movie theaters, restaurants, fast food chains, banks, petrol stations, car dealerships, apartments and health clubs, as well as health care facilities. In the UK, mystery shopping is increasingly used to provide feedback on customer services provided by local authorities and other non-profit organizations, such as housing associations and churches.

Methodology When a client company comes on board with a company providing Mystery Shopping services, a survey model will be drawn up and agreed to which defines what information and improvement factors the client company wishes to measure as part of the mystery shopping process. These are then drawn up into survey instruments and assignments that are allocated to shoppers registered with the mystery shopping company in question.

Some of the common details and information points shoppers the date and time of the pre-visit phone call the name of the store on each side of the store visited number of employees in the store on entering how long it takes before the mystery shopper is greeted the name of the employee's)

whether or not the greeting is friendly the questions asked by the shopper to find a suitable product the types of products shown if or how the employee attempted to close the sale whether the employee invited the shopper to come back to the store cleanliness of store and store associates speed of service compliance with company standards relating to service, store appearance, and

Shoppers are often given instructions or procedures to make the transaction atypical to make the test of the knowledge and service skills of the employees more stringent or specific to a particular service issue (known as scenarios). For instance, mystery shoppers at a restaurant may pretend they are lactose-intolerant, or a clothing store mystery shopper could inquire about gift-wrapping services. Not all mystery shopping scenarios include a purchase.

From there, the shopper will then submit the data collected to the Mystery shopping company in question. The data is then reviewed and analyzed before quantitative and qualitative statistical [analysis] reports on the data are then returned to the client company that enables measurement against the previously defined criteria.

Ethics The most widely used set of professional guidelines and ethics standards for the industry is ISO 20252[5] ratified in 2006

There exists a scam that uses mystery shopping as a premise for fraud, where a person is sent a bad check with a request to deposit it into their bank account, wire a portion of the money through a wire transfer company such as Western Union and keep the remainder as a mystery shopping fee, and informed to mail the money immediately as the test is evaluating response time. People who wire the "remainder" discover the check is bad and lose the money they transfer and the wire transfer service fee in addition to the total amount of the check, often leaving them in debt to their banksTwo people were arrested in Canada for conducting this scam, but the scam is still prevalent.

Statistics The mystery shopping industry had an estimated value of nearly $600 million in the United States in 2004, according to a 2005 report commissioned by the (MSPA). Companies that participated in the report experienced an average growth of 11.1 percent from 2003 to 2004, compared to an average growth of 12.2 percent. The report estimates more than 8.1 million mystery shops were conducted in 2004. The report represents the first industry association attempt to quantify the size of the mystery shopping industry. Similar surveys are available for European regions where mystery shopping is becoming more embedded into company procedures

As a measure of its importance, customer/patient satisfaction is being incorporated more frequently into executive pay. A study by a U.S. firm found more than 55% of hospital chief executive officers surveyed in 2005 had "some compensation at risk," based on patient satisfaction, up from only 8% to 20% a dozen years ago."

Predictive analytics encompasses a variety of techniques from statistics and data mining that analyze current and historical data to make predictions about future events. Such predictions rarely take the form of absolute statements, and are more likely to be expressed as values that correspond to the odds of a particular event or behavior taking place in the future. In business, predictive models exploit patterns found in historical and transactional data to identify risks and opportunities. Models capture relationships among many factors to allow assessment of risk or potential associated with a particular set of conditions, guiding decision making for candidate transactions. 1\2

One of the most well-known applications is credit scoring, which is used throughout financial services. Scoring models process a customers credit history, , customer data, etc., in order to rank-order individuals by their likelihood of making future credit payments on time. Predictive analytics are also used in insurance, telecommunications, retail, travel, healthcare, pharmaceuticals and other fields. 2\2

Types of predictive analytics Generally, predictive analytics is used to mean predictive modeling, scoring of predictive models, and forecasting. However, people are increasingly using the term to describe related analytic disciplines, such as descriptive modeling and decision modeling or optimization. These disciplines also involve rigorous data analysis, and are widely used in business for segmentation and decision making, but have different purposes and the statistical techniques

Predictive models
Predictive models analyze past performance to assess how likely a customer is to exhibit a specific behavior in the future in order to improve marketing effectiveness. This category also encompasses models that seek out subtle data patterns to answer questions about customer performance, such as fraud detection models. Predictive models often perform calculations during live transactions, for example, to evaluate the risk or opportunity of a given customer or transaction, in order to guide a

Descriptive models
Descriptive models describe relationships in data in a way that is often used to classify customers or prospects into groups. Unlike predictive models that focus on predicting a single customer behavior (such as credit risk), descriptive models identify many different relationships between customers or products. But the descriptive models do not rank-order customers by their likelihood of taking a particular action the way predictive models do. Descriptive models are often used offline, for example, to categorize customers by their product preferences and life stage. Descriptive modeling tools can be utilized to develop agent based models that can simulate large number of individualized agents to predict possible futures.

Predictive analytics
Definition Predictive analytics is an area of statistical analysis that deals with extracting information from data and using it to predict future trends and behavior patterns. The core of predictive analytics relies on capturing relationships between explanatory variables and the predicted variables from past occurrences, and exploiting it to predict future outcomes.

USES - Direct marketing Product marketing is constantly faced with the challenge of coping with the increasing number of competing products, different consumer preferences and the variety of methods (channels) available to interact with each consumer. Efficient marketing is a process of understanding the amount of variability and tailoring the marketing strategy for greater profitability. Predictive analytics can help identify consumers with a higher likelihood of responding to a particular marketing offer. Models can be built using data from consumers past purchasing history and past response rates for each channel.

Additional information about the consumers demographic, geographic and other characteristics can be used to make more accurate predictions. Targeting only these consumers can lead to substantial increase in response rate which can lead to a significant reduction in cost per acquisition. Apart from identifying prospects, predictive analytics can also help to identify the most effective combination of products and marketing channels that should be used to target a given consumer.

Cross-sell Often corporate organizations collect and maintain abundant data (e.g. customer records, sale transactions) and exploiting hidden relationships in the data can provide a competitive advantage to the organization. For an organization that offers multiple products, an analysis of existing customer behavior can lead to efficient cross sell of products. This directly leads to higher profitability per customer and strengthening of the customer relationship. Predictive analytics can help analyze customers spending, usage and other behavior, and help crosssell the right product at the right time.

Customer retention With the amount of competing services available, businesses need to focus efforts on maintaining continuous . In such a competitive scenario, needs to be rewarded and customer attrition needs to be minimized. Businesses tend to respond to customer attrition on a reactive basis, acting only after the customer has initiated the process to terminate service. At this stage, the chance of changing the customers decision is almost impossible.

Proper application of predictive analytics can lead to a more proactive retention strategy. By a frequent examination of a customers past service usage, service performance, spending and other behavior patterns, predictive models can determine the likelihood of a customer wanting to terminate service sometime in the near future. An intervention with lucrative offers can increase the chance of retaining the customer.

Silent attrition is the behavior of a customer to slowly but steadily reduce usage and is another problem faced by many companies. Predictive analytics can also predict this behavior accurately and before it occurs, so that the company can take proper actions to increase customer activity.

Underwriting Many businesses have to account for risk exposure due to their different services and determine the cost needed to cover the risk. For example, auto insurance providers need to accurately determine the amount of premium to charge to cover each automobile and driver. A financial company needs to assess a borrowers potential and ability to pay before granting a loan.

For a health insurance provider, predictive analytics can analyze a few years of past medical claims data, as well as lab, pharmacy and other records where available, to predict how expensive an enrollee is likely to be in the future. Predictive analytics can help underwriting of these quantities by predicting the chances of illness, default, bankruptcy, etc.

Predictive analytics can streamline the process of customer acquisition, by predicting the future risk behavior of a customer using application level data. Proper predictive analytics can lead to proper pricing decisions, which can help mitigate future risk of default

Collection analytics Every portfolio has a set of delinquent customers who do not make their payments on time. The financial institution has to undertake collection activities on these customers to recover the amounts due. A lot of collection resources are wasted on customers who are difficult or impossible to recover.

Predictive analytics can help optimize the allocation of collection resources by identifying the most effective collection agencies, contact strategies, legal actions and other strategies to each customer, thus significantly increasing recovery at the same time reducing collection costs.

Fraud detection Fraud is a big problem for many businesses and can be of various types. Inaccurate credit applications, fraudulent transactions, identity thefts and false insurance claims are some examples of this problem. These problems plague firms all across the spectrum and some examples of likely victims are credit card issuers, insurance companies, retail merchants, manufacturers, business to business suppliers and even services providers. This is an area where a predictive model is often used to help weed out the bads and reduce a business's exposure to fraud

Portfolio, product or economy level prediction Often the focus of analysis is not the consumer but the product, portfolio, firm, industry or even the economy. For example a retailer might be interested in predicting store level demand for inventory management purposes. Or the Federal Reserve Board might be interested in predicting the unemployment rate for the next year. These type of problems can be addressed by predictive analytics using Time Series techniques (see below). Wrong Information

Statistical techniques The approaches and techniques used to conduct predictive analytics can broadly be grouped into regression techniques and machine learning techniques.

Regression Techniques Regression models are the mainstay of predictive analytics. The focus lies on establishing a mathematical equation as a model to represent the interactions between the different variables in consideration. Depending on the situation, there is a wide variety of models that can be applied while performing predictive analytics. Some of them are briefly discussed below.

Linear Regression Model The linear regression model analyzes the relationship between the response or dependent variable and a set of independent or predictor variables. This relationship is expressed as an equation that predicts the response variable as a linear function of the parameters. These parameters are adjusted so that a measure of fit is optimized. Much of the effort in model fitting is focused on minimizing the size of the residual, as well as ensuring that it is randomly distributed with respect to the model predictions.

The goal of regression is to select the parameters of the model so as to minimize the sum of the squared residuals. This is referred to as ordinary least squares (OLS) estimation and results in best linear unbiased estimates (BLUE) of the parameters.

Once the model has been estimated we would be interested to know if the predictor variables belong in the model i.e. is the estimate of each variables contribution reliable? To do this we can check the statistical significance of the models coefficients which can be measured using the t-statistic

This amounts to testing whether the coefficient is significantly different from zero. How well the model predicts the dependent variable based on the value of the independent variables can be assessed by using the R statistic. It measures predictive power of the model i.e. the proportion of the total variation in the dependent variable that is explained (accounted for) by variation in the independent variables.

Discrete choice models Multivariate regression (above) is generally used when the response variable is continuous and has an unbounded range. Often the response variable may not be continuous but rather discrete. While mathematically it is feasible to apply multivariate regression to discrete ordered dependent variables, some of the assumptions behind the theory of multivariate linear regression no longer hold, and there are other techniques such as discrete choice models which are better suited for this type of analysis. If the dependent variable is discrete, some of those superior methods are logistic regression, multinomial logit and probit models. Logistic regression and probit models are used when the dependent variable is binary

Logistic regression In a classification setting, assigning outcome probabilities to observations can be achieved through the use of a logistic model, which is basically a method which transforms information about the binary dependent variable into an unbounded continuous variable and estimates a regular multivariate model (See Allisons Logistic Regression for more information on the theory of Logistic Regression).

The Wald and likelihood-ratio test are used to test the statistical significance of each coefficient b in the model (analogous to the t tests used in OLS regression; see above). A test assessing the goodness-of-fit of a classification model is the .

Multinomial logistic regression An extension of the to cases where the dependent variable has more than 2 categories is the . In such cases collapsing the data into two categories might not make good sense or may lead to loss in the richness of the data. The multinomial logit model is the appropriate technique in these cases, especially when the dependent variable categories are not ordered (for examples colors like red, blue, green). Some authors have extended multinomial regression to include feature selection/importance methods such as Random multinomial logit.

Probit regression Probit models offer an alternative to logistic regression for modeling categorical dependent variables. Even though the outcomes tend to be similar, the underlying distributions are different. Probit models are popular in social sciences like economics.

A good way to understand the key difference between probit and logit models, is to assume that there is a latent variable z. We do not observe z but instead observe y which takes the value 0 or 1. In the logit model we assume that follows a logistic distribution. In the probit model we assume that follows a standard normal distribution. Note that in social sciences (example economics), probit is often used to model situations where the observed variable y is continuous but takes values between 0 and

Logit vs. Probit The Probit model has been around longer than the logit model. They look identical, except that the logistic distribution tends to be a little flat tailed. In fact one of the reasons the logit model was formulated was that the probit model was extremely hard to compute because it involved calculating difficult integrals. Modern computing however has made this computation fairly simple. The coefficients obtained from the logit and probit model are also fairly close. However the odds ratio makes the logit model easier to interpret.

For practical purposes the only reasons for choosing the probit model over the logistic model would be: There is a strong belief that the underlying distribution is normal The actual event is not a binary outcome (e.g. Bankrupt/not bankrupt) but a proportion (e.g. Proportion of population at different debt levels).

Time series models Time series models are used for predicting or forecasting the future behavior of variables. These models account for the fact that data points taken over time may have an internal structure (such as autocorrelation, trend or seasonal variation) that should be accounted for. As a result standard regression techniques cannot be applied to time series data and methodology has been developed to decompose the trend, seasonal and cyclical component of the series. Modeling the dynamic path of a variable can improve forecasts since the predictable component of the series can be projected into the future.

Time series models estimate difference equations containing stochastic components. Two commonly used forms of these models are autoregressive models (AR) and moving average (MA) models. The Box-Jenkins methodology (1976) developed by George Box and G.M. Jenkins combines the AR and MA models to produce the ARMA (autoregressive moving average) model which is the cornerstone of stationary time series analysis. ARIMA (autoregressive integrated moving average models) on the other hand are used to describe nonstationary time series

Box and Jenkins suggest differencing a non stationary time series to obtain a stationary series to which an ARMA model can be applied. Non stationary time series have a pronounced trend and do not have a constant long-run mean or variance

Box and Jenkins proposed a three stage methodology which includes: model identification, estimation and validation. The identification stage involves identifying if the series is stationary or not and the presence of seasonality by examining plots of the series, autocorrelation and partial autocorrelation functions. In the estimation stage, models are estimated using non-linear time series or maximum likelihood estimation procedures. Finally the validation stage involves diagnostic checking such as plotting the residuals to detect outliers and evidence of model fit.

In recent years time series models have become more sophisticated and attempt to model conditional heteroskedasticity with models such as ARCH (autoregressive conditional heteroskedasticity) and GARCH (generalized autoregressive conditional heteroskedasticity) models frequently used for financial time series. In addition time series models are also used to understand inter-relationships among economic variables represented by systems of equations using VAR (vector auto regression) and structural VAR models.

Survival or duration analysis Survival analysis is another name for time to event analysis. These techniques were primarily developed in the medical and biological sciences, but they are also widely used in the social sciences like economics, as well as in engineering (reliability and failure time analysis).

Censoring and non-normality which are characteristic of survival data generate difficulty when trying to analyze the data using conventional statistical models such as multiple linear regression. The Normal distribution, being a symmetric distribution, takes positive as well as negative values, but duration by its very nature cannot be negative and therefore normality cannot be assumed when dealing with duration/survival data. Hence the normality assumption of regression models is violated

censored observation is defined as an observation with incomplete information. Censoring introduces distortions into traditional statistical methods and is essentially a defect of the sample data. The assumption is that if the data were not censored it would be representative of the population of interest. In survival analysis, censored observations arise whenever the dependent variable of interest represents the time to a terminal event, and the duration of the study is limited in time.

An important concept in survival analysis is the hazard rate. The hazard rate is defined as the probability that the event will occur at time t conditional on surviving until time t. Another concept related to the hazard rate is the survival function which can be defined as the probability of surviving to time t.

Most models try to model the hazard rate by choosing the underlying distribution depending on the shape of the hazard function. A distribution whose hazard function slopes upward is said to have positive duration dependence, a decreasing hazard shows negative duration dependence whereas constant hazard is a process with no memory usually characterized by the exponential distribution. Some of the distributional choices in survival models are: F, gamma, Weibull, log normal, inverse normal, exponential etc. All these distributions are for a non-negative random variable.

Duration models can be parametric, nonparametric or semi-parametric. Some of the models commonly used are Kaplan-Meier, Cox proportional hazard model (non parametric).

Classification and regression trees (CART) is a non-parametric technique that produces either classification or regression trees, depending on whether the dependent variable is categorical or numeric, respectively. Trees are formed by a collection of rules based on values of certain variables in the modeling data set

Rules are selected based on how well splits based on variables values can differentiate observations based on the dependent variable Once a rule is selected and splits a node into two, the same logic is applied to each child node (i.e. it is a recursive procedure) Splitting stops when CART detects no further gain can be made, or some pre-set stopping rules are met

Each branch of the tree ends in a terminal node Each observation falls into one and exactly one terminal node Each terminal node is uniquely defined by a set of rules A very popular method for predictive analytics is Leo Breiman's Random forests or derived versions of this technique like Random multinomial logit.

Multivariate regression splines is a non-parametric technique that builds flexible models by fitting . An important concept associated with regression splines is that of a knot. Knot is where one local regression model gives way to another and thus is the point of intersection between two splines.

In multivariate and adaptive regression splines, basis functions are the tool used for generalizing the search for knots. Basis functions are a set of functions used to represent the information contained in one or more variables. Multivariate and Adaptive Regression Splines model almost always creates the basis functions in pairs.

Multivariate and adaptive regression spline approach deliberately overfits the model and then prunes to get to the optimal model. The algorithm is computationally very intensive and in practice we are required to specify an upper limit on the number of basis functions.

Machine learning techniques Machine learning, a branch of artificial intelligence, was originally employed to develop techniques to enable computers to learn. Today, since it includes a number of advanced statistical methods for regression and classification, it finds application in a wide variety of fields including , , face and speech recognition and analysis of the stock market

In certain applications it is sufficient to directly predict the dependent variable without focusing on the underlying relationships between variables. In other cases, the underlying relationships can be very complex and the mathematical form of the dependencies unknown. For such cases, machine learning techniques emulate human cognition and learn from training examples to predict future events. A brief discussion of some of these methods used commonly for predictive analytics is provided below. A detailed study of machine learning can be found in Mitchell (1997).

Neural networks Neural networks are nonlinear sophisticated modeling techniques that are able to model complex functions. They can be applied to problems of prediction, classification or control in a wide spectrum of fields such as finance, cognitive psychology/neuroscience, medicine, engineering, and physics.

Neural networks are used when the exact nature of the relationship between inputs and output is not known. A key feature of neural networks is that they learn the relationship between inputs and output through training. There are two types of training in neural networks used by different networks, supervised and unsupervised training, with supervised being the most common one.

Some examples of neural network training techniques are backpropagation, quick propagation, conjugate gradient descent, projection operator, Delta-Bar-Delta etc. Theses are applied to network architectures such as multilayer perceptrons, Kohonen networks, Hopfield networks, etc.

Radial basis functions A radial basis function (RBF) is a function which has built into it a distance criterion with respect to a center. Such functions can be used very efficiently for interpolation and for smoothing of data. Radial basis functions have been applied in the area of neural networks where they are used as a replacement for the sigmoidal transfer function. Such networks have 3 layers, the input layer, the hidden layer with the RBF non-linearity and a linear output layer. The most popular choice for the nonlinearity is the Gaussian. RBF networks have the advantage of not being locked into local minima as do the feed-forward networks such as the multilayer perceptron.

Support vector machines Support Vector Machines (SVM) are used to detect and exploit complex patterns in data by clustering, classifying and ranking the data. They are learning machines that are used to perform binary classifications and regression estimations. They commonly use kernel based methods to apply linear classification techniques to non-linear classification problems. There are a number of types of SVM such as linear, polynomial, sigmoid etc.

Nave Bayes Nave Bayes based on Bayes conditional probability rule is used for performing classification tasks. Nave Bayes assumes the predictors are statistically independent which makes it an effective classification tool that is easy to interpret. It is best employed when faced with the problem of curse of dimensionality i.e. when the number of predictors is very high.

k-nearest neighbours The nearest neighbour algorithm (KNN) belongs to the class of pattern recognition statistical methods. The method does not impose a priori any assumptions about the distribution from which the modeling sample is drawn. It involves a training set with both positive and negative values. A new sample is classified by calculating the distance to the nearest neighbouring training case. The sign of that point will determine the classification of the sample. In the k-nearest neighbour classifier, the k nearest points are considered and the sign of the majority is used to classify the sample

The performance of the kNN algorithm is influenced by three main factors: (1) the distance measure used to locate the nearest neighbours; (2) the decision rule used to derive a classification from the knearest neighbours; and (3) the number of neighbours used to classify the new sample. It can be proved that, unlike other methods, this method is universally asymptotically convergent, i.e.: as the size of the training set increases, if the observations are iid, regardless of the distribution from which the sample is drawn, the predicted class will converge to the class assignment that minimizes misclassification error. See Devroy et alt.

Popular tools There are numerous tools available in the marketplace which help with the execution of predictive analytics. These range from those which need very little user sophistication to those that are designed for the expert practitioner. The difference between these tools is often in the level of customization and heavy data lifting allowed. For traditional statistical modeling some of the popular tools are DAP/SAS, S-Plus, PSPP/SPSS and Stata. For machine learning/data mining type of applications, KnowledgeSEEKER, KnowledgeSTUDIO, Enterprise Miner, GeneXproTools, Clementine, KXEN Analytic Framework, InforSense and Excel Miner are some of the popularly used options.

Classification Tree analysis can be performed using CART software. R is a very powerful tool that can be used to perform almost any kind of statistical analysis, and is freely downloadable. WEKA is a freely available open-source collection of machine learning methods for pattern classification, regression, clustering, and some types of metalearning, which can be used for predictive analytics. RapidMiner is another freely available integrated open-source software environment for predictive analytics, data mining, and machine learning fully integrating WEKA and providing an even larger number of methods for predictive analytics

Recently, in an attempt to provide a standard language for expressing predictive models, the Predictive Model Markup Language (PMML) has been proposed. Such an XML-based language provides a way for the different tools to define predictive models and to share these between PMML compliant applications. Several tools already produce or consume PMML documents, these include ADAPA, IBM DB2 Warehouse, CART, SAS Enterprise Miner, and SPSS. Predictive analytics has also found its way into the IT lexicon, most notably in the area of IT Automation. Vendors such as Stratavia and their Data Palette product offer predictive analytics as part of their automation platform, predicting how resources will behave in the future and automate the environment accordingly.

The widespread use of predictive analytics in industry has led to the proliferation of numerous productized solutions firms. Some of them are highly specialized (focusing, for example, on fraud detection, automatic saleslead generation or response modeling) in a specific domain (Fair Isaac for credit card scores) or industry verticals (MarketRx in Pharmaceutical). Others provide predictive analytics services in support of a wide range of business problems across industry verticals (Fifth C). Predictive Analytics competitions are also fairly common and often pit academics and Industry practitioners (see for example, KDD CUP).

Conclusion Predictive analytics adds great value to a businesses decision making capabilities by allowing it to formulate smart policies on the basis of predictions of future outcomes. A broad range of tools and techniques are available for this type of analysis and their selection is determined by the analytical maturity of the firm as well as the specific requirements of the problem being solved.

Sales force management systems are information systems used in marketing and management that help automate some sales and sales force management functions. They are frequently combined with a marketing information system, in which case they are often called Customer Relationship Management (CRM) systems. 1\3

Sales Force Automation Systems (SFA), typically a part of a companys customer relationship management system, is a system that automatically records all the stages in a sales process. SFA includes a which tracks all contact that has been made with a given customer, the purpose of the contact, and any follow up that might be required. This ensures that sales efforts wont be duplicated eliminating the risk of irritating customers.

SFA also includes a , which lists potential customers through paid phone lists, or customers of related products. Other elements of an SFA system can include, , order management and . More developed SFA systems have features where customers can actually model the product to meet their required needs through online product building systems.

This is becoming more and more popular in the automobile industry, where patrons can customize various features such as color and interior features such as leather vs. upholstered seats.

An integral part of any SFA system is company wide integration among different departments. If SFA systems arent adopted and properly integrated to all departments, there might be a lack of communication which could result in different departments contacting the same customer for the same purpose. In order to mitigate this risk, SFA must be fully integrated in all departments that deal with customer service management

Advantages to sales people Proponents claim that sales force automation systems can improve the productivity of sales personnel. Here are some examples: Rather than write-out sales orders, reports, activity reports, and/or call sheets, sales people can fill-in prepared e-forms. This saves time. Rather than printing out reports and taking them to the sales manager, sales people can use the company intranet to transmit the information. This saves time

Rather than waiting for paper-based productinventory data, sales-prospect lists, and salessupport information, they will have access to the information when they need it. This could be useful in the field when answering prospects questions and objections. The additional tools could help improve sales staff morale if they reduce the amount of record keeping and/or increase the rate of closing. This could contribute to a virtuous spiral of beneficial and cumulative effects.

These sales force systems can be used as an effective and efficient training device. They provide sales staff with product information and sales technique training without them having to waste time at seminars. Better communication and co-operation between sales personnel facilitates successful team selling.

More and better qualified sales leads could be automatically generated by the software. This technology increases the sales persons ratio of selling time to non-selling time. Non-selling time includes activities like report writing, travel time, internal meetings, training, and seminars.

Advantages to the sales manager Sales force automation systems can also affect sales management. Here are some examples: The sales manager, rather than gathering all the call sheets from various sales people and tabulating the results, will have the results automatically presented in easy to understand tables, charts, or graphs. This saves time for the manager.

Activity reports, information requests, orders booked, and other sales information will be sent to the sales manager more frequently, allowing him/her to respond more directly with advice, product instock verifications, and price discount authorizations. This gives management more handson control of the sales process if they wish to use it.

The sales manager can configure the system so as to automatically analyze the information using sophisticated statistical techniques, and present the results in a user-friendly way. This gives the sales manager information that is more useful in : Providing current and useful sales support materials to their sales staff Providing marketing research data: demographic, psychographic, behavioural, product acceptance, product problems, detecting trends

Providing market research data: industry dynamics, new competitors, new products from competitors, new promotional campaigns from competitors, macro-environmental scanning, detecting trends Co-ordinate with other parts of the firm, particularly marketing, production, and finance Identifying your most profitable customers, and your problem customers

Tracking the productivity of their sales force by combining a number of performance measures such as: revenue per sales person, revenue per territory, margin by customer segment, margin by customer, number of calls per day, time spent per contact, revenue per call, cost per call, entertainment cost per call, ratio of orders to calls, revenue as a percentage of sales quota, number of new customers per period, number of lost customers per period, cost of customer acquisition as a percentage of expected lifetime value of customer, percentage of goods returned, number of customer complaints, and number of overdue accounts. More complex models like the PAIRS model (by Parasuraman and Day) and the Call Plan model (by Lodish) can also be used.

Advantages to the marketing manager It is also claimed to be useful for the marketing manager. It gives the marketing manager information that is useful in : Understanding the economic structure of your industry Identifying segments within your market Identifying your target market Identifying your best customers in place Doing marketing research to develop profiles (demographic, psychographic, and behavioral) of your core customers

Understanding your competitors and their products Developing new products Establishing environmental scanning mechanisms to detect opportunities and threats Understanding your company's strengths and weaknesses Auditing your customers' experience of your brand in full Developing marketing strategies for each of your products using the marketing mix variables of price, product, distribution, and promotion

Coordinating the sales function with other parts of the promotional mix (such as advertising, sales promotion, public relations, and publicity) Creating a sustainable competitive advantage Understanding where you want your brands to be in the future, and providing an empirical basis for writing marketing plans on a regular basis to help you get there Providing input into feedback systems to help you monitor and adjust the process

Strategic advantages Sales force automation systems can also create competitive advantage. Here are some examples: As mentioned above, productivity will increase. Sales staff will use their time more efficiently and more effectively. The sales manager will also become more efficient and more effective. (see above) This increased productivity can create a competitive advantage in three ways: it can reduce costs, it can increase sales revenue, and it can increase market share.

Field sales staff will send their information more frequently. Typically information will be sent to management after every sales call (rather than once a week). This provides management with current information, information that they will be able to use while it is still valuable. Management response time will be greatly reduced. The company will become more alert and more agile.

These systems could increase customer satisfaction if they are used with wisdom. If the information obtained and analyzed with the system is used to create a product that matches or exceeds customer expectations, and the sales staff use the system to service customers more expertly and diligently, then customers should be satisfied with the company. This will provide a competitive advantage because customer satisfaction leads to increased customer loyalty, reduced customer acquisition costs, reduced price elasticity of demand, and increased profit margins.

Disadvantages Detractors claim that sales force management systems are: difficult to work with require additional work inputting data dehumanize a process that should be personal require continuous maintenance, information updating, and system upgrading costly difficult to integrate with other management information systems

Encouraging use For all the reasons stated above many organisations have found it difficult to persuade sales people to enter data into the system. For this reason many have questioned the value of the investment. Recent developments have embedded sales process systems that give something back to the seller within the CRM screens. Because these systems help the sales person plan and structure their selling in the most effective way they give a reason to use the CRM.

WMS is an ERP (Enterprise resource planning) which is managed solely via the internet, A WMS gives organizations or businesses the ability to centralize a company at multiple locations. The system allows management the ability to allocate work to employees, check customer details, and issue accounts to customers, while viewing the performance of employees in real-time. A WMS aids in the running of a business, from warehouse stock control right through to accounts and POS (Point of Sale) and typically includes a CRM component (customer relationship management). Management can watch a business with real-time demographics sales, stock control and accounts within an organization.

Technology
A WMS comprises two major technology components: the software application, and the data store. The most popular software technology's include PHP, Python, Ruby and ASP.NET. The most popular data store technologies include MySQL and Microsoft SQL Server. With exposure to the vastness that is the internet, security is of paramount concern in the application's design.

Sales Force Automation Systems (SFA), typically a part of a companys customer relationship management system, is a system that automatically records all the stages in a sales process. SFA includes a which tracks all contact that has been made with a given customer, the purpose of the contact, and any follow up that might be required. This ensures that sales efforts wont be duplicated eliminating the risk of irritating customers. SFA also includes a , which lists potential customers through paid phone lists, or customers of related products. Other elements of an SFA system can include, , order management and . More developed SFA systems have features where customers can actually model the product to meet their required needs through online product building systems. This is becoming more and more popular in the automobile industry, where patrons can customize various features such as color and interior features such as leather vs. upholstered seats. 2\3

An integral part of any SFA system is company wide integration among different departments. If SFA systems arent adopted and properly integrated to all departments, there might be a lack of communication which could result in different departments contacting the same customer for the same purpose. In order to mitigate this risk, SFA must be fully integrated in all departments that deal with customer service management. 3\3