A Case for Analytical Customer Relationship Management

The Internet has emerged as a low cost, low latency and high bandwidth customer communication channel. Its interactive nature provides an organization the ability to enter into a close, personalized dialog with individual customers. The simultaneous maturation of data management technologies like data warehousing, and data mining, have created the ideal environment for making customer relationship management (CRM) a much more systematic effort than it has been in the past. In this paper we described how data analytics can be used to make various CRM functions like customer segmentation, communication targeting, retention, and loyalty much more effective. We briefly describe the key technologies needed to implement analytical CRM, and the organizational issues that must be carefully handled to make CRM a reality. Our goal is to illustrate problems that exist with current CRM efforts, and how using data analytics techniques can address them. Our hope is to get the data mining community interested in this important application domain.