Analytical CRM software opens up new worlds to marketers

The introduction of analytical Customer Relationship Management (aCRM) software is taking existing CRM solutions one giant step further by providing in-depth analysis of the geographic data that surrounds customer information.

One thing that consumer and business customers have in common is location – an address, a postal code, a phone number. But for many businesses, the global reach of the Internet, and its potential to contact new customers, has overshadowed the strategic value in something as simple as knowing exactly where your customers live, shop and play.

However, a customer’s location, provides the necessary first step to garner other insightful information – such as personal lifestyle preferences, buying patterns, nearby businesses, and much more – that can add a valuable dimension to understanding and predicting a customer’s needs and wants.

The introduction of analytical Customer Relationship Management (aCRM) software is taking existing CRM solutions one giant step further by providing in-depth analysis of the geographic data that surrounds customer information. aCRM involves using the location of customers, markets and sites to enrich customer data, segmenting it into value groups, identifying sales and customer service efforts, and determining which customers and/or markets to target and how best to maximize response rates. For aCRM to be truly effective, geography must be added to the mix at the very beginning of the analysis process.

By linking customers to specific regions, companies can determine the magazines a customer is likely to read, as well as where similar potential customers reside. In doing so, companies can dramatically improve marketing strategy, customer relations, sales, profit and ROI.

Until recently, organizations with new services or products typically began their marketing efforts without knowing precisely where best to begin geographically, while CRM systems have lacked the focus to really help out – providing raw numbers that only a statistician can make sense of.

aCRM, on the other hand, is being used today by a growing number of companies in a variety of sectors, including government, finance, retail and telecommunications, to take the same data and break it down by geographic location, effectively placing the results on a map that can be displayed across the enterprise or across the Internet. Analysts predict the aCRM market will grow from $454 million in 2000 to $2.38 billion by 2004.

TD Canada Trust, for example, implemented aCRM software in support of its business planning process, focusing on its retail network to help understand markets on a local level. It has since used the information to create tailored local campaigns to supplement its national campaigns.

With so many companies having made huge investments in CRM systems without seeing results, some might be hesitant to invest in aCRM software. But aCRM actually leverages the initial investment. TD Canada Trust’s experience taught it that data is just data until you make meaning of it, put it into context and show people how to apply it – then it becomes intelligence. By taking customer data and ‘mapping it out,’ patterns become visible – the numbers effectively come to life.

A basic CRM analysis will not tell a local sports retailer, for example, that a competitor has moved between it and a pocket of its best customers in another part of the city. However, by integrating location into the analysis through aCRM software, the retailer now has the ability to proactively change its marketing strategies to minimize this competitive threat.

aCRM also provides new levels of versatility. Displaying information on a map is just the beginning. Organizations can view aCRM vendor databases such as census reports, provincial boundary files and even StatsCan files that include postal boundaries.

So instead of blanketing a wide market area and hoping to capture customers, companies can target potential customers whom they think are going to give them maximum value. The result is lower direct mailing costs and improved response rates.

The more information you add to the software, the better your analysis will be – and the ease of integration into existing databases makes aCRM profitable quickly.

The software can be up and running with existing large CRM vendor software or even simple spreadsheet databases in a very short time. This makes aCRM software a tool for both large companies that have vast customer data warehouses and small companies that run low-end database programs.

As more organizations begin to integrate the software across their enterprises, separate customer data files compiled by different departments will become a thing of the past. Eventually, access to aCRM information will be instantaneous and available to anyone who needs it, even on cell phones and PDAs.

Exploiting the location information trapped within traditional CRM databases by using spatially enabled aCRM is giving organizations unprecedented new tools to know their customers as never before.

Paul Thompson is senior product manager, aCRM Software and Services at MapInfo Canada in Toronto. He can be reached at paul_thompson@mapinfo.com.