Companies purchasing analytical CRM applications should
beware of supplier claims that the software will work immediately
without being tailored to particular business requirements,
analysts have warned.Research firm Datamonitor has predicted that
the global analytical CRM market will grow from $2.3bn (£1.4bn) in
2002 to $4bn (£2.5bn) in 2006, as companies, which have completed
operational CRM rollouts, look for effective ways to exploit their
existing investments.
Many software suppliers promise that their
off-the-shelf analytical CRM applications can use data in the
datawarehouse to segment and define customer groups and target
outbound marketing.
However, the Datamonitor report said that
users are often confused because the main suppliers, such as
Siebel, SAS and Microsoft, all have a different definition of what
analytical CRM comprises.
“The marketing messages used by most suppliers
imply that true analytical CRM can be sold in an off-the-shelf
packaged solution and this simply does not reflect reality,” said
Ahmed Siddiqui, technology analyst at Datamonitor and report
author.
“These [suppliers] are unlikely to succeed in
the long term because customers buying their so-called analytical
technology rarely see the benefits that can be realised with
sophisticated analytical CRM packages and so become
disillusioned.”
Data quality - the process of consolidating
and cleaning every byte of data within a business - is the key to
ensuring the success of analytical CRM, Siddiqui said, adding
that the quality of data directly affects the effectiveness of
outbound marketing, analytics and customer loyalty and, more
fundamentally, the ability to do business
For example, when companies use inaccurate
data about “life events”, such as getting married or moving house,
this could annoy, upset and, potentially, lose a customer.
Furthermore, the incorrect information may be about credit history
and the customer could be mis-sold a product, Siddiqui said.
“Suppliers who offer analytics without
emphasising data quality and its fundamental importance may be
misleading the market,” he added. “Customers need to be careful
that they do not buy a solution that will not work at 100%
effectiveness.”