Core Content: Customer Intelligence

In an increasingly competitive world, just competing on superior product performance has become very tough. Therefore, companies have turned toward leveraging existing customer relationships. Actively managing customer relationships includes the following objectives:

1. Acquisition (identifying & attracting new customers)

2. Cross/up-selling (profitable usage stimulation)

3. Retention (identifying customers who intend to attrite/churn, and trying to keep profitable customers)

4. Recapturing lost customers

Each of these objectives can be supported by analytical tools powered by traditional statistical techniques or data mining algorithms. Hence, the field of analytical Customer Relationship Management (aCRM) has seen stellar growth.

This new approach to conducting business has been acknowledged by book authors such as Thomas Davenport & Jeanne Harris in 'Competing on Analytics' (2007) and Ian Ayres in 'Super Crunchers' (2007). The MMA program is not a master in marketing management, but it focuses on research and highlights mostly quantitative issues. The target group consists of both people with working experience and young graduates who feel the need for an in-depth education in marketing analysis. By bringing together a group of motivated students and teachers, and by dynamic and multimedia teaching methods, the Department of Marketing is striving to transfer in-depth knowledge of the marketing field.

Analytical Customer Relationship Management

In analytical CRM, we try to capture customer dynamics, i.e. customer inflows as well as outflows. CRM analysts construct statistical/data mining models to better understand, as well as predict customers' future behavior. This makes customer intelligence very actionable, because we are able to quantify, e.g. the probability a customer is going to stop purchasing a firm's products/services in the coming year. This 'propensity to churn or attrite' can then be used to rank their entire customer base in order to prioritize which customers should receive special customer retention treatment. Using targeted marketing campaigns, analytical CRM empowers companies to learn from their campaigns, and finetune offers to different customer segments. Hence, businesses often turn to customer intelligence to increase their marketing ROI (return on investment). This enables marketing departments to become more accountable.

Many studies have shown that a good way to improve customer retention is to sell more products to the same customers, i.e. extend the portfolio of products or services bought from a given supplier. Of course, given a specific customer profile, companies would like to know what is the next most-likely product or service a customer is going to buy. In analytical CRM, we build cross-sell/up-sell models, also known as NPTB (next product to buy) models. These enable marketing analysts to target customers with the most appropriate product.

Customer intelligence goes beyond mere 'business intelligence', which is interpreted by software vendors as just report generation, and/or OLAP applications used to find reasons for deviations or above/below-average performance of businesses. While this approach is valuable, customer intelligence goes beyond reporting about the past. It empowers analysts to predict the most likely future events of individual customers.

In the Master of Marketing Analysis, we teach the analytics to build these analytical CRM models for retention, cross-sell, marketing optimization, ... . This gives our graduates a real advantage on the job market, because these are sought-after skills in today's competitive markets.

Academic papers as well as videos about customer intelligence can be found at www.crm.UGent.be.