Companies turning to customer relationship management to make the sale

November 27, 2013

Excited, surprised or annoyed when those holiday catalogs or promotional offers start coming in the mail or via email?

According to a Kansas State University expert in management, your shopping habits play a big role in determining when and if you receive retailers' promotional . Your habits can also influence whether you receive the information through the mail and electronically.

"It's all being done today by data analysis," said Reo Song, assistant professor of marketing in the university's College of Business Administration. "The data companies analyze include customer demographic information; purchase history, such as purchase time, amount, quantity, price; purchase channel—online, offline or catalog; payment medium—cash, debit card or credit card; and whether the purchase was a response to promotion."

The business world is changing from opinions-based decision-making to data-based decision-making, which makes customer relationship management so important to companies, Song said. He added that intuition is still important in business, but that its value is enhanced when complemented by data analyses.

"That data-driven decision-making plays a huge role in all areas of our life, including business, sports and politics," he said. "The role of the business managers who make decisions based on hunches is dwindling, being replaced by analysts who can tackle massive data for insight. Customer relationship management is one of the most important areas in business in this sense. Developing customized offerings to different customers by analyzing customer data is an inevitable trend in business."

Another benefit of customer relationship management, he said, is that companies can develop probability of purchase or response to marketing programs and send targeted promotions and offers to different customers.

"In this way, firms can increase return on investment, or ROI," Song said. "That is, given the same amount of investment, profits or revenues become higher when they use customer relationship management techniques. This is because more people will respond to advertising and promotions as firms target the right customers who have higher probability to purchase."

According to Song, businesses can get data on current and potential customers from various sources. Purchase history and come typically from a store's customer loyalty cards or website registration information. Data from companies can be purchased and combined. Social media websites provide additional valuable source of data. Data warehousing companies combine data from multiple sources, analyze and provide consulting services.

Customer relationship management also is trending more toward mobile devices like smartphones and tablets.

"Companies still send mail catalogs, but many customers on the companies' websites after looking at catalogs instead of ordering via phones," he said.

The best way to get information on deals, promotions and new products from a company is to register your email at their websites. Obtaining a company's loyalty card is an additional way to receive information, Song said.

Explore further: Analytics technology to identify performance raising measures based on employee/customer behavior

Related Stories

Businesses increase revenue with social media

March 25, 2013

Researchers at Aalto University, the University at Buffalo, and Texas A&M University have proven a link between customers' use of social media and higher revenue.

Memo to big box retailers: Goodwill has a shelf life

November 26, 2013

Big box retailers may have had the secret to combatting online retailers all along: instant gratification. A new study from Columbia Business School that is published in the Journal of Consumer Research warns that the positive ...

IBM combines local IT systems with cloud storage

November 27, 2013

IBM today announced that its inventors have patented a technique for combining Big Data from distributed cloud services with data stored on local IT systems to gain new insights that can enable businesses to more efficiently ...

Recommended for you

48-million-year-old horse-like fetus discovered in Germany

October 7, 2015

A 48 million year-old horse-like equoid fetus has been discovered at the Messel pit near Frankfurt, Germany according to a study published October 7, 2015 in the open-access journal PLOS ONE by Jens Lorenz Franzen from Senckenberg ...

Chimpanzees shed light on origins of human walking

October 6, 2015

A research team led by Stony Brook University investigating human and chimpanzee locomotion have uncovered unexpected similarities in the way the two species use their upper body during two-legged walking. The results, reported ...

How much for that Nobel prize in the window?

October 3, 2015

No need to make peace in the Middle East, resolve one of science's great mysteries or pen a masterpiece: the easiest way to get yourself a Nobel prize may be to buy one.

The dark side of Nobel prizewinning research

October 4, 2015

Think of the Nobel prizes and you think of groundbreaking research bettering mankind, but the awards have also honoured some quite unhumanitarian inventions such as chemical weapons, DDT and lobotomies.

Who you gonna trust? How power affects our faith in others

October 6, 2015

One of the ongoing themes of the current presidential campaign is that Americans are becoming increasingly distrustful of those who walk the corridors of power – Exhibit A being the Republican presidential primary, in which ...


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.