Académique Documents
Professionnel Documents
Culture Documents
MAY 2009
WRITTEN BY
HOI LAM LEUNG
BSc SOFTWARE ENGINEERING (BUSINESS
SYSTEM)
Hoi.L.Leung@student.manchester.ac.uk
1
ABSTRACT
From the recently years, CRM has introduced the technology – data
mining for improving the relationship with the customers. Data mining is used
the computerization of algorithm to analyze the collected data in order to
provide a useful information for the company purposes. In other hand, the
company could use this information to understand and manage the
customer’s profile in different aspects. Data mining has four different
approaches, which are Classification, Sequential patterns, Clustering, and
Association rules. Each of the approaches have their own methods used for
CRM in different companies, therefore this dissertation is going to investigate
the relationship between CRM and Data mining. The relationship is looked at
three different levels, which are process level, service level and technology
level. The research will be focusing on the technology that the company used
and what kind of data that they keep from the customer in order to find out
how well is the CRM if they have utilized and will they aware of Data mining
as a new technology if the company has never utilized it before. After
analyzed the researching, I have to provide the recommendation for individual
scenario and conclude how does Data mining success with the CRM.
ACKNOWLEDGEMENTS
Firstly, I would like to thank my friends and cousins for spending the
time to complete the Questionnaire for me.
Secondly, I would also like to thank the University Libraries and the
Libraries from outside for providing the books and journals. Without them, the
research would be most difficult because I have not touched the CRM and
Data mining before. Therefore, I have no background knowledge about the
contexts.
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TABLE OF CONTENTS
ABSTRACT
ACKNOWLEDGEMENTS
CHAPTER 3 – RESEARCHING
Review the Research method
Analyzing the final Questionnaire
Overview the questions from Questionnaire
Importance of the questions
Reasons for the questions
Desired outcomes from the questions
Procedure of the researching
Problems in Researching
CHAPTER 5 – CONCLUSION
Summary
Recommendation on improvement
REFERENCES
APPENDIX
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CHAPTER 1 – LITERATURE REVIEW
This chapter will review the background contexts of the project and
provide an insight for the reader to get a good start to understand about the
CRM and the Data mining. I will begin with the introduction of what are CRM
and Data mining included the different approaches. Then followed by the
discussion on the overview of the combination of CRM and Data mining and
also the challenges for CRM through the data mining techniques. At last, I will
briefly outline the processing throughout the project report.
INTRODUCTION OF CRM
There are various definitions for CRM, but none of it has specified the
actual meaning for CRM. I have chosen this definition, because it emphasized
the importance of the customer relationship within a business and how they
are going to manage the relationship with the customers. The main foundation
of the study is which Data mining techniques are introduced and helped on
the improvement of CRM.
Gefen and Ridings (2002) mentioned the CRM system has consisted of
different types of modules, which included operational CRM, analytical CRM
and collaborative CRM. However the primary one needed for this study is
analytical CRM only, which is to analyze the customer data and their
behaviour tends and patterns in order to improve the customer relationship.
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Group believes that a CRM initiative lacking the analytical component will fail
to provide a panoramic customer view long-term. In 100% of the CRM
projects we've seen that lack CRM analysis, there was a total and complete
inability to effect change in the customer relationship and improve the return
on the customer relationship." (Elizabeth Shahnam, Senior Program Director,
Application Delivery Strategies, META Group)
1
Thearling.K, (2000), An Introduction to Data Mining, http://www.thearling.com/text/dmwhite/dmwhite.htm, date
accessed 10 April 2009
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(Emerging Boston unit multiprocessor numerous information
Today) sales next computers, startups delivery
month? Why?" massive (nascent
databases industry)
For this study, I will be focused on the automated prediction of trends and
behaviours. I will carry out the research on different companies and hopefully
find out what data are they keep from the customer and use what kind of
technologies for analyzing the data in order to measure the behaviour and
trends from the customers. This will be more detail in later chapter.
Most of the data mining tools are operated at the data warehouse and
then required for extracting the data, after that importing the data and finally
analyzing the data. Furthermore, the result for analyzing the data warehouse
could improve the business processes such as promotion campaign
management, fraud detection or new product rollout…etc.
[2]
Thearling.K, (2000), An Introduction to Data Mining, http://www.thearling.com/text/dmwhite/dmwhite.htm, date
accessed 10 April 2009
6
Data mining techniques concern in a mathematical and logical way to
build the model that used it to predict the customer behaviours and pattern
trends. It has four main approaches: - Classification, Clustering, Sequential
pattern, and Association rules.
Jiawei Han and Micheline Kamber (2006) have been described the four
main Data Mining approaches as following:
Classification is the process of finding a model (or function) that describes and
distinguishes data classes or concepts, for the purpose of being able to use
the model to predict the class of objects whose class able is unknown.
Clustering is the analyzing the data objects without consulting a known class
label, unlike Classification, which analyzes class-labeled data objects. The
objects are clustered or grouped based on the principle of maximizing the
intraclass similarity and minimizing the interclass similarity.
Association Rules is a frequent item set typically refers to a set of items that
frequently appear together in a transactional dataset, such as milk and bread.
Part of the success from a business is the way in which they are
interacted with their customer. Over the past few years, companies have
dramatically changed the way of interaction with the customers and due to the
matter, companies have found out that they have to understand very well the
needs and wants from the customers. In the meanwhile, the marketer in the
company should able to understand and identify the trends in the market in
order to have quicker responded in changing with the customer needs.
Therefore, companies should anticipate what the customer desired before
bring any marketing actions. For instance, once the company has provided a
right product in a right time a right place for the customer, they have already
successful in the customer relationship management. It is all because they
provided what the customer wants, so it makes the customer happy and this
could keep the customer loyalty.
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business needed to do then use the data mining technique for processing the
output and to achieve the further improvement in the CRM.
For this study, I will find out how data mining drives the successful and
improvement on CRM if the company has already used this technology.
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Developing deeper models of customer behaviour
This describes the understanding of what customer desired is one of
the major issues in CRM. The current models are mainly draw out the
customer purchase habits and click patterns at the website. However
such as this models are very basic and it does not provided a fully
understand of customers and their individual needs. Hence, the
predictions about the customers are might be unreliable, due to the
wrong actions on these customers. It is suggested that all the
information from the customer point of views should be involved for
building the customer model. Data mining technique could take an
advantage in this point that enable to detect all the customer data and
integrate the data into one piece of information used in CRM. There are
two specific issues should be considered. The first one is what level
should be the customer model and secondly, what dimensions should
be considered in the customer profile. Moreover, Data mining could
benefits to review the specific data based on these two issues.
Acquiring data for deeper understanding in a non-intrusive, low-cost,
high accuracy manner
Companies are still got problem in collecting the data for CRM. People
might be resisted, because individual got right keep their personal data
and the way to collect the data might be costly as well. Once the
datasets have been collected, they might be presented in different kind
of formats and might be located at different departments within an
organization. Therefore, it required the Data mining technique to solve
these problems.
Evaluation framework for distinguishing between correct/incorrect
customer understanding
Although company has found difficult to build up a customer model, but
the evaluation of the model is also a complex task too. It does not
existed a standard metric to measure how well is the particular model
compared with others or whether the model will be reflected to the
customer behaviour or not. Yet, there are still metrics for measure the
quality of the customer model. But it is essential to work better on the
measurement. This might depends on the data analysis from Data
mining and how relevant are the data analyzed. The more reliable the
analyzed data, the more effectively to build the customer model.
Good actioning mechanisms
Even if Data mining provided a trusted result, there is still a need that
how to use them in the daily tasks and required a significant research
efforts. Sometimes, the people obtained the data results but they are
unsure of how to use them in the daily work. Also, the user has to
integrate the analyzed data into the knowledge discovery process. So
that they could focus on the patterns in the customer data in which
based upon the discoveries.
Incorporating prior knowledge
This could help to solve the problem where Data mining tends to find
many divisions of patterns that may already known or redundant.
However, there are number of difficulties existed such as the
knowledge acquisition from domain expert is hard and in other case
that they might know a lot but difficult to contribute it by verbal. Some
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experts might not be sure about what is the relevant to the knowledge,
because it could be very wide. But after they understand the
discovered patterns, then the experts could apply their knowledge onto
it. Once again, Data mining could be conducted the promised results
but it still need to apply specific expert knowledge before it provided a
good recommendation for business purposes.
This study is focused on the two major themes, which are CRM
(Customer Relationship Management) and Data mining. Overview the study
will be divided up into three main parts that involved the investigation the
relationship between CRM and Data mining, followed by researching the
different business domain about their uses of technology. Finally, to provide a
recommendation for the business domain on how does a Data mining
approach drives the improvement on the CRM. In this chapter, it has already
illustrated the content of the background contexts.
The second chapter provide the methodologies on how do I carry out the
research for the study, followed by the chapter three that provide the overview
the questions from the Questionnaire and started with briefly review the
purposes of the methods that I have been chosen. Furthermore, chapter four
provide the analyzing of the data obtained from the research and draw out the
recommendation for individual business scenario. The final chapter provides
the overall conclusions of the study and describes any possible improvement
could be made for this study.
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CHAPTER 2 – RESEARCH METHODOLOGY
This chapter will provide the reader about the research methodology
carried out for the investigation of the relationship between CRM and Data
mining. First of all, I will measure all the possible research methods could be
used for the study and conclude the final methods that I have selected.
RESEARCH APPROACHES
From the previous chapter, I have already review the literature reading
and clearly understand the overall objective of this study. Therefore, I know
what kind of data that has to be collected and it is based upon the subjective
rather than objective.
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The following sources are obtained from the Ryerson University website:
Qualitative Research
The analyzed results are more subjective
The results are based on the smaller sample sizes
The results provide more details on the behaviour, attitudes and
motivation
The findings are more in-depth, because they are generally designed
to the open-ended questions
The researching techniques are includes: Interview, Questionnaire
(Open-ended style of questions), Focus Group, Observation, Case
Study
Quantitative Research
The analyzed results are more objective
The results are based on larger sample sizes
The results provide less details on behaviour, attitudes and motivation
The findings are generally repeated that given its high reliability
The research techniques are included: Observation, Survey,
Experimentation
Interview
This is an informal way for collecting the data on the individual’s personal
histories and experiences. It takes advantage when a particular topic begins
explored if the interviewee has much previous experience on it. They might be
provided the information that could not be found from the books or at the
websites. The data obtained could be at the higher level of information and it
is valuable. Although the interviewee has much experience about the topic but
they might not good on the explanations. Consequently, not much information
could be collected due to the communication problem. It is often that the
interviewee feels nervous during the interview and cause that they do not
perform very well. If the interviewee is not at a higher position within the
organization, they could not provide much depth details that we are desired
for. Nevertheless, this technique could be a considerable to use it in our
research.
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Questionnaire
This is a way of collecting the data by construct a series of meaningful
questions in a form format and given to the respondent for fill in their answers.
Questionnaire is not always designed for statistical analysis of the responses.
It sometimes might be designed for in-depth detailed analysis as well. This
depends on what style of questions that has been constructed. They have
separated into two different styles of question. The first one named Closed-
ended question where the questions are like “How many” or “How often”. The
answer from closed-ended question has fixed, therefore the analysis of the
overall results are usually repeated and replicated. This is generally required
for illustrate the result in a graph or in a chart after analyzed the data. And
possibly use it in annual report. The second one named Open-ended question
where the questions are like “Why the company” or “What do you think”. The
answer from open-ended question has wide range of fields, therefore the
analysis of the overall results are difficult to conclude into single result as
different respondents provide different aspects of the answers. But this style
of question could enhance the desired information that I wanted. This is
generally to conclude the result for a recommendation or taking an action.
Focus group
This is like where a group of people discussing a topic by given their ideas
and thoughts. It is a way of collecting the data by asking the participants about
the questions and they are free to talk with other group members to share
their experiences. It takes an advantage where participants are listening to
each other about their personal experiences build into the question, so that it
helps to stimulate the memories and ideas from others. The group members
should have a common language to share their concepts and views so that it
enables to capture the form of native language in between the members. It is
important that group members understand of what other members are talking
about before the data can be collected. Communication is critical in this
situation. However, this method might have difficult in the research because it
is impossible to ask individual company to arrange a meeting with me if I am
not working for them. If they really manage to arrange a group meeting for us,
it must be beneficial to the company about the discussion topic, otherwise
company is not easily to tell us the actual operation runs in their business.
Also the top level of employee/employer understand the running of company
very well and should be able to provide as much information as they could.
But the higher position employee/employer are usually busy with their own
workings, hence they are not always available or have any spare times to
have a discussion with us.
Observation
This is an appropriate way for collecting the data through natural occurring
behaviours during the activities. It consists of receiving the knowledge from
the outside world and enables to record the data through the scientific
instrument. This method could be time-consuming, because only by observe
from others you might not understand what they are trying to tell you or you
might be misunderstand the actual meaning that they want to tell you. Also,
the information we are desired for that might not able to obtain from the daily
running in the company. It required time to collect the data from inside and
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outside of the company. Sometimes company is not permitted the outside
people to examine the working operations within the company, because firstly
I might interpret their daily workings and secondly they do not have employee
is available for me if I have any queries. Furthermore, this method will not be
working in our research. It is because I am the only one who manages the
whole project and carry out the research. Observation is required more than a
day in the company but I personally do not have enough time to do it.
Nevertheless, this method could possibly obtain much information about the
CRM in the company.
Case Study
This is a formal way of collecting the data from the analysis of archival
information. They are the document that already contained the useful
information about the contexts. I could search the relevant studies on different
business domains and collect the data by read through the study then
analyzed the information for reporting the results. However, libraries and
electronics sources might not have relevant studies available for me. But if
they are available, the contexts itself might not contain the information that I
am looking for. There are positive and negative points of views of using this
research method. The negative view will be taking time to search the case
study and then put more times and efforts for understanding and analyzing
the information. The positive view will be the information is all available and
essential in my research.
METHODOLOGY
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Advantages of Questionnaire
They are cheap and do not need extra costs on the scientific
instruments for using in analysis information.
They do not require much effort from the question compared with focus
group and via telephone survey.
A well-structured Questionnaire could manage to guide the
respondents provides the good answers, because the respondent is
answering the questions one followed by one in which the after
questions will have related to the before one. Therefore, it stops the
frustrating to the respondent if they are not good at answering the
questions.
Disadvantages of Questionnaire
It is not all the respondents are willing to do the Questionnaire
The respondent might not familiar with the topic given by the
Questionnaire, so they are unable to provide appropriate level of
information.
It still requires time for the responses from the respondent to complete
the Questionnaire if they are not doing face-to-face.
Although a good Questionnaire construction is critical to the success of
survey, but incorrect ordering of questions or bad Questionnaire format
might be reduced the value of the data collected.
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student. Internet is widely used over the world and the uses of E-mail service
are almost participating in everyone. I could send the Questionnaire via E-mail
to different companies, once again it costs free of charge. Also, the structure
of the Questionnaire is helped me to capture the information that I desired for,
such as leading the company by asking do they have CRM in their company
firstly, then followed by an optional question like if they answer yes, how does
CRM beneficial to the company, else if the answer is no, why do they not
introduced CRM in their company. The format of the Questionnaire could
assist the company provide the information that I looked for and more
straightforward to answer the questions. Although, Questionnaire has
negative point of views but overall I believe this technique could support me
on the later researching.
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CHAPTER 3 – RESEARCHING
From the previous chapter, I have specified the research method that I
am going to undertake and it is the qualitative research conducted from the
exploratory research. The qualitative research could give the analysis of the
subjective results from the respondents. In the other words, the data captured
is mainly based on the respondent’s behaviour, attitudes and their thoughts
and experiences. This type of research is thoroughly matching up the type of
data that I wanted to be collected. It is because I have to investigate the CRM
within the company and what technology have they used to manage the
improvement to CRM. Therefore, I need to research on different business
domains by qualitative research rather than using the quantitative research,
due to the statistical results are not interesting in this subject of matter.
Accordingly to the qualitative research, it included the several techniques for
support the researching. But the final decision on the selected technique that I
have decided is Questionnaire and Interview. Both of the techniques are the
majority research technique in traditional and satisfied to the data collecting in
the research.
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ANALYZING THE FINAL QUESTIONNAIRE
Initially, I have briefly introduced myself and then mentioned about the
purposes of this Questionnaire by describe the objective for the project. I have
added a note about the definition of CRM and explain the four approaches
from Data mining. The reason is to enhance the knowledge for the respondent
about the given topic. I assumed that not all the respondents have touched
CRM and Data mining before, so it kinds of like to start with a good
understanding of the topic before doing the Questionnaire. All the questions
are closed-ended question which are designed for the respondents to answer
the questions with their opinions and ideas. The answers for individual
question could write as much details as they could, that why I have attached a
text box under the questions rather than the number of lines. The uses of text
box provided an impression that it could write the unlimited of words for the
answer. There are only four questions in Questionnaire. In the Question three
and Question four, they have another two optional questions inside it. The
respondent should only choose one of the optional questions to answer. The
construction of the Questionnaire is well structured. The first question is
started with the name and the type of the business then followed by asking
what information does the company keeps from the customers. After this, I
asked about the company whether they have use the CRM or not with two
optional questions underneath it. It is whether if the answer is yes, the
respondent should answer the question for ‘yes’ option or else answer the
question for the ‘no’ option. The last question is asked about the company
does they used Data mining techniques in CRM or not.
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I believe the ordering of questions in the Questionnaire will not have
any frustrations to the respondents and it appeared a straightforward way to
answer the questions. The words used in the questions are not involved the
jargon or the technique terms, therefore it is easily to understand and easily to
read from the respondent. If the Questionnaire introduced the closed-ended
questions, they should not contain too many questions in it, as most of the
respondents are unlikely to spend too much time for answering the questions.
For this reason, I only have four main questions into the Questionnaire and it
is enough information for the recommendation after analyzed it.
The desired outcome for the question is very obvious and the question
has already indicated the answers that are expected, which are the
name of the company and the type of business of the company.
The reason of choosing this question is to find out what kind of data
that the company has keep about their customer in order to know
currently how they manage with the customer relationship by observing
the customer’s data that they have collected. This question is important
because I have to concern what data that the company needed from
their customers in order to build up a good understanding about
individual customer’s profiles or what possible data have missed about
the customer if the company currently got a problem in CRM. Moreover,
the information for this question could lead to the question four, where I
could recommend which techniques from the Data mining is the most
suitable one to analyze the data pattern compared to the one that the
respondent has mentioned in the answer. Sometimes, company used
the inappropriate technique to analyze the data from customer so
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therefore it does not provide the best predictive pattern or trends for
decision-making.
The desired outcome for the question is the lists of the type of
information that the company keeps from customers. But if the
respondent gives the answer such as customer’s personal details, this
is too shallow level of information, because this type of data is essential
for every company and it will not be able to detect any patterns or
customer’s behaviour used for further action. Furthermore, the
company (e.g. telecom company) should be keep the information such
as the usages of calls and messages used by the customer, the
number of times that they have renewed the contract or what price plan
does the customer currently has. These kinds of information could help
the telecom company deal with individual customers after analyze the
data.
The desired outcome for the question are only yes or no, because the
style of question itself is not looking for the detailed answer, therefore
the answer should be either yes or no and the answer will lead to the
selected optional question below it. For instance, if the company has
used the CRM, then the respondent should answer the question for yes
option.
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the Data mining techniques or not in order to manage the
customer relationship even more effectively.
The desired outcome for this question is the reason why they
are not have a CRM and possibly describe the way that they are
currently use to find out what the customer wants and needs.
Then say whether will the companies aware of Data mining to
help in the CRM if they will introduce CRM in the future. The
respondent should provide the information such as, “Our
Company is only established a year ago and it’s a small
enterprise. We only concern about our regular customers and
when we have new stocks, we will send e-mail to the registered
customer. Or we may give a phone call to inform the customer.
Out market is niche market, so we don’t need a wide
management on the customer relationship to maintain our
customer loyalty, due to the confidence in our products.
However, if our Company becomes well known in the future, we
may consider having a much better management to manage our
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customer’s profile. Also at the moment, Data Mining may not
necessary needed as we don’t have introduced CRM yet”.
The desired outcome for the question are either yes or no because the
style of the question itself is not looking for the detailed answer. The
outcome will be same as in Question 3 initial question.
The desired outcome for this question is the techniques from the
Data mining that the company introduced and the reason why
they have used the technique. The respondent could describe
how the particular technique cooperative with the CRM and is it
really able to help on the improvement on the CRM. The
respondent should provide the information such as, “Our
Company is using Sequential Pattern from Data Mining in order
to detect the customer’s behaviour in their purchasing habits.
The sequential pattern enables us to find out what the customer
is likely to purchase, and sometimes purchase a particular
product along with others. It is easier for us to understand
deeply what they like and we will then target the promotions to
the customer. This is really help us to build up a good
relationship with the customer because we can provide the
goods that they wanted”.
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(b) If not, will you utilize Data mining techniques within CRM
activities?
The desired outcome for the question is the reason why the
company is not utilizing the Data mining techniques and
describe the current technology used within the business. The
respondent might also provide the information like whether they
will use Data mining in the future when business grows and the
reason why they need Data mining at that moment. The
respondent should provide the information such as, “Our
Company is currently using the past statistical method to
analysis the data, such as graphs and tables with statistical
figures and placed into the annual report. Then discussing in the
meeting about the possible actions could take based on the
figures. We may also look at the historical evidence on the
trends and patterns for backing-up our decision…”
I will firstly find out the contact e-mail from the company and then send
the Questionnaire to different companies via E-mail. I will also type the
message in the e-mail to describe the reason for this e-mail with the
attachment of the Questionnaire. Besides, I know some of my friends and
cousins are currently working for a company. So I have sent the
Questionnaire to them as well. The worst situation is when none of the
companies have replied and therefore I need the help from cousins and
23
friends to do the Questionnaire. Hence, at least I still receive some of the
feedbacks from the research, as I am sure that cousins and friends will help
me. When I received the feedback of the Questionnaire and if the information
is not details enough, I will have a telephone interview with the respondents in
order to capture more information through verbal. The importance of obtaining
enough information from the research is because I need to analysis the result
and provide the recommendation for individual scenario.
PROBLEMS IN RESEARCHING
24
company that I do not know anyone who works with in it. It is more difficult to
obtain the company information from the stranger outside the company.
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CHAPTER 4 – DATA ANALYSIS
This chapter is to provide the data analysis from the feedback of the
Questionnaire. For each of the Questionnaire, firstly I will describe the
scenario about the company then followed by the data analysis for the
individual question. Secondly, I will give the recommendation on individual
scenario based on the result of analyzed data along with the literature
knowledge. The analysis of data and the knowledge from the literature could
support the recommendations that I have suggested.
QUESTIONNAIRE OUTCOMES
Scenario 1
Scenario 2
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so therefore he/she does not know what technology does the company used
to analyze the data. Moreover, it is possibly the job roles of the respondent is
generally dealt with the customers rather than working on the analysis of the
customer’s information. Perhaps the company does not use any of the
technologies for data analysis, only by observe the customer’s information
and use personal knowledge and experiences to analyze the information. But
I will recommend a possible Data mining approach that the company could
use in order to help on the data analysis even more efficiently and accurately.
The actual feedback of the Questionnaire is attached on the appendix.
Scenario 3
27
Scenario 4
EOS Trading Ltd is a trading company and its business is mainly concern
about the exporting the goods to different oriental countries. The respondent
has mentioned that the company will keep the customer information such as
the customer’s purchase the type of goods, the purchasing data and quantity,
the business type of customers and the contracts of agreement. The customer
stated in this information mean another company that the EOS trading Ltd is
cooperative with. The company has used the CRM and the respondent draw
out the beneficial on CRM that the company may take advantages. The
benefits are included as it is helpful to understand what customer’s needs and
what the customer may wants. By this point, the company might send the
different promotions to different type of business, which is good for marketing.
The company has not yet introduced approaches in the CRM and the
respondent has mentioned that the company may be used this technology in
the future. He/she did not explained the reason why the company has not
used the Data mining approaches, so I assumed that they are used the past
statistical methods to analyze the data and the assumptions will be included in
the recommendations as well. Then I could specify one of the possible
technique that the company could use to compared with their currently
methods in order to have a more reliable data analysis and enhanced the
effectively in the CRM for marketing purposes.
Scenario 5
TOP DECK, Café Deco Group is running the Food & Beverage business. It is
like a restaurant and enables the organization to organize the events in the
restaurant. The respondent has mentioned that the company will keep the
customer’s information such as the customer’s profile, the frequency that the
customer visits the restaurant and stated whether or not the customer is a VIP
member. The customer stated in the information mean the organization that
host the event at the restaurant and they are cooperative together. The
company has used the CRM and the respondent specified the benefits from
CRM are included building up a good reputation for the company, constructive
the business and take the promotion target to the specify customer based
upon the customer’s profile to understand their needs and wants. The
company has introduced the Data mining approaches in the CRM, but did not
specify the one that the company currently used. The respondent has
commented that the company uses Data mining approaches within the CRM
is because it could detect the regular customers from the number of times the
customer has visited the restaurant. Also it enables to sort out the customer
data and detect which customer is a VIP member or other queries. Moreover,
it helps to analysis the marketing segment.
Scenario 6
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budgets in each contract. The company has used the CRM and one of the
ways to manage the customer is the employee arrange a meeting with the
customers and promote the different type of insurance to them depends on
the customer’s needs. The respondent explained the benefit of the CRM is
where the company could promote the similar insurance contracts to the
customers depends on the customer’s profile in order to work out the type of
insurance that they might be needed. Also, the employee could promote
another best insurance plan for the customer that they might want to have a
contract or this particular insurance contract is essential for the customer at
the moment. The company has introduced the Data mining approaches in the
CRM and the respondent stated that the company is currently taking the
Clustering and Sequential Pattern techniques. He/she also commented that
Clustering is needed for grouping the similar customers together, e.g.
depends on their incomes or the budgets of the contract. Moreover, the
Sequential pattern is needed to find out how often the customer will have a
new insurance contracts and what kind of insurances that the customer has
already been sign the contract.
RECOMMENDATIONS
Scenario 1
This scenario has described the company will record the usage of the calls
and messages from the customer. And they are currently using the Sequential
pattern approach from Data mining to carry out the data analysis.
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Scenario 2
This scenario has described the company will keep the information such as
client’s daily trading activities that monitor the customer’s behaviour on the
funding and investment. But the company did not provide the information on
the Data mining approach, so I assumed that they are currently not used this
technology for the data analysis.
Scenario 3
This scenario has described the bank keeps all the account information,
including all purchase history. The company has used the Data mining
approaches within the CRM activities but did not mentioned the one that the
bank is currently used. They stated the bank used the Data mining for fraud
detection.
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or over £10k. If he/she has income over £10k, the bank is more likely to
accept their application. If he/she only has income below £10k, the bank
would look at the jobs the customer currently working with for further
consideration. Also, there are other issues may affect the application such as
whether or not the customer has bad debts. The methods help the bank to
take all he considerations into account and decision-making on the
acceptance the credit card application.
Scenario 4
This scenario has described the company keeps the information about the
type of goods that the customer will purchase and the purchasing data and
the quantity of the goods. The company has not yet introduced the Data
mining approaches in the CRM activities but may be used in the future.
Scenario 5
This scenario has described the company will keep the information such as
the frequency of the customer visited the restaurant…etc. The company has
also introduced the Data mining approaches in the CRM activities.
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the services in the restaurant in order to find out what the customer needs and
wants. If the customer is a regular customer, they could be possibly upgraded
to become a VIP member. In order to become a VIP, it depends on the
number of visit to the restaurant and how much do they spend on each of the
event. The company could use the information to send out the special offers
to the VIPs and provide the benefits for priority on the booking events. If the
data analysis shows the particular VIPs have been organized over 20 events
in the restaurant, the company could give the 10% discount on the events
afterward. This could keep the customer loyalty and encourages the customer
returns.
Scenario 6
This scenario has described the company keeps the information such as the
type of insurance contract, the budgets of each contract, etc. The company
has introduced the Data mining approaches in the CRM activities. They are
currently used of Clustering and Sequential patterns.
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CHAPTER 5 – CONCLUSION
SUMMARY
Although there are only six pieces of Questionnaire has returned, but
some of the feedbacks are provided enough information to do the data
analysis. The results have separated into six different scenarios and the
analysis shown that the most common Data mining approach used by the
company is Classification. The company realized that it is critical to
understand what the customer needs. In order to deeply satisfy each of the
customers, the company must have the information about the trends or
patterns on customer’s activities with the company, e.g. the customer
purchasing history and provide the services/goods they wanted. Most of the
company concluded the used of Data mining technique do really help them to
maintain the customer relationship and benefits in the marketing and it is
encouraging the customer loyalty.
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On the recommendation, I have recommended the Data mining
approaches for the company that might be used in the future if they have not
yet introduced. Some of the company has already introduced the Data mining
technology in the CRM and I suggested how they could use the current ones
to improve on the CRM. There is not promised on the success on the CRM
when introduced this technology. But it has proofed the Data mining
techniques could have the improvement on the CRM. The successful of the
business also concerned about the other issues not just based upon the
customer relationship management.
RECOMMENDATION ON IMPROVEMENT
Overall the dissertation, I have done the best on each parts in the
project in order to achieve the main objective of the project. I have firstly
search the literature from books in library, searching from Internet, etc and I
studied on the literature reading enhanced my knowledge on the background
context. Then I have decided the research methodology used it for the
researching and analysis the result for further recommendation.
I could also carry out a survey about the people’s knowledge on CRM
and Data mining and the rating on the benefits on the CRM when introduced
the Data mining approaches. For example, I will ask people do they know the
relationship between CRM and Data mining and then if the participant does
not know anything about it, I will briefly explain the relationship between them.
The participant will then mark as ‘no’ on the knowledge of the topic. Moreover,
I will describe the benefits of use the Data mining approaches in the CRM.
The participant then gives the response what do they think about the
advantages of it and rating on it. 1 is totally agreed with the company use this
technology, 3 is satisfied and 5 is totally disagreed. This survey could help the
participant builds up the knowledge on the research topic. Once they
understand the context, they could do the Questionnaire by apply the
knowledge that they have gained from the survey and the experiences on the
operations of the company. Therefore the information obtained is richer and
detailed enough for data analysis and further recommendation.
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The major effort of the project is on the researching, as the results of
the researching will affect the data analysis that is possibly given the worst
recommendations to the company. Finally, in order to do better in this project,
I must undertake a rich researching and the results could support me for the
data analysis and gives the best on the recommendation apply on the
different scenario.
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REFERENCES
Adebanjo.D, (2003), Classifying and selecting e-CRM applications: an
analysis-based proposal. Journal of Management Decision, Vol.41, No.6,
pp.570-577
Boire Filler Group, History of CRM – Data Mining and it’s Growth,
http://www.anderson.ucla.edu/faculty/jason.frand/teacher/technologies/palace/
datamining.htm, date accessed 05 April 2009
Dr. Robert Shaw, CRM Today – What’s Really CRM – Defining CRM &
Customer Relationship Management, http://www.crm2day.com/what_is_crm/,
date accessed 01 April 2009
Jean-Marc Adamo, (2002), Data mining for Association Rules and Sequential
Patterns: Sequential and Parallel Algorithms, Springer-Verlag New York Inc
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J.Han, M.Kamber, (2006), Data mining: Concepts and Techniques, 2nd edition,
Morgan Kaufmann
Kotler.K, (2006), Marketing Management, 12th edition, Prentice Hall
Sir Isaiah Berlin, (1991), The Crooked timber of humanity, Random House Inc
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APPENDIX
Scenario 1
Scenario 2
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Scenario 3
Scenario 4
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Scenario 5
Scenario 6
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