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Chapter 05
CRM, Big Data, and Marketing Analytics
5-1
LEARNING OBJECTIVES
LO 5-1 Define CRM and articulate its objectives and capabilities.
LO 5-3 Understand the concept of customer touchpoints and why touchpoints are critical in
CRM.
LO 5-5 Recognize key approaches to marketing analytics.
LO 5-7 Explain return on marketing investment (ROMI), including cautions about its use.
CHAPTER OUTLINE
I. OBJECTIVES AND CAPABILITIES OF CRM
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CRM, Big Data, and Marketing Analytics
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II. THE CRM PROCESS CYCLE
A. Knowledge Discovery
B. Marketing Planning
C. Customer Interaction
D. Analysis and Refinement
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CRM, Big Data, and Marketing Analytics
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III. MORE ON CUSTOMER TOUCHPOINTS
A. CRM, Touchpoints, and Customer Trust
B. CRM Facilitates a Customer-Centric Culture
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CRM, Big Data, and Marketing Analytics
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IV. BIG DATA AND MARKETING DECISION MAKING
A. Categories of Big Data: Structured and Unstructured
B. Big Data Sources and Implications
i. Data from Business Systems
ii. Data from Social Media Platforms
iii. Data from Internet-Connected Devices
iv. Data from Mobile Apps
v. Data from Commercial Entities
vi. Data from Government Agencies
5-5
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CRM, Big Data, and Marketing Analytics
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V. MARKETING ANALYTICS
A. Marketing Analytic Approaches
i. Descriptive Analytics
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CRM, Big Data, and Marketing Analytics
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ii. Diagnostic Analytics
iii. Predictive Analytics
iv. Prescriptive Analytics
B. Capabilities of Marketing Analytics Supported by Big
Data
i. Marketing Mix Enhancement
ii. Increased Personalization
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CRM, Big Data, and Marketing Analytics
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VI. THE MARKETING DASHBOARD
A. Goals and Elements of a Marketing Dashboard
B. Potential Pitfalls in Marketing Dashboards
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CRM, Big Data, and Marketing Analytics
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VII. RETURN ON MARKETING INVESTMENT (ROMI)
A. Cautions about Overreliance on ROMI
B. Proceed with Caution
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CRM, Big Data, and Marketing Analytics
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VIII. SUMMARY
KEY TERMS
customer relationship management (CRM) A comprehensive business model for increasing
revenues and profits by focusing on customers.
customer satisfaction
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CRM, Big Data, and Marketing Analytics
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return on customer investment (ROCI) A calculation that estimates the projected financial
returns from a customer. It is a useful strategic tool for deciding which customers deserve what
levels of investment of various resources.
database marketing Direct marketing involving the utilization of the data generated through
CRM practices to create lists of customer prospects who are then contacted individually by
various means of marketing communication.
organizational learning The analysis and refinement phase of the CRM process that is based on
customer response to the firm’s implementation strategies and programs.
structured data Data that is generated in such a way that a logical organization is imposed on it
during its generation, thus enabling it to be more readily analyzable for knowledge creation. It is
typically either numeric or text that is substantially limited to a certain set of input values.
unstructured data Data that is generated in such a way that it does not possess a specific
organizational structure that renders it readily analyzable for knowledge creation.
semi-structured data Data that fits between structured and unstructured data in the sense that it
contains some elements of structure that make it easier for machines to understand its
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CRM, Big Data, and Marketing Analytics
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marketing analytics Include a set of methods facilitated by technology that utilize individual-
level and market-level data to identify and communicate meaningful patterns within the data for
predictive analytics An approach that utilizes data to make predictions about future marketing
outcomes of interest.
prescriptive analytics An approach that involves determining the optimal level of marketing-
relevant factors for a specific context by considering how adjusting their levels in varying ways
will impact different marketing outcomes.
behaviors and preferences on the related website).
marketing dashboard A comprehensive system providing managers with up-to-the-minute
information necessary to run their operation including data on actual sales versus forecast,
progress on marketing plan objectives, distribution channel effectiveness, sales force
productivity, brand equity evolution, and whatever metrics and information are uniquely relevant
