Context-Aware Applications - Guide to Cloud Computing for Business and Technology Managers - page 505

23.1.3 CRM Decision Patterns
This section describes an overview of the statistical models-based decision
patterns used in CRM applications as the guiding concept for profitable cus-
tomer management. The primary objectives of these systems are to acquire
profitable customers, retain profitable customers, prevent profitable custom-
ers from migrating to competition, and winning back lost profitable custom-
ers. These four objectives collectively lead to increasing the profitability of
an organization.
CRM strategies spanning the full customer lifecycle are constituted of four
decision patterns or models:
1. Customer acquisition: This involves decisions on identifying the
right customers to acquire, forecasting the number of new custom-
ers, the response of promotional campaigns, and so on. The objec-
tives of customer acquisition modeling includes identifying the right
customers to acquire, predicting whether customers will respond to
company promotion campaigns, forecasting the number of new cus-
tomers, and examining the short- and long-run effects of marketing
and other business variables on customer acquisition.
This is a conscious move from mass marketing of products to one that is
focused on the end consumer. This is a direct result of increases in data
collection and storage capabilities that have uncovered layer upon layer of
customer differentiation. Differentiating and segmenting with regards to
demographic, psychographic, or purchasing power-related characteristics
became more affordable and possible, and eventually became necessary in
order to keep up with competing firms. Although segment-level acquisition
did not take this theory to the extent that one-to-one customer acquisition
has, it reinforced a growing trend of subsets or groups of customers within
a larger target market. Being able to collect, store, and analyze customer data
in more practical, affordable, and detailed ways has made all of this pos-
sible. As firms have become more capable and committed with data analyses,
offerings have become more specific, thus increasing the amount of choice
for customers. This has in turn spurred customers to expect more choice and
customization in their purchases. This continuous firm-customer interac-
tion has consistently shaped segment-level marketing practices in the pro-
cess to better understand customers.
The decision patterns would incorporate
• Differences between customers acquired through promotions and
those acquired through regular means
• Effect of marketing activities and shipping and transportation costs
on acquisition
• Impact of the depth of price promotions