Chapter 9 Q2: Compare operational and analytical customer relationship management.

Customer relationship management (CRM) is a broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer information.



Aspects of CRM

There are three aspects of CRM which can each be implemented in isolation from each other:
1-Operational CRM- automation or support of customer processes that include a company’s sales or service representative
2-Collaborative CRM- direct communication with customers that does not include a company’s sales or service representative (“self service”)
3-Analytical CRM- analysis of customer data for a broad range of purposes
META Group (acquired by Gartner in April 2005) developed this conceptual architecture in the late-1990s, and dubbed it the “CRM Ecosystem”

For the sake of this question, we will focus on the difference between Operational and Analytical CRM:

Operational CRM provides support to "front office" business processes, including sales, marketing and service. Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database as necessary.
One of the main benefits of this contact history is that customers can interact with different people or different contact “channels” in a company over time without having to repeat the history of their interaction each time.
Consequently, many call centers use some kind of CRM software to support their call centre agents.

Analytical CRM analyses customer data for a variety of purposes including:
1-design and execution of targeted marketing campaigns to optimise marketing effectiveness
2-design and execution of specific customer campaigns, including customer acquisition, cross-selling, up-selling, retention
3-analysis of customer behaviour to aid product and service decision making (e.g. pricing, new product development etc.)
3-management decisions, e.g. financial forecasting and customer profitability analysis
4-prediction of the probability of customer defection (churn).

Analytical CRM generally makes heavy use of predictive analytics.
http://gleez.com/customer-relationship-management-crm