Datawarehouse Your Customers

The success of a company is largely based on its customers. If a company is able to attract customers to buy its products, then its sales will increase. This in turn can help it register huge profits. Therefore every company tries to attract as many customers as possible. Otherwise, it will not be able sell its products. Besides this, it is also important for a company to retain existing customers, or else it may lose business to its competitors.

Companies therefore have to constantly find new ways of attracting and retaining customers, and one of the approaches for achieving this is customer relationship management (CRM).

Why CRM

In order to illustrate the importance of CRM, take the example of a super market. If you go to a super market you will find a large variety of products being sold. The topmost priority of the super market is to sell its products. The only way this can be achieved is by getting customers. It should also be remembered that there will be quite a few other super markets selling the same products and probably at the same rates. Then why should customers come to a particular super market? This is a common problem being faced by many companies.

So companies constantly strive to attract the customer to buy products marketed by them. With respect to this, there are two issues that have to be addressed by every company. The first is to get new customers to buy products that are being sold and the second is to retain existing customers. The best way of achieving these objectives is to concentrate on CRM.

CRM deals with the study of customers and how companies can improve ties with them. It also deals with attracting new customers, studying customers’ buying habits, identifying marketing segments more apt for buying certain products, planning for future product promotions, and predicting market trends.The role of datawarehousing

If companies are going to seriously concentrate on CRM, then they will require lot of information about their customers and the purchases they make. This is what links CRM to datawarehousing.

A datawarehouse can be thought of as a repository containing valuable information, which could be used to a company’s advantage. All the data that is valuable to a company can be stored in a datawarehouse. Thus, data present in the company’s on line transaction processing (OLTP) database and in external data sources will be extracted and placed in its datawarehouse. Also information purchased by the company can be stored in a datawarehouse.Data that is extracted from the company’s various data sources cannot be just dumped into a datawarehouse. Before being stored in the datawarehouse, it should undergo transformation, cleansing and enhancement. Also the quality and accuracy of data stored in the datawarehouse has to be ensured. Decision makers within the company can then analyze data present in their datawarehouse and use the output of this analysis to assist them in taking decisions. _{Advantages of a datawarehouse}A datawarehouse contains a lot of valuable information. Store managers can use the data for the following purposes:

Plan the company’s sales strategyTarget local markets based on buying habits of the customers

Identify market trends by studying past sales details of products being marketed by the company

Identify products in high demand and manage inventory of the store’s productsPredict sales of the products that the company is marketing, based on past sales details

Control inventories of various products that are being marketed in the store

Manage the pricing of products, that is reduce prices of products that are not being sold

In addition, managers can also improve services extended to their customers. Using the data that is present in a datawarehouse, managers can analyze the alternatives that are available to them for improving customer service. One way of doing this is by ensuring the availability of the right products at the right time. That is, it should be ensured that products that are in high demand should always be made available to customers. It is significant to remember that improving the company’s relationship with its customers is important for the success of the company.Another area where a datawarehouse will be of value to the management is planning the store’s operations. With respect to this, there are two issues to be addressed by the management. The first is managing the store’s space, and the second is planning the placing of products in the store.With the help of a datawarehouse, those entrusted with the task of managing the store’s space can analyze the past sales details and identify departments in the store that are performing well. Also, products that have a high demand in the market can be identified. Thus, with the help of this analysis, managers can allocate less space in the store to products that are not frequently bought by customers, and allocate more space to products that are in high demand.The second important aspect that should be addressed to in a store is adjacency planning. This means deciding which products should be placed next to each other in the store. In order to do this, analysis of purchases made by customers will have to be studied by those who are entrusted with the task of deciding on the placement of products in the store. For example, the output of the analysis carried out on the relationship between customers and the products they buy may show that if 20% of the customers buy product X, they also buy product Y. If this is the case, then it would be advisable to place products X and Y in adjacent displays. Doing so will help in increasing the sales of both the products.

Another advantage of having a datawarehousing solution in place is enabling one to carry out database marketing. The datawarehouse may contain lot of information about customers who make purchases from the store, and managers should utilize this information. For example, by carrying out an analysis of the data present in the datawarehouse it can be possible to establish a relationship between purchases made by customers and their geographic details–it may be found that majority of the customers who buy a particular product belongs to a specific region. This in turn can lead to better marketing of the store’s products.The information about customers stored in the companies’ datawarehouse can also prove valuable when promoting new products. It can allow managers to maximize the profitability of their existing client base through more focused, targeted marketing of their complimentary products. Thus, with the help of the available customer information, store managers can decide how best

to hand out its complementary products.Closing the loop

Thus there are number of benefits that companies can achieve if they have a datawarehouse in place. By going in for a datawarehouse, companies will possess a source of high-quality valuable information that can be of immense value to them. If this information is utilized properly, it can give companies the competitive edge that they are constantly looking for. Therefore if a company is interested in CRM, it is advisable for it to implement a datawarehouse.

Warren Sequeira Datawarehousing Consultant Hexaware InfoSystems Ltd