This article by Steve Schultz, High Performance Marketing: Justifying Your Analytic CRM Investments. does a great job of articulating some of the ways for justifying an analytic CRM investment. In a number of these areas the use of EDM tools like business rules and executable predictive analytic models starts to increase the value of each technology. For example:
- Business Intelligence/Reporting
The revenue enhancements identified - quicker business decisions, more effective cross-sell, more accurate customer retention decisions - can all be greatly enhanced if decision automation has been used to leverage this data automatically across all touch-points, not just those with human intervention.
- Analytics/Data Mining
If the data mining technology is used to mine for business rules, such as customer segmentation ruels, and these are implemented in the systems backbone then the cost savings increase as changes can be reflected instantly in all the systems that need the segmentation rules. If predictive analytic technology is used to push analytic models into these same, production decisioning applications then the time and cost to implement new models likewise falls dramatically. One thing missing from this analysis is the value of time to market - I know of banking customers, for instance, that were losing $1M a day in revenue until a particular model got implementation. That gets expensive fast.
Here, of course, the value of using EDM technology to get decisions made in real time by automating them is more or less essential - you simply cannot get these benefits for "real-time" if you are relying on people to make decisions - what happens when no-one is around or when a customer is using an automated channel. Here the benefits accrue if and only if you move to real decision automation.
Marketing analytics is a hot topic, especially as a way to get a return from CRM. Using EDM technologies like business rules and predictive analytics makes it easier to see and quantify the benefits.