Data Base and Data Warehouse

The difference between operational CRM and Analytical CRM

Which of the customers have been steadily increasing their purchases from Slim Well (making world a slimmer place) during last two years? Which one showed a decrease in the purchase pattern? Is this because these customers are getting thinner over time, and therefore, do not need our products any more**
** This makes us ponder further

Operational CRM Database.. Current data which is just useful for current queries. (one month old or a few months old.) Example A bank would have its branch accounting system, which the teller at the branch uses to perform one transaction such as withdrawing or depositing money, crediting interest or deducting bank charges, etc., Or a telephone company, which uses billing software to keep track of the details of every call made. Or any organisation which has implemented an ERP system, which might be used for transactions such as raising an individual invoice, keeping track of each individual payments or issuing one item from stores. In todays world all these systems work on-line. So the term On-line transaction processing or OLTP

Analytical CRM Data warehouse .. Maintains old data as old as is necessary to answer management queries.

Database
Used in OLPT systems Operational staff Usually up-to date

Data Warehouse
Used for analytical queries By management Up dated on monthly basis

Stores details of every transaction Usually stores current data with perhaps recent history Usually normalised

Stores summary data

Stores historical data, usually in snapshots taken at regular intervals doesnt need to be normalised Updated from the database

Definition

Data warehouse is a large reservoir of detailed and summary data that describes the organization and its activities, organized by the various business dimensions in a way that facilitates easy retrieval of information that describes the organization's activities.

Data mart is a subset of the data warehouse that is tailored to meet the specialized needs of particular group of users

Data Warehousing Objectives

Ensure that the warehouse data is accurate Keep the warehouse data secure Make the data easily available to authorized users Maintain descriptions of the warehouse data so that users and systems developers can understand the meaning of each element

Data Warehouse System

Data Gathering system

Staging Area

Warehouse Data repository

Information Delivery system

Data flow Control flow

Management And control

Metadata repository

Data Warehouse Architecture

Four components- two providing a processing capability and two providing data to be used in processing Staging area and management and control performs the processing capacity. Data is provided by the warehouse data repository and the metadata repository

Management and Control

The Management and control components are like a traffic officer standing in the middle of a street intersection, controlling the flow of traffic through the intersection. M&C causes the following data flows: Into the staging area Through the staging area as the various screening processes are performed From the staging area to the warehouse data repository From the warehouse data repository to information delivery From metadata repository to information delivery

Staging Area

This is where data is prepared to be moved into the warehouse data repository and metadata repository ETL extraction, transformation and loading The data has to be extracted from internal databases and files and combined with data from other external sources

Extraction

The data must be extracted from the databases and files which includes internal transaction processing systems, marketing research and marketing intelligence and also such external sources as customers, suppliers and the government The data must be transformed into a format for loading into the warehouse a process that includes cleaning, standardizing, reformatting and summarizing.

Transformation of Data Includes

Cleaning the data for inaccuracies and inconsistencies Standardizing involves converting the cleansed data to a uniform format for data element names, codes( customer codes, product codes and geographic codes) and units of measurement (dozens, pounds) Reformatting is required when the gathered data is in a different format than that of the warehouse data repository Summarizing is performed so that requested summary information can be presented without the need for processing, thus speeding up the delivery

Loading

When data is written into the data warehouse, the data is loaded. It is kept updated by adding new data on a periodic basis. Once the ETL processes are completed, the data resides in the warehouse data repository, waiting to be used.

Warehouse Data Repository

The data is stored The data content in the data warehouse gives a compilation of geographic, demographic, activity, psychographic and behavioral data.

Geographic Data

Geographic data describes where the customer is physically located and where the customer-related transaction or activity occurs

Demographic Data

This consists of those customer characteristics that are either permanent or slow to change. Examples: gender, birth data, ethic origin, religion

Activity Data

This traces the activities of customers as they interact with the organisation by making purchases, returning items, making inquiries, seeking services and so on. This data is generated in high volumes each day by the transaction processing systems and telemarketing systems This data is useful to find the RFM score and support such marketing strategies as cross-selling and up-selling The data can be furthered used to reveal shopping behavior patterns and be used to project each customers lifetime value

Psychographic and Behavioral Data

Psychographic data consists of psychological and sociological characteristics that influence customer behavior Behavioral Data captures the unique shopping behavior patterns and consumption habits of individual consumers

Warranty card can be used get this data

Warranty card

The main reasons for purchasing the product How the customer learned about the product A special occasion (such as birthday or anniversary) for which the purchase was made Recent activity in making purchases by mail or over the internet Activities (hobbies and interests) of persons in the household

Data mining is a collection of process that enables a data warehouse user to learn of patterns, relationships and trends in data not previously known to exist

Data Mining

Using the past data to find patterns. These patterns together give a model which helps predict the future This process is predictive modeling Data mining can be directed and undirected data mining When the goal of finding patterns is not known it is called undirected data mining. When the goal of finding patterns is known it is called as directed data mining

Data Mining Functions

Harrahs gambling casino organization mines its data warehouse. It offers its customers a frequent gambler magnetic stripe card, called Total Rewards, which can be used to get free trips, meals and hotel rooms. Based on the data mining the casino is able to cluster their customers into demographic grouping. Identify associations among gambling machines And even project sequences in which the machines will be used. The customers can be classified into those who give more revenue.

Data Mining Functions

Classification helps the companys to divide the customers based on the customers behavior so that special products and services can be offered to more valuable classes Clustering is identifying customers with similar characteristics who can be tapped with a particular type of marketing program Associations are relationships between such entities as products. Sometimes there might be a pattern or sequences in a customers purchase behavior.