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Describe how to identify the best customers. Customer relationship management, as a process strategy, attempts to manage the interactions between a company and its customers.
To be successful, organizations must identify customers who yield high profitability or high potential profitability. To accomplish this task, significant amounts of information must be gathered from customers, stored and integrated in the data warehouse, and then analyzed for commonalities that can produce segments that are highly similar, yet different from other customer segments. A useful approach to identifying the best customers is recency-frequency-monetary (RFM) analysis.
Data mining uses RFM, predictive modeling, and other approaches to identify significant relationships among several customer dimensions within vast data warehouses. These significant relationships enable marketers to better define the most profitable customers and prospects.
1. Explain the concept of data mining. Provide five examples of companies that are currently using data mining and explain why each is using it.
Explain the importance of capacity planning in deciding on the number of police officers or fire trucks to have on duty at a given time.
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