Welcome.

Week 9

Strategic Relationship Marketing (CRM): MARK 4014

Professor John Paulo Cardoso
[email protected]
 CRM FUNDAMENTALS
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MODULE 9: Customer Data & Privacy

 AGENDA
Managing Customer
Databases

Using Customer Related Data

Customer Data & Privacy

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 Marketing in a cookie-

RIP COOKIES
less world

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Microsoft Stock Photo 4
 RIP COOKIES: WHAT NEXT?
How can marketers and advertisers prepare
for a cookie-less future?

Location based marketing will also be the cookie of the

physical world.

More focus will be on data provided by customer relationship

management (CRM) platforms.

Person (or people)-based advertising is a privacy-first strategy

that aims to provide a better ad experience for consumers.
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GEOMARKETING

Location is the
cookie of the
physical world (!)

Microsoft Stock Photo CRM FUNDAMENTALS

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 USING FIRST-PARTY DATA – CRM DATA

“You need to provide very clear value in exchange for the

customer providing you their data. People have no problem
giving you the data if they know that you are going to use it
for what they think are the right reasons. […] When you use
first-party data, it’s not a shock to the consumer when you
market to them.”
⁻ Sav Khetan, Tealium Product VP

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USING FIRST-PARTY DATA – CRM DATA

“Companies should instead

focus on the data people
share with them willingly,
tracking customer data over
time and augmenting that
information with information
from public sources to gain a
more comprehensive
perspective about the
customer.”
• David Campbell, SugarCRM Product VP
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PEOPLE-BASED MARKETING
• PBM takes the data from your
CRM platform and connects it
with online identities.
• This approach uses a unique data
point to identify a user – like an
email address, and any apps that
require email login.
• They also combine data with
algorithms to identify a user in a
household.
• This moves away from a device-
first approach using cookies to a
user-first approach.
Microsoft Stock Photo CRM FUNDAMENTALS
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MANAGING CUSTOMER Step by step process

DATABASES CRM FUNDAMENTALS

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 KNOWLEDGE
MANAGEMENT
The practice of applying
knowledge to fulfil the customer
management goals and objectives
of the organization.

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Figure 1. Knowledge Management. (“Infinity Research,” 2019)
 Functional areas
• sales, marketing, service, logistics and
accounts
WHERE CAN
YOU FIND Channels
CUSTOMER– • company-owned retail stores, third-party
retail outlets and online retail, etc.
RELATED
DATA? Product silos
• different product managers might maintain
their own customer-related data.

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 • Sharable
DESIRABLE • Transportable
DATA • Accurate
ATTRIBUTES: • Relevant
STARTS • Timely
• Secure

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 TYPES OF DATA
Unstructured Structured
Big Data
data data
Do not fit a Provided by a pre-
Structured and
predefined data defined data
unstructured data
model model

Produced by social
Take the form of Most data in
media users, GPS
textual or non- corporate
signals, and stock
textual files databases
ticker data
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TYPES OF STRUCTURED DATABASES
Hierarchical: oldest form, typically product
databases

Network: followed hierarchical, but was

quickly replaced by relational

Relational: standard architecture for CRM

applications
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Figure 2. Relational Database. (Butler & Mckann, 2019)

 RELATIONAL
DATABASE
FOR CRM

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Figure 2. Relational Database. (Butler & Mckann, 2019)
 SINGLE VIEW OF THE CUSTOMER (SVOC)

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Figure 7. SVOC. (Butler & Mckann, 2019)
 DEVELOPING A
CUSTOMER-
RELATED
DATABASE

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Figure 8. Steps for a Relational Database. (Butler & Mckann, 2019)
1. DEFINE DATABASE FUNCTIONS

STRATEGIC CRM OPERATIONAL CRM ANALYTICAL CRM

• IDENTIFIES WHICH • SUPPORTS THE • AIMS TO ENHANCE THE
CUSTOMERS TO TARGET EVERYDAY SELLING, VALUE CREATED FOR
• GENERATE INSIGHT FOR MARKETING AND AND FROM CUSTOMERS.
THE VALUE CUSTOMER SERVICE
PROPOSITIONS OPERATIONS

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 CUSTOMER-RELATED DATABASES

Online Transaction Processing Online Analytical Processing

(OLTP) Database (OLAP) Database
For Operational CRM: used for For Analytical CRM: used to support the
everyday selling, marketing and marketing, sales and service to enhance
customer service business operations customer value

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 2. DEFINE THE INFORMATION REQUIREMENTS

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Figure 4. Moduralized CRM. (Butler & Mckann, 2019)
3. IDENTIFY THE INFORMATION SOURCES

Internal data: External data:

marketing, sales, market research
service, logistics, and marketing
finance, accounts, database
etc. companies

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 SECONDARY AND PRIMARY DATA

Secondary data Primary data

• data already collected • data collected for the first time
• typically for a different purpose • usually from tactics like loyalty
than your CRM requirements programs, subscriptions, etc.

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 4. DATABASE SELECTION
CONSIDERATIONS

Database size

Existing technology

User number and locations

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Figure 5. Database. (“TIBCO,” 2019)
 5. POPULATING
THE DATABASE
1. verify the data
2. validate the data
3. de-duplicate the
data
4. merge and purge
data from two or
more sources
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Figure 6. Merge-Purge Output. (Butler & Mckann, 2019)
6. MAINTAINING THE DATABASE
One in five managing directors change jobs every year

Eight per cent of businesses relocate every year

An average of 5% of postal codes change in a year

In western economies, about 1.2% of the population

dies each year

In the USA, over 40 million people change addresses

each year CRM FUNDAMENTALS
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 OTHER DATA PLAYERS

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Figure 8. Data players. (Butler & Mckann, 2019)
USING CUSTOMER- Step by step process

RELATED DATA CRM FUNDAMENTALS

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BASIC DATA
CONFIGURATION
FOR CRM
ANALYTICS

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Figure 9. Data Configuration. (Butler & Mckann, 2019)
PART 1: ANALYTICS FOR
STRATEGIC CRM GOALS
•Build Revenues
•Reduce Costs
•Enhance Loyalty

Microsoft Stock Photo

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 TACTICS TO BUILD REVENUES

Create cross- Protect

Generate Acquire new Close
and up-sell valued
sales leads customers opportunities
campaigns relationships

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 TACTICS TO REDUCE COSTS

Service
Automate customers Sack Improve
Improve
selling online or unprofitable sales rep
data quality
processes offer self- customers output
service

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 TACTICS TO ENHANCE LOYALTY

Enhance Improve Improve Improve Improve

complaints customer fulfilment online value
resolution service process experience proposition

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PART 2: ANALYTICS FOR THE CUSTOMER LIFECYCLE

• Provide lead
scoring to
Acquisition identify the best
prospects

Retention

• Identify
customers with
the highest CLV
Development

• Detect the next

best offer for the
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CRITERIA USED IN LEAD SCORING
Market Organisational Personal Relational Behavioural
Market size Revenues Seniority Ex-customer Website
visitor?
Market Profits Decision Lost Registrations?
growth role opportunity

Market Spending on Budget Lead source Contracted to

segmentation category owner – website or current
ad supplier?
New entrants Certifications Influence Referral? Video viewed?
Number of Social network Years of New to Research
competitors participation experience database? participant?
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NBA VS NBO
Next Best Action (NBA) Next Best Offer (NBO)

Uses predictive analytics to Uses more complex,

deliver recommendations context-sensitive,
for action. predictive analytics

For example, if to make an Enables making the right

offer, when to make it and offer at the right time
what it should be. and in the right channel.
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https://www.youtube.com/watch?v=PYmGreUOiWY

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 PART 3: DATA ANALYTICS

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Figure 14. Structured vs. Unstructured. (“Big Data,” 2019)
 STRUCTURED DATA TYPES

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Figure 17. Categorical Data. (“Study.com,” 2019)
 UNSTRUCTURED DATA: SENTIMENT ANALYSIS

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Figure 15. Sentiment Analysis. (Butler & Mckann, 2019)
 3V’S OF BIG DATA

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Figure 16. Big Data 3Vs. (Butler & Mckann, 2019)
PART 4: THREE WAYS TO GENERATE
ANALYTICAL INSIGHT

STANDARD REPORTS ONLINE ANALYTICAL DATA MINING

PROCESSING (OLAP)

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 STANDARD REPORT: ACTIVE ACCOUNTS OF A SALES REP

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Figure 18. Standard Report. (Butler & Mckann, 2019)
 OLAP
REPORT:
STAR SCHEMA
EXAMPLE

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Figure 19. Star Schema Example. (Butler & Mckann, 2019)
 DATA MINING REPORT

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Figure 20. Data Mining Example. (Butler & Mckann, 2019)
DIRECTED DATA
MINING
In directed data
mining, you are trying
to predict a particular
data point.
In this example,
which spark plug will
fall out and how
many in order to
forecast inventory.
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Figure 21. Data Mining Example. (Rigger, 2011)
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 DECISION
TREES

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Figure 21. Decision Tree. (“Lovelycoding.org,” 2019)
 OTHER DIRECTED TECHNIQUES

Multiple Regression Discriminant Analysis

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Figure 22. Directed Techniques. (“Towards Data Science,” 2019)
 UNDIRECTED
DATA MINING
This type of approach is
about discovering new
patterns in the data.
In this example, statistical
methods bring
dependencies between
the attributes of multiple
dimensions (e.g.
temperature, speed, pace,
acceleration, to light.

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Figure 21. Data Mining Example. (Rigger, 2011)
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 HIERARCHICAL
CLUSTERING

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Figure 22. Hierarchical Clustering. (Butler & Mckann, 2019)
 OTHER UNDIRECTED TECHNIQUES

Two-step clustering K-Means clustering

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Figure 23. Undirected Techniques. (“Towards Data Science,” 2019)
 ARTIFICIAL INTELLIGENCE & DATA MINING CRM FUNDAMENTALS
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Figure 24. AI & CRM. (“Towards Data Science,” 2019)
 USE OF MACHINE LEARNING

Neural Networks CRM FUNDAMENTALS

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Figure 25. Directed Techniques. (“Towards Data Science,” 2019)
https://www.youtube.com/watch?v=08nxB6bmP1c

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MCDONALD’S EXAMPLE – GO TO BLACKBOARD

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MANAGING CUSTOMER What should marketers

PRIVACY
be aware of?

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 PERSONAL
INFORMATION
PROTECTION
Free online services are often
offered in exchange for
personal information, and
companies use that
information to offer
personalized content.
As a result, privacy legislation
and frameworks have been
enacted.

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Figure 27. Database. (“TIBCO,” 2019)
Quebec’s Bill 64
(Created in 2020,
enacted in 2022 )

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CALIFORNIA
CONSUMER PRIVACY
ACT
(Created in 2018,
enacted in 2020 )

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Figure 27. CCPA. (“IAPP.COM” 2019)
GENERAL DATA
PROTECTION
REGULATION
(2018)

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 DID YOU GET
THESE?
GDPR is the first major
attempt to make privacy the
default setting on the
Internet.
When it first launched, you
would have received many
similar emails… even in
Canada as companies
standardize their privacy
settings.

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Figure 28. GDPR Email. (“Uber,” 2018)
https://www.youtube.com/watch?v=j6wwBqfSk-o

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 The right to be informed

The right of access

The right to rectification

WHAT ARE
YOUR The right to erasure

RIGHTS? The right to restrict processing

The right to data portability

The right to object

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 WHAT’S AT STAKE?
Any Canadian business that collects
personal information about EU residents
--whether they're tourists, students or
online customers --risks maximum fines
of up to 6% of annual earnings if they
violate it

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Figure 29. GDPR Joke. (“DataExperts,” 2018)
CANADA’S
PIPEDA
(2000)

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 PIPEDA WAS PASSED INTO
LAW IN APRIL 2000
• Stands for Personal Information Protection
and Electronic Documents Act (PIPEDA)
• The federal privacy law for private-sector
organizations
• Rules for how businesses must handle
personal information in the course of
commercial activity

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Figure 30. OPCC. (“OPPC,” 2019)
5 MAIN FEATURES OF THE PIPEDA
Rules for the management of personal information by organizations

Strikes a balance between an individual's right to the protection of personal information and the need
of organizations to obtain and handle such information for legitimate business purposes

Canadians have the right to know and ask why a business or organization is collecting, using or
disclosing their personal information

Businesses must obtain the individual's consent when they collect, use or disclose personal
information

Individuals may complain to the Privacy Commissioner about how organizations handle their personal
information

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PRIVACY BY
DESIGN
(1995)

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 DEVELOPED BY DR. ANN
CAVOUKIAN IN THE MID-1990S
• Privacy by Design adopted globally as a
framework for the protection of privacy
• A practical, proactive approach of embedding
privacy into the design specifications of:
• Organizational practice
• Information technologies
• Networked system architectures

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Figure 31. Anne Cavoukian. (“Privacy by Design,” n.d.)
 THE PRIVACY BY DESIGN FRAMEWORK

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Figure 32. Privacy Framework (“Privacy by Design,” n.d.)
 Managing Customer

DISCUSSION POST
Data Ethically

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