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CustomerRelationshipManagementAndApplicationsofDataMiningTechniquesInBusiness-to-BusinessIndustryCustomerRelationshipManagement(CRM):TheConceptFirmstodayarebecomingmoreawareofthefundamentalchangesofcustomerrelationshipsandtheneedtoimplementnewsolutionsandstrategiesthataddressthesechanges(Rygielskietel.2002).AndthustheconceptofCRMhasbeenintroduced.DefinitionofCRM:CRMisanenterprise-widebusinessstrategydesignedtooptimizeprofitability,revenueandcustomersatisfactionbyorganizinganenterprisearoundcustomersegments,fosteringcustomer-satisfyingbehavioursandlinkingprocessesfromcustomersthroughsuppliers.(Collins2001)FunctionsofCRM:CRMrequiresthefirmtoknowandunderstanditsmarketsandcustomers.Thisinvolvesdetailedcustomerintelligenceinordertoselectthemostprofitablecustomersandidentifythosenolongerworthtargeting.CRMalsoentailsdevelopmentoftheoffer:whichproductstoselltowhichcustomersandthroughwhichchannel.Inselling,firmsusecampaignmanagementtoincreasethemarketingdepartment’seffectiveness.Finally,CRMseekstoretainitscustomersthroughservicessuchascallcentresandhelpdesks.(Rygielskietel.2002)Manypractitionersrecognisethatkeepingcustomersismoreprofitablethanattractingnewcustomers(BitranandMondschein,1997).AccordingtoSrivastavaetel.(2002),toacquireanewcustomercostsfivetoseventimesmorethantoretainanexistingone.Hence,manycompaniesareadoptingCRMasameanstodevelopandmaintainsuccessfulcustomerrelationship(VerhoefandDonkers,2001).ThisgenerallyacceptedviewonthemotiveofadoptingCRMfocusesmoreonmaintainingtherelationshipofexistingcustomers,notonacquiringnewcustomers.However,acquiringnewcustomers,whichcanbeviewedasCustomerRelationshipEstablishment(CRE),shouldformapartofCustomerRelationshipManagement.Myargumentsarea)alltheCRMactivitiesarebasedontheacquisitionofnewcustomers,itisthepremiseoftheCRMactivitiesonwards,andb)tounderstandapotentialcustomer’sneedisasstrategicallyimportantastounderstandacurrentcustomer’sintermsofproductdesignaswellasafter-salesservice,andfurthermore,c)thesametheoryandpractiseofCRMactivitiesonacurrentcustomercanalsobeappliedtoaprospect,e.g.marketingsegmentationondifferentiatingprofitable(potential)customersfromthosenon-profitable.Thus,marketingactivitiesinvolvingconvertingprospectstocustomersshouldalsobeincludedintotheCRMdomain.CRMinBusiness-to-Business(B2B)Industry:TheNecessityCRMisnotonlyapplicableformanagingrelationshipsbetweenbusinessesandconsumers,butevenmorecrucialforbusinesscustomers.InB2Benvironments,transactionsaremorenumerous,customcontractsaremorediverse,andpricingschemesaremorecomplicated.CRMstrategies,suchascustomisedcatalogues,personalisedbusinessportals,andtargetedproductoffers,canhelpsmooththisprocessandimproveefficienciesforbothcompanies.(Rygielskietel.2002)Fromtherespectiveofcustomerbehaviour,Bush(2002)suggeststhatB2Bbuyerschooseasupplierwithwhomtheycandeveloparelationship;onetheycangobacktoasrequiredandoneonwhichtheyfeeltheycandepend.Oncetheyhavechosenasupplier,havinginvestedthistimeandeffort,theyaremorelikelytostaywiththatsupplierforlonger.ThisinvokestheequalimportanceofdeployingCRMinbothrecruitingnewcustomersandmaintainingexistingcustomers.DataMiningTechniques:TheToolCRMcanbeviewedfromtwoperspectives.OperationalCRMreferstothebusinessstrategythatfocusesontheday-to-daymanagementofthecustomerrelationshipacrossallpointsofcustomercontactandisenabledbysalesandservicetechnologies.AnalyticalCRMisthepartoftheCRMbusinessstrategythatdrivesincreasedcustomerintelligenceandmakesinformationactionableacrossalltouchpoints.(Collins2001)Itencompassesahostofdataminingapplications(e.g.,marketing,forecastingandbudgeting)thatenablecompaniestodevelopgreatercustomerintelligenceandaccordinglycustomer-specificstrategies.AnalyticalCRMwillbethemainthemerunningthroughouttheresearch/project.TheessenceofCRMisunderstandingcustomerneedsandleveragingthatknowledgetoimproveacompany’slongtermprofitability.Itrequiresthealignmentofthreebuildingblocks:insightintocustomerdecision-making,informationaboutcustomers,andinformation-processingcapability.(Stringfellow,etel.2004)RecentdevelopmentsinInformationTechnology(IT)haveimprovedtheinformation-processingcapabilitydramatically.Thisalongwiththeincreasingavailabilityofcustomerinformation,collectedinternallywithcontinuoustransactionrecordsorboughtfromexternalsources,hascreatedopportunitiesaswellaschallengesforcompaniestoleveragethedataandgaincompetitiveadvantage.Largeamountofcustomerinformationisaccessibleinthedatabases,however,theknowledgehiddenbehindthedataisnotexplicitandreadyathand.Withrespectstotheseconditions,theneedtousedataminingtools,whichcanhelpuncoverthehiddeninsightofcustomerbehaviours,hasbeenraised.Dataminingistheprocessofsearchingandanalysingdatainordertofindimplicit,butpotentiallyuseful,information.Itinvolvesselecting,exploringandmodellinglargeamountsofdatatouncoverpreviouslyunknownpatterns,andultimatelycomprehensiveinformationfromlargedatabases(Shaw2001).Dataminingcanbeeasilyfittedintovariousbusinessfunctions.LetstakemyMScsummerprojectforexample......Basedontheinterplaybetweenpotenti