Abstract
Shift from Product-centric to Customer-centric Strategies calls for Increased Use of Marketing
& Customer Analytics
Customer retention and customer wallet-share growth are the most pressing pain points in
business-to-consumer (B2C) industries such as financial services, telecommunications, and retail. It
is essential for these enterprises to understand their most important customers and the strategies
required to expand and maintain their customer base. Campaign strategies are shifting from
product-centric, mass-marketing approaches that are more effective for aggressive new customer
acquisition, to customer-centric, one-to-one marketing approaches that enhance customer loyalty.
Marketing and customer analytics is central to effective customer segmentation that will enable
enterprises to identify their best customers and determine the ideal tactics and strategies to
maximize near-term and long-term customer value.
This Frost & Sullivan research service covers the North American CRM analytics markets. The
study examines the key application markets across function and industry. It also forecasts market
drivers and restraints and analyzes vendor solution offerings and strategies in a competitive
framework.
The Changing Role of the Contact Center Drives Demand for CRM Analytics
As margins and differentiation on products is declining, companies are turning toward customer
experience to drive competitive advantage and customer loyalty. The role of the contact center is
evolving from merely servicing customers to playing a key role in customer retention and growth.
Companies are increasingly integrating real-time analytics to support up-sell, cross-sell, and
retention programs. Because of the sheer impact a real-time customer interaction can have on
retention and growth opportunities, service analytics will be crucial in the CRM analytics market.
"Financial services and telecommunications represent the highest spending industry verticals
in CRM analytics, contributing to about 50 percent of the North American CRM analytics markets in
2004," notes the analyst. "While customer wallet-share growth continues to be the hot
button in the financial services industry, in the case of telecommunications, customer churn
management is the primary driver for spending."
CRM Portfolios with Analytic Applications Set to Increase Market Share
CRM vendors, business intelligence (BI) & analytics vendors have adopted different approaches
to CRM Analytics - top-down in the case of the former, and bottoms-up in the case of the latter. CRM
vendors focus on providing pre-built analytics for their operational CRM applications, while BI
& analytics vendors concentrate on providing tools for enterprises to build analytical
capabilities ground up.
The CRM analytics market in North America grew by 15 percent from 2003 to 2004. The market for
CRM vendors grew by 20 percent while the market for BI & analytics vendors grew by 11 percent
over this period. While both groups have shown impressive growth rates, the CRM vendors have managed
to capitalize the most from the opportunities that the market presented. "CRM vendors need to
demonstrate credibility on the issue of data integrity by appreciating the heterogeneity of the
analytics environment, while BI & analytics vendors need to improve CRM competencies for
business decision makers," says the analyst. | 
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