Consider the following situation: Kelly Sanders owns Verve, a high fashion bouti
ID: 357044 • Letter: C
Question
Consider the following situation:
Kelly Sanders owns Verve, a high fashion boutique retailing in exclusive clothes, jewelry, and other accessories. Verve also sells a select range of bags and shoes. Kelly had to work very hard to find a niche among its elite clients. Earlier, she used to have a personal rapport with each client, knew their taste, their shopping history at Verve, and so on. However, the clientele of Verve has grown so large that Kelly is finding it difficult to keep track of her customers. Kelly is concerned that this may negatively affect her business.
You are a consultant specializing in business intelligence for small businesses. Kelly has approached you with her problem. She mentions that she has all sorts of data in her sales database, but she doesn’t know how to get out the information that she needs.
In an essay, explain how Kelly could use RFM and OLAP to make Verve more successful.
Explanation / Answer
Answer: Customer relationship management is the key to success for any marketing business. Kelly as described in this situation is facing an issue where the small businesses face a problem of inability to manage customer relationships when their customer bases increases. The business intelligence systems in this case are essential for taking care of their relationship with the customers. Recency, Frequency, Monetary (RFM) analysis and online analytical processing (OLAP) are two systems which can help the people like Kelly to take care of their business in a more effective manner. The RFM analysis is a quantitative analysis which helps the business to identify their best customers based on the criteria like how recently the customers has made purchases, how often does he makes purchases and how much do they spend. Based on this analysis Kelley can keep track of her top most customers and create a focus on them. Similarly OALP analysis enables a business to perform multidimensional analysis of the business data and understand the business trends related with planning and forecasting and customer management. By using both these analysis Kelly can identify her important customers, their purchasing trends and needs and develop suitable customer relationship management strategies for them