CRM AND DATA MINING

A THESIS PRESENTED TO THE

DEPARTMENT OF THE COMPUTER
SCIENCE
UNIVERSITY OF MANCHESTER

MAY 2009

WRITTEN BY
HOI LAM LEUNG
BSc SOFTWARE ENGINEERING (BUSINESS
SYSTEM)
Hoi.L.Leung@student.manchester.ac.uk

SUPERVISOR: ILIAS PETROUNIAS

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ABSTRACT

From the recently years, CRM has introduced the technology – data
mining for improving the relationship with the customers. Data mining is used
the computerization of algorithm to analyze the collected data in order to
provide a useful information for the company purposes. In other hand, the
company could use this information to understand and manage the
customer’s profile in different aspects. Data mining has four different
approaches, which are Classification, Sequential patterns, Clustering, and
Association rules. Each of the approaches have their own methods used for
CRM in different companies, therefore this dissertation is going to investigate
the relationship between CRM and Data mining. The relationship is looked at
three different levels, which are process level, service level and technology
level. The research will be focusing on the technology that the company used
and what kind of data that they keep from the customer in order to find out
how well is the CRM if they have utilized and will they aware of Data mining
as a new technology if the company has never utilized it before. After
analyzed the researching, I have to provide the recommendation for individual
scenario and conclude how does Data mining success with the CRM.

ACKNOWLEDGEMENTS

It is a pleasure for me to thank the many people who have supported

for my graduate studies and the different ways of contribution on the process
of writing this dissertation.

Firstly, I would like to thank my friends and cousins for spending the
time to complete the Questionnaire for me.

Secondly, I would also like to thank the University Libraries and the
Libraries from outside for providing the books and journals. Without them, the
research would be most difficult because I have not touched the CRM and
Data mining before. Therefore, I have no background knowledge about the
contexts.

Finally, I would like to thank my supervisor, Ilias Petrounias for giving

me the advice and the correct directions to write this dissertation.

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TABLE OF CONTENTS
ABSTRACT

ACKNOWLEDGEMENTS

CHAPTER 1 – LITERATURE REVIEW

Introduction of CRM (Customer Relationship Management)
Introduction of Data Mining
CRM and Data Mining
Challenges for CRM through Data Mining
Outline the study

CHAPTER 2 – RESEARCH METHODOLOGY

Research approaches
Methodology

CHAPTER 3 – RESEARCHING
Review the Research method
Analyzing the final Questionnaire
Overview the questions from Questionnaire
Importance of the questions
Reasons for the questions
Desired outcomes from the questions
Procedure of the researching
Problems in Researching

CHAPTER 4 – DATA ANALYSIS

Questionnaire Outcomes
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
Scenario 6
Recommendations
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
Scenario 6

CHAPTER 5 – CONCLUSION
Summary
Recommendation on improvement

REFERENCES

APPENDIX

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CHAPTER 1 – LITERATURE REVIEW

This chapter will review the background contexts of the project and
provide an insight for the reader to get a good start to understand about the
CRM and the Data mining. I will begin with the introduction of what are CRM
and Data mining included the different approaches. Then followed by the
discussion on the overview of the combination of CRM and Data mining and
also the challenges for CRM through the data mining techniques. At last, I will
briefly outline the processing throughout the project report.

INTRODUCTION OF CRM

Strauss defines CRM as:

“CRM is used to define the process of creating and maintaining relationship
with business customers or consumers. Alternatively, CRM is a process of
identifying, differentiating, retaining and growing customers through
customization.” (Strauss et al, 2006)

There are various definitions for CRM, but none of it has specified the
actual meaning for CRM. I have chosen this definition, because it emphasized
the importance of the customer relationship within a business and how they
are going to manage the relationship with the customers. The main foundation
of the study is which Data mining techniques are introduced and helped on
the improvement of CRM.

Accordingly to the project, the main objective is to carry out the

investigation of the relationship between CRM and Data Mining at three
different levels. Therefore, I have to understand the importance of CRM within
a business and how does Data mining has the effects on the CRM service.

Feinberg states the importance of CRM as:

“Understand better customer behaviour as he/she is the central focus.”
(Feinberg et al, 2002)
“A business and marketing strategy that integrates technology, process and
all business activities around the customer.” (Feinberg et al, 2002)

Gefen and Ridings (2002) mentioned the CRM system has consisted of
different types of modules, which included operational CRM, analytical CRM
and collaborative CRM. However the primary one needed for this study is
analytical CRM only, which is to analyze the customer data and their
behaviour tends and patterns in order to improve the customer relationship.

Dr. Robert Shaw (2001) indicated that analytical CRM is known as

strategic CRM. It has involved the understanding of customer activities in the
front office and enable to analyze the data information through data mining.
Adebanjo (2003) also determined that analytical CRM requires technology to
compile and process customer data and new business processes to refine
customer-facing practices to increase loyalty and profitability. On the other
hand, analytical CRM is described as used of the mathematical algorithms, in
order to implement the results for the customer relationship strategy. "META

4
Group believes that a CRM initiative lacking the analytical component will fail
to provide a panoramic customer view long-term. In 100% of the CRM
projects we've seen that lack CRM analysis, there was a total and complete
inability to effect change in the customer relationship and improve the return
on the customer relationship." (Elizabeth Shahnam, Senior Program Director,
Application Delivery Strategies, META Group)

INTRODUCTION OF DATA MINING

In the information system world, it included the gathering large amount

of data in a wide range of fields, storing the data into a database, retrieving
the data in an effective and fast way. Data analysis is essential as huge
amount of unrelated data converted into meaningful information and then put
into contexts to become a knowledge driven to a decision. In the many past
years, the statisticians have studied about ‘mined’ through the database for
looking up the significant patterns from enormous dataset. Today, data mining
has become one of the powerful technology tools for the extraction of hidden
predictive information from large databases. Kurt Thearling (2000) has
simplest defined Data Mining as “automates the detection of relevant patterns
in a databases.”

The evolution of this development is started from the business

collected the data and stored the data into the computers, then followed by
accessed the data from the database and more recently years, businesses
used the technology enable the people navigate through the data in a real
time.

This is a table1 shows the steps of evolution in Data Mining:

Evolutionary Business Enabling Product Characteristics
Step Question Technologies Providers
Data Collection "What was my Computers, IBM, CDC Retrospective,
total revenue in tapes, disks static data
(1960s) the last five delivery
years?"
Data Access "What were unit Relational Oracle, Sybase, Retrospective,
sales in New databases Informix, IBM, dynamic data
(1980s) England last (RDBMS), Microsoft delivery at
March?" Structured record level
Query
Language
(SQL), ODBC
Data "What were unit On-line analytic Pilot, Comshare, Retrospective,
Warehousing sales in New processing Arbor, Cognos, dynamic data
& England last (OLAP), Microstrategy delivery at
Decision March? Drill multidimensional multiple levels
Support down to databases, data
Boston." warehouses
(1990s)
Data Mining "What’s likely to Advanced Pilot, Lockheed, Prospective,
happen to algorithms, IBM, SGI, proactive

1
Thearling.K, (2000), An Introduction to Data Mining, http://www.thearling.com/text/dmwhite/dmwhite.htm, date
accessed 10 April 2009

5
(Emerging Boston unit multiprocessor numerous information
Today) sales next computers, startups delivery
month? Why?" massive (nascent
databases industry)

The innovation of data mining drives the business in a most efficiently

way to analyze all the data. It also provide a reliable information for future
decisions, because this technology has existed for at least 10 years and the
algorithms behind it have been implemented and presented as
understandable, reliable and accurate mathematical tools compared with
outperform statistical methods.
The motivation of Data Mining is to understand is to perceive patterns
(Sir Isaiah Berlin) and the key in business is to know something that nobody
else knows. (Aristotle Onassis)

Moreover, the scopes of data mining are mainly concentrated on:

1) Automated prediction of trends and behaviours
2) Automated discovery of previously unknown patterns

For this study, I will be focused on the automated prediction of trends and
behaviours. I will carry out the research on different companies and hopefully
find out what data are they keep from the customer and use what kind of
technologies for analyzing the data in order to measure the behaviour and
trends from the customers. This will be more detail in later chapter.

Most of the data mining tools are operated at the data warehouse and
then required for extracting the data, after that importing the data and finally
analyzing the data. Furthermore, the result for analyzing the data warehouse
could improve the business processes such as promotion campaign
management, fraud detection or new product rollout…etc.

Figure 1[2] shows the diagram of architecture for data mining:

[2]
Thearling.K, (2000), An Introduction to Data Mining, http://www.thearling.com/text/dmwhite/dmwhite.htm, date
accessed 10 April 2009

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 Data mining techniques concern in a mathematical and logical way to
build the model that used it to predict the customer behaviours and pattern
trends. It has four main approaches: - Classification, Clustering, Sequential
pattern, and Association rules.

Jiawei Han and Micheline Kamber (2006) have been described the four
main Data Mining approaches as following:

Classification is the process of finding a model (or function) that describes and
distinguishes data classes or concepts, for the purpose of being able to use
the model to predict the class of objects whose class able is unknown.

Clustering is the analyzing the data objects without consulting a known class
label, unlike Classification, which analyzes class-labeled data objects. The
objects are clustered or grouped based on the principle of maximizing the
intraclass similarity and minimizing the interclass similarity.

Sequential Pattern is a frequently occurring subsequence such as the pattern

that customers tend to purchase first a PC followed by a digital camera with a
memory card. Mining frequent patterns leads o the discovery of interesting
associations and correlations within data.

Association Rules is a frequent item set typically refers to a set of items that
frequently appear together in a transactional dataset, such as milk and bread.

CRM AND DATA MINING

Part of the success from a business is the way in which they are
interacted with their customer. Over the past few years, companies have
dramatically changed the way of interaction with the customers and due to the
matter, companies have found out that they have to understand very well the
needs and wants from the customers. In the meanwhile, the marketer in the
company should able to understand and identify the trends in the market in
order to have quicker responded in changing with the customer needs.
Therefore, companies should anticipate what the customer desired before
bring any marketing actions. For instance, once the company has provided a
right product in a right time a right place for the customer, they have already
successful in the customer relationship management. It is all because they
provided what the customer wants, so it makes the customer happy and this
could keep the customer loyalty.

The increasing of accessed to information and analyzed the

information is become significantly competitive advantage in a business
environment. Organizations have to operate under the knowledge where in
the position enable to view all their marketing initiatives. At the same time,
organizations could have an insight of what have to be done and what is not
necessary needed. It is perform like a learning process that illustrate a clear
view to the business what is working and what don’t. This strives on the
improvement and it drives the key to the successful of CRM through Data
mining. The decision-making stage is firstly provided the input on what the

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business needed to do then use the data mining technique for processing the
output and to achieve the further improvement in the CRM.

The growth of the capability to analyze the data is dramatically

increased and it becomes more importantly for an organization adopt this
changes by introduced a best efficient way to automate detecting the market
patterns.

From the old days, organization might be time-consuming just on the

data analysis by some statistical method. But it has no evidence showing that
how reliable and accurate from these methods. As the market trends and
customer desires have been unstable changed, businesses have to response
the changes in an effective way. Yet, the technologies have also been
developed rapidly in the recently years. Many companies have merged the
latest technology with the existing ones in order to increase the productivity
drives to the profitability. Nowadays, Data mining is become a useful tool in
many application domains. It helps the businesses to distinguish the relevant
patterns for the predictors to perceive the customer behaviour and the market
trends. This is one of the reasons that business should use this technology
with CRM and there are many successful cases have shown.

For this study, I will find out how data mining drives the successful and
improvement on CRM if the company has already used this technology.

CHALLENGES FOR CRM THROUGH DATA MINING

In this section, I will build up a discussion of the challenges for CRM

through Data mining. For this study, firstly I have to understand the
relationship between CRM and Data mining thoroughly. Secondly, I have to
evaluate how does the Data mining approaches drives the improvement in
CRM. Thirdly, I will provide a recommendation to the business domain. These
are some possible challenges for CRM:

 Non-trivial results almost always need a combination of Data Mining

techniques
This describes the importance to the composition of Data mining and
the data analysis in general. It shown that if the company wanted to
analyze the data for CRM, it should observe the data from different
angles and be aware of the different aspects that the data could appear
the different meanings to it. In this case, it required the different types
of Data mining technique in order to combine all the data into single
relevant information for decision-making purposes.
 Real-world validation of results is essential for acceptance
This describes the detected patterns for CRM by Data mining
techniques are usually treated as a prediction that required the new
data to be tested for the actual acceptance of the result. This should
then taking a decision or provided a recommend action. It is essential
that the testing data could verify the acceptance, because it shown the
data is in realistic and reliable to use in the real situation, better than
just predicted the data in an unrealistic way.

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 Developing deeper models of customer behaviour
This describes the understanding of what customer desired is one of
the major issues in CRM. The current models are mainly draw out the
customer purchase habits and click patterns at the website. However
such as this models are very basic and it does not provided a fully
understand of customers and their individual needs. Hence, the
predictions about the customers are might be unreliable, due to the
wrong actions on these customers. It is suggested that all the
information from the customer point of views should be involved for
building the customer model. Data mining technique could take an
advantage in this point that enable to detect all the customer data and
integrate the data into one piece of information used in CRM. There are
two specific issues should be considered. The first one is what level
should be the customer model and secondly, what dimensions should
be considered in the customer profile. Moreover, Data mining could
benefits to review the specific data based on these two issues.
 Acquiring data for deeper understanding in a non-intrusive, low-cost,
high accuracy manner
Companies are still got problem in collecting the data for CRM. People
might be resisted, because individual got right keep their personal data
and the way to collect the data might be costly as well. Once the
datasets have been collected, they might be presented in different kind
of formats and might be located at different departments within an
organization. Therefore, it required the Data mining technique to solve
these problems.
 Evaluation framework for distinguishing between correct/incorrect
customer understanding
Although company has found difficult to build up a customer model, but
the evaluation of the model is also a complex task too. It does not
existed a standard metric to measure how well is the particular model
compared with others or whether the model will be reflected to the
customer behaviour or not. Yet, there are still metrics for measure the
quality of the customer model. But it is essential to work better on the
measurement. This might depends on the data analysis from Data
mining and how relevant are the data analyzed. The more reliable the
analyzed data, the more effectively to build the customer model.
 Good actioning mechanisms
Even if Data mining provided a trusted result, there is still a need that
how to use them in the daily tasks and required a significant research
efforts. Sometimes, the people obtained the data results but they are
unsure of how to use them in the daily work. Also, the user has to
integrate the analyzed data into the knowledge discovery process. So
that they could focus on the patterns in the customer data in which
based upon the discoveries.
 Incorporating prior knowledge
This could help to solve the problem where Data mining tends to find
many divisions of patterns that may already known or redundant.
However, there are number of difficulties existed such as the
knowledge acquisition from domain expert is hard and in other case
that they might know a lot but difficult to contribute it by verbal. Some

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 experts might not be sure about what is the relevant to the knowledge,
because it could be very wide. But after they understand the
discovered patterns, then the experts could apply their knowledge onto
it. Once again, Data mining could be conducted the promised results
but it still need to apply specific expert knowledge before it provided a
good recommendation for business purposes.

OUTLINE THE STUDY

This study is focused on the two major themes, which are CRM
(Customer Relationship Management) and Data mining. Overview the study
will be divided up into three main parts that involved the investigation the
relationship between CRM and Data mining, followed by researching the
different business domain about their uses of technology. Finally, to provide a
recommendation for the business domain on how does a Data mining
approach drives the improvement on the CRM. In this chapter, it has already
illustrated the content of the background contexts.

The content of the following chapters have listed below as shown:

CHAPTER 1: LITERATURE REVIEW

CHAPTER 2: RESEARCH METHODOLOGY
CHAPTER 3: RESEARCHING
CHAPTER 4: DATA ANALYSIS
CHAPTER 5: CONCLUSION

The second chapter provide the methodologies on how do I carry out the
research for the study, followed by the chapter three that provide the overview
the questions from the Questionnaire and started with briefly review the
purposes of the methods that I have been chosen. Furthermore, chapter four
provide the analyzing of the data obtained from the research and draw out the
recommendation for individual business scenario. The final chapter provides
the overall conclusions of the study and describes any possible improvement
could be made for this study.

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CHAPTER 2 – RESEARCH METHODOLOGY

This chapter will provide the reader about the research methodology
carried out for the investigation of the relationship between CRM and Data
mining. First of all, I will measure all the possible research methods could be
used for the study and conclude the final methods that I have selected.

RESEARCH APPROACHES

In many businesses circumstance, research is one of the main issues

drives to the successful for obtaining the information from the outside of the
organization. This information might be useful or not useful. It depends on the
knowledge of the researcher and the performance of how they are going to
research. The result will have different outcomes undertake from the different
situation. However, Research can be operated in a variety of ways.
Companies have to consider firstly what information do they wanted to obtain,
is it either qualitative or quantitative. Secondly, which methods are better for
the cost-effective in order to collect the large amount of data from outside the
company? Thirdly, researcher should carry out a comparison between the
research methods in order to evaluate the most suitable methods for the
researching, i.e. the time might be required for completion the research and
the costs for this particular method.

From the previous chapter, I have already review the literature reading
and clearly understand the overall objective of this study. Therefore, I know
what kind of data that has to be collected and it is based upon the subjective
rather than objective.

The exploratory research is one type of research where if a problem

has not been clearly defined. Kotler (2006) defines this type of research: “The
Objective of exploratory research is to gather preliminary information that will
help define problems and suggest hypotheses.” It enables to determine the
appropriate research should be used and decided the method for data
gathering. Even if the results of the exploratory research are not useful for the
decision-making, but it has provide an insight into the subject of matter. The
purpose of this study is to find out the company used of the technology and
how the technology helps in their CRM. The research area is not much known
about the company and therefore I need to choose the exploratory research
for deeper investigation to the situation. Also, a particular reason for this
exploratory research is to find out more and understand about the operations
of the company before given a best recommendation for it. Moreover, there
are two other researches that are conducted in the exploratory research.
These researches are qualitative and quantitative. Sometimes both of the
research methods could be used when performed the exploratory research.
Nevertheless, each of the methods comprised the strengths and weaknesses.

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The following sources are obtained from the Ryerson University website:
Qualitative Research
 The analyzed results are more subjective
 The results are based on the smaller sample sizes
 The results provide more details on the behaviour, attitudes and
motivation
 The findings are more in-depth, because they are generally designed
to the open-ended questions
 The researching techniques are includes: Interview, Questionnaire
(Open-ended style of questions), Focus Group, Observation, Case
Study

Quantitative Research
 The analyzed results are more objective
 The results are based on larger sample sizes
 The results provide less details on behaviour, attitudes and motivation
 The findings are generally repeated that given its high reliability
 The research techniques are included: Observation, Survey,
Experimentation

I have selected the qualitative research method for the researching.

The reason for this is because I have to collect the detailed information from
individual company, especially their behaviour to the customer. Quantitative
Research could not be obtained this kind of information as the findings are
only limited to the level of data and it is not subjective. Qualitative Research
has also provided an in-depth analysis of the results and therefore it could be
used for later recommendation. However, there are varieties of research
techniques from Qualitative Research. But I have only select one or two
techniques from it, as not all of the techniques are suitable for this researching.
I will now evaluate each of the techniques and looking at the best techniques
for the researching process.

Interview
This is an informal way for collecting the data on the individual’s personal
histories and experiences. It takes advantage when a particular topic begins
explored if the interviewee has much previous experience on it. They might be
provided the information that could not be found from the books or at the
websites. The data obtained could be at the higher level of information and it
is valuable. Although the interviewee has much experience about the topic but
they might not good on the explanations. Consequently, not much information
could be collected due to the communication problem. It is often that the
interviewee feels nervous during the interview and cause that they do not
perform very well. If the interviewee is not at a higher position within the
organization, they could not provide much depth details that we are desired
for. Nevertheless, this technique could be a considerable to use it in our
research.

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Questionnaire
This is a way of collecting the data by construct a series of meaningful
questions in a form format and given to the respondent for fill in their answers.
Questionnaire is not always designed for statistical analysis of the responses.
It sometimes might be designed for in-depth detailed analysis as well. This
depends on what style of questions that has been constructed. They have
separated into two different styles of question. The first one named Closed-
ended question where the questions are like “How many” or “How often”. The
answer from closed-ended question has fixed, therefore the analysis of the
overall results are usually repeated and replicated. This is generally required
for illustrate the result in a graph or in a chart after analyzed the data. And
possibly use it in annual report. The second one named Open-ended question
where the questions are like “Why the company” or “What do you think”. The
answer from open-ended question has wide range of fields, therefore the
analysis of the overall results are difficult to conclude into single result as
different respondents provide different aspects of the answers. But this style
of question could enhance the desired information that I wanted. This is
generally to conclude the result for a recommendation or taking an action.

Focus group
This is like where a group of people discussing a topic by given their ideas
and thoughts. It is a way of collecting the data by asking the participants about
the questions and they are free to talk with other group members to share
their experiences. It takes an advantage where participants are listening to
each other about their personal experiences build into the question, so that it
helps to stimulate the memories and ideas from others. The group members
should have a common language to share their concepts and views so that it
enables to capture the form of native language in between the members. It is
important that group members understand of what other members are talking
about before the data can be collected. Communication is critical in this
situation. However, this method might have difficult in the research because it
is impossible to ask individual company to arrange a meeting with me if I am
not working for them. If they really manage to arrange a group meeting for us,
it must be beneficial to the company about the discussion topic, otherwise
company is not easily to tell us the actual operation runs in their business.
Also the top level of employee/employer understand the running of company
very well and should be able to provide as much information as they could.
But the higher position employee/employer are usually busy with their own
workings, hence they are not always available or have any spare times to
have a discussion with us.

Observation
This is an appropriate way for collecting the data through natural occurring
behaviours during the activities. It consists of receiving the knowledge from
the outside world and enables to record the data through the scientific
instrument. This method could be time-consuming, because only by observe
from others you might not understand what they are trying to tell you or you
might be misunderstand the actual meaning that they want to tell you. Also,
the information we are desired for that might not able to obtain from the daily
running in the company. It required time to collect the data from inside and

13
outside of the company. Sometimes company is not permitted the outside
people to examine the working operations within the company, because firstly
I might interpret their daily workings and secondly they do not have employee
is available for me if I have any queries. Furthermore, this method will not be
working in our research. It is because I am the only one who manages the
whole project and carry out the research. Observation is required more than a
day in the company but I personally do not have enough time to do it.
Nevertheless, this method could possibly obtain much information about the
CRM in the company.

Case Study
This is a formal way of collecting the data from the analysis of archival
information. They are the document that already contained the useful
information about the contexts. I could search the relevant studies on different
business domains and collect the data by read through the study then
analyzed the information for reporting the results. However, libraries and
electronics sources might not have relevant studies available for me. But if
they are available, the contexts itself might not contain the information that I
am looking for. There are positive and negative points of views of using this
research method. The negative view will be taking time to search the case
study and then put more times and efforts for understanding and analyzing
the information. The positive view will be the information is all available and
essential in my research.

METHODOLOGY

The evaluation of all the possible research techniques has been

described in the previous section. Obviously, the conclusion is only a few
appropriate techniques could be used in the research. Such as focus group,
observation and case study techniques are not suitable for this researching,
because they required more times and efforts compared to the one I have
selected. I have also specified some of the negative points in the above
section for each of the techniques. Besides, I have decided to select the
Questionnaire and Interview techniques as my final research methods. The
reason is both of the techniques are seem the most effective and quicker way
for collecting the data. I decided to use the Questionnaire technique only at
the first decision. But in order to derive more information for the researching, I
have decided to use Interview technique as well for back up the Questionnaire.
I will now justify the final selected techniques are the most satisfactory for the
research.

Questionnaire is constructed a series of questions asked to the

respondents provide the answer in order to obtain the useful information
about the given topic. Then the researcher, I will analyze the information to
generate a result of overall. This technique is customary to the market
research method, because it enables to collect a wide range of information
from a large number of respondents. From the recently years, some
companies have established a website allow people to post the Questionnaire
online. This encourages more respondents to do the Questionnaire in order to
increase the amount of data collected.

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Advantages of Questionnaire
 They are cheap and do not need extra costs on the scientific
instruments for using in analysis information.
 They do not require much effort from the question compared with focus
group and via telephone survey.
 A well-structured Questionnaire could manage to guide the
respondents provides the good answers, because the respondent is
answering the questions one followed by one in which the after
questions will have related to the before one. Therefore, it stops the
frustrating to the respondent if they are not good at answering the
questions.

Disadvantages of Questionnaire
 It is not all the respondents are willing to do the Questionnaire
 The respondent might not familiar with the topic given by the
Questionnaire, so they are unable to provide appropriate level of
information.
 It still requires time for the responses from the respondent to complete
the Questionnaire if they are not doing face-to-face.
 Although a good Questionnaire construction is critical to the success of
survey, but incorrect ordering of questions or bad Questionnaire format
might be reduced the value of the data collected.

There is variety of ways of questionnaire construction. It depends on

what type of data what the company wanted to obtain. The style of questions
is also affect on the Questionnaire format. They have open-ended questions
and closed-ended questions. A Questionnaire might contain one style of
questions or both styles of questions, again it depends on what data that the
company try to collect from the respondent. The open-ended question is
usually limited the number of answers, so sometimes it misleads the
respondent selected the incorrect answers if they are unsure about the
question. This could deduce the accuracy on the analysis of the results. But
this is quicker way to analyzing the data for output the result. The closed-
ended question is usually allowed the respondent gives comments and their
ideas and experiences to the question. However the analysis of the result
might be required times and efforts, because the answers could be wide
range of fields and sometimes the answers from the entire Questionnaire are
not have the same commons. Hence, it does not output a single result for it.
Even though, this is the only style of question asked to capture the data about
the respondent’s behaviour.

Questionnaire is the satisfied technique in this researching, because I

could use the closed-ended style of questions to find out what data does the
company keeps from the customer and what technology have they used to
help on the CRM? The respondent could provide as much information as they
want by constructed the closed-ended questions in the Questionnaire format.
No limited the answers for the respondent, so that they could give the relevant
information to the research. Questionnaire is a cheaper way to collect the data
from the company, hence I don’t have to put extra costs on this project and I
supposed this technique is the most cost-effective to the undergraduate

15
student. Internet is widely used over the world and the uses of E-mail service
are almost participating in everyone. I could send the Questionnaire via E-mail
to different companies, once again it costs free of charge. Also, the structure
of the Questionnaire is helped me to capture the information that I desired for,
such as leading the company by asking do they have CRM in their company
firstly, then followed by an optional question like if they answer yes, how does
CRM beneficial to the company, else if the answer is no, why do they not
introduced CRM in their company. The format of the Questionnaire could
assist the company provide the information that I looked for and more
straightforward to answer the questions. Although, Questionnaire has
negative point of views but overall I believe this technique could support me
on the later researching.

Interview is just the back-up technique when there is not enough

information obtained from the Questionnaire. This technique has an
advantage of where the data can be captured immediately because I am
actually talking with the information provider. It is no matter about the
interview is face-to-face or via telephone interview. I could record all the
information during the interview and analyzed the information afterwards. This
is no difference with the Questionnaire, because I asked the question in
personally and listens to the answers from the respondent, same as the
respondent reads the question by himself/herself and then contribute the
answers to the questions. But communication is critical to the interview as I
need to understand what the respondent tried to tell me before I could do the
analysis of the information at later, otherwise I will capture the inaccurate
information if I misunderstand the actual meanings that they wanted to
illustrate. Overall, Interview is also a satisfied technique for the researching
later as I could obtain higher level of information via verbal and it stimulates
my memories on the information. The respondent is likely to talk more on the
ideas and experiences to the questions rather than write more on the paper.
Therefore the information is valuable.

Furthermore, I will describe the procedure on researching in the next

chapter. I believe the Questionnaire and Interview techniques are supported
me in collecting the data and the literature knowledge supported on the
analysis of the results consequently a recommendation could be provided.

16
CHAPTER 3 – RESEARCHING

This chapter will provide an in-depth on the actual researching itself. I

will start with the review the research methods that I have been selected.
Then I will attach the screenshot of the Questionnaire and analyze the
perspective to the final output of the Questionnaire. Followed by that I will
introduce the overview the questions selected in the Questionnaire and
specify the reasons that why I will choose the particular question and what is
the expected information that I am looking for in each of the question. At last, I
will briefly outline the procedure how am I going to carry out the research and
what problems might be occurred during the researching, especially the
possible issues could affect on the collecting data.

REVIEW THE RESEARCH METHOD

From the previous chapter, I have specified the research method that I
am going to undertake and it is the qualitative research conducted from the
exploratory research. The qualitative research could give the analysis of the
subjective results from the respondents. In the other words, the data captured
is mainly based on the respondent’s behaviour, attitudes and their thoughts
and experiences. This type of research is thoroughly matching up the type of
data that I wanted to be collected. It is because I have to investigate the CRM
within the company and what technology have they used to manage the
improvement to CRM. Therefore, I need to research on different business
domains by qualitative research rather than using the quantitative research,
due to the statistical results are not interesting in this subject of matter.
Accordingly to the qualitative research, it included the several techniques for
support the researching. But the final decision on the selected technique that I
have decided is Questionnaire and Interview. Both of the techniques are the
majority research technique in traditional and satisfied to the data collecting in
the research.

17
ANALYZING THE FINAL QUESTIONNAIRE

The following is the screenshots of the final output of the Questionnaire:

First page Second page

Initially, I have briefly introduced myself and then mentioned about the
purposes of this Questionnaire by describe the objective for the project. I have
added a note about the definition of CRM and explain the four approaches
from Data mining. The reason is to enhance the knowledge for the respondent
about the given topic. I assumed that not all the respondents have touched
CRM and Data mining before, so it kinds of like to start with a good
understanding of the topic before doing the Questionnaire. All the questions
are closed-ended question which are designed for the respondents to answer
the questions with their opinions and ideas. The answers for individual
question could write as much details as they could, that why I have attached a
text box under the questions rather than the number of lines. The uses of text
box provided an impression that it could write the unlimited of words for the
answer. There are only four questions in Questionnaire. In the Question three
and Question four, they have another two optional questions inside it. The
respondent should only choose one of the optional questions to answer. The
construction of the Questionnaire is well structured. The first question is
started with the name and the type of the business then followed by asking
what information does the company keeps from the customers. After this, I
asked about the company whether they have use the CRM or not with two
optional questions underneath it. It is whether if the answer is yes, the
respondent should answer the question for ‘yes’ option or else answer the
question for the ‘no’ option. The last question is asked about the company
does they used Data mining techniques in CRM or not.

18
 I believe the ordering of questions in the Questionnaire will not have
any frustrations to the respondents and it appeared a straightforward way to
answer the questions. The words used in the questions are not involved the
jargon or the technique terms, therefore it is easily to understand and easily to
read from the respondent. If the Questionnaire introduced the closed-ended
questions, they should not contain too many questions in it, as most of the
respondents are unlikely to spend too much time for answering the questions.
For this reason, I only have four main questions into the Questionnaire and it
is enough information for the recommendation after analyzed it.

OVERVIEW THE QUESTIONS FROM QUESTIONNAIRE

In this section, I will now explain each of the questions in the

Questionnaire. For the explanation, I will justify the reason why I have chosen
this question and specify the desired outcomes from individual questions.

1. What is the name and the type of business is your company?

The reason of choosing this question is to get start on the company

background, so I know what type of business that I am investigating in.
If the name of the company is well known, i.e. Ikea, then I am already
have the background knowledge on the company because it is a
popular company recognized by people. Furthermore, if I know the type
of business of the company, I could expect the answers for the
following question. For example, if the company is a banking business,
then I should expect the answer will be customer’s personal details,
customer’s income…etc on the next question where asking about what
customer information that the company will keep.

The desired outcome for the question is very obvious and the question
has already indicated the answers that are expected, which are the
name of the company and the type of business of the company.

2. What information does your company will keep from the

customers? For example, their purchasing habits.

The reason of choosing this question is to find out what kind of data
that the company has keep about their customer in order to know
currently how they manage with the customer relationship by observing
the customer’s data that they have collected. This question is important
because I have to concern what data that the company needed from
their customers in order to build up a good understanding about
individual customer’s profiles or what possible data have missed about
the customer if the company currently got a problem in CRM. Moreover,
the information for this question could lead to the question four, where I
could recommend which techniques from the Data mining is the most
suitable one to analyze the data pattern compared to the one that the
respondent has mentioned in the answer. Sometimes, company used
the inappropriate technique to analyze the data from customer so

19
 therefore it does not provide the best predictive pattern or trends for
decision-making.

The desired outcome for the question is the lists of the type of
information that the company keeps from customers. But if the
respondent gives the answer such as customer’s personal details, this
is too shallow level of information, because this type of data is essential
for every company and it will not be able to detect any patterns or
customer’s behaviour used for further action. Furthermore, the
company (e.g. telecom company) should be keep the information such
as the usages of calls and messages used by the customer, the
number of times that they have renewed the contract or what price plan
does the customer currently has. These kinds of information could help
the telecom company deal with individual customers after analyze the
data.

3. Does your company use CRM (Customer Relationship

Management)?

The reason of choosing this question is the initial question conducted

to the two optional questions within it. I have to know whether the
company used the CRM for manage with their customer or not. But no
matter the company has use CRM or not, the respondent still need to
answer the optional question underneath it. This is one of the reason
that why I have added the two optional questions, because I have to
know either how CRM helps with the company if they have introduced
one or why they are not introducing CRM in their company.

The desired outcome for the question are only yes or no, because the
style of question itself is not looking for the detailed answer, therefore
the answer should be either yes or no and the answer will lead to the
selected optional question below it. For instance, if the company has
used the CRM, then the respondent should answer the question for yes
option.

(a) If yes, how does it beneficial to the purposes of marketing?

Does it helpful used in understand what customer needs
and wants?

This question is for the answer ‘yes’ option. The reason of

choosing this question is to understand how does the company
used the CRM beneficial in the marketing and whether it is
helpful to improve the customer’s profile or not. This could
determine whether the company has been successful on the
customer relationship or not. It enables to find out what does the
companies think of the CRM. The information from this question
could enhance the company’s views of using the CRM and how
does it improve the relationship with their customer due to make
it better in the customer’s profile. The information could also
conduct whether the company should be needed to introduce

20
 the Data mining techniques or not in order to manage the
customer relationship even more effectively.

The desired outcome for the question is to mention about the

benefits on the marketing if the company currently used CRM
and describe how CRM helps the company to understand more
about their customers. For example, if the company is a retail
business, the respondent should give the information such as
“Our Company has use the CRM to provided an insight of the
customer needs and their purchasing habits. By knowing this,
we could promote our deals with the customer upon their needs.
In order to obtain as much information about individual customer,
we may increase the details in their profile and help us to target
particular product that the customer may need. The information
of purchasing habits from customer will need to use of Data
mining approaches to analyze the data and the result pattern will
need for the decision-making in later.”

(b) If no, do you aware of data mining introduced from CRM?

This questions for the answer ‘no’ option. The reason of

choosing this question is to find out the reason why the
company has not introduced the CRM and will they aware of
Data mining to use it in CRM. The information might provide
what other methods that the company used to manage the
relationship with their customers. From this information, I could
know more how the companies understand what the customer
wants and in the recommendation, I could able to compare both
of the ways and determine which method is more efficiently and
effectively. Also, the respondent will describe the reason
whether they will aware of the Data mining help in the CRM.
This information then could be used in the recommendation to
show how Data mining technique is useful in the CRM and
illustrate the benefits from it.

The desired outcome for this question is the reason why they
are not have a CRM and possibly describe the way that they are
currently use to find out what the customer wants and needs.
Then say whether will the companies aware of Data mining to
help in the CRM if they will introduce CRM in the future. The
respondent should provide the information such as, “Our
Company is only established a year ago and it’s a small
enterprise. We only concern about our regular customers and
when we have new stocks, we will send e-mail to the registered
customer. Or we may give a phone call to inform the customer.
Out market is niche market, so we don’t need a wide
management on the customer relationship to maintain our
customer loyalty, due to the confidence in our products.
However, if our Company becomes well known in the future, we
may consider having a much better management to manage our

21
 customer’s profile. Also at the moment, Data Mining may not
necessary needed as we don’t have introduced CRM yet”.

4. Does your company used Data Mining approaches in CRM?

The reason of choosing this question is the initial question conducted

to the two optional questions within it. I have to know whether the
company has introduced the Data mining techniques in their CRM or
not. But no matter the company has introduce the Data mining or not,
the respondent is still choose one of the optional question to answer. It
is important to know what techniques from the Data mining that the
company used if they have used it, because I could find out which
particular techniques they have used and how does this type of
technique help the improvement on the CRM.

The desired outcome for the question are either yes or no because the
style of the question itself is not looking for the detailed answer. The
outcome will be same as in Question 3 initial question.

(a) If do so, which Data mining techniques have you used?

Why do you used?

This question is for the answer ‘yes’ option. The reason of

choosing this question is to find out which data mining
techniques are used by the company and the reasons why they
have selected this particular technique for improving the CRM. I
could then understand whether this technique really useful in
their CRM or not. The information gives me a good
understanding of the relationship between CRM and Data
Mining. This could provide an insight to the relationship and able
to use the information to support the aim of this project.

The desired outcome for this question is the techniques from the
Data mining that the company introduced and the reason why
they have used the technique. The respondent could describe
how the particular technique cooperative with the CRM and is it
really able to help on the improvement on the CRM. The
respondent should provide the information such as, “Our
Company is using Sequential Pattern from Data Mining in order
to detect the customer’s behaviour in their purchasing habits.
The sequential pattern enables us to find out what the customer
is likely to purchase, and sometimes purchase a particular
product along with others. It is easier for us to understand
deeply what they like and we will then target the promotions to
the customer. This is really help us to build up a good
relationship with the customer because we can provide the
goods that they wanted”.

22
 (b) If not, will you utilize Data mining techniques within CRM
activities?

This question is for the answer ‘no’ option. The reason of

choosing this question is to find out whether the company will be
utilizing the Data mining techniques in the CRM activities or not.
I could know that what the companies think about the
technology or they might not know anything about it. The
information might contain the reason why the company is not
used the Data mining approaches and describe whether they will
use the technique or not in the future. When I know the
technology that the company currently used, then I could
compare both of the technologies and give the recommendation
why the company should use Data mining techniques to replace
other technologies, especially in the CRM situation. I could
provide the benefits of these approaches.

The desired outcome for the question is the reason why the
company is not utilizing the Data mining techniques and
describe the current technology used within the business. The
respondent might also provide the information like whether they
will use Data mining in the future when business grows and the
reason why they need Data mining at that moment. The
respondent should provide the information such as, “Our
Company is currently using the past statistical method to
analysis the data, such as graphs and tables with statistical
figures and placed into the annual report. Then discussing in the
meeting about the possible actions could take based on the
figures. We may also look at the historical evidence on the
trends and patterns for backing-up our decision…”

PROCEDURE OF THE RESEARCHING

While the Questionnaire is accomplished, I have to decide which type

of business domain should I investigate into it. According to the literature, the
applications of Data mining in solving problems are included: Banking, Fraud
detection, e-Commerce, Health Care, Marketing, Retail Business, Telecom
Business and WEB analysis. I might be considered these areas of businesses
for further investigation. It is because the applications are listed above has
proof that it is already worked with Data Mining techniques and nowadays, if
the company is within these business area, they should have introduced the
Data mining techniques as well for improvement on the CRM.

I will firstly find out the contact e-mail from the company and then send
the Questionnaire to different companies via E-mail. I will also type the
message in the e-mail to describe the reason for this e-mail with the
attachment of the Questionnaire. Besides, I know some of my friends and
cousins are currently working for a company. So I have sent the
Questionnaire to them as well. The worst situation is when none of the
companies have replied and therefore I need the help from cousins and

23
friends to do the Questionnaire. Hence, at least I still receive some of the
feedbacks from the research, as I am sure that cousins and friends will help
me. When I received the feedback of the Questionnaire and if the information
is not details enough, I will have a telephone interview with the respondents in
order to capture more information through verbal. The importance of obtaining
enough information from the research is because I need to analysis the result
and provide the recommendation for individual scenario.

PROBLEMS IN RESEARCHING

The researching methods have no promised on the accuracy of the

data collected and to assure that the data can be collected. It is a method to
drive the procedures on what the company could do on the data gathering. It
shows the particular skills might be needed on the researching. In this section,
I will summary the possible problems might be occurred in the data collecting
during the research.

The possible problems might be occurred:

 Not all the companies are willing to do the Questionnaire due to the busy
in their own works.
 Sometimes companies do not want to tell others about the way that they
manage with their customer, because if they have a successful way in the
CRM, other companies might be followed the same way in order to have
competitive advantage in the market.
 The e-mail with the Questionnaire attachment might seem as a junk e-
mail, therefore the company could ignore the mail.
 It depends on the size of the business. If the company is only a small
enterprise, they might not need to have a good CRM as their sales are
come from regular customers. So that the company might not interesting
on the relationship with other customers.
 It depends on the type of business. Not all the businesses are needed to
introduce the technology on Data mining. The Data mining techniques are
mainly for larger business where they have large amount of unrelated
data and use of the technology to help them find the relevant patterns
from those data.
 It depends on the knowledge of the respondent. If the respondent is on
the lower position in the company, they might not have enough strategic
level of knowledge to answer the questions in the Questionnaire.
 The respondent might misunderstand the meaning of the questions so
therefore they provide the irrelevant information on the answers.
 The feedback of the Questionnaire might not contain enough information
to the questions. The respondent might provide a short answer rather
than the detailed one. So the information obtained is lack of knowledge
about the company and affect the justification on the later
recommendation.

I should be aware of these problems and undertake the other way on

the researching if any of the problems are really occurred. The researching in
this project is very critical as I have to analysis the data and give
recommendation on it. Moreover, I should not too optimistic on the outside

24
company that I do not know anyone who works with in it. It is more difficult to
obtain the company information from the stranger outside the company.

25
CHAPTER 4 – DATA ANALYSIS
This chapter is to provide the data analysis from the feedback of the
Questionnaire. For each of the Questionnaire, firstly I will describe the
scenario about the company then followed by the data analysis for the
individual question. Secondly, I will give the recommendation on individual
scenario based on the result of analyzed data along with the literature
knowledge. The analysis of data and the knowledge from the literature could
support the recommendations that I have suggested.

QUESTIONNAIRE OUTCOMES

Scenario 1

Smartone-Vodafone Company is a Telecom company within the

Telecommunication Industry. Vodafone is a well-known Telecom company
around the world and few years ago Vodafone has merged with Smartone at
Hong Kong. Now, they have a connection in between different regions, which
means the data in the system could be shared, accessed and updated in the
real-time. The respondent has mentioned that Smartone-Vodafone Company
is mainly keep the customer personal information and the data that record the
usages of the callings and messages. The company has used the CRM to
manage with their customers and the respondent explained that it is helpful to
send specific promotion to individual customer. Moreover, the company also
has introduced the Data mining approaches in the CRM and specified that
they are using Sequential Pattern. The respondent has described this
approach is easy to organize the data to specific customer.
The actual feedback of the Questionnaire is attached on the appendix.

Scenario 2

Newedge Group is an institutional brokerage house, where provide a service

to help the customer to analyze the financial problem and the matter of funds.
The respondent mentioned that the company would keep the customer
information such as the client’s account information (legal, compliance, admin,
etc), the client’s portfolio (funds structure), the client’s daily trading activities
and open positions, the operational details (settlement, corporate actions) and
the client’s cash balance and securities position. All the information could help
the company to produce a financial report and summary the report in order to
work out a suitable decision on funding actions. The company has used the
CRM and the respondent described use of the CRM could enhance the
beneficial to their business by knowing about the client’s funding strategies
and investment objective. It also allows updating the client’s capital structure,
enhance the clientele relationship and increase the value by constantly
improves the service provided. This all could gain more understanding of the
customer’s needs and wants in the financial situation. It gives a support that
the company could recommend on the best funding and investment decision.
However, the respondent did not provide any information about the Data
mining approaches. This might because the company did not use any of the
techniques from Data mining or the position of the respondent is not at the top

26
so therefore he/she does not know what technology does the company used
to analyze the data. Moreover, it is possibly the job roles of the respondent is
generally dealt with the customers rather than working on the analysis of the
customer’s information. Perhaps the company does not use any of the
technologies for data analysis, only by observe the customer’s information
and use personal knowledge and experiences to analyze the information. But
I will recommend a possible Data mining approach that the company could
use in order to help on the data analysis even more efficiently and accurately.
The actual feedback of the Questionnaire is attached on the appendix.

Scenario 3

Bank of America is an organization of the banking business. They have

different branches located all around the UK. The respondent is worked for
the card services department in the bank, he/she mentioned that the bank is
issuing and monitoring the distribution of credit cards all over the UK. The
respondent gives the information about the company will keep the customer’s
information such as all the account information, including all purchase history.
The company does used the CRM and illustrate the operation of the card
service department as there is no physical bank branch, so all the customer
issues are dealt with over the phone. Also every time when a customer is
contracted or is contracted by the bank, a written record will be kept on their
account. Besides, when the customer is speaking to the employee, the
employee must write a series of notes explaining what happened in the
conversion, hence the different departments can determine the reason for the
customer’s call and be able to look at what has already been discussed in the
past. The respondent also provide the information about the benefits of using
the CRM such as the bank enables to determine the moment where the caller
comes through whether or not they have an account with the bank. The
employee could know what the account is, what we are able to sell them and
what products they already have from the bank. It also enable to help in
resolve problems and issues with the customers very quickly as the employee
has every discussed notes and if needed, the bank can even check the exact
phone call to determine what was said between the employee and the
customer. The bank has also introduced the Data mining approaches within
their CRM activities. However, the respondent did not state which approaches
did the bank used, only mentioned the bank used the Data mining for the
fraud prevention. The reason for the bank used Data mining for the fraud
prevention is to monitoring customers spending habits and where the card is
usually used. The respondent has illustrated how the bank operates with the
fraud prevention as, “For example, if a transaction takes place abroad without
prior warning to the bank, the credit card will be cut off and put on a fraud
prevention system.” Furthermore, the bank also keeps track of all types of
insurance that the customer has purchased from bank of America or their
affiliates. The bank has introduced the Data mining approaches for the fraud
detection and prevention method, but didn’t point out the specific approaches
have been used in the bank. Moreover, the respondent explained the reason
of using Data mining in fraud prevention is because it is the best way to
quickly determine a pattern, and when fraud occurred we could act quickly to
stop our customer losing money when it is not their fault.

27
Scenario 4

EOS Trading Ltd is a trading company and its business is mainly concern
about the exporting the goods to different oriental countries. The respondent
has mentioned that the company will keep the customer information such as
the customer’s purchase the type of goods, the purchasing data and quantity,
the business type of customers and the contracts of agreement. The customer
stated in this information mean another company that the EOS trading Ltd is
cooperative with. The company has used the CRM and the respondent draw
out the beneficial on CRM that the company may take advantages. The
benefits are included as it is helpful to understand what customer’s needs and
what the customer may wants. By this point, the company might send the
different promotions to different type of business, which is good for marketing.
The company has not yet introduced approaches in the CRM and the
respondent has mentioned that the company may be used this technology in
the future. He/she did not explained the reason why the company has not
used the Data mining approaches, so I assumed that they are used the past
statistical methods to analyze the data and the assumptions will be included in
the recommendations as well. Then I could specify one of the possible
technique that the company could use to compared with their currently
methods in order to have a more reliable data analysis and enhanced the
effectively in the CRM for marketing purposes.

Scenario 5

TOP DECK, Café Deco Group is running the Food & Beverage business. It is
like a restaurant and enables the organization to organize the events in the
restaurant. The respondent has mentioned that the company will keep the
customer’s information such as the customer’s profile, the frequency that the
customer visits the restaurant and stated whether or not the customer is a VIP
member. The customer stated in the information mean the organization that
host the event at the restaurant and they are cooperative together. The
company has used the CRM and the respondent specified the benefits from
CRM are included building up a good reputation for the company, constructive
the business and take the promotion target to the specify customer based
upon the customer’s profile to understand their needs and wants. The
company has introduced the Data mining approaches in the CRM, but did not
specify the one that the company currently used. The respondent has
commented that the company uses Data mining approaches within the CRM
is because it could detect the regular customers from the number of times the
customer has visited the restaurant. Also it enables to sort out the customer
data and detect which customer is a VIP member or other queries. Moreover,
it helps to analysis the marketing segment.

Scenario 6

AIA is an Insurance company and it is International business. This is one of

the well-known insurance companies over the world. The respondent has
mentioned that the company will keep the customer’s information such as
customer’s personal information, the type of insurance contract and the

28
budgets in each contract. The company has used the CRM and one of the
ways to manage the customer is the employee arrange a meeting with the
customers and promote the different type of insurance to them depends on
the customer’s needs. The respondent explained the benefit of the CRM is
where the company could promote the similar insurance contracts to the
customers depends on the customer’s profile in order to work out the type of
insurance that they might be needed. Also, the employee could promote
another best insurance plan for the customer that they might want to have a
contract or this particular insurance contract is essential for the customer at
the moment. The company has introduced the Data mining approaches in the
CRM and the respondent stated that the company is currently taking the
Clustering and Sequential Pattern techniques. He/she also commented that
Clustering is needed for grouping the similar customers together, e.g.
depends on their incomes or the budgets of the contract. Moreover, the
Sequential pattern is needed to find out how often the customer will have a
new insurance contracts and what kind of insurances that the customer has
already been sign the contract.

RECOMMENDATIONS

Scenario 1

This scenario has described the company will record the usage of the calls
and messages from the customer. And they are currently using the Sequential
pattern approach from Data mining to carry out the data analysis.

I recommended the Telecom Company could also apply to the Classification

and Clustering. Classification is to classify the dataset into the predetermined
groups. The decision tree technique could help the company to identify the
customer’s profile and categorized the individual into different groups. Firstly,
the attribute on the decision tree is to determine whether the customer is a
new customer or an existing customer. If he/she is a new customer, the
company could group them all into one single group. If he/she is an existing
customer, the decision tree then determines whether or not he/she is a good
customer. This is based on the customer’s loyalty and the customer has paid
the payment on time. If the customer always keeps the payment paid on time,
they are classifying to a good customer. On the other hand, if the customer
always has bad debts on the payment will lead to classify to the bad customer
category. This may reduce the offers or deals given by the company and
caused the other problems such as upgrade a new phone. Clustering is
grouping the similar objects to the same cluster and dissimilar the objects in
other clusters. The top-down methods conducted from the hierarchical
clustering could help the company to divide the calling usages from individual
customers. The method enables to split the datasets into two clusters by
categorization whether the phone calls are local or international. If the
customers make lots of international calls, the company could deal a good
price plan such as low rates per minutes in order to maintain the relationship
with the customer.

29
Scenario 2

This scenario has described the company will keep the information such as
client’s daily trading activities that monitor the customer’s behaviour on the
funding and investment. But the company did not provide the information on
the Data mining approach, so I assumed that they are currently not used this
technology for the data analysis.

I recommended the company could apply on the Classification. Classification

is to classify the data into the predetermined groups. The decision tree could
determine which customers are always have a positive cash balance, and
therefore those customers are placed in a security position when they want to
do the funding. Moreover, classification could also classify the different
predetermined risk groups. The company could group the customers by their
current security positions. If the customer always negative in the cash balance
after the investment, then he/she will be categorized into one of the risk
groups. If the customer is categorized in one of the risk group, the company
will determine whether or not they should still doing the trading activities, what
level of insecure the position they have and what possible other risks may
affect the customer too.

Scenario 3

This scenario has described the bank keeps all the account information,
including all purchase history. The company has used the Data mining
approaches within the CRM activities but did not mentioned the one that the
bank is currently used. They stated the bank used the Data mining for fraud
detection.

I recommended the Bank of American could apply on the Clustering and

Classification. The Clustering is grouping the similar data into one cluster and
dissimilar data into another cluster. The bank could keep the customer
purchases history information for the market basket analysis. The bank
enables to track the frequent of using the credit cards and monitor on the
products they have purchased. The identification of the Clustering is to
categorize the customer will use the credit card where spending over £500
per purchased item and the customer will only spend below £500 per item.
The bank should used the information for providing a low interest rates credit
card to the customer who always spend over £500 per purchased item, e.g. a
brand bag. The bank could also promote a credit account service for the
customer such as they are only paid less than 10% of the interest rates of the
credits. This could encourage the customer to have more frequents of using
the cards. The Classification is looking for the dataset and classifies the data
items into predetermined groups. The decision tree method could provide the
information whether the bank should accept the applying of the credit cards
from the customer. The decision tree initially is to determine the age of the
customer either below 18 or over 18. If he/she is below 18, it is difficult for the
bank to offer a credit card for them due to their non-stable incomes. So the
customers are classified to the rejecting category. If he/she is above 18, then
the tree is analyzing the annual incomes from the customer either below £10k

30
or over £10k. If he/she has income over £10k, the bank is more likely to
accept their application. If he/she only has income below £10k, the bank
would look at the jobs the customer currently working with for further
consideration. Also, there are other issues may affect the application such as
whether or not the customer has bad debts. The methods help the bank to
take all he considerations into account and decision-making on the
acceptance the credit card application.

Scenario 4

This scenario has described the company keeps the information about the
type of goods that the customer will purchase and the purchasing data and
the quantity of the goods. The company has not yet introduced the Data
mining approaches in the CRM activities but may be used in the future.

I recommended the Trading Company could apply on the Classification and

Association rules. Classification is looking for the dataset and to classify the
data into predetermined group. In this case, the decision tree could automate
detecting what types of the customers are they. If the customer is more likely
purchases the raw material such as wools and cottons, they are classifying in
the textiles industry. Or if the customer is likely to purchase the materials such
as irons or metals, they are classifying in the mining industry. The company
should used this information to carry out the promotion to specify customer
depends on what materials they required. Also, the Classification approach
could identify who are the regular customers. The company could offer the
discount for the regular customer in order to keep the good relationship with
their customers. Association rules are looking for the co-existence of items
that happens and detect the patterns between the data. If the customer
always purchased the wools, what is the probability that they are likely to
purchase the item and other materials (e.g. cotton) together? The values from
the support and confidence threshold could enable to help the company to
determine who are the customers do not purchased both of the items together.
Therefore, the company could take further decision on the customers who did
not purchased the wools and other materials together, what are the particular
reasons for it. This is the possible concern that the company needed to be
considered.

Scenario 5

This scenario has described the company will keep the information such as
the frequency of the customer visited the restaurant…etc. The company has
also introduced the Data mining approaches in the CRM activities.

I recommended the company could also apply on the Classification.

Classification is to classify the data into different predetermined groups. The
decision tree could determine the level of customer. At first, the attribute will
be determined the regular customer or not. If the customer is not a regular
customer, they are classified to the seldom-visited group. The company could
promote to this particular group customers by advertising a cheaper event
price plan. Or possibly carry out a research on what the customers think about

31
the services in the restaurant in order to find out what the customer needs and
wants. If the customer is a regular customer, they could be possibly upgraded
to become a VIP member. In order to become a VIP, it depends on the
number of visit to the restaurant and how much do they spend on each of the
event. The company could use the information to send out the special offers
to the VIPs and provide the benefits for priority on the booking events. If the
data analysis shows the particular VIPs have been organized over 20 events
in the restaurant, the company could give the 10% discount on the events
afterward. This could keep the customer loyalty and encourages the customer
returns.

Scenario 6

This scenario has described the company keeps the information such as the
type of insurance contract, the budgets of each contract, etc. The company
has introduced the Data mining approaches in the CRM activities. They are
currently used of Clustering and Sequential patterns.

I recommended the insurance company could also apply on the Classification

and Association rules. Classification is to classify the date items into the
predetermined groups. The decision tree could determine what classes of the
customer. At first, the attribute determined the incomes from the customer
either below £10k or over £10k annually. If he/she is below £10k, they are
classifying to the group who purchased the essential insurances such as
health insurance, life insurance…etc. On the other hand, he/she is above
£10k, they re classifying to the group who could purchase the premium
insurances as the customer enables to afford on the payment every month.
The premium insurance in this situation is meaning the unpopular insurance
that people will have such as helicopter insurances. They are only target to
the customer who owns a helicopter. Or the other premium insurances are
looking at the budgets in the contract, e.g. over £50k. Association rules are
looking for the patterns between the data and therefore it could be used in the
fraud detection. In this case, customers could have fake insurance claim. For
example, this approach could use in the health insurance to detect the fraud
and the inappropriate practice in pathology test requests. The company then
refuses for the insurance claim and keep the record on this particular
customer. Moreover, the identification of the Association rules should look at
the likelihood that the customer purchased insurance A then followed by
purchased insurance B. The company then calculated the probability of the
customers will purchase both of the insurances at the same time and the
customers will not purchase.

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CHAPTER 5 – CONCLUSION
SUMMARY

In this dissertation, I have studied the data mining approaches within

the CRM activities and the context of CRM itself. This enhanced the
knowledge on the relationship between the CRM and Data mining. The
investigation of the relationship is concerned at three different kinds of levels,
which are process, service and technology. The researching in this study is
not as realistic as I supposed. The feedback of the Questionnaire is too little.
The information contained in the feedback is not detailed enough for the data
analysis and provide a good recommendation for the company due to the lack
of high-level of information has obtained.

Although there are only six pieces of Questionnaire has returned, but
some of the feedbacks are provided enough information to do the data
analysis. The results have separated into six different scenarios and the
analysis shown that the most common Data mining approach used by the
company is Classification. The company realized that it is critical to
understand what the customer needs. In order to deeply satisfy each of the
customers, the company must have the information about the trends or
patterns on customer’s activities with the company, e.g. the customer
purchasing history and provide the services/goods they wanted. Most of the
company concluded the used of Data mining technique do really help them to
maintain the customer relationship and benefits in the marketing and it is
encouraging the customer loyalty.

I have discussed the problems might occurred in the researching from

the previous chapters. The major problem in this research is the level of
position of the employee worked in the company. Not all the employee is fully
understand the strategic level of operations within the company.
Consequently, lack of information could be obtained, as the respondents are
only general employee working on the daily tasks. They could not be involved
in the high level of decisions making from the company. Furthermore, some
companies did replied the e-mail and explained that the company information
are available on their official website. If the information does not appear on
the site, the company is considered that information as confidential. This is
one of the e-mail message replied:
“Dear Ms. Leung,
We received your e-mail and we would like to thank you for your interest in MANGO and the
fact that you thought of our company to carry out your work. Our website has useful
information about MANGO as a company. It contains a brief summary, which we have
compiled in several sections, due to the large number of requests, and since we are unable to
give an answer to each specific question about MANGO. Any absent information would be
considered as confidential. Please visit our web page www.company.mango.com and choose
the sections "The Company", "Franchises" and "Communication". Our "Communication"
section includes an interesting economic dossier, where you can find income information,
graphics and general information about our company. We hope this information will be of
some assistance to you. We would like to wish you all the best with your project.
Best regards from the MANGO team.”
This is also another problems were discussed.

33
 On the recommendation, I have recommended the Data mining
approaches for the company that might be used in the future if they have not
yet introduced. Some of the company has already introduced the Data mining
technology in the CRM and I suggested how they could use the current ones
to improve on the CRM. There is not promised on the success on the CRM
when introduced this technology. But it has proofed the Data mining
techniques could have the improvement on the CRM. The successful of the
business also concerned about the other issues not just based upon the
customer relationship management.

RECOMMENDATION ON IMPROVEMENT

Overall the dissertation, I have done the best on each parts in the
project in order to achieve the main objective of the project. I have firstly
search the literature from books in library, searching from Internet, etc and I
studied on the literature reading enhanced my knowledge on the background
context. Then I have decided the research methodology used it for the
researching and analysis the result for further recommendation.

However, this study is still having improvement on it and especially on

the researching results. I will be still used the same research methodology for
researching. But I should send out the Questionnaire as soon as possible,
straight away when I have planned the processing of the project in my
seminar. This is because if the worst situation has reached in which there are
no replies from the company, I might have more time to figure out another
way to obtain the data. The alternatively way for researching in this project is
try to arrange a meeting with the manager in the company and discussed the
topic with him/her in order to understand more about the company through
verbal. Such a way could be time-consuming and increase the amount of
efforts, but this could be a better way to capture the information that I needed.
For this way of method, firstly I will send e-mail or give a call to the company
for arrange a meeting, then go to one of the branches around the UK and
have a discussion with the employee who are at the manager level.

I could also carry out a survey about the people’s knowledge on CRM
and Data mining and the rating on the benefits on the CRM when introduced
the Data mining approaches. For example, I will ask people do they know the
relationship between CRM and Data mining and then if the participant does
not know anything about it, I will briefly explain the relationship between them.
The participant will then mark as ‘no’ on the knowledge of the topic. Moreover,
I will describe the benefits of use the Data mining approaches in the CRM.
The participant then gives the response what do they think about the
advantages of it and rating on it. 1 is totally agreed with the company use this
technology, 3 is satisfied and 5 is totally disagreed. This survey could help the
participant builds up the knowledge on the research topic. Once they
understand the context, they could do the Questionnaire by apply the
knowledge that they have gained from the survey and the experiences on the
operations of the company. Therefore the information obtained is richer and
detailed enough for data analysis and further recommendation.

34
 The major effort of the project is on the researching, as the results of
the researching will affect the data analysis that is possibly given the worst
recommendations to the company. Finally, in order to do better in this project,
I must undertake a rich researching and the results could support me for the
data analysis and gives the best on the recommendation apply on the
different scenario.

35
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APPENDIX
Scenario 1

Scenario 2

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Scenario 3

Scenario 4

39
Scenario 5

Scenario 6

40