Customer Relationship Management: The Application of Data Mining Techniques in the Telecommunications Sector

Abstract

: It is widely recognized that organizations of all sizes need to form one-to-one relationships with their customers in order to achieve a respectable reputation in the business market and make continuous profits. This particular need stems from the fact that customers are the core of every business. Customer Relationship Management (CRM) is based on this understanding. The study examines the feasibility of applying data mining techniques in the telecommunications industry and to define the different factors involved in the fields of data mining and CRM. These factors include the need for a large budget to purchase the data mining software and hardware, the need for data mining experts to handle installation procedures and employee training. Nevertheless, the complexity and the enormity of data mining techniques might act as a repelling agent to the adaptation of the new technology, and strategic integration of processes might be time-consuming and costly. The findings suggest that CRM and data mining are valuable tools for direct marketing, which can generate a further return on investment and be used to identify the targeted and potential customers who are responding to the new product offerings. By using the historical purchasing data, data mining techniques can predict the likelihood that a customer is serious and will respond to the promotion.