What do you get when you combine CRM and predictive analytics? Potentially some very detailed, real-time information about customers, which can be used to improve interactions and increase sales, reports Todd R. Weiss at CIO magazine.

Predictive analytics functions increasingly are being integrated with CRM applications to enable online retailers to make customized offers to customers. Some vendors are embedding this capability into the products, and others are selling it as an add-on, said James Kobielus, an analyst with Forrester Research (NASDAQ: FORR).

The idea is to better target your outreach to individual customers.

"The black art in all of this is determining how a human being is going to respond in predictive circumstances when they are presented with an offer from a company," Kobielus said.

Businesses are looking to get more out of their CRM systems, and predictive analytics offers a way to generate new sales opportunities. Call-center agents fielding questions or complaints could have enough data at their fingertips to offer special opportunities based on previous purchases or other account information.

"We are seeing [some of] this in CRM now and we will see more of it," Kobielus says. "CIOs should be thinking about it because CMOs are thinking about it."

As Weiss points out, this is not a brand new technological innovation but instead a spin-off from business intelligence technologies that have been around for a while. The difference is that it is being incorporated directly with CRM applications.

In a similar fashion, these analytics tools are being tied in more with social networks like Facebook and Twitter. This latter technique gives businesses a way to expand their CRM data and hone their target marketing.

To determine the best way to integrate CRM and predictive analytics, businesses need to draw insights from the marketing team as well as IT.

"It's not something you'll be able to jump into with little thought," Weiss writes. "You'll want to know your goals before you take the first steps so you can achieve adequate payback from your investments of time and resources."

For more:
- see Todd R. Weiss's article at CIO magazine

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