Customer satisfaction is crucial to building and maintaining a loyal base of shoppers. Yet with a complex web of marketing, sales, customer service, and communication tools competing behind the scenes, it can be a challenge to provide consistent, relevant care and attention to every client. This is where customer relationship management (CRM) comes in.
By providing a framework for filtering and interpreting customer data, CRM models can help you achieve successful relationship management efficiently, while driving your business goals. But with so many CRM models out there, how do you know which is best for your business?
What is a CRM model?
Customer relationship management (CRM) can refer to the framework for collecting customer data, as well as the software that actually records customer information, activity, and communications in a centralized database. A CRM model, meanwhile, is the strategy behind all of that valuable data collection and the subsequent communications.
CRM models offer businesses a way to guide the customer journey, from early lead nurturing to successful acquisition. By logging data throughout the customer lifecycle, CRM systems can identify trends and offer opportunities for marketing personalization to improve the customer experience—and, ultimately, drive more sales. Your CRM model is the approach you follow to do all this.
Effective CRM models
Figuring out which CRM model is right for your business is an exercise in evaluating and prioritizing your current needs and long-term goals. When considering the options, weigh factors like company size, the current state of customer relationships, and your team’s bandwidth.
Identify, differentiate, interact, and customize (IDIC)
The IDIC CRM model focuses on identifying your customers and their needs, differentiating them into segments based on shared characteristics, interacting with them accordingly, and using all of the valuable data you’ve collected to customize your offering. A skin care brand might use IDIC to create customer segments based on skin type and skin goals, then use that data to shape its product road map.
Here’s how the approach works:
- Identify. Who are your active customers, your leads, and your target customers? What are their needs and pain points?
- Differentiate. Once you have a better understanding of your customers, segment them according to factors like demographics, personal needs, and purchase history. Then assess the potential value of each group.
- Interact. Now you can use your customer segmentation to create personalized customer interactions (and even services) based on each segment’s wants and needs.
- Customize. Continue using these sustained interactions to learn from your customers and further customize your marketing campaigns and product road map to cater to the highest-value customers.
Quality competitive index (QCI)
The QCI CRM model focuses more on providing quality service for existing clients to prevent churn than on moving new clients through the sales funnel. This means it’s better suited for larger companies that already have a substantial customer base and high brand awareness.
Because the QCI strategy is about improving service quality, it works well for companies that want superior service, rather than something like competitive pricing, to be a differentiator.
Implementing a QCI approach involves careful consideration of the following components:
- Planning and analysis. Use existing customer data and business goals to form an overarching objective.
- Proposition. Determine how you’ll meet your customers’ needs, and then pitch your proposition to them.
- Information and technology. Review your tech stack to identify gaps and then modify accordingly.
- People and organization. Create internal workflows for CRM management, assigning responsibilities (like email response) to specific stakeholders.
- Process management. Observe how customers move through the customer lifecycle (from prospect to onboarding), and ensure you’re supporting them throughout.
- Customer management activity. Focus on three stages: acquisition (acquiring new customers), penetration (identifying customers and connecting them to your business and its goal), and retention (keeping them engaged and preventing churn).
- Effect management. As you implement the QCI model, keep an eye on your key performance indicators (KPIs) to measure success.
- Customer experience. Solicit feedback (via surveys, interviews, social listening) from your customers and use any learnings to refine your process.
CRM value chain
The CRM value chain model focuses on identifying your greatest customer value potential and refining your processes to maximize it. Like the QCI approach, the CRM value chain is likely a good fit for more established businesses with extensive customer data and a goal of fostering deep customer loyalty. Because this approach is focused on targeting high-value customers, you should also have a workflow in place for converting customers.
Follow these steps to implement the CRM value chain model:
- Review your customer portfolio. Evaluate which customers bring the most value to the company and allocate resources accordingly.
- Build customer intimacy. Engage your high-value customers and use each of these touchpoints as opportunities to collect data to target them more intimately.
- Invest in network development. Share your learnings with outside investors, third-party suppliers, and other brand partners so they can help optimize the customer experience.
- Develop a value proposition. Define what sets you apart from competitors. Your value proposition is the offering that you can uniquely provide, and it should be reflected across your CRM model.
- Refine your relationship management. Update policies and procedures to reflect your new value proposition and customer valuation.
Payne and Frow’s five process model
If you’re process-oriented and have a good sense of how you’d like to shape your business, Payne and Frow’s five processes could be a good fit. This model was developed by Adrian Payne and Pennie Frow in a 2005 paper on customer relationship management.
Whereas the QCI model is designed to improve relationships with existing customers, and the CRM value chain model to help identify the most valuable customer, Payne and Frow’s five process model is a more general approach to improving customer relationships overall. It’s also less exacting and more conceptual than the IDIC approach, which makes it a great choice for small and medium-sized businesses that value flexibility.
The five processes are designed to occur simultaneously:
- Develop a strategy. In this stage, you’ll develop a business strategy (clarify your company’s vision and what sets it apart) and customer strategy (create target audience profiles and customer segments according to shared values, demographics, etc.).
- Identify your values. As a company, what unique values do you offer to these customer segments? Use this knowledge to brainstorm how to best target them.
- Implement multichannel integration. Consistency is key. Make sure your new CRM strategy is integrated cross-functionally to ensure customers receive appropriate messaging at all life cycle stages.
- Collect information. As you roll out your new value-based strategy, make sure you have procedures and tech in place to properly capture and translate data.
- Assess performance. How is your new CRM strategy working? Are you meeting your KPIs, or is there another way to better measure CRM performance? Take these questions back to stakeholders and continue to evaluate and address successes and pain points.
Gartner’s CRM model
Like Payne and Frow’s five processes, Gartner’s is a more conceptual approach to CRM. Created by the consulting firm Gartner, it emphasizes eight components of successful CRM, each of which you can embed into your company’s operations.
Gartner’s CRM model can work well at larger enterprises that are guided by a compelling vision (the first of Gartner’s eight competencies). The eight components are:
- Vision. Determine your CRM goals and how they align with your other business objectives.
- Strategy. Translate those goals into action, determining which channels to use and how to communicate your company’s unique offering.
- Customer experience. Solicit customer feedback and adjust accordingly to improve the customer journey.
- Processes. Focus on internal efficiency, letting customer insights inform your CRM practices behind the scenes.
- Information. Identify what customer information matters most and effectively collect and store it.
- Technology. Evaluate whether your current tech stack supports your new data needs or requires new software.
- Metrics. Set KPIs that connect to broader goals and ensure your team has what it needs to track them.
- Organizational collaboration. Encourage cross-functional CRM adoption to help guarantee a consistent customer experience.
CRM model FAQ
What does CRM mean?
Customer relationship management (CRM) can refer to both your business’s strategy for managing and communicating with customers (collecting personal data and preferences, and serving content designed to move them along the sales funnel), as well as the actual software for CRM implementation and automated data tracking.
What is the CRM model?
A CRM model is a methodology for understanding how to best interact with your customers. The model you choose will set the tone for your messaging and customer interactions, as well as define the work your company does to improve customer satisfaction.
What are the three common CRM models?
The most common is the IDIC model (identify, differentiate, interact, and customize), which focuses on customer segmentation and personalization. The quality competitive index (QCI) and CRM value chain model propose their own multistep methods for managing existing customers or figuring out which customers hold the most potential value. Two additional models that approach CRM more broadly are Payne and Frow’s five processes and Gartner’s CRM model.
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