What Are CRM Models?

What is a CRM model?

A CRM model is a workflow that guides all of your team’s interactions with leads, prospects and customers. It provides a loose framework that your company can follow to acquire and retain customers. It is not the same thing as CRM software, although CRM software offers benefits that can improve the effectiveness of whichever CRM model you choose. These include improved tracking of customer interactions and data-sharing integrations with your other business software.

Most popular CRM models

The below CRM models are the most widely used across all industries.

Identify, Differentiate, Interact and Customize (IDIC)

The IDIC CRM model is the brainchild of the Peppers & Rogers Group, which introduced the model in 2004. Each of its letters represents a step in the process:

• Identify: In the IDIC model, you’ll start by identifying your leads and customers. More importantly, you’ll enrich your leads and customers. In doing so, you’ll learn about their pain points and other distinguishing factors. Both these qualities allow you to develop better personal relationships with your customers and segment them into groups.
• Differentiate: Once you’ve segmented your customers, you should differentiate them based on how much value you expect them to bring to your business. Don’t just look at immediate value ― consider long-term value too. After you differentiate your customers, you’ll better understand how much time and money you should put toward each one.
• Interact: The first two steps in the IDIC model exist to set you up for actual interaction with prospects and customers, giving you a meaningful picture of the customer’s wants and needs so that you can send them personalized content and communications. This shows your prospect or customer that you understand their needs, improving customer engagement and making them more likely to purchase from you.
• Customize: Although the previous step involves tailored communications and content, it should only be the start of modifying your approach to fit your customer’s needs. The final step of IDIC is to customize your approach based on what you’ve learned about your customer. That means tweaking your offerings or deals to meet the customer’s needs or budget best.

Payne and Frow’s Five Forces

Ph.D.s Adrian Payne and Pennie Frow introduced their Five Forces CRM model to focus on not just processes but elements too. These are the five processes:

1. Strategy development: In the Payne and Frow model, strategy development comprises your business and customer strategies. Your business strategy includes your unique vision for your company and what distinguishes it in its industry and market. Your customer strategy involves creating ideal buyer personas, segmenting your audience and otherwise identifying the qualities that might make a customer choose you.
2. Value creation: In this step, you’ll determine the value you bring to your customers and vice versa. For example, maybe your events company has access to one-of-a-kind spaces that consumers just can’t get elsewhere ― that’s the value your customers receive. The value you receive is customers who remain loyal to you since nobody else offers spaces like yours.
3. Multichannel integration: After developing your strategy and creating your value, you should inform your whole team of everything you’ve established. That means not just your sales team but marketing and customer service too.
4. Performance assessment: Once your multichannel approach has been put to work, you should reassess your strategy. If your customers are happy and your team is meeting its key performance indicators (KPIs), then you should be all set. If not, revise your strategies and values based on input from your team and customers.
5. Information management: This step comprises your front-office and back-office applications, information technology (IT) framework and all your other CRM analysis tools. You’ll add information to these platforms as you move through the model, which will inform your future movements through the model. For example, if a customer says on a tech support call that they are considering upgrading their subscription package, the support agent could enter that information into the CRM, signaling sales and marketing teams to try upselling that customer.

These are the four elements of the Payne and Frow process:

• CRM readiness: You should prepare to implement CRM software before implementing the Five Forces CRM model.
• CRM change management: You should have protocols in place for modifying your CRM workflows, CRM dashboard and other software components before starting with this model.
• CRM project management: You should know how projects administered in your CRM will be managed from start to finish.
• Employee management: You should have a firm sense of which employees are responsible for which tasks along your sales pipeline. You should also know which sales representatives are assigned to which prospects or customers.

QCI

The Quality Competitive Index (QCI) CRM model focuses more on managing customers than improving relationships with them. It has eight components:

1. Analysis and planning: Fill in any data and behavioral gaps that your prospect presents, then figure out what value your company brings to the customer.
2. Proposition: Use your customer’s needs to determine how you’ll serve them, then propose this approach to the customer.
3. Information and technology: Look at your technology to determine how it’s adding customer information to your CRM and analyzing this data. Use what you learn to conduct reviews and update or modify your technology as needed.
4. People and organization: Designate certain employees as responsible for managing customer feedback, such as service inquiries and online reviews.
5. Process management: Ensure that your sales and customer service teams are consistently supporting customers. Identify shortcomings and figure out how to resolve them.
6. Customer management activity: This element has three elements of its own ― acquisition (obtaining and learning about new customers), penetration (collecting information about customers and helping them feel connected to your business and its goals) and retention (keeping customers engaged with your business, which might include winning back dissatisfied customers).
7. Effect measurement: Analyze your teams’ performance to see how their work corresponds to sales. Get granular by looking at each sales and customer service rep’s work as well.
8. Customer experience: Conduct the same process as in the previous step, but for customer satisfaction instead of sales volume.

CRM value chain

Harvard Business School professor Michael Porter introduced the CRM value chain model to help companies identify and develop unique solutions for customers. Through this CRM model, you’ll determine which activities bring you the most value and refine your processes to best assist your customers.

The CRM value chain model has two stages. The primary stage has five parts:

1. Customer portfolio analysis: Determine which customers bring your company the most value. Then, figure out how to divide your resources among your customers based on this value.
2. Customer intimacy: Interact with your customers and obtain new data from each interaction. Adjust your offerings for the customer according to what you learn.
3. Network development: This step is unique among CRM models in that it looks beyond your company and customers to third parties such as suppliers, investors and partners. Your goal is to use the data from your customer intimacy step to advise these third parties on how they can operate to optimize the customer experience.
4. Value proposition development: Use the preceding three steps to develop a unique value for your customer. Focus on individualized service and minimizing costs so you can charge your customers less (or retain more earnings).
5. Relationship management: Take a step back and look at the previous steps of your process. Determine spots where you can improve or make changes, then implement them. This way, you can perform better overall in customer retention, acquisition and development.

The second stage is about making sure your company has the following:

• Leadership and culture: Without someone directing your operations and setting company standards, your CRM model will be harder to execute.
• Procurement processes: You should have a solid workflow in place for moving customers from highly interested prospects to actual customers.
• Human resources (HR) management processes: You should recruit an HR team (or hire a third-party HR provider) to resolve internal issues as you go about the CRM value chain model.
• IT management processes: Since CRM is quite data-intensive, proper IT management is necessary for successful CRM.
• Organization design: You need to designate who is responsible for what and who reports to whom.

The best CRM software for CRM models

If you’re in the market for a CRM system, we’ve done the research for you. Check out our picks for some of the best CRM software for running CRM models and converting more leads.

• If you’re looking for a major player in the CRM space that can support businesses of all sizes, check out our Salesforce review. There are no minimum seats required to use this CRM either, so you can use it from day one.
• When you want to take quick action on leads and sales, you need a CRM born out of task management. For that, check out our com’s sales CRM review. The company offers a free trial too, so you can test out whether it suits your team and CRM models. 
• If you want to visualize your customer journey from lead identification to repeat customer, our Pipedrive review might interest you. This tool lets you build sales pipelines to suit your workflow and you can do so by whatever CRM model you choose. 

Are you not sure how to compare these products? Check out our guide on choosing a CRM system for your small business.

Make the most of your data with CRM models

Choosing the right CRM model for your business can help you make the most effective use of data gleaned from your interactions with customers. When pairing a well-oiled CRM model with a powerful CRM system, you can support your sales and marketing teams to drive more leads, convert more customers and land more sales. If you’re looking for a way to grow your business quickly, CRM models may hold the answer. 

Tejas Vemparala contributed to this article.