Customer Relationship Management (CRM) Models
Your company has a serious problem. Customers are leaving left and right, taking streams of revenue with them. You can’t figure out what’s going on — your product/service receives great reviews, your sales team is qualifying prospects every day, and people are reading the material sent by marketing.
Your company might have all the right elements to be successful, but if you’re not investing time and effort into relationships with potential/current customers, you can kiss their business goodbye.
It’s not rocket science — when customers don’t feel valued or even hear from your company on a regular basis, they head over to a competitor who will. If this is the case, your company might just be in need of a Customer Relationship Management model.
Definition of a Customer Relationship Management Models model
CRM stands for customer relationship management — this includes the type of service you provide, the interactions you have, and the resources you share to match customer needs. A Customer Relationship Management Models model is a framework for how your company will manage these customer relationships, from acquisition to retention. The better you understand potential and current customers, solve their pain points, and build trust/rapport, the more likely they’ll stick around.
It’s important to note that a CRM model and a CRM tool are two different things. Yes, this can be confusing, but a CRM tool is software that’s designed to store and manage your customer data. Consider it a type of intelligent database that’s built around relationships. A Customer Relationship Management Models tool can be used to support your CRM model.
A CRM model outlines the steps you’ll be taking to win a customer’s trust and nurture it over time. And implementing this type of model has multiple benefits — not just for sales, but across departments:
- Build quality customer relationships and increase their loyalty to your company.
- Understand customer wants/needs and personalize the customer experience.
- Create a competitive advantage as you serve customers better than your competitors.
However, the ultimate benefit of a CRM model is that it can lead to stable revenue.
3 common Customer Relationship Management Models models
Many CRM models have been created over the years, but they all pretty much have the same message: Learn everything you can about individual customers in the prospecting stage of the sales funnel and use this information to provide an amazing experience throughout the life of the customer.
Let’s now break down three common customer relationship management (CRM) models and discuss how their capabilities can help you strengthen relationships with customers. Even though these CRM models are similar, that doesn’t mean they’re not valuable in their own way. Some you might find more pertinent to your business:
- IDIC CRM model
- Buttle’s CRM Value Chain model
- Payne & Frow’s Five-Step Process model
Below we provide a quick summary about how each model works.
1. IDIC CRM model
The IDIC CRM model is an excellent framework for discovering and using your customers’ needs and values as the foundation for how you interact with every customer.
How it works:
Developed by Peppers and Rogers in 2004, the IDIC model is made up of four actions to strengthen personal relationships, from prospects to customers.
- Identify individual customers. Develop an understanding of what their business struggles with and what they value. Divide into segments.
- Differentiate customers. Use the information about your customer segments to sort customers by their value to your business (now and in the future) and by their specific needs.
- Interact with customers. Armed with in-depth knowledge about your customer, demonstrate that you understand their needs on an individual level.
- Customize for customers. Take what you know about your customers and customize your offerings to meet their needs and values.
With the IDIC model, you gain important insights on what’s essential to your customer’s happiness and what personalizations you can offer to help achieve that.
2. Buttle’s Customer Relationship Management Models Value Chain Model
While every customer is important, not every customer is created equal. According to the 80/20 rule in sales, 20% of your customers provide 80% of your profits.
With Buttle’s CRM value chain model, offer extra attention and service to your most valuable customers.
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How it works:
Designed to be used as a platform when developing CRM strategies, the CRM Value Chain is a five-step process focused on “strategically significant customers.”
These types of customers are treated differently from other customers as they generate more revenue and make for better referrals. With this model, you can develop quality, long-term relationships with your most valuable customers.
- Customer portfolio analysis. Also known as CPA, this step helps you identify your most valuable customers.
- Customer intimacy. Now that you have a list of “strategically significant customers,” find out what they need to determine how you can best serve them. Customer data can give these insights.
- Network development. Satisfying top customers is a team effort. Work closely with marketing, support, and vendors outside of your company.
- Value proposition development. Combine your network with your product/service and offer significant value for your top customers. Plan to provide things like product add-on discounts, exclusive resources via email, and one-on-one consulting sessions.
- Managing the relationship. With these foundations in place, nurture customer relationships over the long term.
The CRM Value Chain doesn’t mean you should ignore your other customers. However, it does mean that you should make extra efforts to serve truly invested customers. Consider these customers to be the bread and butter of your business. These efforts ensure that your most valuable customers stick with your company, which ultimately impacts your company’s bottom line.
3. Payne & Frow’s Five-step Process Model
Eighty-seven percent of customers think brands need to put more effort into providing a consistent experience. Payne & Frow’s Five-Step Process Model ensures that the customer experience is consistent across all departments (not just sales) thanks to the third process (multi-channel integration process).
How it works:
The five processes of the model are categorized as follows:
- Strategy development. Divided into two strategies, this process first looks at business strategy, determining the vision of your product/service and how it competes in the industry. Customer strategy means that you outline the characteristics of your current and potential customers.
- Value creation. This process looks at the value customers bring to your business, as well as the value you bring to your customers. Create a value proposition based on this information.
- Multichannel integration. In this process, every department works together. When every department (such as marketing, sales, and support) are all on the same page and understand the value that your company is bringing to the table, your customers receive a cohesive experience.
- Performance assessment. Analyze how well your value proposition is performing. Is revenue up? Are your customers happy? Are your reps engaged with customers? With different departments?
- Information management. Also called “Data Repository,” this process supports the other processes and includes IT systems, analysis tools, front-office applications, and back-office applications.
Although each of these models is similar, they work better for different business setups. For example, maybe your business revenue is supported by only a handful of customers. The CRM Value Chain Model might be the best relationship framework for your company.
Or, if your product/service solves a complex need in your industry, use the IDIC model. No matter what model you choose (do your research), you’ll need a tool to ensure that relationship management is successful. This is where CRM software comes in.
Use a CRM tool to support your CRM model
Managing customer relationships is no simple task. Not only do you have to keep up with customer expectations, you also want to exceed expectations and make your customers want to stick with your company for the long term.
But how do you organize contact information, data, customer questions, etc., AND make sure it’s easily accessible to reps for every customer interaction? A CRM tool makes this management easy.
Here are just a few ways you can use a CRM tool to support your Customer Relationship Management Models model:
Organize customer info. A CRM gives sales reps the ability to record customer calls, track emails, and automatically move information into the customer’s record. Reps can then refer back to this information at any time, such as before customer check-in calls. As a result, customer conversations have a personal touch and the customer feels valued.
Easily access data. Valuable customer data is available right within your CRM to offer insights about each customer and personalize your value propositions. Data is automatically pulled into sales reports so you can view things like response time and call outcome. In addition, if you have a mobile CRM, your reps can refer to data while visiting with customers.
Work with marketing & support: CRM integrations with marketing automation software and support platforms ensure that conversations are consistent across channels/departments and no communication falls through the cracks. Every department understands what customer needs are and the measures being taken by each department to meet those needs.
For example, marketing can view what top customers are asking sales and support. They can then take this information to create helpful resources (e.g., whitepapers, blog posts, and reports) to send to these customers.
Building mutual trust with customers and communicating that you value their business is key to both acquiring and retaining customers. Now that you know what a CRM model is and how to use it with a CRM tool, select and implement your own to optimize your relationships with customers.
Content retrieved from: https://www.business2community.com/sales-management/what-is-a-crm-model-02235682.