Today, there are several Customer Relationship Management (CRM) models in businesses. They are important because certainly, a CRM solution initiates wondrous opportunity to grow, for small businesses and large enterprises as well. Businesses today need to expertly handle prospects and existing clients with excellent care for maintaining long-term and healthy relations. This is because customers are the most significant portion of any business, and it is necessary to have a strong relationship with them to decrease customer attrition.
Your business might own all the appropriate components to become successful, but if you are not investing time and effort into relationships with current/possible customers, you can still encounter poor outcomes in business. You need to keep up with your contacts, accurately diagnosing problems while assuring satisfaction. Having positive interactions with your customers, can make them feel appreciated making better customer relations with your firm. When consumers connected with your organization don’t feel valued, they go to your competitor who makes them feel valued. If this is the problem that your business is facing, then you might be in a need of a CRM model.
Always remember that a customer relationship management life cycle begins with your marketing department, passes over to sales, then to operations, and stops back at marketing and sales. At this point, you should be more focused on maintaining the relationship with your consumer and probably upselling. The approach that you use to you handle customer interactions at every step of the cycle plays a huge role in successfully engaging customers or losing them.
So, what should you do to enhance the performance of these processes? Spending on the appropriate software along with smart marketing automation and using a platform with the best CRM features is all that is required. CRM software can take a lot of that workload for business and sales processes. Around 75% of businesses utilizing CRM agree of having more reliable customer relationships, it works as a compelling marketing weapon. So, cultivating strong relations with consumers and building great customer relationship management promote faster business growth, helps you get new consumers, and also preserves the existing ones.
What is Customer Relationship Management?
Before analysing the best Customer Relationship Management models, it is crucial to determine the concept of Customer Relationship Management. CRM includes processes, strategies, and software that runs your company’s interactions with customers and possible clients. CRM can be employed in sales, marketing, and operations, to manage and enhance relationships, and upselling.
CRM models help you adequately understand how your business approaches, converts, and preserves customers:
- A CRM model states how your organization gets and retains customers.
- The most successful CRM models indicate your team how to learn about customers, analyse them, reach them and improve your approach.
- CRM software facilitates easier CRM model adherence while supporting your company’s practices about customer data, sales, and relationships.
Top best CRM models that help in better customer relations
Using a platform with the most suitable CRM features is a crucial part of the marketing strategy. Defined below are the top customer relationship management models that help in structuring excellent customer relationships and are widely used across all industries:
1) The IDIC Model
IDIC CRM model was produced by Peppers and Rogers. This model intimates’ businesses to take four actions to build, keep, and retain long-term one-to-one relationships with customers. It helps to evaluate the expectation of consumers and the value they add to the business. IDIC CRM model is an outstanding framework for identifying and utilizing your customers’ requirements and values as the groundwork for how you communicate with each customer. Each of its letters represents a step in the process:
Identify: Under the IDIC model, the first step would be identifying your customers and leads. Every business needs to identify that who are its actual customers and should have a deep understanding of their customers. Doing so will make you learn about their pain points and other different factors. This helps in developing better personal relationships with customers and sort them into groups as per their needs, wants, and purchase behaviours.
Differentiate: Now your segmented customers, need to be differentiated based on the current and projected lifetime value that you expect them to bring to your business. Always remember not all customers bring the same value to the business. Differentiating your customers will help you understand how much money and time you should put toward each one. Provide more value to those customers who are making more value for your business. You should also differentiate your customers as per their needs.
Interact: The initial two steps under the IDIC model lay the foundation to set you up for actual interaction with customers and prospects, giving you a significant idea of the customer’s demands and requirements so that you can provide them personalized content and information. This shows your customer that you know their requirements, which makes them more likely to purchase from you. Always remember to learn from your every interaction to continuously enhance your future interactions.
Customize: This is the final step of IDIC, it customizes your approach based on what you have discovered about your customers in the previous three steps. That means tweaking your deals or offers to adequately meet the customer’s requirements or budget. The main purpose here is to assure that your customers’ expectations and demands are satisfied. Utilize all the collected information that you know about your customers and make your offerings accordingly.
2) QCI model
The Quality Competitive Index (QCi) model is a customer management model. It begins with the customer’s external environment, their business goals, pain points, and other factors that influence them. This QCI model analyses the people and technology associated with it, which keeps this whole system running. It represents several activities that businesses need to perform to get and retain customers. The QCi model helps you review modern practices and produce a quantitative approach to enhance the customer management process. This model is more of a customer management model rather than a consumer relationship model.
3) CRM value chain
A CRM value chain is a high-level model that helps organizations identify and generate unique solutions for customers. With the help of this CRM model, you can discover which activities bring you the maximum value and improve your processes to adequately serve your customers to gain a competitive advantage. This CRM model recognizes all the steps and activities needed to create a strong relationship with a customer.
These exercises are broken into two stages: Primary and Support
1- Primary stage
The primary stage of CRM has five main processes that enable the strategy:
Customer portfolio analysis: Just like the IDIC model, the primary step of the value chain model is to analyse your consumers to recognize which customers bring your company the most value. This analysis step assists businesses to understand their customers to divide resources among their customers based on this value.
Customer intimacy: Now comes the next step which is to engage with the customer and develop the original database of information. Businesses need to collect data at every touchpoint in the interaction to adequately understand and assist their customer. Communicate with your consumers and get new data from each interaction. Modify your offerings for the customer according to what you discovered and learned.
Network development: This step looks beyond your business and customers and focuses on third parties such as partners, customer service, suppliers, and investors. Your purpose here is to utilize the data from your customer data to inform these third parties so that the whole system operates together in optimizing your customer’s experience.
Value proposition development: Utilize the previous three steps to get customer information and interaction data for generating a unique value for your customer. Concentrate on individualized service and reducing costs, so that you can reduce process costs to build more value for the customer or retain more earnings.
Relationship management: This is the end stage of the value chain model under which you manage your customer lifecycle. This process involves evaluating your organizational structure and business processes, thereby discovering points where you can improve or make changes, and then executing them to manage customer development, acquisition, and retention.
2- Support stage
The second stage is about making sure your organization owns the following:
Leadership and culture: Your CRM model would become more difficult to execute without someone directing your operations and establishing company standards.
Procurement processes: Having a solid workflow in-house is necessary for driving customers from extremely interested prospects to genuine customers.
HR management processes: An HR team to fix internal issues as you progress with your CRM value chain model.
IT management processes: Proper IT management is essential for successful CRM, as CRM is quite data intensive.
Organization design: It is essential to designate who is accountable for what and who reports to whom.
There are five supportive requirements needed to efficiently implement the strategic processes of the primary stage. Designing and evolving these underlying conditions will set a successful CRM value chain implementation.
4)The Payne’s Five Forces Process Model
Today around 85 percent of consumers think that brands should put in more effort and energy toward providing a consistent experience. For this, here we have a comprehensive model developed by Adrian Payne. Payne & Frow’s Five-Step Process Model assures that the consumer experience is consistent across every department, not only sales. This model incorporates five core processes in Customer Relationships Management (CRM), namely: strategy development, value creation, multichannel integration, performance assessment, and information management process.
How it works:
The five processes of the model are described as follows:
1) Strategy development:
This strategy development process is divided into two strategies: customer strategy and business strategy. For business strategy, a business needs to develop a vision of its products/services and how it competes in the industry. Next comes the customer strategy which means that you draft the characteristics of your current and potential customers and identify future actions to tackle different customer needs.
2) 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. The value creation method of Payne’s Five Processes model includes identifying the value that a customer brings to your business, plus the value that you bring to your customers. The business needs to understand which customers are valuable through the process of value proposition and value assessment based on the above information.
3) Multichannel integration:
This process works on inputs from value creation processes and business strategy. It involves converting the insights from these processes to outputs in value-adding activities. This process suggests the business to perform tasks to engage customers, learn and understand their perspectives, and retain them for a longer-term. This helps businesses to concentrate on decision-making that integrates all channels and assure that the customer experience is positive.
4) Performance assessment:
Performance assessment is extremely important to know how well the value proposition of the business is performing and whether the customer’s interest is leading to more solid business performance. According to Payne’s Five Processes model, the performance assessment of business should likewise involve monitoring of customer satisfaction and analysis of Key Performance Indicators (KPIs).
5) Information management:
Information management is the analytical component of this model. It works as a support to the other processes. Payne’s Five Process model incorporates analysis tools, IT systems, back-office applications, and front-office applications. This process suggests gathering, organizing, and utilizing information associated with customers, with insights on consumer behaviour. It encourages businesses to build proper marketing responses and enhance value propositions.
Also, read: 4 Best CRM for outlook Integration 2021
Customer relationship management is an essential component of every part of the business. It is not only restricted to consumer support rather it applies to the entire customer life cycle throughout their journey. Buyers need a CRM to manage their relationships with customers. And building long-lasting customer relationships are vital for businesses as this promotes your brand to stand out from its competition and provide customers with reasons to connect with you emotionally. All businesses are different however the core principle of success is always the same. So, having a solid base of customer relationships is the foundation of every business.
All of the above-defined models are similar, they serve better for different business setups. Consider these examples, if your business revenue is maintained by simply a few customers, then the CRM Value Chain Model might be the most beneficial relationship framework for your business. Or, if your product/service resolves a complicated requirement in your business, utilize the IDIC model. It does not matter what model you pick; you’ll need a tool to assure that relationship management is successful. All the best!
To execute any of these CRM models accurately, you’ll be requiring CRM software that organizes your consumer data and coordinates all your teams’ efforts. CRM tracks your consumer data and interactions so that you don’t miss any important leads and prospects.