CRMModels
CRMModels
MỤC LỤC
1. The IDIC models 1
2. The CRM Value Chain 2
3. The five-process model PAYNE and FROW 5
1. The IDIC models
The IDIC model suggests that companies should take four actions in order to build
closer one-to-one relationships with customers:
+ Identify who the customers are and build a deep understanding of them.
+ Differentiate customers to identify which customers have most value now and
which offer most for the future.
+ Interact with customers to ensure a deep understanding of customer
expectations and customers’ relationships with other suppliers or brands.
+ Customize the offer and communications to ensure that the expectations of
customers are met.
More specifically, this model has supported businesses with each action as follows:
● Identify customer expectations
A business working towards customer relationship management has to first identify its
customer’s needs, wants and preferences. This helps to curate new products and
strategies oriented towards customers. For instance, in terms of identification, Nestle
conducted a market survey to identify the customer base for their coffee by assessing
the nations where caffeine intake was high. It found that Western countries had a more
positive outlook towards coffee drinks while Eastern nations preferred tea as their
caffeine drink. The company then established its coffee brand, Nescafe, in Western
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countries. The brand also offered coffee-flavored candies in Eastern countries to
gauge reaction to the flavor.
Differentiation by value helps to identify customers that are loyal and should be
focused on. Their feedback can be valuable for product line extension, increased
efficacy, and performance, as well as revenue generation.
● Customer interaction
Customer interactions help to understand customer expectations and how they relate
to business products and services. The interaction, based on customer value and needs,
provides a chance to collect feedback, opinions and wants. Unilever always has its
sales representatives and customer care executives ready to discuss possible
improvements they can make on their product line or take feedback for improvements.
This has helped them develop customer-oriented products.
The IDIC model provides a sound framework through which businesses can tread
through customer engagement and work to meet their expectations.
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was developed by Francis Buttle in 2004. The main aim of this model is to integrate
an organization’s internal and external processes to create value for the customer at a
profit. Furthermore, the model is applicable in both business-to-business (B2B) and
business-to-customer (B2C) types of businesses of all sizes.
The value chain model for customer relationship management is staged into primary
and secondary stages. The secondary stage is a support system for the primary stage
and both of these stages consist of various processes.
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and their needs. Furthermore, it helps the business to strategize for effective
interaction and helps discover highly valued customers for a long-term relationship.
● Network development
The process of network development is slow and steady as it requires extensive
interaction between the organization and the customers, at every step of the
relationship. Moreover, the customer needs to be engaged in the pre-sales, sales and
post-sales stages.
EXAMPLE: To develop this kind of network, Amway chose to make its customers a
part of its marketing plan. The company worked to include their loyal customers to
develop more connections for the company in return for greater concessions on
products and services, along with a percentage of commission on sales through them
to their related networks, thus building a quite extensive customer network.
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The secondary stage of the value chain model
The secondary stage of the CRM value chain model is a supportive stage that provides
structure and helps the business to perform its primary functions. The various aspects
of this stage:
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Each of the above is a cross-sectional, process-oriented approach and are interlinked.
They have their own role and function for increased success with CRM
implementation. Strategy development and value creation process are a part of
strategic CRM. The multichannel integration process is a part of operational CRM.
Information management and performance assessment processes are a part of
analytical CRM
● Strategy development
The strategy development process is further divided into two parts; business strategy
and customer strategy. For business strategy, a business needs to develop a vision in
relation to its offerings. The purpose is to create a goal to establish itself as a key
player in the industry. This model suggests that invariably:
+ Business strategy paves the way for understanding,
+ How customer strategy needs to be shaped and,
+ How it should change over time in conjunction with the changing needs of the
customers.
It involves understanding the choice of customers and their characteristics for
developing effective products and services. According to Payne and Frow, it is
important to examine both current and potential customer base as a part of customer
strategy. It helps with appropriate segmentation and identifying future actions to tackle
different customer needs.
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assessment. This process, as per the model, needs to be transformative as per the
results received from the strategy development so that value is extracted and
transformed into meaningful propositions. Payne’s Five Processes model explains that
there are 3 aspects of effective value creation. Firstly, the organization needs to
determine which processes can create value for the customer. Secondly, identify
customers who can add value to the organization. Thirdly, identify how to maximize
value in desirable customer segments for a successful exchange of values
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E-retailers have majorly benefitted from this model. Integrating Payne’s Five Process
model is very important to provide a customer-based value proposition. E-retailers
work to build CRM strategy by engaging customers, offering value propositions such
as discounts, loyalty privileges and priority shipping. Multi-channel integration can
also be included from customer reviews, customer service, e-mail support as well as
return policies. Performance of the CRM process can also be assessed from the online
traffic, time spent on browsing and surfing habits. Assessing what factors trigger
purchase intention can help create better value propositions.
Payne’s Five Process model evaluated the correlation between business processes,
prospects and customers. The various processes encompass the spectrum of CRM,
right from the strategic point of view to assessing the performance of customer
engagement. Every process supports itself and other processes, with each task being
interdependent for success.
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References
[1] Francis Buttle, Stan Maklan. (2019). Customer Relationship Management
Concepts and Technologies
[2] Ahmadi, H., Osmani, M., Ibrahim, O., & Nilashi, M. (2012). Customer
relationship management model for UTM Alumni Liaison Unit. CRM History, 2(5).
[3] Eko, K. (2014). The comparison of CRM model: A baseline to create Enterprise
architecture for social CRM. In Proceedings of the First International Conference on
Advanced Data and Information Engineering (DaEng-2013) (pp. 479–487).
Singapore: Springer.
[4] Srivastava, M. (2013). Principles of Managing Customer Relationships. SIBM,
VI(2).
[5] Gummesson, E., (2015) Return on Relationships (Ror): Financial Aspects of
Relationship Marketing and Crm in a Business-To-Business Context. In Creating and
Delivering Value in Marketing. Springer, Cham, pp. 43–47.
[6] Kapooria, P., (2017) Customer Relationship Management: Key to Customer
Sovereignty, New Delhi: Idea Publishing.
[7] Abdul-Muhmin, A.G. (2012). CRM technology use and implementation benefits in
an emerging market. Journal of Database Marketing & Customer Strategy
Management, 19(2), 82–97.
[8] Debnath, R., Datta, B., & Mukhopadhyay, S. (2016). Customer Relationship
Management Theory and Research in the New Millennium: Directions for Future
Research. Journal of Relationship Marketing, 15(4), 299–325.
[9] Pinnington, S., & Jones, M. (2015). Performance Measurement for Customer
Relationship Management (CRM). In Developments in Marketing Science:
Proceedings of the Academy of Marketing Science (DMSPAMS) (pp. 112–117).
Springer.