Customer Relationship Management (CRM) is a management function that provides a base for creating and maintaining good relations for a long-term association. It provides a platform to organize and synchronize customer service, as well as works to provide effective technical support. Therefore the process of CRM becomes very important for a business in the long term. An effective CRM tool helps businesses with valuable feedback about products and attend to queries and grievances.
In order to enable the smooth functioning of customer service, certain models are followed. These customer relationship models have been developed over the past few decades by various researchers. The most common models relating to CRM are IDIC Model, QCI Model, and CRM Value Chain Model.
The IDIC (identify, differentiate, interact, customise) is a model developed by Peppers & Rogers (1995). The model helps to assess the expectation of customers and their value to the business (Eko, 2014).
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 (Ahmadi et al, 2012). 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 countries. The brand also offered coffee-flavoured candies in Eastern countries to gauge reaction to the flavour.
Differentiate customer expectations
To meet customer expectations it is important to differentiate the customer base into value and need (Peppers & Rogers, 1995). This differentiation helps to prepare strategies that meet company goals and customer expectations for strong customer relations.
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 (Srivastava, 2013).
Differentiating existing customers on the basis of their needs helps to strategize promotions (Charantimath, 2011). For instance, apart from analyzing the customers who add value to the company’s brand image, DuPont made it a point to understand that other customers needed effective customer service to address their needs individually.
Customer interactions help to understand customer expectations and how they relate to business products and services (Eko, 2014). 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.
Customizations to meet customer expectations
After identifying, differentiating and interacting with the customers a fair idea can be drawn for new strategies and product customizations (Peppers & Rogers, 1995). For instance, market research firms like McKinsey realized the need for customizations from the feedback of customers. Their customers expected increased customizations on their requests. This will help them in taking their own strategic decisions based on the reports of McKinsey. McKinsey incorporated the clause of providing a percentage of customization leverage in its reports.
The IDIC model provides a sound framework through which businesses can tread through customer engagement and work to meet their
- Ahmadi, H., Osmani, M., Ibrahim, O., & Nilashi, M. (2012). Customer relationship management model for UTM Alumni Liaison Unit. CRM History, 2(5).
- Buttle, F. (2009). Customer Relationship Management: Concepts and Technologies. Oxford: Elsevier.
- Charantimath, P. M. (2011). Total Quality Management. New Delhi: Pearson.
- 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.
- Peppers, D., & Rogers, M. (1995). A new marketing paradigm: Share of customer, not market share. Planning Review, 23(2), 14–18. http://doi.org/10.1108/eb054500
- Srivastava, M. (2013). Principles of Managing Customer Relationships. SIBM, VI(2).