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What Are CRM Models?

Max Freedman
Max Freedman

CRM models can help you better understand how your company reaches, converts and retains customers.

  • A CRM model dictates how your company acquires and retains customers.
  • The most popular CRM models tell your team how to learn about customers, group them, contact them and tweak your approach.
  • CRM software enables easier CRM model adherence while bolstering your company’s practices around customer data, relationships and sales.
  • This article is for business owners interested in incorporating CRM models into their sales, marketing and customer service work.

To manage the many challenges that come with sales work, companies of all stripes have increasingly adopted customer relationship management (CRM) software, often with great results. One report found that 65% of companies with mobile CRM are meeting their sales quotas, and this success may be partially due to these companies using a CRM model alongside their software. Below, learn how CRM models and software make sales work more approachable.

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 – rather, CRM software enables you to move efficiently through your CRM model while coordinating with your team.

Did You Know?

CRM software is not necessary to run a CRM model. However, CRM software can substantially improve your ability to execute your chosen CRM model.

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


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, 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 best meet the customer’s needs or budget.

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 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, customer service and all the subdepartments within each.

  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, 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 reps are assigned to which prospects or customers.


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.
  • 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 clearly designate who is responsible for what and who reports to whom.
Key Takeaway

The four most popular CRM models generally advise learning about your customers, grouping them, contacting them, and then using what you learn to rebuild and revise your sales processes.

How a CRM tool can help your business

To execute any of these CRM models properly, you’ll need CRM software that centralizes your customer data and coordinates all your teams’ efforts. You’ll also want your CRM to enrich customer data and update in real time. It should facilitate all sales, marketing and customer service tasks. In short, a CRM tracks your customer data and interactions so that you don’t miss out on meaningful leads and prospects.

If you’re interested in learning more about how CRM software can help your business and which brands might suit your needs, visit our CRM software reviews page. There, we’ve named what we think are the best easy-to-use, low-cost, and free CRMs as well as the best ones for small and growing businesses. Once you have the right tool for your company, implementing a powerful CRM model and making more sales should be much easier.

Image Credit: demaerre / Getty Images
Max Freedman
Max Freedman
Contributing Writer
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He's also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.