Crm Models - Idic Model

           IDIC model is developed by Peppers and Rogers in 2004. The main concept of IDIC is to build closer one to one relationships with customers by following the step which including identify, differentiate, interact and customize. First step will be identify who is the actual customer and build deep understanding of them. This is because the firm must be capable to identify customers before establishing relationship hence the firm is able to serve them profitably. Secret Recipe, has implementing IDIC model. They practice customer identify regularly according to their ages, lifestyle and so on. From the beginning, the waiters of Secret Recipe will be the one who handling of customers and have interaction with them. The waiter will be in the restaurants to serve the customers by bring them to the table seat, introduce menu, taking orders, serve the food and helping the customer with the bills payment. Based on the process, waiter able to identify and interact with customers to gain relationship. It is to understand what the customer’s needs, wants, customers likes and dislikes. Hence, when the next time customers come back, the staff would know what he or she wants more quickly.

          Second, is to make differentiate towards every customer into different segments. Peppers & Rogers has justified this stage by explaining that customers represent different levels of value to a company and that they have varied needs. This stage is to identifying the customer’s segmentation which including profitable, non profitable customers, frequent users or non users. The company need differentiate its customers in order to know who have the biggest value to the firms. It allows company to formulate and implement strategies toward different customers. Secret Recipe differentiates their customers according to the various timings and types of customers. For example during lunch hour it will be more crowds by officers while families will be during evening or dinner hours. Hence, Secret Recipe will categorize their customers into three segments which officers will be customers during launch hour; families will become the customers during dinner hour whereas dessert lovers will visit during tea time. According to the analysis, Secret Recipe may implement promotional strategy for example lunch set, family dinner package and special tea set in order to fulfill and satisfied the needs of different customers. To company, they not only gain profit and loyalty, but also building and improving customers relationship management.

          Third, is having effective interaction between company and customers. Interact with customers to ensure that the firm has gain understanding customer expectation and their relationships with other suppliers or brands. Having interaction and communication directly with customers will be more effectively to provide a better insight into customer’s needs. This effort make customers gain loyalty towards the brand and help to build long term relationship. Interaction can be carry on through pre-purchase, purchase and post-purchase stage. During purchasing stage, Secret Recipe’s staff should communicate with their customers whether they are satisfied about the food served and service. While post- purchase stage is too seek for feedback from customers in order to improve their product and service, so that when the next return of customers able to experience become more satisfying and pleasant.

        Customization is the last criteria. Practice customization is to adapt the behavior of customers based on individual’s needs and value. By having interaction with customers, it allows company to figure out what their customer’s preferences and habits. Company should customize the offer and communication to ensure that the expectations of customers are met.Secret Recipe has differentiated their customer based on their lifestyle. For the customer who more concerning in healthy lifestyle or vegetarian customers, Secret Recipe have launched a new menu which is offers them vegetarian food. Besides that, Secret Recipe has produce a new recipe which is Hi Fibre cream cheese cake, which make by light cheese but satisfying with hi-fibre grains, seeds and nuts toppings. This is specially design for the cake lover who are much more concern in healthy lifestyle. Customization plays an important role to ensure the loyalty of customers.

CRM value chain has separated into primary stage and a secondary stage is to support the primaries.  According to model, the primary stages are customer portfolio analysis, customer intimacy, network development, value proposition development and managing the customer lifecycle. Primary stages help to study customer habits and interact with customers to develop a relationship and also maintain the relationship.    

Stage 1: Customer portfolio analysis, it is to identify target customers which represent most value for the company. This stages it to analysis data of customers that has been collected. It able to helps the company to gain insights in order to define their strategies to interact with customers and understand their needs. For example Starbucks Company which selling coffee beverage, in order to seek for most valuable target customers, they need to collect customer data and statistic information to evaluate the coffee lover in the market nowadays.

Stage 2: Customer intimacy is the time to engage with the customers and interact with the most valuable and to provide them better value than competitors. It can be analyze through data collecting and mining. To build long term relationship require more knowledge of customers by knowing what, who, why, when and how of customer behavior. After analysis, Starbucks need to engage with potential customers and offer better beverage than their competitor for example Coffee Bean and Tea Leaf.

Stage 3: Network development. In order to serve customer relationship, it’s important to build up a good network which contain of suppliers, manufacturers, employees, investor, technology, distributor and retailers.  This is to serve the customer more profitability and commit into long term relationship. Starbucks has develop its own network to be a part of the innovation and process optimization to produce the best quality coffee, tea, juice and soluble products.

Stage 4: Value proposition development. In this step company has already know who to serve, the network has to work together to create and deliver the values to the chosen customers. It is to create a value proposition which to meet all the requirements, preferences and expectations of the customers. Starbucks is targeting to middle and high income people, hence they has chose to use the finest coffee bean to provide high quality coffee and offering friendly environment for their target market in order to meet their expectations.  

Stage 5: Manage customer lifecycle is to manage the relationship with customers of concerning in developing new structures and process to continue the relationships successfully. To manage the lifecycle of customers, the company needs to acquisition, retention and finalize the development of customer. In order to manage customers’ lifecycle, Starbucks always provide new products and offering membership cards to gain the customer loyalty towards their brand.

In order to succeed primary stages, it needed to be support by certain secondary stages condition. Leadership and culture which means the leaders of Starbucks company has provide direction and prioritize CRM within the organization, it should be require to implementing customer relationship, create a culture for customers satisfaction. Process is one of the conditions which are organization implement tasks or activities to create something value for the customers. The people in any business are the one who interact with the customers. Staffs of Starbucks are well trained to deal with customers to ensure a positive interaction employees need to know how to deal with all kinds of the situation. Data and Information technology provides all the insights that are essential for CRM. It needs to the acquired, stored, analyzed, maintained, improved and distributed properly to be of any value.

References

1. Jawed Siddiqi, Babak Akhgar & Tim Wise (2008) A framework for the implementation of a Customer Relationship Management strategy in retail sector. Viewed on 15 October 2015 <>
2. Pepper, D. and Rogers, M. (2011) Managing Customer Relationships: A Strategic Framework, 2nd Edition, New Jersey, John Wiley & Sons
3. Pepper, D. and Rogers, M. (1991) A new marketing paradigm: share of customer, not market share.Viewed on 15 October 2015,
4. Martin 2015, Better Targeting your Customers with CRM Value Chain Model, viewed on 15 October 2015.

 < http://www.entrepreneurial-insights.com/crm-value-chain-model-better-targeting-customers/>

1. Zabanga 2015, The IDIC approach to relationship building, viewed on 15 October 2015. <http://www.zabanga.us/internet-marketing-2/the-idic-approach-to-relationship-building.html>
2. 1to1media 2014, Building customer relationship in four step, Viewed on 15 October 2015. <http://www.1to1media.com/speaking/blog/2014/01/building-customer-relationships-in-four-steps.html>
3. Irina Grazdane. (2011) A customer relationship management approach for optical retail business.  Pp34-38 Viewed on 16 October 2015 <https://www.theseus.fi/bitstream/handle/10024/68584/Irina_Grazdane.pdf?sequence=1>