3 Types of CRM Software: Which Is Right for Your Business?

Illustrated cover image of an article about the 3 types of CRM software and which is best for you business by MKTR.AI

There’s no doubt about it – no matter what size your company is, managing your customers is necessary for the success of your business. 

Because in this continuously growing competitive market, managing your customer database through hundreds of spreadsheets, hopping from one document to another to find lead or customer data, or navigating among sales opportunities by checking on Post-it notes is no longer an option!

This is where choosing a customer relationship management (CRM) system comes into play. If CRM has yet to make it into your vernacular, here’s a quick 101: 

“A CRM is software that helps businesses automate repetitive processes for efficiency, track customer data, and boost customer satisfaction. It was designed to improve customer experience when interacting with a company and keep them coming back to build a large base of repeat customers. It helps businesses successfully add strategies, practices, and technology for winning and retaining customers profitably.”

Read more: Comprehensive Guide To CRM Tools.

In simpler terms, a good CRM allows you to focus on selling and keeping your customers happy, rather than scrambling to keep tabs on all of your pipelines and customer information. A CRM can help you make sense of the large amounts of data collected about your customers, so you can further optimize your marketing and sales tactics.

Whether you’re looking to implement a CRM for the first time or want to switch to something that better suits your needs, there are 3 major types of CRM systems to consider. Let’s differentiate them one by one…

3 Major Types Of CRM

CRM falls broadly into three major types and each one supports your business goals from different angles. Understanding the categories will give you a sense of what type of CRM best suits your company. They are: 

  1. Operational CRM
  2. Analytical CRM
  3. Collaborative CRM

These three categories largely complement one another; while many CRM solutions have overlapping features, knowing which functions benefit you most will help buy the software you really need. 

Keep reading to learn more about each type of CRM as well as features and benefits unique to each type. So let’s start, shall we?


What Is An Operational CRM?

As the name suggests, Operational CRM mainly focuses on sales and marketing activities. This streamlines and automates sales and marketing as well as service processes. Its main role is to generate leads and then convert them into contacts within the CRM, capturing all the details at the same time.

Operational CRM focuses on making business processes more efficient by automating marketing, sales, and customer-related activities. The primary purpose of an operational CRM is to generate sales by nurturing leads in the right manner. 

The sales automation module of the CRM software can manage the entire sales process starting from a marketing campaign, tracking leads to closing sales. 

Key Features and Benefits of Operational CRMs:

Marketing Automation

Tools allow you to automate aspects of your marketing, so you can more effectively target customers at various stages of the sales funnel. For instance, an operational CRM takes care of predictable tasks like initiating an email campaign whenever a new prospect enters the system.

Sales Automation

This feature can help you manage your pipelines, nurture leads, acquire new customers, and onboard new clients with ease. This might involve automatically tracking contacts and updating their status from prospect to qualified lead once they’ve completed certain actions or met specific criteria.

Service Automation

As you can imagine, it is designed to provide a higher level of customer service. A CRM with service automation can provide helpful information via email, text message, or a phone helpline depending on customer preferences. This not only creates a more consistent customer experience, but it also frees up your team members to focus on more pressing tasks.

Contact Management

With this feature, you don’t have to keep track of leads in your head. Instead, you can manage your contacts in a central platform. Each time a contact interacts with your company, the CRM automatically updates their contact details. Your team can track every interaction and pick up where someone else left off, making sure no contacts slip out of your funnel.

Lead Scoring

Operational CRMs can automate lead scoring and win probability so that you know which leads to nurture with automation or a personal touch. Lead scoring helps you figure out which leads are the highest priority, who is most likely to become a customer, and which leads will spend the most over time.

You Should Consider An Operational CRM If:

  • You have a linear sales process
  • You are a sales and marketing-led business (new business-focused)
  • You lean towards workflow automation and prefer the software to perform redundant administrative tasks
  • You want to use lead scoring and win probability
  • You spend too much time trying to keep contact information organized
  • You need a clear view of each customer’s activity and profile
  • You want to scale your email marketing efforts and grow your database

What Is Analytical CRM?

The Analytical CRM analyses data collected from various sources and perform an analysis to discover and present meaningful information. It mainly analyses customer sales data and interaction history to evaluate customer response to marketing campaigns. 

This CRM helps in studying customer behavior and preferences that can be used for customizing product offerings. An Analytical CRM analyzes data collected by operational CRM and enhances the decision making capability of the organization by providing valuable data visibility.

An Analytical CRM also analyses customer interactions, in particular, trying to gauge the lead status and the proactive measures required for lead conversion. The CRM software collects and organizes marketing, sales, customer service data in an easily understandable format to help the reader make informed, data-driven decisions.

Key Features and Benefits:

Customer Segmentation

An analytical CRM stores your data in one central, organized, easy-to-analyze database. Data mining uses statistical analysis to find patterns and relationships in your data. Meaning, it allows you to view clients according to identifying criteria such as age, gender, location, income, and interests, enabling tailored promotions, services and messaging to specific groups. 

When you personalize the customer experience with personas, your customers know you understand them. And when your CRM gathers and analyzes a new piece of customer data, you can build a more complete view of your customers. Understanding your customers’ wants, needs, and personalities can help you improve your marketing. 

Sales Forecasting

Analyzing data on your company’s past sales trends can help you predict future demand such as what kinds of sales trends are important. On the individual level, predictive analytics can inform sales reps when and how to offer customers product suggestions based on past behavior and amenability to additional purchases. 

Using the available data for targeted outreach offers greater likelihood of a successful outcome for each action as well as overall improved customer satisfaction.

Customer Acquisition 

Analytical CRMs turn prospects into customers and also give you insight into your customers’ behavior and past purchases. This gives you the perfect setup for cross-selling and upselling opportunities. 

You’ll be able to know which customers want to buy products. Lastly, it can help you find patterns in purchase history – so you know exactly which people to target with upsells and cross-sells.

Customer Retention

Analytical CRM can diagnose past and predict consumer trends, sales activity, product availability and so forth. The enormous availability of highly granular data on a wide scale allows opportunities for more personalized engagement that builds customer loyalty and retention.

Because of the above-mentioned features, it will keep current customers happy and coming back for more! 

You Should Consider An Analytical CRM If:

  • You have account management-driven sales process
  • You want to gather more data about your target customer
  • You want to build customer personas based on data
  • You have a finance-led management style
  • Your end-users are data-driven and value metrics
  • You want to figure out which touchpoints drive the most revenue
  • You want to track your sales KPIs
  • You want to improve your sales process or strategy based on business intelligence data

What Is Collaborative CRM?

A Collaborative CRM software helps in collaboration between departments in an organization. The software can help sales, marketing, technical support share any information that has been collected through customer interactions. 

The purpose of a collaborative CRM system is to make information sharing easy so that your organization can collaborate more efficiently to provide better service to the customers.

Collaborative CRM software also presents a single platform to access information collected by different departments. By centralizing the workflow, the software helps in the easy sharing of data and insights that are otherwise not easily available. 

The use of a collaborative CRM software can assist in raising the level of your customer service that ultimately leads to an increase in sales in the long term. It is also useful in increasing customer loyalty and detecting patterns in customer engagement. The information presented by this CRM software can be used to customize your product offering and enhances your success in closing your sales.

Key Features and Benefits:

Relationship Management

Improved customer experience is achieved by tailoring customer engagement based on data obtained through numerous touchpoints. Each interaction with the customer contributes to a unified company profile of a customer. 

This can be made available to employees operating on various channels – phone, email, social networks, live web chat – while they engage the customer, allowing for a more consistent experience for the customer and better use of time by the employee. 

A collaborative CRM helps you manage relationships with your customers. When a new customer comes on board, your sales team shares that customer’s preferences, goals, and any other information on their contact profile. This keeps all teams aligned and up to date before they interact with each customer. This gives people a better, more personalized experience across the board.

Interaction Management

This management process deals with designing the communication or interaction channel process within an organization which is specific to customer interaction and finally enhancing the extent of communication between both the parties. 

The communication channel depends on the customers’ preference for how they require the interaction to be dealt with. Also, feedback from support can be used proactively by the marketing team to connect with targeted customers, relating to certain products.  

Without the collaborative CRM, this would generally not happen as data is not often shared and losses can occur as well as damage to customer relationships. The overall aim is to improve the customer experience, improving loyalty and boosting sales.

Document Management

Collaborative CRM is becoming a necessity – business is increasingly on-the-go, and besides sales and service calls that take employees out of the office, colleagues stationed in distant locations need to be able to cooperate in real-time.

So if your team needs access to a contract, technical documentation, or proposal, a collaborative CRM can help. CRMs with document management systems help keep every document from every team organized.

You don’t have to search through your desk or pester your finance team to hunt down a pricing agreement — it’s all in one easy-to-navigate place.

You Should Consider A Collaborative CRM If:

  • You need to improve communication between departments
  • You have multiple stakeholders and departments moving in and out of the platform
  • You have multiple locations or have a digitally driven company culture where most communication occurs online
  • You are comfortable with customer data being easily accessible by most in the company
  • You want to focus on customer retention and loyalty
  • You need to share customer information with vendors
  • You want to organize and align customer-focused efforts across your business

There You Have It!

Whether you’re in sales, marketing or customer service, a CRM is critical to the success of your business. It acts as the internal system of record and a single point of truth for the company.

For a business owner or executive considering CRM software, it’s worthwhile to understand which types of CRM solutions exist, and how they can serve your company. 

Different types of CRM come equipped with different features and applications. So before you implement your CRM, make sure to decide your future strategy and purchase the one most suited to your business needs.

We get it, it can be a daunting task. So here’s our previous article that will make it a bit easier by exploring major factors with which you can quickly cherry-pick the best sales CRM tool for your business: How To Select The Best CRM Software for Your Startup.

Got any questions? Or maybe, have something to add? Please leave a comment below and tell us what you’re thinking.

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