What are the 3 Main Types of CRM Software? (and Which One is the Right for Your Business?)
Did you know that nearly 91% of companies with more than 10 employees use customer relationship management (CRM) software? [1]
It is official! CRM software is the biggest software market in the world. Do you know why? Today, most aspects of a modern business revolve around catering to the evolving needs of customers. Budding startups to top brands are competing against each other to stay relevant in the current market landscape.
Customer relationships and experience have thereby become a top priority for all types of businesses. As a result, companies are investing in CRM systems to boost sales, improve customer support, generate more revenues, and have an edge over their competitors.
While the benefits of CRM software are understood, businesses are unsure about the approach they must take to choose a tool that is best suited for their requirements.
In this article, we will slice and dice the different types of CRM to help you understand which tool is right for you.
But first, let’s understand what a CRM is.
SEE ALSO: Difference between CRM and Marketing Automation: What Is Best for Your Business?
What is CRM?
In very plain and simple words, CRM is a platform that enables companies to strengthen ties with their customers and improve relationships.
Such systems manage different elements of interaction between customers and brands.
Different types of CRM systems
- Operational CRMs
- Analytical CRMs
- Collaborative CRMs
The core functionalities of a CRM platform include dashboards to track different metrics, sales and marketing tools, and a database.
However, your company may require a tailored CRM solution to operate at optimum efficiency. Besides, a personalized solution will also address the niche requirements of your organization’s operating model.
Let’s take a look at the three main types of CRMs that are available on the market, and why you might like one more than the other.
1. Operational CRM
As the name suggests, this type of CRM streamlines all your core operations. If you dive deeper, you will find out that an operational CRM addresses every nitty-gritty of your customer’s operations.
Each interaction your potential or current customers have with your company can be managed with an operational CRM.
In most cases, such CRMs branch out to three main areas – marketing, service, and sales – to organize tasks and allow your teams to provide a seamless customer experience.
Features:
- Marketing automation
Although there are plenty of independent marketing automation tools available in the market, they are also integrated in CRMs.
Since marketing teams are tied up with a multitude of tasks ranging from running campaigns to increasing customer retention, automation of these processes is critical to boost productivity and efficiency.
An operational CRM allows users to craft advanced email marketing campaigns sequences. Once you have created a campaign, everything else is taken care of by the CRM.
This is largely possible due to the onset of event-based marketing, wherein every new development in a customer’s journey triggers a new action from the platform.
- Service automation
Service automation refers to automating your customer service processes. The most effective way to achieve this is by providing your customers with self-service options.
This can include setting up online autopay or schedule appointments from their mobile devices.
Although these are all pretty routine tasks, they are only possible due if you have an operational CRM.
Chatbots are a prime example of service automation.
- Sales automation
Operational CRMs are loaded with features that untie the knots within different sales processes. It can assign leads to sales reps and also provide a complete view of the quality of leads through lead scoring.
An operational CRM plays an important role in enhancing the core sales processes and workflows by automating repetitive tasks.
Examples of Operational CMR: HubSpot
2. Analytical CRM
Analytical CRMs are very dependent on data. These CRMs leverage the data collected by companies such as preferences, contact information, and more to improve customer experience.
Companies are increasingly focusing on making the most of this data to tighten their marketing and sales efforts and also offering tailored customer support.
Features:
- Data mining
Data mining is an important component of an analytical CRM. It is a process in which patterns are discovered in large data sets.
Analytical CRMs make use of data mining techniques to identify data trends that are in tune with customer preferences.
- Data warehousing
A data warehouse is nothing but a database that is integrated with analytical CRMs. It is one of the most reliable and efficient systems that can be used by analysts to source, combine, and create customer data for analysis.
In data warehousing, historical and current data are consolidated and stored in the same place. This simplifies data analysis and extraction in such processes compared to those in which traditional databases are used.
- OLAP tools
Online analytical processing (OLAP) tools are the third component of a typical analytical CRM.
They are categorized as tools that are predominantly used to analyze data stored in databases. Besides, they are also used to evaluate multidimensional data from various perspectives.
In simple terms, OLAP tools are used by analytical CRMs to confirm hypotheses that are derived from data generated by data mining and warehousing.
Analytical CRM example: Zoho Analytics
3. Collaborative CRM
Again, as the name suggests, a collaborative CRM ensures that the sales, service, and marketing teams work in tandem to understand their customer’s interests, wants, and more.
Features:
- Interaction management
Interaction management keeps an eye on all interactions between customers and businesses.
It enables companies to keep track of correspondence made via emails, social media, calls, and more.
- Channel management
Channel management adds a zing to interaction management and goes a step ahead. It can be termed as a process of using data collected and analyzed during interaction management to identify the best communication channels for different customer groups.
Collaborative CRM example: Copper
Operational, Collaborative, or Analytical CRM – Which One Will You Choose?
As we have seen, each CRM type comes with its own share of unique benefits. Every business will gain something from each type.
However, the real question is, which CRM type is best suited for your business needs?
Although most of the leading CRM software companies provide solutions with features included in all three types, yet, it is important to identify which CRM type will be an ideal fit for your business.
So, which type of CRM will you choose?
The answer is pretty simple. If you are inclined toward organizing your sales, marketing, and customer service, you should be looking for an operational CRM.
However, if you are leaning toward using data to understand your customers, an analytical CRM is the right choice.
Last but not least, if your priority is to boost collaboration and coordination between different departments, you should be exploring collaborative CRMs.
SEE ALSO: What is the Future of CRM? – 7 CRM Trends to Look Out for in 2021 and Beyond
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Image 1 Source: ToolsMetric
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Source:
[1] Wolff. A (2020) “20+ CRM Stats You Need to Know for 2021” Benchmark ONE [online] Available from: https://www.benchmarkone.com/blog/crm-stats-2021/ [accessed July 2021]
