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Types Of CRM and How To Choose The Best One For Your Business

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Types Of CRM and How To Choose The Best One For Your Business

Maintaining strong customer relationships in today’s fast-moving business world is more important than ever. With such a variety of CRM systems on the market, how do you choose the best one?

Whether you’re aiming for operational efficiency, detailed analytical insights, or enhanced team collaboration, understanding the types of CRM  can significantly impact your brand.

In this article, we will break down the different types of CRM types and offer detailed insights on choosing the one that best meets your business needs, ensuring long-term growth and improved customer satisfaction.

🔑Key Highlights

  • CRM is software that allows every business type to simply manage all communications and strengthen relationships with their prospects and clients.
  • The comparison between different types of CRM is based on their focus, benefits, key features, and ideal types of businesses.
  • The three types of CRM systems are analytical CRM, collaborative CRM, and operational CRM which are explained below with with their key features.
  • The best way to choose the right CRM system for your business is to identify your business needs, define your CRM goals, research CRM options, evaluate each key feature and user-friendly interface, evaluate customer support, and make an informed decision.
  • Measuring the effectiveness of the CRM system can be done by aligning matrics with CRM goals, focusing on areas, using built-in reporting tools for generating reports, and conducting surveys to gather feedback from your team members.

What is CRM Software?

CRM, which stands for Customer Relationship Management, is a software system that aids business owners to easily keep track of all communications and develop relationships with their leads and customers. As per research, CRM is one of the fastest-growing software markets and is expected to have a global revenue of $114.4 billion by 2024.

What is CRM software

CRM system enables your sales, customer service, and marketing teams to organize customer and prospect information, monitor sales opportunities, produce reliable forecasts, simplify customer service operations, oversee marketing campaigns, and utilize detailed CRM analytics to make better business decisions.

In recent years, the channels through which customers communicate(social media, emails, messaging, and cell phone)  with brands and make purchases have become increasingly complex. At the same time, businesses find it difficult to track and manage, their audiences. This is where CRM software comes into play but first, you need to understand there are three types of CRM and each type is essential for business.

Comparison of Types of CRM  based on different types of business

There are three types of CRM, and each type has its own advanced CRM features. Some of the areas based on which CRM systems can be evaluated for businesses are according to their focus, benefits, key features, and ideals.

Features Analytical CRM Collaborative CRM Operational CRM
Focus The main focus of analytical CRM is  mostly on Customer Insights and Data Analytics Focus mostly on improving customer interactions The main focus of operational CRM is streamlining business processes.
Benefits Identifying trends and preferences of customers, improving marketing ROI, and predicting & developing targeted campaigns. Effective and efficient customer service, resolving clients’ issues faster, breaking down and improving departmental silos. Proper workflow automation, improves sales pipeline management, generate reports & forecasts. 
Key Features Data Warehousing & Business Intelligence, Advanced Reporting & Analytics, Customer Segmentation & Scoring, Predictive Modeling, and Data Visualization. Centralized Customer Data, Team-wide Communication, Task and Activity Management, Cross-Functional Collaboration, and Social media integration. Contact Management & Lead Scoring, Sales Pipeline Management, Task Automation & Workflows, Reporting & Dashboards, Integration with Other Business Tools
Ideal For Business that relies on data-driven decision-making, e-commerce & subscription-based business, marketing & customer analytics team. The CRM is ideal for service-oriented businesses like telecom, hospitality, and business with complex customer journeys. Operational CRM is suitable for businesses with higher sales volume or businesses looking to improve operational efficiency.

What are the types of CRM?

Types Of CRM

1. Analytical CRM systems

An analytical CRM enables you to extract, structure, and evaluate data about your prospects, customers, and sales, allowing you to access specific details like how much each customer has spent.

If you have a lot of customer data and no organized method to analyze it, an analytical CRM might be what you need. Companies aiming to enhance their marketing strategies and those that use big data will greatly benefit from this CRM’s advanced analysis features.

With an analytical CRM system, you can help your sales and marketing teams understand customer preferences and patterns better, enabling them to tailor their strategies. It also helps you track key performance indicators, customer analytics, sales reporting, and more.

Key features of analytical CRMs

Analytical CRMs are all about leveraging data to gain deeper customer insights and make data-driven decisions. Here are some of the key features that set them apart:

  • Data Warehousing and Business Intelligence: Analytical CRMs go beyond storing basic customer data. They integrate with data warehouses to consolidate information from various sources, providing a holistic view of your customer base. Business intelligence (BI) tools help analyze this data and extract valuable insights.
  • Advanced Reporting and Analytics: These CRMs offer robust reporting and analytics capabilities. You can create custom reports, segment your customer base, and analyze trends to understand customer behavior, identify buying patterns, and measure marketing campaign effectiveness.
  • Customer Segmentation and Scoring: Analytical CRMs allow you to segment your customers based on demographics, purchase history, and other relevant data points. You can then assign scores to leads and customers to prioritize your sales and marketing efforts.
  • Predictive Modeling: Advanced analytical CRMs use predictive modeling techniques to forecast future customer behavior. This helps you identify customer needs, have better customer communication management, and identify potential churn risks.
  • Data Visualization: Complex data is often easier to understand when presented visually. Analytical CRMs offer data visualization tools like charts, graphs, and dashboards to make insights readily apparent.

2. Collaborative CRM systems

Many businesses find it difficult to share customer data between departments. A collaborative CRM platform simplifies this process by providing a full view of the customer lifecycle, allowing team members to add information as needed.

This CRM system focuses on linking your marketing, sales, and customer service teams, making sure that all departments have access to the same information to provide a consistent and positive customer experience.

Using collaborative CRMs, you can easily create thorough customer profiles using data from past interactions. These profiles may include the customer’s goals, preferred ways of communication, and essential documents. This CRM system guarantees that anyone, whether they’re inside or outside your company, can access customer information.

Key features of collaborative CRMs

Collaborative CRMs focus on breaking down departmental barriers and fostering teamwork to provide a more unified customer experience. Here are some of their key features:

  • Centralized Customer Data: A central database acts as a single source of truth for all customer information, accessible to different departments like sales, marketing, and customer support. This ensures everyone has a complete picture of the customer journey.
  • Team-wide Communication: Features like internal chat, threaded discussions on customer profiles, and task comments enable seamless communication and information sharing across teams. This eliminates silos and ensures everyone is on the same page.
  • Task and Activity Management: Collaborative CRMs allow teams to assign tasks, track progress, and collaborate on activities related to specific customers. This fosters transparency and accountability, leading to faster issue resolution and improved customer satisfaction.
  • Cross-Functional Collaboration: The CRM facilitates collaboration between departments by providing shared visibility into customer interactions, marketing campaigns, and support tickets. This empowers teams to work together to deliver a cohesive customer experience.

3. Operational CRM systems

Operational CRMs help simplify how a company manages its customer relationships. They offer tools to visualize and manage the entire customer journey effectively, even across various points of interaction. This includes initial website interactions, managing leads in the sales process, and understanding customer behavior after purchase.

Operational CRMs include similar features to collaborative CRMs, but they also have extra tools for overseeing, arranging, and improving the entire customer journey. While collaborative CRMs prioritize keeping customers satisfied and loyal, operational CRMs also focus on the initial phases of customer engagement, starting from brand awareness to acquisition.

In operational CRMs, you’ll see more automation features. These CRMs often have tools for automating sales, marketing, and service tasks to make managing customer relationships smoother.

key features of  operational CRMs

Operational CRMs are the workhorses of the CRM world, focusing on streamlining and automating tasks to improve overall business efficiency. Here are some of their key features:

  • Contact Management and Lead Scoring: Operational CRMs provide a central hub for managing all your customer contact information, including names, contact details, and interaction history. Lead scoring helps prioritize leads based on their potential value and sales readiness.
  • Sales Pipeline Management: Visualize your sales pipeline, track the progress of deals, and manage opportunities from initial contact to closing. This allows sales teams to analyze the sales process, overview every sales pipeline stage, and optimize their sales outcome.
  • Task Automation and Workflows: Automate repetitive tasks like sending follow-up emails, generating quotes, or scheduling meetings. Workflows can be set up to automate a sequence of tasks based on specific triggers, saving time and ensuring consistency.
  • Reporting and Dashboards: Gain insights into key performance indicators (KPIs) like sales pipeline velocity, conversion rates, and customer satisfaction. Operational CRMs offer customizable dashboards that provide a real-time view of your team’s performance and overall sales health.
  • Integration with Other Business Tools: Operational CRMs often integrate with other business tools like email marketing platforms, accounting software, and calendar apps. This creates a streamline process for business and eliminates the need for manual data entry.
🔍 Also Read: Benefits of Integrating KrispCall with Your CRM

How to choose the right CRM system for your business?

Choosing the best CRM for your company is primarily based on your specific business operations and needs. Since every business functions differently, what is effective for one might not be for another. Therefore, it’s crucial to pinpoint the problem you need the CRM to solve and understand your company’s unique goals before deciding. Here are seven step-by-step processes to choose the right CRM system for your business 

  •  Identify Your Business Needs: When selecting a CRM, consider your business size, industry, and sales process complexity. Ensure the CRM supports your team size and collaboration needs and matches your budget to the available plans, from free to comprehensive paid options.
  • Define Your CRM Goals: Understand the CRM goals that a CRM should fulfill Do you aim to streamline lead management and automate tasks, enhance customer service and loyalty, gain insights into sales and customer behavior, or boost team communication and productivity? 
  • Research CRM Options: Create a shortlist of CRMs that align with your business requirements, including size, industry, budget, and desired features. Consider solutions tailored to your industry, offering specialized functionalities.
  • Evaluate Key Features: Make sure to go through key features that are required for your business. The CRM must be able to provide efficient contact management with lead scoring & segmentation, visualize and manage your sales pipeline. It should be able to automate marketing campaigns, handle customer support interactions, and integrate with existing business tools.
  • Consider User Interface: Having the right CRM is not enough, most of the time it’s about how user-friendly it is. If you and your team need to invest more time just learning how to use the CRM then that’s not worth it. 
  • Evaluate Customer Support: Examine the support services offered by the CRM vendor, including phone, email, chat, or a knowledge base. Look into online reviews or case studies to assess how well they handle customer support inquiries.
  • Make an Informed Decision: Lastly, Review the CRMs you’ve shortlisted, comparing their features, pricing, user experience, customer support, and suitability for your industry. Opt for a scalable CRM that can accommodate your business’s growth and gather input from potential users to ensure it aligns with their requirements.

How To Measure the  Effectiveness Of CRM Systems

A CRM system’s success can’t simply be measured by tracking its features. The purpose is to understand how CRM impacts both your business goals and the overall customer experience. To determine how effective your CRM is, use the following comprehensive approach:

  • Firstly, align metrics with your CRM goals by revisiting the initial objectives you set for implementing the CRM (e.g., increased sales efficiency and improved customer retention).
  • Focus on these core areas to measure CRM success such as sales performance (sales cycle length, close rate, average deal value), customer satisfaction(Customer Satisfaction Score, Customer Churn Rate, Customer Lifetime Value, and team productivity(Number of Leads Generated, Number of Tasks Completed and Team Collaboration).
  • Most CRMs offer built-in reporting tools that generate reports on various metrics. Utilize these to analyze your CRM’s effectiveness in areas like sales pipeline, lead conversion rates, and customer service experience.
  • Conduct user surveys by gathering feedback from your team members who use the CRM daily. Surveys can help you understand user experience, identify areas for improvement, and assess overall user satisfaction with the CRM system.

Following these simple measurement guidelines will assist you in measuring the effectiveness of your CRM system.

Conclusion

Selecting the right Customer Relationship Management (CRM) system is essential for a business to thrive. By understanding the three main types of CRM—Operational, Analytical, and Collaborative will help your business to make decisions that are well-suited to their specific needs and goals.

To find the best CRM for your business, think about your company’s unique needs, such as how you interact with customers, the importance of analyzing data, and the need for teamwork across departments. Assess each CRM type with these factors in mind to choose the one that fits your business goals, helping you grow and improve customer relationships.

FAQ

Can you use multiple types of CRM systems at the same time?

Yes, you absolutely can. In fact, many businesses prefer to use multiple types of CRM systems so that they can improve the efficiency of their business processes and accomplish more things at once. While you can use each CRM separately, they can also be used concurrently to achieve your goals, depending on what your company’s specific needs are.

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Dinesh Silwal

Dinesh Silwal is the Co-Founder and Co-CEO of KrispCall. For the past few years, he has been advancing and innovating in the cloud telephony industry, using AI to enhance and improve telephony solutions, and driving KrispCall to the forefront of the field.

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