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CRM
The 3 types of CRM explained (2024)
Liucija Adomaite
July 25, 2024
|
7 min. read
Liucija Adomaite
LAST UPDATED
May 23, 2024
READING TIME
7 min.
Building and nurturing great customer relationships is key to a successful business.
CRM (Customer Relationship Management) tools allow you to manage all customer interactions, including customer service, task automation, contact management, email marketing, analytics, workflow, and more.
The primary goal of CRM software is to deepen your understanding of your customers and use this insight to enhance customer experience.
In order to better understand how CRM systems work and how to choose the right one for your business, we analyzed the most common types of CRM and the benefits they bring.
What are the three types of CRM?
If you wonder what CRM is, its short definition is:
CRM, or "Customer Relationship Management," is a software system that manages all customer relationships. The goal of CRM is to build and nurture stronger relationships with your leads and clients.
There are three main types of CRM: collaborative, operational, and analytical.
The difference between these three main types of CRMs lies in the goals they serve and the features designed to reach them.
1. Collaborative CRM.
This type of CRM focuses on breaking down silos and fostering communication and collaboration across different departments that interact with customers. The goal of collaborative CRM is to ensure that everyone has a shared view of the customer and can work together to provide a seamless customer experience.
2. Operational CRM.
This type of CRM focuses on automating tasks and streamlining workflows related to customer interactions. The goal of operational is to manage all day-to-day activities in sales, marketing, and customer service.
3. Analytical CRM.
This type of CRM focuses on data and insights. Analytical CRM gathers customer data from various sources and analyzes it to understand customer behavior, preferences, and trends. As a result, companies can make data-driven decisions like sales strategies and marketing campaigns.
3 types of CRM: The 360° Overview
1. Collaborative CRM: the best CRM type for a 360-degree view of the customer and cross-communication between teams
Collaborative CRM software is designed to enhance teamwork across various departments in managing customer relationships. A collaborative CRM is also known as strategic CRM, as it enables different teams or functional areas to share customer data.
Collaborative CRM tools typically offer functionalities for communication across teams, sharing data, and automating workflows, all with the goal of elevating customer interactions and satisfaction through a single, integrated interface.
This type of CRM establishes the same knowledge base about the customers in different departments which allows to make synced decisions. It does so, by synchorizing customer data and interactions from Sales, Marketing, Customer Support departments, and from different channels like social media, phone, email, website.
Overall, collaborative CRM offers a holistic approach to managing customer relationships.
The most common features of collaborative CRM are:
Centralized customer database
Document and file sharing
Shared customer data and history
Communication and collaboration tools
Social media integration
Workflow automation across departments
Visual collaboration features like Kanban boards and Gantt charts
Improved customer service through coordinated efforts
The main benefits of collaborative CRM include:
Enhanced Customer Experience: A collaborative CRM ensures all customer interactions are documented and accessible by relevant teams. This allows for consistent, personalized service across touchpoints, improving customer satisfaction and loyalty.
Reduced Costs: Streamlined communication and collaboration minimize duplicated efforts and wasted resources. Additionally, better targeting and upselling opportunities through a unified customer view can reduce marketing and sales costs.
Improved Sales and Marketing: Collaborative CRMs empower sales and marketing teams to work together seamlessly. Marketing can provide qualified leads, and sales can leverage customer insights for effective conversion strategies.
Better Decision-Making: Data from all customer interactions is centralized, providing a holistic view for better decision-making. This can inform strategies across departments, from product development to marketing campaigns.
Increased Efficiency: Collaborative CRMs automate workflows and eliminate information silos, leading to a more efficient work environment for all customer-facing teams.
Stronger Customer Relationships: Collaborative CRM fosters better communication and understanding of customer needs across departments. This allows for building stronger, more enduring customer relationships.
The most popular examples of collaborative CRM are Salesforce, ClickUp, Microsoft Dynamics 365.
2. Operational CRM: the best CRM type for streamlined workflows and automated tasks
Operational CRM creates a centralized system that supports the sales, marketing, and customer service operations within a company. It stores all the relevant information on customers, leads, and employees in a unified repository.
The goal of operational customer relationship management is to help automate and simplify customer relation functions: marketing, customer service, and sales.
In general, analytical and collaborative CRMs have more specialized features, while operational CRMs tend to offer more general functions that support a wide range of business functions.
Overall, operational CRM helps streamline the operations of sales, marketing, and service during an entire consumer journey.
The most common features of operational CRM are:
Lead generation and nurturing
Sales pipeline management
Contact management and communication
Task automation and reminders
Reporting and analytics on sales activities
The main benefits of operational CRM are:
Efficiency and Automation: Operational CRMs automate repetitive tasks like data entry, sending follow-up emails, scheduling meetings, and generating reports. This frees up valuable time for customer-facing teams to focus on more strategic activities like building relationships and closing deals.
Sales Pipeline Management: Operational CRMs help visualize and manage the sales pipeline, allowing sales reps to track leads, prioritize opportunities, and close deals faster. They provide features for lead scoring, opportunity management, and sales forecasting.
Stronger Customer Relationships: By centralizing customer data and interaction history, operational CRMs empower customer service reps and sales teams to provide a more personalized experience. They can access all relevant customer information in one place, allowing them to address inquiries and concerns more effectively.
Communication and Collaboration: Operational CRMs facilitate communication and collaboration within teams. Shared calendars, task management features, and internal communication tools ensure everyone is on the same page regarding customer interactions.
Better Data Quality and Reporting: Operational CRMs ensure consistent data entry and maintain a central repository of customer information. This improves data quality and provides valuable reports on sales performance, marketing campaign effectiveness, and customer service metrics.
Increased Customer Satisfaction: By streamlining processes, improving communication, and enabling personalized interactions, operational CRMs contribute to a more positive customer experience. This leads to higher customer loyalty.
The most popular examples of operational CRM are HubSpot, Zoho and Salesforce.
3. Analytical CRM: the best type of CRM for data-driven insights and actionable decisions to boost revenue
Analytical CRM is a type of CRM that offers businesses an in-depth view of behind-the-scenes processes. It collects and analyses client interactions, behavior, forecasts sales and identifies new opportunities.
This information remains behind the closed doors and invisible to clients. As a result, analytical CRM when leveraged correctly can increase business revenue.
The goal of analytical CRM is to transform complex customer data into actionable strategies to build stronger customer relationships and increase sales.
Analytical CRM typically offers features like:
Customer segmentation and targeting
Customer behavior analytics
Sales forecasting
Identifying sales opportunities
Performance measurement and reporting
The main benefits of analytical CRM are:
Customer Segmentation and Targeting: By analyzing customer data, businesses can segment their customer base into groups with similar characteristics and preferences. This allows for targeted marketing campaigns that are more relevant and effective, leading to higher conversion rates and increased ROI.
Deeper Customer Understanding: Analytical CRM goes beyond demographics to uncover hidden patterns and trends in customer behavior. Businesses can understand what products or services customers are likely to purchase next, their preferred communication channels, and potential areas for dissatisfaction.
Sales Forecasting: With a clear view of customer buying patterns and sales trends, businesses can forecast sales more accurately. This allows for better resource allocation, inventory management, and setting realistic sales goals.
Identified Sales Opportunities: Analytical CRM can uncover hidden sales opportunities by pinpointing customers who are likely to convert or identifying upselling and cross-selling possibilities. This equips sales teams to prioritize leads and maximize sales potential.
Data-Driven Decisions: Analytical CRM provides valuable data and metrics to inform strategic decisions across the organization. Marketing campaigns, product development roadmaps, and customer service initiatives can all be optimized based on customer insights.
Improved Customer Lifetime Value: By understanding customer behavior and preferences, businesses can develop strategies to retain customers and increase their lifetime value. This can involve personalized loyalty programs, targeted product recommendations, and proactive customer service.
Reduced Customer Churn: Analytical CRM can help identify customers at risk of churning by analyzing their purchase history and engagement levels. With this knowledge, businesses can take proactive steps to win back these customers and reduce churn rates.
Examples of the most popular analytical CRM systems are Salesforce Einstein, HubSpot Marketing Analytics, and Zoho Analytics.
Operational CRM vs Analytical CRM
Operational CRM focuses on streamlining day-to-day operations, while analytical CRM focuses on delivering data analytics and strategy broader than daily customer interactions.
Collaborative CRM vs Operational CRM
Operational CRM Improves efficiency, automates tasks, enhances sales pipeline management, and makes businesses more organized from the inside. Collaborative CRM, on the other hand, creates a unified view by aligning teams from different departments for a well-coordinated team effort. It leads to increased decision-making with shared customer data.
Other CRM subtypes and formats
1. Personal CRMis a CRM system designed for individuals to organize and manage their personal and professional relationships efficiently. It enables users to track interactions, schedule reminders for important dates, and streamline communication with contacts such as friends, family, and business associates. This system enhances your productivity and ensures no important task or communication is overlooked. The best personal CRM apps include Airtable, Dex, Notion, Contacts+, Folk, and Close. Find out more in the in-depth guide of the 10 best personal CRM tools to use in 2024.
2. Marketing CRM, also known as Marketing Automation, is a specific strategy within customer relationship management (CRM) that focuses on marketing efforts. Marketing CRMs typically offer marketing features like lead generation and personalized communication. These apps can be a little more expensive, but some sales-focused businesses may be willing to invest more in order to close more deals faster. Notable examples of marketing CRM include HubSpot CRM and Salesforce Marketing Cloud.
3. Multichannel CRM allows your sales team to manage customer interactions across different channels such as phone, email, chat, social media, and so on.
4. Omnichannel CRM joins all these communication channels together in an integrated and unified view. Omnichannel CRM focuses on a customer-centric approach and aims to provide a seamless customer experience.
CRM vs Marketing Automation
CRM is used to manage entire sales processes in an organization, while Marketing Automation system is used for short purchase cycles and campaign automation. With marketing automation system you can analyze, automate and streamline tasks, as well as follow prospect activities such as website views, blog reads, email opens and form fills. Marketing automation tools schedule and track email campaigns and mass communications.
Omnichannel CRM vs Multichannel CRM
The key difference between these two subtypes of CRM lies is the focal point of what marketing strategy they benefit. Omnichannel CRM focuses on a customer-centric approach while using all available media channels in the company. Meanwhile, multichannel CRM employes a product-centric approach where more than one channel is used to promote the product or service.
What type of CRM is best for your business? We asked the expert.
In order to find out what CRM system is best for your team and goals, it's best look at real-life examples.
That's why we asked the expert in the field–Lucas Perret, the Sales Operations Manager at lemlist, who streamlines revenue processes and drives growth with tech and workflow automation on a daily basis.
Lucas shared insider advice and practical tips on how to choose the best CRM, how to implement a new system, what features to look for in CRM, and what to do to make the most out of it.
What type of CRM is best for small-medium-sized B2B businesses?
Lucas: For freelance individuals who don't want to scale a sales team, the best CRM would be Folk, Attio (operational CRM). For small companies with a sales team, I suggest HubSpot and Pipedrive (collaborative CRM).
At lemlist, we like using HubSpot because it's better for reporting, easy to integrate with other tools, and much more complete.
What kind of CRM software is best for sales teams?
Lucas: I'd say collaborative. Sales teams should get a CRM system with easy reporting, team management features, and that are easy to integrate with other tools.
How to choose the right CRM for your business?
Lucas: It's very important to test the CRM yourself in a sandbox environment. It's easy to make mistakes and overestimate a CRM's capabilities. Often, a feature that is promoted may not actually solve the problems it's intended to address. Therefore, it's crucial to personally test these features in real-world scenarios.
These are the main steps to take when choosing the CRM:
1. Think about which features you need the most and evaluate your budget.
2. Network with sales ops working in similar companies.
3. Create a shortlist of 2-3 CRMs.
4. Check how those solutions will integrate with your current tech stack.
5. Create a sandbox environment and have one member of your sales team give their feedback about the tool.
6. Score each solution on a specific set of criteria that are important to them (easy to use, flexibility, reporting) and decide accordingly.
What kind of feature is a must for a well-balanced CRM system?
Lucas: First, good UX, as it should be easy for the sales team to use it. Second, flexible reporting. Third, it should be easy to integrate with other tools like API, native integrations, and so on. And lastly, team features are a must.
Is it hard to implement a new CRM tool in business operations?
Lucas: It can be difficult if you have a lot of existing data. For a smooth transition, I recommend:
1. Only migrate the things you really need. Take this opportunity to clean your data and remove useless contacts from your CRM.
2. Don't underestimate the time required to train your team–it will take time and it's important they use the CRM the right way.
3. Work in an organised way: document all the processes, respect naming conventions and so on. A CRM can become very messy super fast, so it's important to respect some good practices to keep the CRM usable and useful for everyone.
Key Takeaways
The three types of CRM are analytical, operational, and collaborative.
Analytical CRM uses data as the foundation of the platform. Operational CRM is based on automating workload. Collaborative CRM enhances teamwork across all teams and departments and builds a unified customer view.
Usually, most CRM apps and tools have features that are found in all types of CRMs, they offer analytical, operational and collaborative functionalities.
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Liucija Adomaite
Jul 25, 2024
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