If you’re ready for customer relationship management software (CRM), picking one can seem overwhelming. After all, you have hundreds to choose from. You won’t find a one-size-fits-all solution. Different CRMs meet different business needs.
Your business has unique obstacles, goals, and needs. You need a CRM that fits.
To give you a head start, we’re diving into the three main types of CRM software to help you choose the best one for your business.
In this post, we’ll cover:
- The 3 most popular types of CRM systems
- The CRM features and benefits unique to each type
- What kind of business should use each type of CRM
What are the different types of CRM?
There are three main types of CRM software:
- Operational CRM: Uses sales and marketing automation to give you a complete view of each customer’s journey.
- Analytical CRM: Analyzes your customer data and identifies patterns to help you make better business decisions.
- Collaborative CRM: Organizes and shares customer information with your internal and external stakeholders.
Understanding the benefits of each type of CRM will help you choose the right one for your business.
Keep reading to learn more about each type of CRM.
What is an operational CRM?
An operational CRM gives you a complete view of each customer’s interactions with your company. These sales CRMs use sales and marketing automation to save you time — and make sure no contacts or tasks fall through the cracks.
What are the features and benefits of an operational CRM?
1. Contact management. You don’t have to keep track of leads in your head. With an operational CRM, you can manage your contacts in a central platform.
Each time a contact interacts with your company, the CRM automatically updates their contact details.
In ActiveCampaign’s CRM, you can view a lead’s entire history from the contact record. Include notes, assign tasks to your sales team, view deal information, and see your contact’s complete details — all in one place.
Your team can track every interaction and pick up where someone else left off, making sure no contacts slip out of your funnel.
2. Lead scoring. Operational CRMs can automate lead scoring and win probability so that you know which leads to nurture with automations or a personal touch.
Lead scoring helps you figure out:
- Which leads are the highest priority?
- Who is most likely to become a customer?
- Which leads will spend the most over time?
3. Sales team automation. An operational CRM can stop sales tasks from piling up or getting forgotten. Automatically assign tasks to your sales team based on customer actions or deal value.
In this sales automation, an ActiveCampaign user chooses to assign a task based on the deal value.
If the deal value is above $500, the CRM will automatically assign a task for a salesperson to call the lead. If the deal value is below $500, the lead will automatically be entered into a nurture campaign.
And speaking of automated lead nurture…
4. Marketing automation. An operational CRM can help you automate how you market to leads and prospects. You can drop people into email funnels based on the information you have about them.
What information can you use to automate?
- Account size
- Purchase history
- Product/service interest
- Type of organization
- Organization size
- Estimated close time
- Interaction with your sales team
- Interaction with your marketing messages
- Visits to specific pages of your website
- Almost any other info you can collect
If a lead has spoken with a sales rep several times and downloaded content from your site, they already know who you are. They’re a “warm” lead. You should use a different funnel, shorter than the one you’d use for a contact who filled out a form on your site, but never spoke to a sales rep.
To learn more about automatically nurturing leads with email funnels, click here.
Who should use an operational CRM?
You should choose an operational CRM if…
- 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 use lead scoring and win probability, but don’t know where to start
- You manually assign each task and lead to your sales team
- You want to scale your email marketing efforts and grow your database
If you want to save time on sales and marketing and keep everything in one place, consider an operational CRM.
What is an analytical CRM?
An analytical CRM gathers, organizes, and analyzes your customer data and sales data to help you make better business decisions.
This data can include the average deal cycle, customer retention rates, monthly recurring revenue, and any other information you collect.
Business intelligence meets contact management. An analytical CRM makes sense of your data — including some you might not even know you have. (Illustration by Tony Babel via GIPHY)
What are the features and benefits of an analytical CRM?
The biggest benefit of an analytical CRM? It does the data gathering and analysis for you. Here’s how.
1. Data mining. An analytical CRM serves as a data warehouse: it stores your data in one central, organized, easy-to-analyze database.
Data mining uses statistical analysis to find patterns and relationships in your data. One common use of an analytical CRM is cluster analysis. With cluster analysis, you can segment your customer list based on:
- Education level
- Marital status
- Past purchases
- And a whole lot more!
This lets you target the right people with the right messages.
Other common analyses include linear, logistic, and multiple regression. Analytical CRMs do the math for you, so you don’t have to create the world’s most complicated spreadsheet to identify sales trends.
2. Cross-sell and upsell opportunities. Analytical CRMs give you insight into your customers’ behavior and past purchases. This gives you the perfect setup for cross-sell and upsell opportunities.
Which customers want to buy which products? An analytical CRM can help you find patterns in purchase history – so you know exactly which people to target with upsells and cross-sells.
3. Buyer persona building. 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.
When you personalize the customer experience with personas, your customers know you understand them. This can make a big difference in your bottom line. Take a look at the numbers:
Companies who personalize their marketing with buyer personas see better results. (Source: Red-Fern Media)
4. Sales forecasting. Analyzing data on your company’s past sales trends can help you predict future demand.
What kinds of sales trends are important?
- If sales spike in the summer and dip in the winter, you need to manage seasonal inventory and staffing
- If some months are historically higher or lower performing, you can incorporate that information into your sales targets and quotas
- If contracts tend to get signed at the end or beginning of a specific quarter, you need to know the right time to follow up
Sales forecasting makes sure that you aren’t surprised by predictable long term trends.
5. Attribution. Analytical CRMs help you figure out which touchpoints led someone to become a customer. This helps you figure out where your best customers come from – and how to sell to them better.
Touchpoints include viewing or clicking on an ad, visiting your website, and any other interactions a potential customer has with your business.
- First-touch attribution links revenue to a lead’s first interaction with your company
- Last-touch attribution links revenue to a lead’s last interaction with your company before becoming a customer
- Multi-touch attribution links revenue to more than one touchpoint. An analytical CRM with multi-touch attribution assigns different weight to each touchpoint across the buyer journey. Your CRM attributes revenue to each touchpoint based on its weight.
With attribution, you can see which marketing efforts have the biggest impact. These insights help you do more of what works, and less of what doesn’t.
Who should use an analytical CRM?
You should consider an analytical CRM if…
- You want to better understand why customers are (or aren’t) buying your products
- You want to gather more data about your target customer
- You want to build customer personas based on data
- You want to figure out which touchpoints drive the most revenue
- You spend too much time poring over spreadsheets — and not enough time selling
- You want to track your sales KPIs
- You want to improve your sales process or strategy based on business intelligence data
What is a collaborative CRM?
Collaborative CRMs (also called “strategic CRMs”) share customer information across teams. This includes internal and external stakeholders, such as other departments, suppliers, vendors, and distributors.
Don’t worry — analytical and operational CRMs can (and should) still be used for collaboration between teams.
The biggest difference? A collaborative CRM focuses more on customer service, customer satisfaction, and customer retention than customer acquisition.
What are the features and benefits of a collaborative CRM?
1. Interaction management. Like an operational CRM, a collaborative CRM helps keep track of each interaction a customer has with your business.
Every customer-facing team — sales, support, community management, vendors, and anyone else who so much as sends an email — has access to a log of customer interactions and team notes.
When you share notes across teams, you get access to a treasure trove of information.
- Feedback from the support team can help you figure out how to sell to future customers
- Conversations in your communities can help you understand what new products your customers want
- Notes from sales calls can help you understand what language to put in your marketing materials
Each team has information about your customers. A collaborative CRM helps break down silos and share that information across teams.
2. Relationship management. 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.
Keep all teams aligned and up to date before they interact with each customer. This gives people a better, more personalized experience across the board.
3. Document management. 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.
Who should use a collaborative CRM?
You should consider a collaborative CRM if…
- You need to improve communication between departments
- You want to focus on customer retention and loyalty
- Your customers often have specific preferences and needs
- You need to share customer information with vendors
- You want to organize and align customer-focused efforts across your business
You know each type of CRM. So… now what?
We hope you feel a little bit closer to choosing the right type of CRM for your business. But how can you make sure you pick the best of the best in that category?
Make sure that your new CRM checks these boxes:
- Integrates with your existing technology
- Gives you live, talk-to-actual-humans support
- Makes it easy to migrate contacts and automations from a previous CRM (if you have one)
- Creates less day-to-day work for your team — not more
With all of the above met — no matter which type you choose — you’ll be well on your way to CRM bliss.