According to a recent study published by Gartner, CRM is both the largest and fastest growing enterprise software category -- additionally, spending on CRM software reached $48.2 billion in 2018. In other words, the CRM market is an absolute powerhouse.

As the market continues to expand and more businesses start to rely on these platforms, having a picture of what CRMs are and what they do is becoming an absolute must for business owners and their employees.

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A CRM, or Customer Relationship Management software, is a digital resource businesses use to manage all of their relationships with prospects and customers. Every business that uses a CRM does it to improve their customer experience.

CRMs are used to attract leads, convert those leads into customers, and sustain customer relationships. While there’s no one-size-fits-all CRM standard, all CRMs generally fall into one or more of the following three types.

Here, we're going to explore the differences between the three types of CRMs on the market, and why you might choose one over another to fit your needs.

Operational CRMs

What is an Operational CRM?

An Operational CRM is designed to streamline and simplify an organization’s main business processes. In doing so, the tool can help companies generate leads, convert those leads into contacts, and provide businesses with the service infrastructure necessary to delight and retain their customers as time goes on.

Operational CRMs achieve these goals through three main features -- marketing automation, sales automation, and service automation. Let's dive into those now.

  1. Marketing Automation
  2. Sales Automation
  3. Service Automation

Operational CRMs make life easier for companies’ marketing teams by automating a lot of the busy work that would otherwise take up sizeable chunks of their day-to-day. Operational CRMs allow marketers to automate otherwise tedious and time-consuming responsibilities like coordinating email campaigns, distributing content offers, and reaching out to contacts at scale.

Some CRMs can also deliver marketing analytics, track the ROI of online ads, and offer companies personal insight into individual leads. A few -- like the HubSpot CRM -- can even help businesses with more challenging, specialized marketing practices like SEO and blogging.

Another feature central to virtually any operational CRM is sales automation. Sales automation is meant to streamline a company’s sales process, enabling its reps to spend more time interfacing with prospects and bringing customers on-board.

Sales automation generally includes processes like email scheduling for individual leads, tools that enable prospects to set their own meetings with sales reps, and software to coordinate and log sales calls.

Many operational CRMs also make life easier for sales reps by enabling workflows that allow them to easily and automatically rotate leads, delegate contacts, and create deals and tasks. Additionally, operational CRMs often offer features like sales record creation, better sales record visibility, and simpler lead prioritization.

Service automation is the final piece of the operational CRM puzzle. Its purpose is to help a company create an extraordinary experience for its customers, keep them loyal, and encourage them to personally promote the company brand.

Service automation almost always sets a framework for one-on-one correspondence between service reps and customers. This may include things like setting up inboxes that aggregate customer emails, or coordinating live chats.

Service automation also can contain ways to delegate service tasks to reps via ticketing systems. Features like live chat, assistance with knowledge bases, and FAQ pages are also commonly associated with service automation.

Who Should Use an Operational CRM?

Businesses with more linear sales processes will usually get the most out of operational CRMs. SMBs can get a lot out of these platforms, but that’s not to say that operational CRMs are specific to their needs. Even larger enterprise companies can benefit from using this kind of software.

Ultimately, if your company is trying to automate its workflow and take the human element out of the more monotonous, administrative side of your business, an operational CRM is the way to go.

Operational CRM Examples

  • Price: Free
  • Best for: any business looking to streamline its sales, marketing, and service processes.

HubSpot offers a full stack of software for marketing, sales, and customer service -- all with a completely free CRM at its core. Together, HubSpot’s sales, marketing, and service hubs provide everything a business needs to organize, track, and build better relationships with leads and customers. 68,000 companies in over 100 countries trust HubSpot to continue growing their businesses.

Analytical CRMs

What is an Analytical CRM?

Analytical CRMs rely on data gathering and analysis to help the companies better serve their customers. These CRMs are generally used to analyze data like customer preferences, customer properties, contact data, and other information gathered from customers both on and offline.

Companies can then leverage the data they’ve collected for better sales efforts, more effectively targeted marketing campaigns, and higher-quality customer support networks. Generally speaking, the most crucial components to most Analytical CRMs are data warehousing, data mining, and OLAP tools.

  1. Data Warehousing
  2. Data Mining
  3. OLAP Tools

A data warehouse is a type of database incorporated into many analytical CRMs. It provides one of the most effective systems analysts can use to collect, integrate, and prepare customer data for analysis.

A data warehouse stores current and historical data in a single place and makes processes like data extraction and conducting data analysis easier than in more conventional databases.

The next component of an analytical CRM is data mining --a catch-all term for the process of discovering patterns in large data sets. Analytical CRMs use data mining techniques to track down information and data trends relevant to customer interests. This allows them to offer a better picture of a company’s customer lifecycle: a process that encompasses customer identification, attraction, retention, and development.

The third -- and generally final -- component of a typical analytical CRM is OLAP tools. OLAP stands for Online Analytical Processing. It’s a category of tools used to analyze data stored in databases. These tools are used to evaluate multidimensional data from multiple perspectives.

For example, a business may want to analyze how customers are interacting with its website. It has access to data about the online features customers are using, customers’ locations, and when they’re logging on. Having a comprehensive picture of this data could give salespeople insight into how, where, and when they should be reaching out to prospects.

Instead of analyzing each of those dimensions individually, OLAP tools enable that business to conduct its analysis on all of them simultaneously. Additionally, with OLAP tools, that business could see how customers in specific regions are interacting with their website over specific time frames.

Ultimately, OLAP tools are what an analytical CRM uses to validate hypotheses that may have been derived from information accrued by its other components.

In the example provided above, the other parts of the CRM would have gathered the data on how, when, and where customers are interacting with the site. Its OLAP tools would have essentially clarified and applied that information, giving that business a better idea of how to conduct its sales, marketing, and service efforts.

Who Should Use an Analytical CRM?

Analytical CRMs are best for businesses looking to leverage data to get a picture of how their customers operate. If you’re interested, it also wouldn’t hurt to have an employee -- or a few employees -- at your company willing to make a conscious effort to learn some pretty technical software. Analytical CRMs aren’t necessarily difficult to use, but they’ll take a bit more work on your company’s end to figure out.

Analytical CRM Examples

Zoho Analytics
  • Price: $25 - $495 per month
  • Best for: almost any sized businesses looking to improve their data analysis and reporting capabilities.

Zoho Analytics gives you real-time analytics to help inform smarter business decisions. The software allows your data to transform huge amounts of raw data into actionable reports and dashboards. These capabilities can enable you to better track key performance indicators, including current trends and future predictions.

Collaborative CRMs

What is a Collaborative CRM?

With a collaborative CRM, a company’s marketing, sales, and service departments all share customer information freely with one another. The hope is that this system will improve synchronicity within the business and give each department a better understanding of their customers’ needs, wants, and interests.

A collaborative CRM has two definitive components -- interaction management and channel management. Let's explore those components now.

  1. Interaction Management
  2. Channel Management

Interaction management is a process that tracks every interaction between a business and its customers -- whether through email, social media, face-to-face interactions, phone calls, or other communication channels.

Interaction management allows a company to keep a log for these kinds of correspondence, as well as team notes about them. Different business units can then share this information across the organization.

Channel management takes interaction management a step further. It’s the process of using the information gathered and analyzed during interaction management to identify and, ultimately, pursue the communication channels that best suit customers’ preferences.

Should your company’s customer service unit communicate primarily via email or chat? Should your sales team make a point of pursuing one-on-one meetings or phone calls with prospects? These are the kinds of questions that channel management is designed to answer.

Who Should Use a Collaborative CRM?

Businesses with multiple locations stand to gain a lot from collaborative CRMs’ emphasis on business unit synchronicity. The same goes for companies that rely heavily on cross-department communication. It goes without saying, but a collaborative CRM won’t be a good fit for any company not comfortable with customer information being shared liberally throughout the organization.

Collaborative CRM Examples

  • Price: $19 - $119 per month
  • Best for: typically small businesses that place an emphasis on collaboration and are interested in a CRM with a simple, user-friendly interface.

With Copper, all your customer data is stored in one place, allowing everyone across your organization to be in the loop about any customer interaction or deal. The platform’s user-friendly interface also features custom pipelines and dashboards. Copper is a good choice for small businesses looking for a simple, straightforward CRM that integrates seamlessly with G Suite.

Each kind of CRM has its own benefits, and any business stands to gain a lot from what they all have to offer. Fortunately, most of the more prominent CRM platforms incorporate elements of all three types. Still, it’s important to recognize which kind of CRM best suits your needs and make your decision with that in mind.

If you’re looking to streamline your sales, marketing, and customer service, you should err on the side of operational. Alternatively, if you're looking to use hard data to better understand your customers, prioritizing analytical may be the way to go. Lastly, if you want to make business synchronicity and collaboration your main priorities, you should explore collaborative CRMs.

Different systems suit different situations. Regardless of which way you may be leaning, you need to take the time to understand your company’s needs, resources, and culture before making the decision.

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 Sales Enablement

Originally published Dec 3, 2019 7:30:00 AM, updated December 03 2019


Choosing a CRM