Customer relationship management (CRM) software has become invaluable for businesses looking to manage interactions across sales, marketing, customer service, and other key functions. With many options available, it‘s important to understand the pros, cons, and use cases to select the right system. This comprehensive guide examines the six major types of CRM systems on the market.
What is CRM and Why is it Important?
CRM software consolidates customer data and interactions onto a single platform accessible across an organization. This gives a unified view of the customer to help businesses deliver personalized, seamless experiences across channels.
Benefits of CRM systems include:
- Increased customer retention and loyalty
- Higher sales win rates
- Streamlined processes and workflows
- Enhanced team collaboration and productivity
- Deeper insights into customer behavior
With the ability to impact multiple aspects of operations, CRM is a key pillar of managing the customer lifecycle. The right system tailored to business needs can drive greater profitability through optimized customer relationships.
Types of CRM Systems
There are six primary categories of CRM systems:
- Operational CRM
- Analytical CRM
- Collaborative CRM
- Strategic CRM
- Mobile CRM
- Social CRM
Here we explore the key capabilities, advantages, and potential drawbacks of each.
1. Operational CRM
Operational CRM, sometimes referred to as front office CRM, focuses on the day-to-day interactions across sales, marketing, and customer service. Key features include:
- Contact management
- Lead scoring and routing
- Sales force automation
- Marketing automation
- Customer service ticket tracking
- Knowledge base
- Dashboards and reporting
Centralizing these functions provides teams increased visibility and coordination of efforts. Sales reps also gain enhanced productivity and efficiency with workflow tools and customer data at their fingertips.
Pros:
- Increases sales opportunities through improved lead handling
- Boosts customer service capabilities
- Unifies data sources for more informed decision making
- Streamlines repetitive tasks to focus energy on value-adding activities
Cons:
- Significant upfront investment to purchase and implement
- Possible lack of support or adoption from personnel
- Ongoing administration and customization required
Operational CRM consolidates key customer-facing activities onto a unified platform. (Credit: Salesforce)
With native sales, marketing, and service functionalities, operational CRM delivers immense value particularly for customer/revenue focused divisions.
2. Analytical CRM
While operational CRM focuses on executing front office processes, analytical CRM centres on making sense of all the data generated from customer interactions. These systems integrate extensive reporting and analytics features to help uncover insights that drive strategy.
Key analytical CRM capabilities:
- Segmentation
- Predictive analytics/modeling
- Campaign analysis
- Metrics and KPI tracking
- Custom reporting
The goal is taking raw CRM data and transforming it into actionable intelligence. Users can identify trends, optimize resource allocation, forecast future needs, and enhance decision making.
Pros:
- Identifies revenue opportunities through customer analysis
- Enables data-driven decision making
- Supports financial planning and budgeting
- Provides deeper view into marketing performance
Cons:
- Significant upfront and ongoing costs
- Heavy reliance on quality data inputs
- Resource intensive to maintain and draw insights
Analytical CRM derives meaning from customer data. (Credit: Salesforce)
For larger enterprises, analytical CRM empowers stakeholders through precisely tailored reporting uncovering key trends and patterns.
3. Collaborative CRM
Whereas operational and analytical CRM focus mainly on core customer-facing units, collaborative CRM spans company-wide. It breaks down information silos across departments, enabling a single source of truth on customers.
Collaborative CRM provides:
- Cross-departmental customer data access
- Integrations with complementary systems
- Collaboration tools
- Visibility across processes
By linking CRM to other business systems like ERP, different teams can better coordinate efforts for an optimized customer experience. This also ensures critical information doesn‘t get lost as customers interact with various departments.
Pros:
- Enhances holistic view of customer health and needs
- Connects organizational dots to improve responses
- Encourages knowledge sharing for faster service
- Minimizes redundant and conflicting workflows
Cons:
- Changes traditional departmental structures
- Potential internal political conflicts
- Leadership buy-in and culture shift required
- Complex integrations with existing systems
Collaborative CRM unites company ecosystems. (Credit: Salesforce)
Spanning core customer data across the business, collaborative CRM breakdown information silos for the big picture.
4. Strategic CRM
While most CRM tools take an operational approach, strategic CRM is exactly what is sounds like – a strategy. Rather than software itself, it represents aligning customer centricity with an organization‘s vision and objectives.
Key elements include:
- Customer focused policies and leadership
- Omni-channel experience development
- Enterprise-wide customer intelligence distribution
- Customer value based budgeting
- CRM tools that support strategy execution
Essentially, businesses define exactly what customer relationship management means for them. Software and technology become enablers toward this vision rather than the end goal.
Pros:
- Provides a clear roadmap for customer relationship development
- Ensures organization-wide adoption and accountability
- Optimizes technology spend to genuinely identified needs
- Establishes consistent guidelines for decision making
Cons:
- Requires strong leadership and culture shift
- Challenging to gain organization-wide buy-in
- Manual strategy execution even with software
- Hard to quantify direct ROI of approach
Strategic CRM provides the playbook. (Credit: Salesforce)
More a mindset than software, strategic CRM gives direction to relationship management.
5. Mobile CRM
Mobile CRM applications deliver system access on smartphones and tablets. This allows field sales and service teams working outside the office to access/update data or conduct other tasks from anywhere.
Key attributes include:
- Real-time data synchronization
- Optimized interfaces for smaller screens
- Alerts and notifications
- Access without internet connectivity
- Location based features
- Voice integration
With the capabilities supporting a mobile workforce, agents can lookup customer history prior to meetings, conduct paperwork, update data and schedules, and handle inquiries – no matter where they are.
Pros:
- Allows customer management from anywhere with internet
- Fast team coordination through instant updates
- Drives productivity for field teams
- Enables quicker response times
Cons:
- Can encourage distraction for some employees
- Security vulnerabilities of devices being hacked/lost
- Reliant on software vendor’s mobile capabilities
- Spotty connectivity hindering access
Mobile CRM powers a distributed workforce. (Credit: Salesforce)
Particularly beneficial for field sales and services teams, mobile CRM enables customer management on-the-go.
6. Social CRM
The rise of social media provides new channels for customers to engage and share feedback. Integrating these platforms into existing CRM helps businesses manage new touchpoints consistently with traditional interactions.
Common social CRM features include:
- Social media account linking
- Monitoring tools
- Publishing/scheduling interfaces
- Analytics on engagement
- Unified message handling
This ensures customer-related social media data enters the CRM workflow rather than occurring in silos. Handled similarly to calls or emails, businesses can respond and track conversations across platforms.
Pros:
- Manages rising social customer inquiries efficiently
- Analyzes community engagement levels
- Enables direct social channel communication
- Supports case management with complete history
Cons:
- Additional noise from unqualified social mentions
- Requires different support skillsets
- Risk of messages going viral rapidly
- Difficult to quantify concrete ROI
Social CRM captures rising social media customer engagement. (Credit: Sprout Social)
Blending social media with existing CRM combines engagement insights for enhanced service.
Choosing the Right CRM System
With varied solutions available, narrowing the options comes down identifying your needs. Beyond core software requisites, consider your business processes, user adoption capabilities, IT infrastructure, and budget thresholds.
Though concentrating on a single CRM type often makes most sense initially, many find value eventually integrating a mix like operational for day-to-day workflows and analytical for drilling into trends. Building on a foundation that aligns to immediate priorities allows evolution over time.
No matter your current size or industry, there exists technology capable of optimizing how you manage customer relationships. Given the centrality of CRM to long term viability, investing in the tools for your situation can drive profits for years ahead through enhanced retention and satisfaction.
The image featured at the top of this post is (c) Wright Studio/Shutterstock.
Frequently Asked Questions
What is a CRM system?
A CRM system is software allowing businesses to track interactions and data across current and prospective customers. This supports managing relationships for enhanced retention and loyalty.
What are some key benefits of a CRM system?
CRM provides increased sales productivity, unified customer data, workflow efficiencies, analytics on engagement, and ultimately higher customer lifetime value.
What are the main types of CRM software?
The core CRM system types include operational, analytical, collaborative, strategic, mobile, and social CRM tailored to different needs.
How do you choose the right CRM software?
Align software capabilities to current pain points and growth goals across sales, marketing, service, and executive leadership. Define must-have versus nice-to-have features based on real workflows.
How can you ensure CRM success?
Drive adoption through training and leadership. Set objectives and key metrics to track performance. Continually enhance and optimize utilization of the platform to maximize value over time.
