The three different types of CRM and what they offer
There are three main types of CRM, and before you go ahead and implement a system for your business it pays to understand exactly what is different about them and what each one offers.
Your CRM will enable you to communicate effectively with customers and prospects, having essential information at your fingertips when you need it. Without it, valuable opportunities can be missed. Sales, marketing and customer service departments will find themselves in sync as they will all have access to identical information. No matter which type of CRM software you use, it will become the single point of entry for all client related information.
For those who may feel doubtful about using different types of CRM systems, a recent Salesforce study showed that the use of a CRM can increase sales by up to 29%, sales forecast accuracy by 42%, and productivity by 34%. For businesses fixed on improving levels of customer satisfaction as well as profitability and revenue, the installation of a CRM system to build long-term customer relationships is a must.
So what are the three main types of CRM? We like to classify them as either:
1. Operational CRM
This streamlines and automates sales and marketing as well as service processes. Its main role is to generate leads and then convert them into contacts within the CRM, capturing all details at the same time.
With regard to sales, it will enable existing customers to be dealt with efficiently and new ones acquired, organizing information effectively. Its various modules will incorporate contact and lead management as well as sales forecasting. You should consider this option if you run a linear sales process focused on new business and prefer tasks to be automated. It will do all that you need when it comes to storing and organizing contacts and computerizing many of your sales and marketing actions.
As far as marketing is concerned, it helps businesses when offering products and provides ways of communicating with customers. Campaign management is a big plus, enabling emails, phone calls and meetings to be tracked and organized. Finally, the service automation side enables quality customer service to be provided, dealing with things like call management and monitoring based upon KPIs.
Example: a current customer calls up to query the current interest rate on his account, possibly thinking of switching to a competitor; instead of just telling him the answer, the CRM pops up a current deal relating to reduced interest rates so you are not only able to retain him but make him additionally happy.
2. Analytical CRM
Data analysis is the main function of this CRM, looking at customer data and providing management with much better insight with regard to current business status. Decisions can be made much more efficiently and correctly and campaign effectiveness can be tracked.
Sales and customer service personnel can use the information provided to support and improve customer relationships. Information will be gathered from many different channels and then analyzed in a structured way, enabling companies to put business methodology in place and effectively analyze KPIs.
Companies that run an account management driven sales procedure with a finance led management style will find the analytical CRM well suited for their purpose. It will be able to collect, store and evaluate information provided from all departments, helping to plan marketing campaigns based upon accurate data.
Example: a customer buys a printer from an online store. In the background, this information is taken and fed into the CRM. When she next goes online, matching items will be flagged up to match her printer i.e. consumables such as ink and paper. When new models come out, they will be emailed to her, enabling the company to use her data for promotions and surveys. This will better satisfy customer needs and help build market share.
Sometimes referred to as a Strategic CRM, this shares customer information between business departments such as sales, marketing, technical, support etc.
Feedback from support can be used proactively by the marketing team to connect with targeted customers, relating to certain products. Without the collaborative CRM this would generally not happen as data is not often shared and losses can occur as well as damage to customer relationships. The overall aim is to improve the customer experience, improving loyalty and boosting sales.
Those companies that have many departments linked to the CRM, a variety of locations with most of the communication occurring online and who are happy to have customer data easily accessed by all staff will find the collaborative CRM very suitable. It will enable them to pull together and share client information with all teams, improving client relationships and boosting customer satisfaction and therefore loyalty.
Example: a customer buys a new car and then has a problem with it. The customer service department liaises with the technical and the data is fed into the system. The department that sold the car can communicate with the buyer, making sure their problem does not manifest into a lost customer, also taking the time to ensure that their problem is rectified correctly and they are made aware of offers and deals particularly suitable to them i.e. warranty cover etc.
Different types of CRM come equipped with different features and applications. Before you implement your CRM, make sure to decide your future strategy and purchase the one most suited to your business needs.
There are certainly many good reasons why companies should use CRM software, no matter the type. Departments can use the data within the CRM to add notes, send emails, make calls and schedule important appointments. Reports can be customized and the sales pipeline carefully managed. When used correctly, interactions with customers can be logged in real-time so that everyone with access to the CRM has full visibility.
Research has shown that CRM users feel that by using the platform, their churn rates have decreased and customer retention improved. As a result, revenue is also boosted as insight provided by the CRM enables you to select the most profitable customers and focus on strengthening your relationship with them. This insider knowledge is vital as it can indicate the best time to look for repeat business. By identifying your ideal customer and producing a profile, you can proceed with accurately targeted marketing. Collaboration is also vastly improved; no longer do departments have to go-it-alone but all can work together, sharing information across the CRM and working towards the same objectives. There can be no case of one department not knowing what the other is doing. The result? Happy customers and hence improved sales.
It is clear that whichever type of CRM you decide on, it can have a powerfully positive effect upon your business. But don’t make the mistake of thinking that it is a magic wand. It sets the foundation for good customer relationship management, enabling companies to be successful but you have to do the rest and build upon it, whether you choose operational, analytical or collaborative.
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