Types of CRM Software: Which One Is Right for Your Business?
Jess served on the founding team of a successful B2B startup and has used a wide range of sales and marketing tools over the course of her 15-year career. She uses her industry knowledge to deliver the best answers to your questions about sales tools and sales management.
Jill is a writer at Fit Small Business specializing on Customer Relationship Management (CRM) software.
This article is part of a larger series on CRM.
Customer relationship management (CRM) software is a tool businesses use to manage and improve their relationships and interactions with existing and potential customers. There are three fundamental types of CRM platforms: operational, analytical, and collaborative. In this article, we outline the features and benefits of each type of CRM system, including their best use cases, to help you choose which one best fits your business needs. We also explore our top-recommended providers for each type of CRM.
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What Are the Three Types of CRM Software?
While there are three fundamental CRM types, each one aims to improve the quality of your customer relationships and the service you provide them. When choosing a CRM, it is crucial to consider the specialized features and functions to ensure that you can address your business requirements accordingly.
Operational CRMs automate your sales processes to save you time and effort. Analytical CRMs focus on gathering and analyzing your CRM data to help you deliver better service to your customers. And lastly, collaborative CRMs bring your sales, marketing, and support departments together to help you better understand your customers’ needs.
1. Operational CRM
An operational CRM manages and tracks your company’s interactions with prospects and customers to help you acquire new customers and retain existing ones. It automates business processes to save you time. Business owners also employ this type of CRM to generate leads, convert them into paying clients, record contact details, and serve customers. It also allows you to facilitate accounting, inventory, project, and human resource functions from a single system.
Who operational CRM systems are best for:
- Companies wanting to standardize and automate sales and CRM processes through automated workflows
- Sales professionals needing to manage pipeline stages and perform sales activities like appointments and quotes
- Teams that execute and track marketing campaigns and link them to leads and contacts
- Sales professionals and business managers who need to manage post-sale projects for the products they are selling
- Businesses that coordinate and execute inbound or outbound calling within their CRM
The core features of an operational CRM include sales automation, marketing automation, and service automation.
Sales automation involves streamlining manual and repetitive steps in the sales process, such as appointment scheduling, pipeline management, lead conversion, and taking notes. This frees up your sales team from administrative tasks and allows them to focus more on selling products and interacting with customers. Furthermore, it lessens the chance of tasks from falling through the cracks as all pipeline stages have a corresponding action point and next step, with notification alerts sent to agents for their attention.
Another aspect of sales automation is lead scoring, which involves ranking your prospects to let sales representatives hone in on which leads are worth pursuing or are ready to engage with your business. For instance, Freshsales, which is an example of this type of CRM, can be set up to monitor your leads and automatically enrich their profile based on available information on the web and interactions with your company.
Freshsales profile enrichment feature automatically updates lead records. (Source: Freshsales)
An operational CRM’s marketing automation feature streamlines repetitive marketing tasks, such as email marketing campaigns, workflows, and social media posts. This process nurtures leads by identifying your audience, choosing the right content, and automatically triggering actions based on a set schedule or the customer’s behavior. Effective marketing automation tools let you focus on growing your business without worrying about every message or post you have to send.
Customer service automation is the process of significantly reducing human labor when servicing clients to improve customer satisfaction and decrease labor costs. Modern CRM systems incorporate help desk tools, such as a knowledge base, artificial intelligence (AI) chatbots, canned responses, a self-service customer portal, and an interactive voice response (IVR) system.
2. Analytical CRM
An analytical CRM collects and organizes sales, marketing, and customer service data, making it easy for business owners to discover insights based on their current business performance. It also displays detailed reports that you can use to make strategic business decisions.
Who analytical CRM systems are best for:
- Managers who need information like performance metrics and dashboards for making data-driven decisions
- Data analysts who monitor customer service efforts and make recommendations based on customer data
- Sales team managers who want visibility on their sales reps’ performance, including the volume of their activities and the value of revenues they bring in to the company
- Accountants who need centralized data storage for their referrals, leads, partners, and clients
- Business intelligence professionals who analyze sales metrics and trends, and use this data to formulate sales forecasts
The primary features of an analytical CRM include data warehousing, data mining, and online analytical processing (OLAP).
An analytical CRM, like Salesforce, acts like a data storehouse, which saves data from various sources in a centralized location. It also organizes the stored data so it can be easily accessed, analyzed, and used in generating reports. This could include details about your customers, business interactions, and even agent performance.
Data mining is analyzing warehoused data to uncover meaningful patterns, trends, and relationships in your data. It automatically interprets the pieces of information so you can use them to improve your sales, marketing, and customer service strategies.
OLAP is a technology that enables users to analyze information and extract business data from multiple database systems simultaneously. It also gives your CRM system forecasting capabilities, allowing you to make data-driven decisions concerning business trends, demands, and budgets.
Salesforce provides sophisticated analytics tools that offer businesses total visibility of their business performance. (Source: Techradar)
3. Collaborative CRM
A collaborative CRM makes cross-team communication and collaboration systems more efficient—improving customer satisfaction, brand loyalty, and company profitability. It covers sales, marketing, customer service, and technical support teams, as well as customers, creditors, vendors, suppliers, and distributors. This type of CRM also uses automation to accomplish its goals.
Who collaborative CRM systems are best for:
- Businesses with multiple locations or departments that heavily depend on cross-team communication
- Teams that need to track customers across multiple channels, especially on the digital side
- Companies that want to gain a better understanding of their customers and increase customer retention and loyalty
The three main features of a collaborative CRM are interaction management, channel management, and document management.
To provide a better understanding of your prospects and customers, a collaborative CRM lets you log all of their touchpoints with your company in a centralized access point. This way, even if not all of your teams interact with the customers directly, everybody can see their customer journey and improve customer service based on the recorded facts.
A collaborative CRM, like Zoho CRM, makes it easy for your company to track and communicate with your customers via their preferred channels—be it on the phone, email, or social media. It records how your customers get in touch with you and lets you respond to them using the same channel.
Document management is a process or system used to capture, track, store, and share electronic documents, such as proposals, contracts, and digital images of your business files. A collaborative CRM allows your teams to access these documents from a centralized location without going through a department’s desk or opening separate software to retrieve the data you need.
Examples of Different Types of CRM Software
Below are examples of each of the three types of CRM software, which are also included in our list of the best CRMs for small businesses. Click through the tabs below to learn the basic details of these CRM software types.
- What it does: Freshsales allows you to track and manage your contacts, accounts, and sales. It has workflow automation tools that enable you to efficiently monitor the deals’ progress in your pipeline.
- Pricing: Free (for up to 3 users) or $15 to $69 per user, per month*
- Free trial: 21 days
*Based on annual billing; monthly pricing is also available at slightly higher rates.
Head to our Freshsales review page to learn more about how this solution can help your business grow.
- What it does: Salesforce Essentials offers advanced analytics and artificial intelligence (AI) tools that help you monitor the stages of your sales cycle and make data-driven decisions. Its features include lead analytics, deal insights, activity statistics, and email analytics.
- Pricing: $25 per user, per month for up to 10 users*
- Free trial: 14 days
*Based on annual billing; monthly pricing is also available at slightly higher rates.
Check out our Salesforce Essentials review to learn if it is the right fit for your business.
- What it does: Zoho CRM allows your sales, marketing, and support departments to capture and view all customer interactions in one place. It also allows you to communicate with customers via phone, chat, email, and social media messengers.
- Pricing: Free (for three users) or $14 to $52 per user, per month*
- Free trial: 15 days
*Based on annual billing; monthly pricing is also available at slightly higher rates.
Read our Zoho CRM review to learn more about its features and capabilities.
CRM Pricing
CRM pricing for different types of CRM varies. However, operational and collaborative CRMs tend to be more affordable as compared with analytical CRM, as reflected in the examples above. Apart from the type of CRM, other factors contribute to pricing, including features, the number of users, and billing frequency, among others. Overall, pricing can range from $12 to $300 per user, per month, depending on the above-mentioned factors. Other providers offer feature-limited free plans for beginners or small teams.
Free and low-cost CRMs, which typically include operational and collaborative CRMs, can range from free to $8 to $15 per user, monthly. CRMs in this pricing category usually support a few user seats and only include basic CRM functionalities, such as contact, lead, and pipeline management.
Mid-range CRMs, which can include the three types of CRM, can cost from $30 to $150 per user on a monthly basis. These usually offer additional features for lead generation, lead scoring, collaboration, and reporting. Others offer more extensive CRM integrations with project management, accounting and invoicing, social media management, and email marketing software.
More advanced plans for large enterprises can cost as much as $300 per user, each month or even as high as $1,000 per month for a set number of user seats. The most expensive CRM systems include deeper customization options and highly sophisticated analytics and reporting tools—typically beneficial for larger-sized enterprise companies.
Bottom Line
Many of the modern CRM providers offer some overlap in the features associated with the three types of CRM systems—some of them could even offer all three in one robust software. When choosing which type of CRM tool you should use, it’s essential to explore your objectives of using one, so it’s easier for you to decide which one best addresses your business needs and goals.
