The Three Types of CRM and How to Determine Which is Right for Your Business

You’ve doubtlessly heard that every business – regardless its industry or size – needs a customer relationship management (CRM) system to communicate effectively with existing customers and prospects, as well as among the different departments of your organization so vital data about customers and leads doesn’t fall through the cracks – perhaps resulting in an unhappy, lost customer or lost sale. But did you know that there are three main types of CRM solutions? Making the wrong choice can be just as bad as not having a CRM at all. We’ll take a look at each in order for you to identify the one most appropriate for your business’s needs.

The three main classifications of CRM solutions are as follow:

  • Operational
  • Analytical
  • Collaborative

Operational CRM – Front Office Business Management and Processes

According to Clear C2, an operational CRM contains your front-office business management and business processes – including all communications throughout the lifecycle of your existing customers and prospects. These communications can occur from sales, marketing and customer service teams. “The primary function of Operational CRM is to take care of your customers. Real-time, automated internal processes make jobs easier and customers happier.”

Here are examples from Clear C2 that will help you understand how operational CRMs help all three departments (sales, marketing and service):

Sales – A sales rep hasn’t called a top customer in a few weeks. A task sends an email reminding the rep to call their customer.

Marketing – A prospect fills out a form on your website. Their contact information is created (or updated) in real-time in your CRM database.

Customer Support – A customer has not received an answer in a few days. The ticket is escalated and an email is sent to the customer support manager.

An operational CRM consists of three core modules – enterprise marketing automation, sales force automation and customer service automation.

Enterprise marketing automation facilitates:

  • Marketing automation
  • Campaign management
  • Email marketing
  • Website integration
  • Customized form letters
  • Event-based marketing

Sales force automation streamlines your sales processes and facilitates:

  • Opportunity management
  • Line-item quoting
  • Sales dashboard with all the relevant charts and graphs
  • Specifications development

Customer service automation can facilitate support through email, contact center, call center, etc.:

  • Service requests
  • Product returns
  • Customer complaints
  • Knowledge base management

According to business writer Courtney Danyel in her article for Discover CRM, you should consider an operational CRM 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.”

Analytical CRM – Data Analysis

Analytical CRM serves to analyze the data of customers generated by the operational CRM apps. Analytical CRM also allows you to understand the behavior of customers in order to determine their true value to the business. This helps your company to approach customers with useful information and proposals that addresses their needs.

According to Hitesh Bhasin – CEO of Marketing91 – The applications in analytical customer relationship management use such analytical marketing tools as data mining to get meaningful information – for example, the buying patterns of existing customers, spending patterns of potential customers, the target market, highly profitable and low-profitable customers, non-customers, customer conversion in a specific period of time, etc.

“This data helps the senior management to make better decisions and implement better marketing campaigns in the market. CRM helps in gathering information of customers from different channels and has to analyze the data in a structured way. It also helps the organization to set a proper business methodology which helps in sales and marketing decisions. It also helps to improve the effectiveness of CRM and helps analysis of key performance indicators which are set by various businesses.”

Clear C2 provides the following examples of how analytical CRMs help sales, marketing and service:

Sales A sales manager compares the sales forecast for a given period to last year’s purchase history and notices that one product is 80% less than last year. 

Marketing A marketing manager notices that one email in a campaign has a low open rate and changes the title of the email.

Customer service A service manager learns that one product has too many complaints and informs the product manager.

Examples of analytical application include:

  • Financial forecasting
  •  Customer satisfaction evaluation and growth
  • Price optimization
  • Product development
  • Purchase history
  • Risk management
  • Cross-selling and up-selling
  • Sales team coverage optimization
  • Customer retention

Danyel recommends an analytical CRM for companies that run an account management driven sales procedure with a finance led management style, as it will be able to collect, store and evaluate information provided from all departments, helping to plan marketing campaigns based upon accurate data.

Collaborative CRM – Interaction Management

Collaborative CRMs are also referred to as strategic CRM, which help share customer information among different departments in an organization – such as sales, marketing, customer support, technical, etc.

These CRMs mainly focus on interaction management with consumers through customer touchpoints. Since the communication gets shared with all the relevant departments within the company, these CRMs help improve team collaboration, increase customer service and streamline business management.

Examples of how a collaborative CRM helps support sales, marketing and customer service include the following:

Sales and marketing – Marketing is notified when a prospect views your website. They call the salesperson. who immediately calls the customer and makes a sale.

Customer service A sales rep looks at his mobile CRM when walking in to see his customer. He notices the customer has called his sales technical support to report a problem.

Examples of collaborative application include:

  • Online services that deal with convenience and cost reduction
  • Effective communication that includes automated phone, email, and internet
  •  Profiling sales data
  • Social CRM
  • Mobile CRM

“Feedback from support can be used proactively by the marketing team to connect with targeted customers, relating to certain products,” writes Danyel. “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.”

Collaborative CRMs are best suited for companies that have many departments, a variety of locations with most of the communication occurring online and are comfortable with having customer data easily accessed by all staff members. “It will enable them to pull together and share client information with all teams, improving client relationships and boosting customer satisfaction and therefore loyalty.”

Choosing the Best CRM Solution for Your Company

Whichever type of CRM you determine best meets your needs, a CRM solution is your company’s most valuable asset – which our blog post on the subject covers in detail.

Regardless of the type you choose, CRM software can help businesses on many fronts. People from different departments can use the CRM and add notes, schedule appointments and make calls. CRM allows you to get customized reports and helps you manage your sales pipeline effectively. When all your team members remain on the same page, it becomes easy to improve customer relationships. There is no longer a danger of losing a sale or an existing customer because one department didn’t know what the other was doing.

If you start using a CRM system, it positively impacts your churn rate. One CRM that can help you create strong customer relationships is eZnet CRM. When you can retain your customers, it helps you to serve your customers better, thereby improving your profits. Our cloud-based solution allows easy and seamless management of every aspect of the customer experience. eZnet CRM helps streamline your business processes, allows you to understand your customers in greater detail, lets you register leads and contacts, improves your customer service and allows you to accurately track all customer interactions.

In addition, we can customize our solution to suit your requirements. Contact us to learn more, and start your free 30-day trial period

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