3 Types of CRM Systems: How to Choose the Right One for Your Business

CRM

Jenna Bunnell – Senior Manager, Content Marketing, Dialpad

Whether we’re boosting our social media presence or teaching kids programming, we’re always looking for new ways to use technology. For modern businesses, the CRM system is an essential tool. It allows them to communicate more effectively, better understand their customers and polish their overall marketing efforts. 

Today’s CRM systems generally fall into one of three categories, each of which responds to different business challenges. To help you pick the right CRM system, this article highlights the unique features and benefits of each one.

 

What is a CRM system?

CRM stands for customer relationship management. A CRM system helps us understand the behaviour of our customers in more detail. It brings together relevant information and presents it to us in a way that helps us boost sales, attract new customers, or retain existing ones.

CRM responds to the way today’s customers communicate with brands. There are many different channels that customers now use (such as emails, social media and even SMS, which is great for SMS marketing). CRM helps bring these different data sources into one location, benefiting business and customer alike.

 

What should I look for in a CRM system?

There are some criteria that apply to all CRM systems, regardless of type.

For starters, you need to know where your customer data is located. Good CRM systems can bring together data from different locations; this allows you to share insights with multiple departments. If you’re shifting contacts and automations from a previous CRM, your new one ought to make this as simple as possible. Data security is also essential; since you’ll be storing customer interactions, it’s vital only your staff can access them. Look for a CRM with a track record of good security—a data breach can strike a serious blow to your reputation. 

Ease of use is another key consideration. A CRM should be something your staff can use without extensive training. It should also integrate properly with any relevant technology you’re already using—particularly since this existing technology often contains the data CRM systems need. Should you need support, this should be an actual person you can talk to. While customers are often happy with bots and AI—at least up to a point—you’ll need someone who knows what they’re talking about.

If you expect your business to expand in the future, consider the system’s payment model. A small business might use an onsite CRM system for a handful of staff members. However, these can be tricky to scale and may not receive useful software updates. A cloud-based system is more convenient in the long run, and although it demands an ongoing fee, it can ultimately help you reduce costs for your business. It’s also more popular than on-premise CRM by a considerable margin.

Make sure you understand the financial impact of your CRM system over time. If you’ve already invested in a cloud phone system, however, the benefits may already be apparent.

The simplest criterion for a good CRM is its impact on your workload. If a CRM is creating more problems than it’s solving, take your business elsewhere.

 

What are the three types of CRM system?

The three types of CRM system are operational, analytical, and collaborative. Each of these systems has its own strengths and responds to different demands.

 

Operational CRM features

An operational CRM system tracks the full journey of your customers. They also help you understand how a customer finds you in the first place.

A major part of operational CRM systems is automation; like robotic process automation, this helps you to save time and solve problems. When somebody interacts with your business, this system can make any updates to their contact details. If you’re wondering which leads to prioritise, the system can help you work out who’s likely to become a customer, or spend the most money. 

Operational CRM systems can also help your staff complete tasks more easily. They can assign them tasks (instead of automating them) if they offer value over a certain threshold. Alternatively, they can notify staff of the best way to move a lead down the sales pipeline. 

These systems can even drop customers into a relevant email funnel—if you have enough information on them. Purchase history, product interest, and prior staff interactions are some useful information sources.

If you need assistance with customer service more explicitly, an operational CRM system can highlight pertinent information before a support call. It can even send your customers a survey if you want to get feedback on your performance.

 

Is an operational CRM system right for me?

Operational CRM systems are great if you want to save time on sales and marketing tasks, or keep information in one place. You should consider one if you struggle to organise contact information, or want to understand your customers in more detail. 

They’re also ideal if you spend a lot of time assigning tasks to your sales team, or if you’ve shied away from lead scoring or email marketing in the past. If you feel your customer-facing departments aren’t performing as well as they should, an operational CRM’s automation helps provide staff with the information they need to excel.  

 

Analytical CRM features

An analytical CRM system is ideal for understanding all the data you collect in greater detail. It’s best for higher-level strategizing, but it can help improve customer interaction as well. This analysis is an excellent way to drive innovation in your business.

These kinds of CRM systems draw on data from multiple sources—monthly revenue, customer retention rates, and so on. This data is then stored in a central location, and mined by the system for useful insights. By mining the data, the system finds patterns that can aid your marketing efforts.

On a basic level, analytical CRM systems let you split up your customers into distinct groups, based on age, gender, purchase history, and other factors. This helps you target people with marketing messages that resonate with them. The system also allows you to build buyer personas—outlines of wants and needs that help you further refine your marketing. 

These systems offer a range of other insights into your customers. You can see which leads are most likely to make a purchase, and which marketing campaigns are the most effective. You can also accurately attribute revenue to specific interactions, including multiple interactions from a single customer. If your products are subject to seasonal sales spikes, you can use the system to create more accurate sales quotas. 

Outside of marketing efforts, analytical CRM helps improve customer service. You can see what customers complain about, and how quickly your customer service teams solve problems for them. 

 

Is an analytical CRM system right for me?

An analytical CRM system is ideal if you have a lot of data you’re not sure how to use effectively. If you already track stats like average speed of answer, you can certainly appreciate the value of this CRM system. 

While tools like Excel automation handle a lot of grunt work, analytical CRM can help you understand why customers are (or aren’t) buying your products, and reduce time spent looking at spreadsheets for business insights. If you want to use data to improve your overall sales strategy, an analytical CRM system is also a great choice.

 

Collaborative CRM features

A collaborative CRM allows you to share data more easily between different departments and locations. It also helps you share data with people outside the business, such as suppliers and distributors.

While the other CRM systems are concerned—explicitly or implicitly— with acquiring new customers, collaborative CRM systems focus on keeping existing ones. They do this by tracking the ways customers interact with you—the channels they use (like a VoIP phone system) and the nature of the interactions themselves (e.g. its subject and any resolution). Some collaborative CRM systems also help store customer documents from multiple departments in a single, easy-to-access location.

By granting multiple departments access to the same information—and allowing them to communicate with each other—your staff gain new insights into keeping customers happy. Pooling knowledge helps you sell to customers more effectively, anticipate customer demand, and improve your marketing materials. 

New customers can benefit from collaborative CRM systems, too. Sales teams can glean customer preferences and goals, which they can then share with their colleagues. This results in a more personalised experience and ensures new customers are likely to become regular ones.

 

Is a collaborative CRM system right for me?

This CRM system is suitable for any business with communication problems—if you’ve got staff spread across multiple locations, for example. You might have tried using a whiteboard online (or something similar) to facilitate dialogue; this system makes communication easier still. If your customers are complaining about having to repeat themselves, this is probably the system for you.

Even if all your staff are under one roof, this system can help strengthen ties between different departments. It’s also a good choice if you want to respond to specific customer preferences, or share information with vendors more easily. 

 

In brief

A CRM system is an excellent choice for many businesses, but it’s important to understand the unique requirements of your own. By having a clear idea of the improvements you want to make, you’ll pick a system that has a major, positive impact on your business.