Types of CRM & How to Choose the Best One for SMBs
If you’re a business owner or a sales professional, you’re probably aware of how important building and maintaining great customer relationships is. One great way to do that is by investing in a solid Customer Relationship Management (CRM) system. Choosing the wrong CRM can be a nightmare for small to medium-sized businesses. Not only can it be costly, but it can also bring about many problems ranging from poor data management to a complicated user interface. I’m AJ, and throughout my decade-long career, I have successfully built, grown, and sold my own digital agency! Recently, I started Small Business Bonfire (SBB) to help small business owners and entrepreneurs like myself to ensure they don’t fall into the same traps I did. After using different types of the best CRM for small business (be sure to check out this review after reading) while growing the agency, I knew this had to be one of the first reviews we did at SBB! Let’s begin!
Key Takeaways
There are three main types of CRM software
CRM software systems can improve customer service efforts
The best CRM software can collect and analyze customer data
Customer relationship management can enhance business processes
SBB Featured Partners
Copper CRM
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HubSpot
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Monday.com
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What Is a CRM?
CRM (short for customer relationship management) software helps businesses of all sizes streamline their sales, marketing, and support operations. From storing customer information and interactions to generating leads and analyzing data, CRM offers various functionalities to improve your business’s productivity, efficiency, and profitability . Some of the most common features of CRM include: Lead management Contact management Marketing automation Analytics and reporting Customer service tools Plus, all the data stored in one place makes it easier to track customer history and resolve any issues quickly. By leveraging CRM, you can better understand your customers’ needs, preferences, and behaviors to tailor your services and products accordingly .
Pro Tip: When it comes to choosing a CRM for your SMB, don't just settle for the first one you come across. Instead, take the time to evaluate your needs and find a CRM that meets them in the most efficient way possible.
- AJ Silber
What are the Three Types of CRM?
While trying out different CRMs during my time at the agency, I discovered three main types of CRM . They include the following: Collaborative CRM Operational CRM Analytical CRM Let’s take a more in-depth approach to each CRM type! Collaborative CRM System First, we’ll begin with collaborative CRMs! What Is a Collaborative CRM? Collaborative CRM is a type of customer relationship management that focuses on enhancing inter-departmental communication and collaboration . It’s a customer-centric approach that involves collaboration among sales, marketing, customer support, and other teams to provide excellent customer service. The objective of a collaborative CRM is to unify the customer experience by gathering customer data across all departments and using it to strengthen customer relationships. This system incorporates tools like internal messaging, shared calendars, and centralized databases to achieve this goal. With a collaborative CRM, SMBs can improve internal collaboration and nurture long-lasting customer relationships, ultimately driving business growth. How Does a Collaborative CRM Work? Collaborative CRM systems work by collecting and organizing client data from all the departments in a business and integrating it into one central place. This helps the company better understand its customer’s needs and preferences. With this data, businesses can create detailed customer profiles that contain important insights such as purchase history and interactions with customer service reps. This ensures that employees know what each customer prefers and can tailor offers when necessary. Additionally, collaborative CRM provides many features that help businesses manage and improve customer relationships with existing and potential customers . These features are as follows: Interaction Management Channel Management Document Management Interaction Management One of the key features of this CRM software is interaction management. With this feature, businesses can effectively manage all customer interactions from different channels such as email, phone, social media, and live chat. This helps in providing a personalized and consistent customer experience. Additionally, interaction management helps businesses keep track of customer inquiries, complaints, feedback, and other important data that can be used to improve customer service. Channel Management Another key element of collaborative CRM systems is channel management, which involves tracking and managing multiple communication channels through which customers interact with a business. This can include everything from social media platforms and email to phone calls and in-person visits. With this feature, you can ensure that your customers can reach your business through the channel they prefer , and each communication is tracked and recorded for future reference. Document Management Lastly, document management allows teams to store, share, and work on important documents, such as projects and proposals , together in a streamlined and organized manner, regardless of location. It ensures everyone has access to the latest updates and versions of the same documen t, so there is no need to worry about the hassle of sending files back and forth via email. This reduces the risk of data loss, as documents are stored securely and backed up regularly, and promotes team productivity. When to Choose a Collaborative CRM as a Small Business As a small business, you should consider a collaborative CRM if you want to improve collaboration among your teams . These types of CRM software are designed to enhance communication and facilitate teamwork, which can result in better customer service and happier clients. With a collaborative CRM, everyone in your organization can see each other’s actions, contacts, deals, and interactions in real time. This helps break down silos within your organization and create a more cohesive and customer-centric team . Collaborative CRM Example: Copper CRM Copper CRM is a great example of a collaborative CRM system that can help small businesses foster closer collaboration among their teams and build stronger customer relationships. It comes with a range of features that enable users to manage their sales pipelines, track interactions, and automate routine tasks. One of the standout features of this CRM system is its seamless integration with Google Workspace, which makes it easy for teams to collaborate in real time, organize their work, and share relevant information. With Copper, SMBs can easily streamline their workflows, gain visibility into their sales performance, and deliver personalized experiences to their customers at scale. Operational CRM System Next, let’s go over operational CRM! What Is an Operational CRM? These types of CRM systems focus on streamlining day-to-day business operations , such as sales, marketing, and customer service automation. Think of it as your business’s trusty sidekick, always there to lend a hand and make things run smoother. Its main goal is to efficiently manage client interactions and data throughout the customer lifecycle , from lead generation to post-sale support. Plus, these systems can give you a wealth of useful data on your customers, which can help you build better relationships with them in the long run. With an operational CRM system, you can automate tasks like lead tracking, deal management, and customer support, freeing up your team to focus on building customer relationships. How Does an Operational CRM Work? Operational CRMs integrate data from various sources, like email, social media, websites, and more, into a cen tralized system, which can be accessed and shared across teams. It provides a central repository of customer data that different teams across the organization can access. This enables quick and efficient response times to customer inquiries, personalized marketing campaigns, and better tracking of customer behavior, preferences, and purchasing history. Operational CRM systems also come with many features that businesses can use to streamline business processes, improve the customer experience, and save time and money on repetitive tasks. Some of these features are: Marketing Automation Sales Automation Service Automation Marketing Automation Operational CRM streamlines marketing efforts through marketing automation. With this feature, marketing teams can set up automated campaigns that will trigger emails or other types of outreach based on user behavior, such as clicking a link or making a purchase. This can be a huge time-saver for small businesses, as it allows you to focus on more important tasks instead of spending hours on manual outreach. Plus, it can also help increase customer engagement and ultimately lead to more sales. Sales Automation Sales automation is another key feature of operational CRM systems, which automates sales-related activities to enhance sales effectiveness and efficiency . This can include automating tasks like order processing, billing, tracking customer interactions, and lead management. It also enables sales teams to focus on hot leads and increase their chances of converting those leads into potential customers . By using sales automation tools, businesses can keep track of all their potential customers and take the necessary steps to move them through the sales funnel. Service Automation Additionally, operational CRM systems provide service automation features, which aim to improve customer service efficiency and quality by automating routine tasks and providing clients with real time customer support. This can include everything from automating ticket creation and routing to providing quick access to customer information, allowing representatives to offer a personalized service experience , which can help businesses save time, reduce errors, and improve the overall customer experience. When to Choose an Operational CRM as a Small Business As a small business owner, you should consider an operational CRM to increase efficiency and streamline your customer-facing operations. This CRM is ideal for businesses that must manage their sales, marketing, and customer service processes with efficacy and efficiency . With operational CRM, small business owners can easily manage leads, track sales, improve customer service, optimize campaigns, and streamline workflows. This makes it an invaluable tool for any small business looking to increase their customer engagement and retention or drive sales processes . Operational CRM Example: HubSpot One great example of an operational CRM for SMBs is HubSpot. This platform offers a range of tools for managing client interactions and automating tasks related to sales, marketing, and customer support. Plus, its intuitive interface makes it easy to use, even for those who aren’t tech-savvy. Some notable features of HubSpot include lead scoring, contact segmentation, and integrations with various third-party apps. With HubSpot, small to medium-sized businesses can track their leads, send targeted emails, and monitor their website traffic all in one place. For more information, here is our HubSpot CRM review ! Analytical CRM System Finally, let’s get into analytical CRM systems! What Is an Analytical CRM? An analytical CRM is a type of customer relationship management software that analyzes customer data to gain insights and make data-driven decisions . This CRM can track consumer interactions, purchase history, and other behaviors to identify trends. It is great for small businesses because it helps them better understand their clients through insights gathered from customer data that can lead to increased sales and customer loyalty. How Does an Analytical CRM Work? Analytical CRM systems collect all kinds of customer information, including purchase history, demographics, website activity, and social media interactions, and store it in a centralized database. It uses algorithms based on this data to spot patterns to help businesses improve their performance. With an analytical CRM, companies can use customer information to create targeted campaigns and offers based on customer preferences, identify new opportunities to upsell or cross-sell products and services, and analyze how popular a product or service is with a certain demographic through customer segmentation. Moreover, there are several important features of analytical CRM that businesses can leverage to assist them in improving their bottom line. Here are some of these main features: Customer Data Tracking Campaign Tracking Decision Making Customer Data Tracking Customer data tracking uses data mining and predictive analytics techniques to identify patterns and trends in customer data, which businesses can use to make informed decisions about marketing, sales, and customer service strategies. The database then allows businesses to segment and target their customers more effectively based on their needs and behavior, which not only enhances customer satisfaction but also helps boost sales and revenue. This feature allows businesses to analyze their sales performance, identify the most profitable customers, and optimize resources to achieve their sales objectives. Campaign Tracking Campaign tracking allows small business owners to follow the success of various marketing campaigns , such as emails or social media ads. This information is then used to develop targeted campaigns tailored to specific customer segments. With this knowledge, businesses can adjust their marketing strategies to improve their sales pipeline and better meet the needs of their customers. By tracking metrics such as open rates, click-through rates, and conversion rates, businesses can measure their return on investment (ROI) and improve their campaigns over time. Decision Making As previously mentioned, analytical CRMs use data mining to help businesses of all sizes make better data-driven decisions by identifying trends and patterns in customer behaviors that might otherwise have gone unnoticed . This provides business owners with deeper insights into their target market, allowing them to create sales and marketing campaigns that are more effective and increase customer loyalty. With this data, businesses can also use analytics to inform other decisions, such as product development, sales forecasting, or pricing strategies, to improve the sales process and increase customer retention . When to Choose an Analytical CRM as a Small Business An analytical CRM might be the best option for small businesses looking to gather customer insights to make informed decisions. These systems are designed to help business owners make sense of each customer interaction and rely heavily on data analytics and machine learning algorithms to do just that. You can personalize the customer experience by analyzing customer data and streamlining your sales and marketing efforts. Additionally, an analytical CRM can help you identify your most valuable customers and provide unique incentives to keep them coming back . Analytical CRM Example: Monday.com Monday.com is a great example of an analytical CRM that offers many handy features designed to help small and medium-sized business owners effectively manage customer relationships. The platform is widely praised for its high level of customizability and affordability, making it a versatile tool that can be easily tailored to meet the unique needs of any business. It includes a range of analytical capabilities, including contact segmentation, lead scoring, and performance metrics tracking. Using these features, business owners can get a bird’s-eye view of their sales pipeline, track engagement with each prospect, and optimize their sales strategies accordingly. To learn more about this CRM platform, consider reading our detailed Monday.com review !
Do You Need All Three Types of CRM?
Now that you know about the types of CRM systems, you might be wondering if you need all three. The answer might surprise you. It all depends on the objectives of your small business . For instance, a basic operational CRM system will suffice if you’re looking to track every customer interaction and manage your sales pipeline. However, analytical CRM systems might be a better fit if you want to gain deeper insights into your customers’ behaviors and preferences. Ultimately, the best way to choose the right CRM is to identify what features you require for your business operations . So, before you choose a CRM system, take time to evaluate your business goals and needs to determine which type of CRM is right for you.
How to Choose CRM Software
Before choosing CRM, there are several factors you should consider . Below are some steps you can follow that I created while trying to find the best CRM software for the agency. Step 1: Understand Your CRM Budget The first thing to consider is your budget. It’s important to clearly understand what you can afford before starting your research , so you can focus on solutions within your price range. Keep in mind that some CRM providers offer scaled pricing plans that vary based on the number of users or features you need. By understanding your budget, you can narrow down your options and find a CRM that provides the most value without breaking the bank. Step 2: Pick an Area of Your Business That’s Struggling Next, you’ll want to identify any areas of your business that are currently struggling or could use improvement . It could be something like lead generation, conversion rates, or customer retention. Once you know the problem area, research CRM software options that offer specific features to address those issues. Step 3: Choose a CRM Based on the Feature Sets It’s also important to consider the features that you need the most. Different CRMs offer different features, so you should choose one that provides the feature sets that align with your business goals . CRM Ease of Use Ease of use is essential when choosing CRM. After all, you don’t want to invest in a system your employees find difficult to use or navigate. Look for CRM systems with intuitive interfaces and customizable features so everyone on your team can easily access the data they need to do their job efficiently. CRM Integrations with Other Software If your business already uses other applications, like Slack, Trello, or MailChimp, you might also want to find a CRM with third-party integrations . This will allow your team to easily connect the CRM with other software and pull in data from different sources. CRM Payment Model For small businesses with a tight budget, it is important to consider the type of payment model your CRM has. Each platform has different payment plans, charges, and optional add-on services. Look for a CRM platform that offers flexible pricing structures to get the best value for your money. CRM Security Features It’s also vital to consider the security features a CRM offers. Search for software that uses secure encryption protocols , access control measures, and additional security protocols like two-factor authentication and biometric scanning. CRM Reporting Features Finally, the reporting features your CRM offers are important. Try to find a platform that tracks all customer-related data in real time and generates detailed reports that can help you gain valuable insights into customer trends. By taking the time to research different CRM solutions and evaluating each of these factors, you can determine which type of CRM is best suited for your small business. Step 4: Sing Up & Deploy a CRM With Your Team Once you have found the software that best fits your needs, it’s time to sign up and deploy it with your team. Make sure everyone is properly trained and understands how to use the system. This will help ensure that all customer data is kept secure and the CRM is set up correctly for optimal usage. Step 5: Test, Test, Test Before going live, it is important to test your CRM system thoroughly. You wouldn’t want to commit to a system only to find out later that it doesn’t meet your requirements or is difficult to use. Testing allows you to experience the software firsthand and see if it’s the right fit for your business. Don’t forget to ask for feedback from employees who are using the CRM—they may be able to provide valuable insight into areas that need improvement or additional features you should Step 6: Don’t Be Afraid to Try Another CRM If, after testing, you find that the CRM system you chose isn’t working for your business, don’t be afraid to try another one. There is no one-size-fits-all solution when choosing a CRM platform, so keep an open mind and remain flexible until you find the right fit.
CRM Types Conclusion
Selecting the right CRM for your business can be challenging, but it is crucial for your succes s. It’s essential to consider factors such as the nature of your business, functionality, integration capabilities, user-friendliness, and security when selecting your CRM. With a vast selection of CRMs on the market, it can be overwhelming to navigate through the options. However, taking the time to assess your needs and research the available options can benefit your small business significantly. Are you a small business owner looking for CRM software? Do you have any questions about the different types of CRM systems? Let SBB know in the comments below!
FAQs Types of CRM
What are the major types of CRM?
There are three major types of CRM: operational, analytical, and collaborative.
What do I need to deploy a CRM?
To deploy a CRM, you’ll need a few things. First and foremost, you’ll need a computer or mobile device. Most CRM solutions are cloud-based, meaning you can access them from anywhere with an internet connection. So, ensure you have a device that can connect to the internet. Next, you’ll need to choose a CRM solution. Many different types of CRMs are available, ranging from simple and basic to feature-rich and complex. For SMBs, it’s usually best to start with a basic CRM and upgrade as needed.
What are the benefits of using a CRM?
A CRM system offers a range of benefits for businesses, including increased efficiency, better organization, and improved customer satisfaction. It also provides a centralized platform to manage customer data, interactions, and history, enabling businesses to offer more personalized and targeted communications. A CRM can help SMBs save time and reduce costs by streamlining workflows and automating tasks.
My business is small. Do I need a CRM?
Absolutely! Even if you’re running a small business, having a CRM system can make a huge difference in managing your customers and growing your business.
What type of data is commonly stored in a CRM?
The data commonly stored in a CRM system includes basic personal information such as name, email address, phone number, and physical address, but it doesn’t stop there! CRM systems can record interactions, such as website visits, social media engagements, email opens and clicks, purchases, customer service inquiries, and even survey responses. In addition, businesses can also use CRM systems to categorize their customers based on various criteria, such as purchasing behavior, demographic factors, lead status, and more.
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