Chapter #3

Types of CRM System

In this chapter, we deep dive into different types of CRM, what they are, what’s the advantages, and who and when you will need a certain type of CRM system.

types of crm

Having the right type of CRM system is essential for your business to deliver optimal customer experiences throughout the lifecycle and improve business ROI.

In fact, Dynamic Consultants commented on the evolution of the CRM market in 2021 and calculated that this number may have increased to an average of around $30.48 for every dollar spent in 2021.

And the Salesforce State of Sales reports found that connecting with customers requires a deeper knowledge of audience data. Around 50% of teams are using data for accurate forecasts, and high-performing sales teams are more likely to baser their forecasts on data-driven insights.

However, what are the types of CRM systems, and which one to choose? In this article we will answer that:

What is CRM System?

Customer Relationship Management (CRM) system is a technology that helps companies manage their customer relationship and track interactions with customers and leads by collecting data from different sources and analyzing it, to create actionable insights for business leaders to make faster and better decisions.

CRM not only refers to technology, but also to all strategies and techniques used by companies to attract, convert, close, and retain customers to improve outcomes.

And the CRM system collects data from multiple channels and departments and store this data to give you a 360-degree view of your customers. The common information collected and stored by CRM is purchase history, personal information, and interactions with the brand.

All this allows you to focus on your company and employee relationships with your customers and optimize your strategies to attract, convert, close and retain more customers and improve your customer experiences.

What Are the Different Types of CRM?

There could be many different types of CRM depending on the features they provide and the target audience they are focused on.

However, there are four main types of CRM systems that you should know:

  • Collaborative CRM: (CCRM) helps your company to manage your customer data more effectively and efficiently to serve and retain customers better and improve customer experience. It units data across departments’ front and back end to improve collaboration and productivity among your team members.
  • Operational CRM: (OCRM) helps companies to centralize their business processes across sales, marketing, and customer management into one and employees are using a shared interface. It automates and streamlines processes saving time and money for businesses.
  • Analytical CRM: Helps the company collects data about its customer interactions and analyze the data in order to improve business outcome. This data can be of various types such as sales, marketing, financial, and service data.
  • Departmental (Modular) CRM: Departmental or Modular CRM systems are specifically designed to accommodate the needs of certain front-end departments such as marketing, sales, customer service, or field service by providing features that fit their needs.

With that, most of the modern CRM systems are a mix of different types of CRM. The most advanced CRM vendors like Dynamics 365, Salesforce, or Oracle offer all types of CRM systems, while smaller CRM vendors can provide only one or just a few types of CRM systems.

Type #1: Collaborative CRM Systems

Collaborative CRM (CCRM) system allows you to connect different departments of your organization as well as outside of your own company that is related to customer services such as marketing, sales, field service, and customer service in order to simplify workflow and processes to improve customer experiences.

crm system helps with collaboration by centralizing data and pro

A collaborative CRM system is giving your whole team better information about all your contacts, including touchpoints, communication, and other engagement histories.

This results in a better understanding of your customers and providing more personalized and seamless customer service across different departments and team members.

CCRM also allows managers and supervisors to share information across departments, share thoughts, ideas, tasks, and workloads with their employees and leaders of the company, which also can result in better collaboration, business outcomes and improve the motivation of employees.

Collaborative CRM enables you to improve your teamwork and collaboration which boosts business productivity and reduces errors.

It synchronizes various customer data sources including second and third-party sources from across departments and from different channels such as phone, live chat, email, social media, website, mobile, and others to give a 360-degree view of your customers.

With that, there are two significant parts to a Collaborative CRM:

  • Interaction Management: This is a program designed to improve leadership skills in such areas as productivity, handling employee conflict, performance improvement, delegation, and overcoming resistance to change by teaching positive models of behavior and on-the-job application.
  • Channel Management: This is a program that helps marketing, customer service, and sales to manage activity that involves numerous channels to manage company leads and customer interactions to create seamless and unified customer experiences.

Advantages of Collaborative CRM Systems

  • Improve collaboration across team members and departments.
  • Increase the productivity of your workforce.
  • Improve data streamline across departments and employees.
  • Increase data accuracy thus the decision making.
  • Lower the cost of customer service.
  • Improve customer personalization.
  • Increase the value-ad of your products.
  • Increase retention rates and loyalty of your customers.

Choose Collaborative CRM System If:

Consider using a Collaborative CRM system (CCRM) if your sales, marketing, and customer service are located across different locations or the communication among team members is not easily accessible.

Also, if multiple departments are involved in communication with your leads and customers throughout the customer lifecycle. Or, if your communication with clients and potential customers is mostly online, then implementing a collaborative CRM system is the right choice.

Type #2: Operational CRM Systems

Operational CRM systems centralize your core front-end activities and processes such as sales, marketing, and customer service. The primary purpose of the system is to enhance, streamline and simplify all company processes to increase productivity, and provide optimal customer experience.

operational CRM system types of crm

It is designed to improve manual and repetitive tasks such as sales administrative tasks to be less of a daunting task so your employees can focus on what they do the best instead of doing manual or digital paperwork.

The three main components of an operational CRM system are:

  • Marketing Management: This helps the marketing team to produce better outcomes from their marketing campaign, improve lead qualification into MQL and improve lead targeting.
  • SalesForce Automation: This helps automate the entire sales cycle. It identifies new prospects, keeps track of customer interactions, makes sales projections, and manages documentation. It also allows sales reps to automate and create workflows.
  • Service Management: This helps your support team to improve communications and customer interactions with your brand by providing timely customer support, increasing first-time fix and faster processing service requests.

Advantage of Operational CRM system

  • Enhancing front-end business processes.
  • Improving customer satisfaction.
  • Streamlining and automating repetitive and manual tasks.
  • Reducing human errors.
  • Improving internal communication.
  • Increasing revenue and ROI.

Choose Operational CRM System If:

An operational CRM system is suited for businesses of all sizes and industry that wants to improve their customer, marketing, and sales management processes, unify operation, and automate repetitive tasks which reduce human errors.

OCRM is the perfect first CRM system to implement for your business as it can improve your outcomes and transform your organization into a customer-centric business.

So, if you are done with repetitive tasks, using a spreadsheet to manage your clients, and having not a clear vision of your front-end business, then the operation CRM system is for you.

Type #3: Analytical CRM Systems

An Analytical CRM system is often part of any other type of CRM system as it does not directly help with front-end activities such as managing customer interactions or collaboration among employees.

As the name suggests Analytical CRM manages the analytical part of your business, which means taking information within your CRM and generating valuable insights for business leaders and employees to improve decision making and business outcomes.

types of crm analytical crm systems dynamics 365 sales interfacr AI

These processes run behind the scenes and leads, and customers cannot see the capture and analysis of their data and interactions with the company.

Analytical CRM is an essential part of your front-end activities as it accumulates various data from customers across the entire lifecycle such as:

  • Financial Data
  • Sales Data
  • Marketing Data
  • Customer Data

This helps you to gain a deeper understanding of your customers and market trends as it helps you with sales forecasting, predicting trends, optimizing your stock inventory to ensure you are ready for any uptimes and downtimes, and more.

And all these result in better marketing campaigns outcomes, aligning sales and marketing activities, and increasing customer satisfaction.

Advantage of Analytical CRM system

  • Increased customer satisfaction
  • Improves outcomes of marketing activities and campaigns
  • Increased sales
  • Improved upsells and cross-sales
  • Improve business readiness for upcoming trends
  • Increase business resilience
  • Improve decision making

Choose Analytical CRM System If:

An Analytical CRM system is an essential part of your business to become a data-driven company. Analytical CRM system helps companies to create insights in real-time so they can make smarter and faster decisions.

Analytical CRM systems like Dynamics 365 CRM applications are using advanced Artificial Intelligence and Machine Learning technologies to understand your data and create insights that can improve your business outcomes.

However, the drawback of an Analytical CRM system is that it can be more costly than Operational or Collaborative CRMs as they are more complicated.

Type #4: Strategic CRM Systems

And the last type of CRM system is the strategic CRM system.

A Strategic CRM system is focusing on a company’s set of activities and tasks that together form company strategy in order to acquire customers, improve customer lifetime value and improve business and customer strategy. Strategic CRM encompasses the strategy development process and the value creation process.

It helps to improve interactions between the company and customers and customize it based on a set of actions, deal value, and other important aspects.

It also allows you to recognize the differences between customers and their economic value to your company, the relationships, and expectations from your business.

For example, important information such as a long-term view of revenues from customers needs to be taken into account when dealing with customers and what’s the value of the customer.

It helps to track the commitment of the customer and act on that. Strategic CRM systems focus on enhancing the information about the customers in order to improve interactions, drive better business outcomes and maintain strong relationships.

Advantage of Strategic CRM system

  • Deliver more personalized and valuable interactions with important customers.
  • Increase the lifetime value of customers.
  • Improve strategic approach with customers
  • Improve decision making with advanced information
  • Recognized economic value of customers

Choose Strategic CRM System If:

A Strategic CRM system helps you to scale your business processes and gives you more data about your customers. This ensures your company employees are following the best practices and delivering the best outcomes.

A Strategic CRM system is implemented by companies with larger sales, marketing, and/or customer service teams when business processes become harder to manage and harder to scale.

At one point as your company grows, your sales process and customers will need to be managed with efficiency. A Strategic CRM system is a more advanced system used by companies used with complex sales processes and they need to track as much information about customers in order to make the right decision.

CRM System for Different Departments

Often advanced and modern CRM systems provided by leaders in the industry such as Microsoft, Oracle and Salesforce offer modular CRM systems that are made to accommodate certain needs of your business, often they focus on certain departments.

Taking a modular approach to CRM in the cloud allows you to focus on your organization’s most pressing pain points, giving you critical insight into the areas of your business that are in most need of optimization—yielding the greatest return from your investments.

Modular CRM applications that work together seamlessly can unify financial and business operations across finance, manufacturing, retail, supply chain, warehouse, inventory, and transportation management, giving you the critical insight, you need to drive your business forward with the flexibility to grow and scale at the pace that’s right for your organization.

So here you have the four most common types of modular CRM systems:

CRM for Sales

One of the most common modular CRM systems is Sales CRM to improve sales processes and increase scalability. Since prospecting to closing deals your sales need to follow company processes to ensure they deliver a standardized approach that yields the best outcomes.

It also helps to automate all your manual tasks, so your salespeople can focus on selling and building strong relationships.

CRM for Sales also helps identify the best deals with the highest possibility to close in the pipeline and identify salespeople to keep them on top of the game. Also, it can provide other reminders to nurture and move leads closer to purchase decisions.

The main advantages of Sales CRM are:

  • Simplify sales
  • Centralize sales operations
  • Improved customer data accuracy
  • Identify bottlenecks in the sales process
  • Shorten the sales cycle
  • Increase sales outcomes
  • Increase time on selling and decrease time on administrative tasks

CRM for Marketing

Another very common CRM module is marketing CRM.

Marketing CRM helps you to engage with customers one on one, at scale, to build meaningful relationships and grow your business and orchestrate personalized journeys across all touchpoints to strengthen relationships and earn loyalty.

It helps the marketing department to manage critical marketing activities across different channels to deliver consistent messaging, help potential customers to find information, active buyer enablement, and manage all marketing campaigns whether online or offline.

The main advantages of Marketing CRM are:

  • Engage customers at scale in real-time.
  • Improve marketing campaigns outcomes.
  • Increase customer loyalty.
  • Personalize customer experiences.
  • Automate repetitive and manual tasks.
  • Build customer trust.

CRM for Customer Service

Customer service is becoming one of the main factors when customers are making purchase decisions, as 64% of people find customer experience more important than price when making a purchase.

And it shows that companies do not only compete in product development and pricing but also how they take care of their customers after the purchase.

And if your company wants to better serve its customers, you need to have a dedicated tool for customer service.

CRM for customer service is another common CRM module that CRM vendors are offering to help you elevate your customer experiences.

By giving your customer service team features specifically designed to provide seamless and personalized customer service such as knowledge base, support chatbot, online live chat, email, phone, and social media support, you effectively accommodate your customers’ needs in on their preferred communication channel.

Because nothing is more frustrating for customers than getting in touch with a customer service representative using ways they are not comfortable with.

CRM for customer service helps your representative manage multiple channels at once, respond fast and efficiently and provide answers to customer questions. It also helps to educate your customer representatives or easily transfer the inquiry to the appropriate customer service agent.

The main advantages of Customer Service CRM are:

  • Manage omnichannel communications
  • Easily provide self-service options
  • Personalize customer engagements
  • Increase agents’ productivity
  • Automate FAQ to using AI and chatbots

CRM for Field Service

CRM for field service helps organizations deliver onsite service to customer locations. The application combines workflow automation, scheduling algorithms, and mobility to set up mobile workers for success when they’re onsite with customers fixing issues.

The main advantage of Field Service CRM are:

  • Improve first-time fix rate
  • Complete more service calls per technician per week
  • Manage follow-up work and take advantage of upselling and cross-sell opportunities
  • Reduce travel time, mileage, and vehicle wear and tear
  • Organize and track resolution of customer issues
  • Communicate an accurate arrival time to customers
  • Provide accurate account and equipment history to the field technician
  • Keep customers updated with the status of their service call and when it’s resolved
  • Schedule onsite visits when it’s convenient for the customer
  • Avoid equipment downtime through preventative maintenance

Learn more about Microsoft Dynamics 365 CRM Applications

Microsoft Dynamics 365 CRM Applications are standalone business apps developed to help companies manage customer data, attract new customers, retain current customers, and improve business efficiencies. Microsoft CRM applications cover business processes including Marketing, Customer Service, Sales, and Field Service. Together with AI, you will get a 360-degree view in real-time of your customers and prospects.

Microsoft Dynamics 365 Sales - sales management solution

Is Sales Management & Sales Force Automation CRM system that enables salespeople to build strong relationships with their customers, take actions based on insights, and close sales faster with actionable insights and a personalized approach.

Microsoft Dynamics 365 Marketing

Is a marketing-automation application that helps manage multi-channel campaigns and turn prospects into business relationships. The app is easy to use, works seamlessly with Dynamics 365 Sales, and has built-in business intelligence.

Microsoft Dynamics 365 Customer Service

Is Customer Automation and Customer Management system. Differentiate your brand by taking advantage of built-in intelligence to deliver faster, more personalized service and add value to every customer interaction.

Microsoft Dynamics 365 Field Service

Provides complete field Service Management including service agreements, predictive maintenance, preventative maintenance, work order management, resource management, product inventory, scheduling and dispatch, mobility, collaboration, customer billing, and analytics.

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