3 Types of CRM Software and How to Choose the Best One

Customer relationship management software is a tool designed to help businesses offer a satisfactory experience throughout a business’s life cycle. From leads to loyal clients, the platform allows businesses to build great customer relations. It analyzes client data and interactions to provide better services. Consequently, it increases sales and customer retention.

There are three main types of CRM software: operational, analytical, and collaborative. However, there are custom CRM software solutions available as well. This means companies in need of personalized or custom CRM solutions can have one built for them. It’s particularly beneficial as it’s designed to cater to a business’s specific needs.

In this article, we’ll discuss the three types of CRM software, their benefits, and how you can choose one that’s best for your business.


Operational CRMs are centered around the full customer life cycle. They generate leads, conversion, delivering services, retention, and loyalty. The software relies on automation to save time and improve efficiency.

The key features that facilitate the functionality include sales, marketing, and service automation.

Sales Automation

Sales and Marketing Poster

Sales automation is solely focused on automating the sales process. Its essential function is lead scoring. It involves identifying high-priority prospects, thus allowing sales representatives to focus on them.

It also helps manage your sales pipeline by automating recurring and tedious tasks. This frees up your sales team from administrative tasks and enables them to focus on selling.

Marketing Automation

This feature gives the marketing team the ability to plan and manage their efforts while automating repetitive tasks. This would include email campaigns, social media posts, managing ads, and mobile messaging.

The process works by:

  • identifying your audience;
  • sharing relevant content based on their interests;
  • automatically engaging a particular set of actions based on their interaction with the marketing material.

This effectively creates a personalized experience for each client.

Service Automation

Service automation is the process of automating the customer service process or giving clients self-service options like booking their appointments online. Operational CRM systems can also incorporate help center features like chatbots and client portals. A key advantage of service automation is that it lowers labor costs and increases consumer satisfaction.

Businesses That Benefit From Operational CRMs

Operational CRMs are beneficial for companies that would like to get more out of their customer data and streamline processes for their workforce. It is also beneficial for companies interested in personalizing the customer experience at every stage of the customer’s life cycle.

Operational CRMs can also be used by companies interested in supervising and keeping tabs on business functions in different departments.


An analytical CRM gives you the ability to collect and analyze client data to enhance business decisions. It does this by giving you insights into your sales, marketing, and customer service efforts. The generated reports can be used to adjust business operations by doing less of what doesn’t work and focusing more on the elements that work.

The main features of an analytical CRM include data warehousing, data mining, and online analytical processing (OLAP).

Data Warehousing

A data warehouse is like a digital vault where data from various sources is stored and organized. This could be data collected from departments that interact with clients. Moreover, you can store employee and business-related data. Thereafter, you can use the data to generate relevant reports.

Data Mining

Data mining is the process of assigning meaning to the data in your depository. This is done through analysis which uncovers patterns that reveal valuable insights about your sales, marketing, or customer relations efforts.

Online Analytical Processing (OLAP)

OLAP is primarily a forecasting technology that analyzes data from different sources in real-time to give predictive outcomes related to budget, demand, and trends. This allows you to make data-driven decisions for future campaigns and test business strategies.

Businesses That Benefit From Analytical CRMs

Analytical CRMs are helpful to sales-driven businesses that:

  • frequently monitor customer relations efforts;
  • wish to make adjustments according to customer data;
  • need to formulate forecasts based on sales metrics and trends.


A collaborative CRM, also referred to as strategic CRM, is centered on making collaboration and communication across teams more efficient. The goal is to focus on customers further along their journey by improving satisfaction and brand loyalty. This, in turn, increases revenue for the company.

For this to work, customer interaction data is analyzed and shared across teams to better understand client needs and improve service. The main features of a collaborative CRM are:

  • interaction management;
  • channel;
  • management;
  • document management.

Interaction Management

A collaborative CRM allows you to log all interactions with your client at a central access point. This makes it easier for members of other teams to understand the customer journey even if they didn’t directly interact with them. Therefore, every team is able to work together to improve customer service based on customer data.

Channel Management

Clients often use a variety of channels to communicate with a business, like social media, email, or phone calls. A collaborative CRM allows you to track which channel your clients use to communicate with your business and for what purposes.

In turn, this allows you to respond using the same channel and understand which medium they prefer for particular queries or interactions. This allows you to meet your customers where they are.

Document Management

Document management refers to the process used to store and manage digital documents in a centralized location. A collaborative CRM allows your employees to easily access any documents they may need, such as a proposal or contract, without requesting it.

Businesses That Benefit From Collaborative CRMs

A collaborative CRM is necessary for organizations that:

  • operate in different locations;
  • have multiple departments;
  • rely heavily on cross-team communication;
  • need to track communication channels used by their clients;
  • are interested in understanding their clients to improve customer satisfaction and loyalty.

Choosing the Right CRM Software

Yes or No

The type of CRM software you need is entirely dependent on your business needs. Each one serves a different purpose. While some businesses use all three, others use only one or two. Alternatively, you can opt for a custom CRM if your needs go beyond what’s on the market. Here’s a quick breakdown of all three and what situations they’re suited for.

A collaborative CRM would be useful if your business has multiple departments and locations. In this case, there’s a need for everyone to stay on the same page. An analytical CRM is ideal if your business has been operational for a while and you’ve gathered a lot of customer data. Otherwise, it would be unnecessary.

An operational CRM would be good if you’re interested in automating business functions and keen on enhancing processes related to the full customer life cycle.

Things to Look for in a CRM Software

It’s essential to have a CRM strategy before you decide on which software to pick. First, identify your challenges and goals to better understand which software might be ideal.

You can then go in search of CRM software with these key factors in mind:

  • easy to set up and offers a good user experience;
  • able to scale as your business grows;
  • secure with minimal risk of data leaks;
  • should allow for easy migration to or from another CRM;
  • integrates well with other products and is easy to modify;
  • mobile app for use on the go.


Improving operational efficiency and enhancing the consumer experience should be every business’ goal. Not only will it increase profitability, but also improve customer satisfaction and loyalty. Additionally, employee productivity will see a steady increase.

Identifying CRM software to help your business achieve its goals is crucial in getting the right results. There are CRM custom solutions available for personalized business needs and off-the-shelf solutions. Needless to say, it’s necessary to identify the challenges your business is aiming for. It will help to overcome them and have a clear objective in order to select the ideal CRM software.

After working 5 years as a Software Analyst in reputed MNC, Rebecca decided to settle down and work from home. Having an expertise in business & being a life motivator, she loves to share similar stuff on our website by the means of her articles.