Article 3 of 4 Part of: Guide to choosing a CRM system To get the most out of a CRM system, organizations must decide whether an operational, analytical or collaborative CRM system is right for them.The right customer relationship management software can help organizations communicate with customers and foster a healthy, long-lasting relationship. However, before purchasing CRM software, an organization must understand the differences between the three main types -- operational, analytical and collaborative -- and how to determine which is the right choice. 3 types of CRM software systemsA CRM system manages and analyzes customer data and interactions to improve customer service, aid in retention and drive sales growth. Over time, the number of tools and functions of a CRM system has expanded to cover every period in the customer lifecycle. But how does an organization know which of the three types of CRM system is right for it? The three types of CRM systems include the following:
Operational CRM systemsAn operational CRM system is the most common type and covers the broadest range of functions. It blends all business processes, such as customer service, marketing and sales, into one within a company. Its primary goal is to help streamline business operations, centralize customer interactions and sales, marketing processes, and service and support efforts in one place. Further, it stores information on customers, leads and employees using a shared platform to better support existing and potential customers.
An operational CRM system captures customer details and uses them to provide service across the customer lifecycle, including marketing, sales and service automation.
Pros and cons of operational CRM systemsAn operational CRM can improve organizational efficiency leading to improved processes, internal cohesion and overall customer satisfaction. However, as with each type of CRM, it is dependent on proper data entry to achieve its full effect, which can be a time-consuming process -- especially for small or mid-sized organizations. When to use an operational CRM systemOperational CRM systems are ideal for helping teams work better to understand customers through the capture and nurture of customer relationships and improve the perception of customers and sales for the company. Examples of operational CRM systems
Analytical CRMThe primary goal of analytical CRM is to leverage customer data into trends and actionable insights the organization can use to improve the customer experience. Data from an analytical CRM can include customer preferences, channels, touchpoints, trends, forecasting and more. Pros and cons of an analytical CRM systemAnalytical CRM systems excel at helping organizations parse large amounts of data and develop strategies to develop new leads, increase customer retention and create efficiencies for the sales and marketing departments. However, while analytical CRM systems can help understand a large amount of data, they can also be more technical and difficult to understand without dedicated staff. Additionally, the insights gleaned from the data are only as good as the data entered, and inconsistent entries can skew the results. When to use an analytical CRM systemAnalytical CRM systems are best for mid-size and large organizations that gather large amounts of data and want to distill that data into trends and insights. Examples of analytical CRM systemsMany analytical CRM systems exist, but two standout options include the following:
Collaborative CRM systemsA collaborative CRM, also known as strategic CRM, enables different teams or functional areas in an organization to share customer data. The result is that everyone uses the same knowledge base about the customers to make decisions, creating a holistic approach to managing customer relationships. While operational CRM tools often focus on marketing and sales, collaborative CRM systems focus primarily on customer service. A collaborative CRM system has two components: interaction and channel management.
Pros and cons of a collaborative CRM systemThis type of CRM system strives to improve the information shared between the sales, marketing and customer support departments. Because these teams work separately, a collaborative CRM tool can help break down those silos to address customer needs and manage customer relationships effectively. However, given this system's interdependent, collaborative nature, it's essential to use it correctly. Otherwise, the connection between touchpoints could break down, and the customer experience will suffer. When to use a collaborative CRM systemOrganizations that operate across multiple locations or work in siloed teams can use a collaborative CRM system to streamline how they gather customer information and communicate with them. Examples of collaborative CRM systems
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