Types of CRM Software: How Should You Choose One for Your Business

Types of CRM Software: How Should You Choose One for Your Business-feature image
January 11, 2023 8 Min read

Many businesses have complex sales, marketing, and customer service procedures to manage their survival, growth, and profitability. CRM software is designed to automate various tasks and activities like managing contacts, optimizing campaigns, tracking lead status, generating customer behaviour reports, and handling the sales process.

Every CRM software is designed with some specialization. CRM software can majorly be categorized into three types: Operational, Analytical, and Collaborative.

This article aims to provide you with all the information related to the functions and uses of each types of CRM.

What is CRM Software?

CRM software is a business system developed to help businesses get the most out of their contacts. It helps in better understanding, managing, and organizing their needs. The software enables you to automate your business processes like marketing, sales, service, and customer support.

If you are using online CRM system, it must provide some valuable insights on the data to make relevant decisions.

Deployment of CRM Software

CRM software could be divided into two types based on deployment Cloud-based CRM and On-Premises CRM.

  • On-Premises CRM Software

    This is the traditional type of software where you must download, install, and maintain the software on your servers. On-premises CRM ensures better control over data with enhanced security. However, these are location-specific, and cannot be used remotely or on the go.

  • Cloud-Based CRM Software

    These are hosted on the cloud and the installation, maintenance, and upgrades are managed by managed service providers. Cloud-Based CRM systems are the future of CRM solutions, as these are cost effective and scalable.

Suggested Read: Best Open Source & Free CRM Software for SMBs in 2022

Types of CRM Software

Here are the three major types of CRM software based on their functions and uses.

Operational CRM Software

Operational CRM solution is designed to manage day-to-day customer interactions through phone, email, or fax. It automates sales processes like lead generation, lead management, opportunity management, sales forecasting, and customer communication.

CRM according to the business processes and makes it easier for you to manage your important data without worrying about hardware failure or manual errors. It automates your customer relationship with the help of multiple tools like IVR, chatbots, etc.

Features of Operational CRM

  • Marketing Automation: Operational CRM helps automate your email, telephone, and other marketing campaigns based on pre-decided templates and customer information.

  • Sales Automation: The software enables users to automatically create quotes, sales orders, and invoices for order processing. It also helps track and schedule deliveries, demos, and other sales procedures based on the business policy.

  • Service Automation: Operational CRM helps manage all your customer service activities like call tracking, ticket management, revenue management, and reports related to your customers.

Who Needs Operational CRM?

Operational CRMs are suitable for businesses that need to manage a high volume of phone, chat, or email communication with their customers. Companies that manage a vast customer base need operational CRM, such as:

  • Telecom Companies
  • Call Centres
  • B2C Service Providers
  • Customer Care Centres
  • Tourism based agencies
  • Logistics and transportation

Examples of Operational CRM in Market

Analytical CRM Software

Analytical CRM solution is designed for businesses that deal with a large number of leads and need some insights for better management. The software provides accurate analysis and prediction about the market pattern and customer behaviour.

Analytical CRM helps you create a pipeline of opportunities that you can convert into sales strategically. The software provides robust reporting, forecasting, and analytics tools that can drill down into your data with ease.

Features of Analytical CRM

  • Collecting data and Insights: It manages all the data from various sources and adds them to your CRM system.

  • Lead scoring: It helps you evaluate, score, and prioritize leads as per their potential of converting into sales.

  • Optimizing Campaigns: This CRM helps you optimize campaigns by looking at the campaign stats and choosing the best-performing campaign for future promotions.

  • Improves Business Methodology: This CRM helps enhance your business methodologies by giving suggestions based on the collected data.

Who Needs Analytical CRM?

Analytical CRMs are suitable for businesses that need accurate prediction and analysis of market & customer behavior, upcoming opportunities, or future campaigns.

  • Real Estate Agents
  • Automobile and Tech Industry
  • Insurance Companies
  • Financial Advisory Firms
  • IT Companies
  • B2B businesses

Examples of Analytical CRM

Collaborative CRM Software

Collaborative CRM solution brings all your sales, marketing, and services teams into one single platform. It unifies customer data, contacts, and deals across the whole organization, which helps to easily collaborate with other team members.

A collaborative CRM solution makes sure all your team have the same information. It is an excellent choice for companies that need faster decision-making, customer prioritizing, and a unified view of customer information.

The CRM unifies all your sales, marketing, and service teams to provide value to optimize marketing campaigns, Higher conversion rates, and better customer service.

Features of Collaborative CRM

  • Centralized Data: All your data are centralized into a central location, which helps you find everything in just a click.

  • Realtime Information Transfer: It enables instant and real-time sharing of information with the whole team across the organization.

  • Customer Service: You can prioritize customer needs and provide better support.

  • Marketing: Sales reps can work together on a campaign and share ideas and pain points with the marketing team. The marketing team could optimize their campaign based on input from the sales team.

  • Customer Analytics: This CRM helps track your company’s performance by creating reports in real-time.

Who Needs Collaborative CRM Software?

Collaborative CRMs are suitable for companies that need a unified view of customer information, cross-departmental workflow, and collaborative working style across the organization.

  • Logistics and Transportation Agencies
  • B2B Service Providers
  • Healthcare Industry
  • eCommerce Websites

Best Collaborative CRM in Market

Suggested Read: What are the Key Capabilities of CRM Platforms?

Why Use Specialized CRM Software?

There are dozens of CRM software out there that serve generic CRM purposes. Here are the reasons to choose specialized CRM for your operational, analytical, and collaboration needs.

  • Higher ROI: Specialized CRMs help you manage your processes efficiently in a customized manner. Operational CRM will save on workforce cost, Analytical CRM will increase conversion rates, and Collaborative CRM will retain loyal customers.

  • Addresses Specific Problems: Specific purpose CRMs come with customized features help address issues faced by any industry. For example, pharma eCommerce businesses need to store uploaded prescriptions for legal and marketing purposes, and operational CRM helps you to do so.

  • Improved Efficiency: Distinct types of CRM software solutions help you get more output in less effort. You can optimize your marketing campaigns based on the data collected through this system. A specialized CRM helps your team to work more efficiently and effectively.

  • Reduce Manual Workload: Manual effort is always prone to errors. With specialized CRM software, you can automate most of your manual tasks, such as data feeding and transfer, reducing human dependency.

How to Choose the Right CRM for Your Business?

The first thing before you move forward is to identify your business needs and preferences.

Reading the above definition, you might think you need each of them for your business as all of them are designed for a specific purpose. So, which one is to choose?

For Small Businesses: No need to Choose a Specific CRM

Here is a catch, most of the CRM software in the market can do all three functions at a generic level. Any cloud CRM software can help streamline operational, analytical, and collaborative tasks anytime and from anywhere.

  • HubSpot, EngageBay, and AgileCRM are excellent CRM solutions for small businesses.

For Medium-Sized Businesses: Any Cloud CRM with and Specific Plan

If you are a medium sized business, the best thing to do is research and find a specific CRM that provides additional features. Most of the CRM vendors offer a starter plan with Basic CRM features and allows users to purchase additional plans for specific needs.

  • Salesforce and Zoho CRM features have specific Operations, Analytical and Collaborative plans for medium-sized businesses.

Large Sized Businesses: Custom Plans

Enterprise-scale CRM solutions have a customized plan for business-specific needs. You can contact CRM service providers via their sales channels and customize the solution to meet your specific requirements.

  • SalesForce, Microsoft Dynamics 365, and Oracle CX CRM are the most comprehensive and customizable CRMs for large businesses.

Types of CRM Software Chart

OperationalAnalytical  Collaborative 
Automating CRM ProcessesGaining Insights and DataIntegrating sales, marketing, and Service Team
1. Sales Automation
2. Marketing Automation
3. Service Automation
1. Data Mining
2. Cross Selling/ Up-Selling
3. Building Buyer Persona
1. Interaction Management
2. Relationship Management
3. Document Management
Manage Large Customer BasePenetrate Existing MarketCustomer Retention and Loyalty
1. HubSpot
2. SalesForce
3. Zoho
1. Zoho Analytics
2. Creatio
3. Alteryx
1. Copper
2. Microsoft Dynamics 365
3. SugarCRM

Suggested Read: What is Operational CRM: Uses, Benefits, Features


CRMs that are not customized for a specific purpose cannot cater to specialized industry needs. Businesses might even need all three, Analytical, Operational, and Collaborative CRMs for comprehensive relationship management and automation.

Operational CRM is the most popular one for automating your workflow and reducing manual effort. However, it also helps in managing customer data and contact details, which can be further analysed with the help of analytical CRM.

Analytical CRM focuses on data analytics and machine learning which will help the company to close more deals. The Centralized Collaborative CRM system allows users to communicate effectively with their employees, business partners, and customers.

A generic CRM might still be cheaper than an industry-specific one, but you need to look at your ROI as well as efficiency. So, wisely choose the CRM type you need.

Suggested Read: What Is Analytical CRM: A Complete Guide to Its Types, Benefits & Features

Written by Rajan Rauniyar

Rajan is pursuing CA with a keen interest in trends and technologies for taxation, payroll compliances, Tally Accounting, and financial nuances. He is an expert in FinTech solutions and loves writing about the vast scope of this field and how it can transform the way individuals and businesses... Read more

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