4 types of CRM and how to choose the right one

The right customer relationship management (CRM) system can give you an edge in delivering stellar customer experiences (CX) and closing more deals. Different types of CRMs offer tools to enhance customer interactions, streamline processes, and boost productivity, which are crucial for fostering meaningful customer relations.

By choosing the type of CRM that aligns with your business goals, you can empower your sales team to provide personalized offers and seamless campaigns that boost retention and drive revenue growth.

Discover the benefits and four different types of CRM in our guide, along with how to choose a system and key components to look for.

More in this guide:

• What is CRM?
• CRM benefits
• The 4 types of CRM
• How to choose CRM software
• Key CRM components to look for
• Frequently asked questions
• Prioritize customer relations with the right type of CRM

What is CRM?

Customer relationship management is a strategy for interacting with current and potential customers. However, in practice, CRM typically refers to a category of sales tools and products that enable effective relationship management. A successful CRM should help you better understand your buyers, allowing you to deliver improved customer experiences.

CRM benefits

CRM software is vital for businesses looking to improve business outcomes. Follow along to learn the top advantages of CRM for sales teams.

Improve team productivity

CRM systems act as a centralized hub for your sales team, helping them manage tasks and track leads and interactions. The functionalities that directly improve team productivity include:

• Communication: A CRM provides a single platform to share customer details and collaborate on deals.
• Automation: Modern CRMs automate processes like data entry and scheduling, freeing up team time for strategic selling activities.

These CRM functions and additional team productivity tools—like project management and collaboration tools—enable sales teams to focus on selling and customer relationships rather than tedious administrative work.

Enhanced customer relations and retention

Prioritized customer relationships are the foundation of long-term customer retention. With a CRM centralizing customer information, sales teams can quickly create personalized offers and tailor sales messaging to meet preferences, support past transactions, address customer expectations, and offer solutions that drive repeat business and referrals and foster customer loyalty.

Refined data analytics and reduced data silos

A CRM acts as a data powerhouse, helping teams capture, store, analyze, and manage all CRM data from various sources in a unified system. These systems also grant information access to organizational teams, breaking down data silos and providing a comprehensive view of customer interactions.

CRMs also boast refined sales and customer analytics capabilities, enabling businesses to identify trends, measure performance, and optimize sales strategies or opportunities for upselling. These analytics—combined with diverse data and CRM reports—provide actionable insights that empower organizations to make data-driven decisions and drive growth.

Organized customer profiles

Sales teams can use a CRM to boost a business and consolidate fractured customer data into organized customer profiles, centralizing information like contact information, purchase history, preferences, and interactions. Organized customer profiles allow for better customer segmentation, prioritization, and targeting, ensuring that your team spends time with the right prospects and customers.

Simplified collaboration

CRMs promote better internal collaboration by providing a shared workspace for communication and information sharing, allowing teams across different departments to discuss data, insights, and customer interactions. With this software, teams can track progress on deals and collaborate on tasks, ensuring everyone is aligned and working toward common goals.

The 4 types of CRM

There are four types of CRM software. From small business CRMs to enterprise-level software, each is tailored to different business needs. Discover more about each type of CRM in our breakdowns below.

1. Operational CRM

Operational CRMs focus on automating and streamlining a company’s processes for customer relationships. These CRMs, including sales CRMs, also help optimize sales, marketing, and customer service by providing tools to allow teams to visualize and efficiently handle the full buyer’s journey.

By optimizing and automating these operations, sales teams can spend more time engaging with customers rather than managing manual tasks. Plus, operational CRMs make it easier for growing companies to continue to provide top-notch service at scale through:

• Sales automation streamlines sales tasks such as lead scoring, opportunity management, and quote generation using sales automation tools.
• Contact management stores and manages all customer information, including contact details, interaction history, and preferences.
• Service management uses tools to track and resolve customer issues, including ticketing systems, live chat functionalities, and knowledge base software.

CRM automation and these other features also free up employee schedules for the areas of their job that require a creative, human touch.

2. Analytical CRM

Analytical CRMs collect and analyze customer data and offer data-driven insights. Digital CRM analytics tools and platforms simplify data collection and streamline analysis, ensuring businesses actually use the information they collect through:

• Data mining extracts valuable insights from customer data to predict trends and behavior.
• Data warehousing stores, organizes, and manages large volumes of data in a CRM database to gain a complete view of customer interactions.

With the insights from analytical CRMs, businesses can better understand what steps lead to successful sales, which increase customer retention, and what the most common customer needs and problems are.

3. Collaborative CRM

To optimize collaboration between sales and service teams, you need a way to share information across an organization in real time. Collaborative CRMs help improve communication between departments, ensuring that everyone aligns with management and strategy expectations.

Collaborative CRM treats each interaction as part of a larger, integrated conversation between the brand and the customer through:

• Interaction management tracks interactions across multiple channels, ensuring each customer receives consistent brand communication and unique offers based on the buyer’s journey stages.
• Channel management manages communication channels like email, phone, and social media to optimize sales strategies and marketing campaigns.
• Document management consolidates where businesses store important customer documents to streamline data access.

Omnichannel integration and departmental collaboration save buyers from repeating information each time they talk to a new contact and enable any team member to access up-to-date, relevant customer information at any time.

4. Strategic CRM

Strategic CRMs help businesses identify high-value customers and create personalized CRM strategies to maximize engagement. This type of CRM software provides a comprehensive solution for managing customer relationships and optimizing business processes through:

• Customer segmentation divides customers into groups based on specific data like behaviors, needs, demographics, or geography.
• Customer engagement develops long-term strategies for keeping customers engaged with a brand, improving retention and revenue growth.
• Customer data management collects, stores, and manages a database of customer information ethically and securely.

With a strategic CRM, businesses can focus more energy on upselling and cross-selling or other business strategies to improve sales and drive company growth.

How to choose CRM software

Choosing a CRM requires you to understand the needs and goals of your business and customers. Consider CRM best practices and follow these steps to pick the best system for you:

Identify goals and objectives

Start by defining what you want to achieve with your CRM. Set sales goals and decide what you want to achieve—such as increased sales or enhanced team productivity—with your software to identify the best fit. This strategic step helps maximize your investment and ensures that your CRM becomes a valuable asset for your organization.

Choose a budget

Don’t forget to consider all the costs of CRM (even those associated with free CRM software), including:

• Training and implementation

• Additional support tools

• Growth options

Knowing your organization’s resources and determining how much you can allocate to a CRM solution can help you avoid overspending while choosing a solution that offers the essential features your sales team needs.

Know your feature, functionality, and integration needs

The CRM you choose must integrate well with your current tools and backend systems while also providing essential features and functions like:

• Automation

• Reporting and analytics

• Lead management
• Sales forecasting

• Customization

These tools, capabilities, and CRM integrations are necessary for most businesses, so evaluate your CRM options and choose the software that best supports your business processes and goals.

Compare CRM software

Don’t settle on a solution without doing hands-on research. To compare CRM software:

• Schedule demos to get a breakdown of each software’s capabilities.
• Sign up for free trials to test out each system’s features and functions.
• Research reviews and customer feedback to see how real users feel about each product.
• Create a shortlist of CRM options and conduct side-by-side comparisons.

These steps can help you make an informed decision and avoid investing in a system that falls short of your expectations.

Key CRM components to look for

When evaluating and choosing a CRM system, it’s essential to consider the following key components:

• Ease of setup: A user-friendly interface and straightforward implementation process can save time and resources.
• Integrations: For streamlined workflows, it’s crucial that you can seamlessly integrate with other business tools and backend systems, such as your customer service tool.
• Centralized collaboration: A solution that fosters teamwork and communication among sales, marketing, and customer service teams can improve efficiency and productivity.
• Payment models: Choose a pricing model that aligns with your budget and business needs, such as subscription-based or usage-based fees.
• Analytics and reporting: Robust analytics and reporting tools can provide insights into consumer behavior and sales performance.
• System security: Strong security measures are essential for protecting sensitive information and supporting customer data privacy.

Depending on your budget, you may need to consider which of these components is most important when vetting your CRM options.

Frequently asked questions

Prioritize customer relations with the right type of CRM

Choosing the right CRM software can improve your sales processes, CX, and customer relations. Operational CRMs can help businesses streamline contact management, while analytical, collaborative, and strategic CRMs support specific business processes and priorities.

With Zendesk Sell, a modern and integrated sales CRM, you can enhance team productivity, improve customer understanding, and make data-driven decisions. Productivity features like sales engagement tools and sales triggers can help you build targeted lead lists, automate workflows, and eliminate repetitive tasks. Plus, our sales CRM supports better customer experiences and full pipeline visibility, enabling businesses to create unique and targeted strategies.

Transform your sales approach with the right type of CRM, and try a Zendesk free trial today.