Customer Relationship Management (CRM) protocols seek to streamline interactions between a company and its clients for mutual gain. CRM seeks to reduce idle or unproductive time for company reps while creating an avenue for the more efficient – and satisfactory – resolution of customer needs. Modern types of CRM solutions, most of them cloud-based, can perform a wide array of functions ranging from contact management to scoring leads, automating email replies and producing granular KPI reports.

Vendors that pioneered cloud-based CRM solutions – and with it, Software-as-a-Service – remain large in the CRM space and provide solutions to businesses large and small – from enterprise-level to SMBs. The industry remains largely open with hundreds of smaller vendors offering various types of CRM functions, service, pricing and integrations. While some vendors supplement their solutions with on-premises hardware or a desktop client, almost all vendors offer cloud-based CRM software via subscriptions tiered to the size and scope of the companies they support.


For a business owner or executive considering CRM software, it’s worthwhile to understand which types of CRM solutions exist, and how they can serve your company.

The Types of CRM Solutions

Customer Relationship Management falls broadly into three categories. Understanding the categories will give you a sense of what type of CRM best suits your company. These three categories largely complement one another; while many CRM solutions have overlapping features, knowing which functions benefit you most will help buy the software you really need.

Operational CRM

Operational CRM automates or streamlines certain business processes – in particular ones that don’t require creative human oversight. Many out of the box operational CRM functions can be further tailored for specific roles. Many aspects of operational CRM, though departmentally distinct, complement and contribute to one another.

  • Sales automation seeks to streamline each stage of the sales cycle. CRM software can be configured to send automatic emails to leads that have been accumulated and qualified through marketing analytics. CRMs also enable a company to value weighted criteria for the software to automatically assign leads a score to determine their readiness for contact by a sales rep. At this point, the sales rep would have access to customer information obtained through numerous online touchpoints – further information gained through direct contact is added as well – so the sales rep can engage the lead with an approach tailored to their tastes. CRMs can also automate reminders for follow-ups, or the follow-ups themselves, and track sales reps performances through KPIs. Certain solutions provide features preventing redundant activities between reps if the customer interacts with multiple employees. Predictive lead scoring tools can speed this process up significantly.
  • Marketing automation tracks visitors’ online behavior – website activity, inbound links, emails – to accumulate raw leads and reach out with email campaigns and promotional activities. Prospects can be prepared for the sales team through triggered or scheduled emails. Many CRMs will produce reports indicating which kinds of marketing activities produced which kinds of leads, how many were qualified, which produced sales, and so forth. Certain CRMs can also automate tailored promotions according to customer demographics and promotions – if they leave a shopping cart unpurchased, the extend of the customer’s relationship with the brand, etc. The software will make these determinations by comparing the value of the customer with the level of promotion for optimal returns. Marketing automation was traditionally distinct from CRM solutions – which began with contact management at its core – but many CRM providers have acquired or developed their own marketing automation features for closer integration between these areas.
  • Service automation filters through customer activity via emails, the company website, phone calls and social media and notifies agents of contact requiring attention. This type of operational CRM also automatically sends order and shipping confirmations, updates customer account data, intelligently routes calls and anticipates follow-up questions. Service automation functions can ping a company agent when customers desire a response, whether through an automated phone interface or via social media. While not foolproof, service automation is improving, and the capacity of service personnel to oversee multiple cases at once prevents companies from getting overwhelmed by an onslaught of tiny interactions in the information age.

Analytical CRM

Analytical CRM software applies models to data obtained through online and offline customer touchpoints. These touchpoints include activity on the company’s website, inbound links, emails, social media, text messages and phone calls, combined with data derived from the company’s direct contact with consumers, business records and external factors, ranging from the weather to the Internet of Things. Analytical CRM can diagnose past and predict consumer trends, sales activity, product availability and so forth. The enormous availability of highly granular data on a wide scale allows for highly specific reports, which can allow businesses to fine-tune operations and customer engagement across multiple channels.

  • Customer segmentation grouping allows companies to view clients according to identifying criteria such as age, gender, location, income and interests, enabling tailored promotions, services and messaging to specific groups. This allows more opportunities for and greater likelihood of cross-selling or personalized engagement that builds customer loyalty and retention.
  • Profitability analysis calculates the profitability of each customer based on the costs of interactions – acquisition, marketing, support, delinquency – and other factors, like average invoice value, credit score, longevity as a customer, etc. Like with lead scoring, it can attribute different weights to each factor (as valued by the company) and grade the customer accordingly. This provides the company a clearer sense of which price points and promotions are worth targeting to which products and customers, as well as the ability to predict a customer’s sensitivity to price changes.
  • Event monitoring allows actions to be triggered upon fulfillment of set criteria. A common criterion is a dollar amount threshold for purchases from a customer – after which they receive a discount, a promotion or membership to a tiered level of service. Event monitoring enables automation of other actions, like a window that requests feedback after a particular service touchpoint. It creates opportunities for further data collection in addition to distinguishing your brand to customers through targeted engagement.
  • Predictive modeling uses historical company data and those derived from myriad consumer online behavior, as well as other factors like region, weather, and holiday schedules to forecast trends, inventory needs, product rollout, staffing needs and more. On the individual level, predictive analytics can inform sales reps when and how to offer customers product suggestions based on past behavior and amenability to additional purchases. It could be as simple as the service recommending which video to watch next, or a discounted offer if a shopper buys the items in their shopping cart within the next ten minutes. Using the available data for targeted outreaches offers greater likelihood of a successful outcome for each action as well as overall improved customer satisfaction.

Collaborative CRM

The goal of collaborative CRM is to create a seamless, unified customer experience across all available channels, whether online or offline. Collaborative CRM features will seek to reduce departmental barriers and ease information sharing.

  • An improved customer experience is achieved by tailoring customer engagement based on data obtained through numerous touchpoints. Each interaction with the customer contributes to a unified company profile of a customer, which includes their tastes, purchase history, prior service record, cost of service, and multiple other metrics. This can be made available to employees operating on various channels – phone, email, social networks, live web chat – while they engage the customer, allowing for a more consistent experience for the customer and better use of time by the employee. This reduces service costs, saves the employee time on each call, and promotes a positive brand impression through personalized service for the customer.
  • Integration of applications used for email, messaging, and social networking through a single interface enables company agents to both passively and actively collaborate – the former by contributing to the unified customer profile mentioned above, and the latter by removing boundaries to instantly message a colleague for information. Collaborative CRM is becoming a necessity – business is increasingly on-the-go, and besides sales and service calls that take employees out of the office, colleagues stationed in distant locations need to be able to cooperate in real-time. CRM software that integrates an employee’s most-used methods of communication saves time from switching between applications for each contact, which adds up.

With much of business performed online and across channels, companies can get overwhelmed by the deluge of information produced from customer interactions with their brand. CRM software can shorten the time it takes to perform routine tasks, setup automatic responses to customer behavior, reduce boundaries and allow companies to anticipate events rather than get caught by surprise. In doing so, CRM saves time and money and enables companies to dedicate more attention to the resource that matters most: their customers.