What is CRM software?
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A customer relationship management (CRM) platform is an essential tool for any business. You need to keep track of your customers, and for that, you have to gather tons of data. So, where do you store that data? The obvious answer is a platform designed specifically for that purpose—a CRM.
CRMs fall into three main categories—operational, collaborative, and analytical—each serving a different purpose: automating tasks, unifying communication, or generating insights.
Choosing the right CRM depends on your team’s primary goal, whether it’s improving efficiency, enhancing collaboration, or making data-driven decisions.
All-in-one CRMs like Nutshell combine features from all three types, making them especially valuable for small and mid-sized B2B teams looking to streamline processes without juggling multiple platforms.
Take our guided tour to explore Nutshell’s incredible features!
But there are quite a lot of CRMs out there. Not only can it be challenging to figure out which CRM you should choose, but you may not even be sure which type of CRM you want. Because if you weren’t aware, there are several types of CRM software out there.
So, the question is, which type of CRM is the best for your business? Keep reading to find out more.
Let’s start by briefly defining what a CRM is and what it does. Basically, CRMs pull customer data from other tools you use and compile it in one place. Not only do they store your customer data, but they can also automatically organize and categorize that data.
Many CRMs also come with additional features, from sales automation to data analytics. However, the exact features depend on the specific CRM being used. They also depend on the type of CRM you’re dealing with—which leads us to our next section.
Maybe you’re wondering which type of CRM software is best for you. But maybe you don’t even know what those different CRM types are.
There are three main types of CRM software, and we’ll cover each one below.
| Operational CRM | Collaborative CRM | Analytical CRM | |
| Primary focus | Drive prospects through the sales funnel | Drive prospects through the sales funnel | Use data to uncover customer insights |
| Key feature | Sales automation | Team-oriented task functionality | Advanced reporting |
| Main benefit | Save time on doing repetitive tasks | Improved communication across your team | Boost growth with accurate data |
| Best for | Smaller teams; businesses that prioritize automation | Large teams | Businesses that want to use data to optimize their marketing |
The first type of CRM is an operational CRM. Operational CRMs focus primarily on driving prospects through the sales funnel by streamlining different processes. For that reason, operational CRMs are big on sales automation.
With an operational CRM, you can guarantee you’re getting a tool that will let you work on big-picture efforts while the CRM handles the smaller, more repetitive tasks. Whether it be organizing data or sending out emails, an operational CRM can handle it.
The result is that you can waste less time on routine tasks while your leads move through the funnel with exceptional speed.
A collaborative CRM puts its focus on connecting your team. Collaborative CRMs still perform all the standard CRM functions and can even feature some automation. But whereas operational CRMs are task-oriented, collaborative CRMs are team-oriented.
One of the great things about CRMs is that they store your customer data in a single, centralized location. That means everyone at your business is using the same data and contributing to the same source. Collaborative CRMs take that interconnectivity and ramp it up to 11.
When one team at your company updates or adds some customer data, a collaborative CRM will make the same changes across the board, so the new information benefits everyone. Furthermore, collaborative CRMs save info on each interaction with each customer, so no one has to worry about repeating what’s already been said or done.
The third type of CRM is an analytical CRM. Analytical CRMs, as the name suggests, put a strong emphasis on using your customer data to uncover valuable insights about your audience.
With an analytical CRM, you can put together advanced reports, charts, and graphs based on the data you’ve gathered about your customers. From generic sales reports to a breakdown of customer demographics, you can create reports on just about any customer metric of your choosing.
As you bring in new and updated data points about your customers, you can improve the quality of your information and the accuracy of your reports.
Find out here.
Now that we’ve had a look at the three major CRM types, we can go back to our earlier question: Which type is best for your company?
Well, that altogether depends on your company’s specific characteristics and needs. Different CRM types are better for different businesses. Keep reading to find out which sort of company each type of CRM is best for.
Operational CRMs focus heavily on streamlining sales processes via automation. For that reason, it goes without saying that operational CRMs are best for companies that prioritize automation.
Does your business feel packed with repetitive tasks every day? Do you have a small team that’s struggling to juggle those repetitive tasks alongside larger-scale actions? If so, an operational CRM might be the right choice for you.
Of course, one of the neat things about operational CRMs is that they’re useful across the board. So, in truth, any business could benefit in some capacity from an operational CRM — just some more than others, depending on how much you value automation.
Collaborative CRMs are ideal for companies with large teams. That’s because the larger your team is, the more difficult it is for your various departments to stay up-to-date with one another, leading to an increased chance of them growing out of sync.
A collaborative CRM is a perfect solution for such a large team. It frees up your different departments from having to communicate everything directly since they can simply make an update to data in the CRM, and the change will be reflected for everyone.
On the other hand, if you have a small team with no issues communicating, you probably don’t need a collaborative CRM.
Analytical CRMs are all about gathering insights from your customer data. So, if the thing you value most about a CRM is the way it can help you learn about your customers and subsequently reoptimize your marketing, an analytical CRM is probably a good choice.
However, be aware that because of how complex analytics can be, these CRMs are often more complicated and require a bit more expertise than operational or collaborative CRMs. So, don’t opt for an analytical CRM if no one on your team has the technical or analytical know-how to manage one.
It’s important to choose the type of CRM to suit your business objectives and team skill level.
Besides, there are other factors to consider when choosing a CRM to adopt.
If you’re already using great software for your sales calls, conferences, invoicing, and general project management, you want to ensure your new CRM software solution will support these tools. Choose a CRM that integrates seamlessly with your current tech stack.
Some CRM software solutions can cost a fortune for even the most basic plans and may incur hidden costs. You want to get the CRM features you need without breaking the bank.
Nutshell’s transparent plans and pricing calculator can help you ensure you’re getting the best deal within your software budget.
When your business grows to scale, you want a CRM that grows with you and your evolving needs. Some CRMs have limits to how much they can support you as you grow, so be sure to keep this in mind.
CRMs can be difficult to introduce to your team. Expect to do a lot of adjusting and troubleshooting in the implementation stages of getting your CRM up and running. Having live, on-hand support from a knowledgeable and dedicated team, as well as a robust support hub, will ensure that your team onboards efficiently.
It can be tough to figure out what to prioritize when it comes to picking a CRM. Do you aim for automation? Collaboration? Analytics? What if you want all three in your CRM? That can quickly become frustrating. Thankfully, there are CRMs out there that feature all three—for instance, Nutshell.
Nutshell goes out of its way to encompass all three priorities. It allows you to easily connect your entire team, it can automate lots of day-to-day processes, and it can automatically generate customized reports for you. Check out how Nutshell stacks up against popular CRMs.
Interested in trying out Nutshell for yourself? Just check out our 14-day free trial today!
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