The Difference Between a Contact Management and CRM Solutions (In Plain English)

The Difference Between a Contact Management and CRM Solutions (In Plain English) image The Difference Between Contact Mangement CRM SystemsThe Difference Between a Contact Management and CRM Solutions (In …What is the difference between a Contact Management and CRM solution? Why is it important? Will someone tell me in plain English what it all means?

These are some of the questions I see around the interwebs and that I get asked, frequently.

I understand the pain. There’s a technical component. There are many people sharing information when they are misguided. There are SO many tools available that it becomes confusing.

I decided to write on this subject because for two reasons.

  1. An associate of mine told me that they were nearly finished with the implementation of their CRM, Constant Contact (an email marketing tool).
  2. A friend of mine was excited to see LinkedIn had added CRM to their free offering when actually it is a Contact Management feature.

What Contact Management and CRM Solutions ARE

In an effort to keep the horse firmly in front of the cart, let’s look at what these solutions are first.

Still, today, you can use paper, an address book, a Rolodex or an excel database to manage people’s information. There is nothing wrong with this. If you are using these platforms, fine. Like anything though, there is technology available to improve productivity and help increase revenues.

Let’s look at each solution.

A Contact Management Solution is a platform for maintaining contact (partner, prospect, customer or otherwise) information. Primarily, it can be (depending on the solution) leveraged to:

  • Track communications
  • Offer reminders for follow up/future communication
  • Share your contacts social information and activity
  • Group people by category
  • Maintain contact information
  • Keep in touch with people

So for example, Outlook or other email tools can be used as a Contact Management Solution. LinkedIn and Contactually also. And, of course, there a many, many, more.

A CRM (Customer Relationship Management) Solution is a platform that can be leveraged as a strategy, it is a solution that supports the sales and marketing activity AND offer a 360 degree view of the customer. Primarily CRM (depending on the solution) can be leveraged to:

  • Track communications
  • Offer reminders for follow up/future communications
  • Maintain contact information
  • Track the customer life cycle through the sales process and beyond
  • Record customer spend
  • Provide insights and analytical information for forecasting, strategic planning and more
  • Manage delivery
  • Integrate with other business systems (e.g. Finance and HR)
  • Measure individual, team and/or company performance
  • Develop, implement and track campaigns
  • Log and track customer service requests and more
  • Map out and track the qualification of leads to prospects to customers in the sales cycle
  • Increase retention rates

And more. Much, much more.

Examples of CRM solutions are Salesforce.com (the market leader), Microsoft Dynamics, Zoho and Highrise.

So what’s the difference?

The Difference Between Contact Management and CRM Solutions

In plain English, the difference is that a Contact Management solution is primarily an information management system that can enable you to be more productive in cultivating relationships. CRM is a sales, marketing and business system for tracking and improving performance.

Do you need one more than the other? Potentially depending on your business and what sales and marketing you do.

Can you use both? Absolutely. (For what it is worth, I use Outlook, Contactually and Salesfore.com)

Should you use both? Yes. I firmly believe that they have independent benefits and because they can be typically be integrated, they can be more powerful.

In Summary

I wanted to write this because there seems to be a widespread misunderstanding of what technology is available and what it does. That is understandable, technology is improving and the capabilities (features and benefits) of these tools has expanded beyond their initial offering.

What is important, and ultimately the key, is keeping in touch with your contacts, partners, prospects and customers. Technology is available to make you more effective in this area and, thus, increasing the chance of greater success.

If you are seeing flat sales and feel like your constantly chasing new prospects/clients then I would strongly recommend investing some time into learning more about how these solutions can help you. The chances are, you are leaving money on the table by not following up with prospects rigidly or maximizing customer retention.

If you would like to know more about some of the resources mentioned here, jump over to this summary here

Thanks For Reading!

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