At first glance, you might think that contact management systems are just the same as customer relationship management (CRM). And while both might have some similarities, each functions differently from the other. Without a proper understanding of their respective features and functions, you might end up getting the wrong solution for your company.
For one, you may consider CRM as the more advanced tool compared to contact management systems. It has certain features and functions that the latter does not have. Meanwhile, contact management systems are often considered as a component of CRM. As a result, 74% of businesses choose CRM over contact management systems.
However, this doesn’t mean that you should just ignore the contact management system. It has its own benefits and merits as well. Who knows, your business might need it more than a CRM. So to help you decide which of two would best suit your company, here’s a quick rundown of how these two solutions differ from each other.
Contact management system
What is a contact management system?
Think of a contact management system as your digital phonebook. It contains all your customers’ contact information, including their names, email addresses, phone numbers, and billing address. But more than that, it could also store other valuable information such as their purchase and order history, records of their past interactions with your sales agents, and their respective backgrounds.
The various benefits of a contact management system make it a more sophisticated and elaborate contact manager than your phone or email built-in contact list. A contact management system is a comprehensive and centralized database of all your customers’ information related to your sales, marketing, and other business processes.
You can integrate it into your various communication channels so you can easily look up information on your respective customers. It also has a collaborative function, allowing your teams to share data.
What are the key features of the contact management system?
While not all contact management systems are the same, there are still some standard features and functions you need to look out for.
Aside from a comprehensive database, most contact management systems have integration capabilities, allowing you to share your contact list with the rest of your communication channels, such as emails and phones. Usually, this database is centralized and has collaborative functions to provide easy access to the rest of your team members and sales agents. Likewise, it offers several functions to make searching easier and faster. This might be in the form of a search bar, customizable tags and categories, groupings, and fields.
Most systems also keep records of past interactions with your customers—from purchases, orders, and queries. It is useful for upselling or cross-selling opportunities. Likewise, this allows your sales rep to push new products and services based on your customer or lead’s previous interests. Lastly, contact management systems can also have a notification feature to remind you of important follow-ups and client calls.
Why use a contact management system?
Businesses are often looking for effective ways to reach out to their customers. And you could only do that if you have the proper tools that could help you record and maintain all your customer contact details. This is why contact management is important.
Contact management tool makes it easier for you to pull up crucial information on your customers to make each interaction meaningful and value-adding.
A contact management system is designed to increase your productivity and efficiency by managing and organizing all your customer contact details in one system. This way, you don’t have to juggle between your phone’s contact list, email inbox, and spreadsheets to retrieve your customers’ contact details. And most importantly, it will make sure that you never miss out on opportunities.
Customer relationship management system
What is customer relationship management?
Compared to the contact management system, CRM has a more comprehensive list of tools and functions to help you manage your customers. In a sense, it does more than manage your customer contacts and interactions.
One of the biggest CRM benefits for business is that it gives you greater control over the progression of your relationship with them. It is designed to help you manage end-to-end customer experience and leverage customer data for future marketing and sales strategies.
Unlike contact management systems, CRM does more than just store data. It is more about managing sales funnels, sales cycles, and building a loyal customer base. It provides additional sales and marketing capabilities that contact management systems do not usually have. This could help streamline your sales process and pave the way for a closed deal with your prospects.
What are the key features of CRM?
Since many online CRM software solutions are available, their features may vary from one another. Nonetheless, CRM shares some similar features with contact management systems. For one, it also has a comprehensive database for all your customer information. However, CRM uses this data to provide insights and analytics to help you strategize your marketing, sales, and PR.
When it comes to automation, CRM does more than remind you of important calls and follow-ups with your customers. It can automatically send cold emails or follow-ups for your drip campaigns and lead generation.
Some CRM software might even use artificial intelligence for smarter automatic responses to your customers’ inquiries. It can also segment and manage leads, keep track of your marketing campaigns, document all your correspondence with your customer, and sync customer data across various communication channels.
Why use CRM?
With a CRM system, you don’t just maintain customer information. You are also managing your relationships with prospects, leads, and customers. Therefore, it has additional tools and functions that most contact management systems do not have.
Anyone who is looking for a more holistic approach to customer management would most probably prefer CRM.
CRM helps simplify the process of lead generation. Likewise, it streamlines your sales process, guiding your prospects throughout each stage of the sales funnel until you manage to close a deal with them. This makes it particularly useful for businesses with long and complex sales cycles that would require ongoing customer interactions.
Which to choose-CRM or contact management system?
While both systems share some similarities, there is a glaring difference in how CRM helps businesses compared to how contact management systems do it.
For one, a CRM system does exactly what a contact management system does and then more. While the latter stores data and information crucial for customer interaction, CRM provides additional tools and functions to turn these interactions into sales.
However, this doesn’t mean that CRM would be the right software for your business. It ultimately boils down to your business needs and capabilities.
For one, CRM tends to be a complex system. It has a lot of tools and functions that you might end up not using in the long run, making it an inefficient and complex software for those with simple sales processes.
Finding the right fit
With 55% of businesses planning to innovate their customer experience, it is high time that you invest in a contact management system or CRM software to make all customer interactions meaningful and relevant. But before you decide to commit to either one, you must first learn to differentiate one from the other.
You can check out Officeclip for an all-in-one solution to manage contacts, capture leads, convert them to customers, and grow your business.
Deepa Kapoor is an online writer for small businesses. She loves to write on the advancements of new technologies and how it affects our lives. She always explores ways to make small businesses more profitable. When not writing, she enjoys reading books and cooking exotic traditional food.