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Contact Management vs. CRM: What are The Differences?

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Contact management systems (CMS) and customer relationship management (CRM) are two terms that confuse many businesses and vendors. Numerous businesses use these terms interchangeably. This is because the boundary between CMS and CRM is quite blurred. But it is crucial for businesses to understand the real meaning and significance of these two phrases. This will help them choose the best system suited for their needs.

photo credit: Nataliya Vaitkevich / Pexels

Customer Relationship Management (CRM)

A CRM, or Customer Relationship Management tool, is an all-embracing software solution used to manage relationships and interactions with partners, potential customers, and existing customers. CRM is a useful tool that can streamline the operations and functions of teams in different departments of an organization, like business development, marketing, or sales. All the important information required for the company, like client data, leads, sales opportunities, and marketing campaigns, can be stored and managed centrally with the help of CRM.

CRM plays an important role in increasing the visibility of crucial data. It also helps teams easily access the necessary data from the system. This helps to greatly improve the productivity of the different teams.

CRM helps businesses organize information about customers and future prospects in an orderly fashion. This will help companies to build a stronger and better relationship with their stakeholders and expand their business.

CRM can be used by businesses to automate repetitive business tasks. This will save precious time for team members that can be diverted to more crucial tasks, increasing productivity and boosting business growth. CRM systems can be used to improve customer service as they can automatically access information on the customer’s preferences.

Contact Management System (CMS)

Storing, updating, and keeping track of contacts and leads is a difficult and tedious task. CMS, or contact management system, is a piece of software that can be used by businesses to organize their contacts and use them to their advantage to meet the needs of the business. A CMS database hosts all the critical information about your customers, like their names, addresses, phone numbers, emails, and transaction notes. It can also store the interaction history of your customers with your business.

The key function of CMS is to record all the data related to every contact present in the contact list of your company and to store a systematically arranged conversation history. This will allow you to access all the necessary information about any specific contact easily within a short period of time.

The best contact management software is not simply a database providing client intelligence. It has several features and functionalities, including:

  • Your team can share data on all customers and leads immediately.
  • You can use it to promote brand awareness and loyalty by giving clients a more customized experience.
  • It can be used to avoid lead leakage.
  • It can enhance and strengthen relationships with buyers and sellers.
  • It can optimize follow-up and cross-selling opportunities.
  • It can be used to access the interaction history of any particular client.

Using contact management tools in an email marketing suite.

CMS vs CRM – The Major Differences

Even though these terms are frequently used interchangeably, they are not the same. Some differences between the two systems include:

Functionality domain

CRM is the central component of any business or organization. It manages numerous important processes of a business, like the sales funnel, sales cycles, client journey, and relationships with partners and customers. It also enables businesses to automate repetitive functions and automatically monitor certain activities.

Unlike CRM, the core function of CMS is to handle and maintain client data like names, phone numbers, addresses, and e-mails. CMS does not contribute to other areas or processes of the company’s operation. It is responsible only for contact management.

Automation

A few CRM platforms allow the setting up of one-click drip campaigns with the help of a feature called email integration. This means your team does not need to waste precious time sending cold emails or follow-ups manually. You can set parameters for the drip system that will automatically trigger the software to send promos, emails, and other relevant services to your customers and leads based on their previous actions. AI-powered CRM platforms that are more intelligent can even use machine learning to provide responses to simple questions using the contexts and keywords from earlier human support.

CMS is not big on automation. A few CMS systems allow notifications and alerts to be sent to team members.

Report generation

A CMS simply gives you the stored customer data. It does not consolidate, analyze, or convert it into any usable form.

CRMs can convert interactions into analytics and reports, so you can distinguish the effective aspects of your sales approach from the ones needing improvement. CRM software can find the weak spots in your sales funnel or sales pipeline. These can provide the company’s sales team help with numerous tasks like:

  • forecasting monthly sales
  • understanding monthly performances
  • predicting monthly lead volume
  • revealing the least and most profitable marketing strategies
  • comparing efforts of lead generation

The insights generated by the CRM can be implemented straight away by your team. These insights can also be shared across different departments and the management board to make better and smarter business decisions.

Segmentation

For convenience, a CMS can divide or segment the contacts depending on their group. The segmentation of CRM is different when compared to that of CMS. CRM provides a form of segmentation called lead segmentation. It is the procedure by which leads are categorized based on interest, preparedness to buy or sell, and business value. CRM segmentation will enable your marketing and sales team to have a greater awareness of each lead’s demands. This will enhance your chances of securing their business.

Documentation

CRM is especially beneficial for large corporations since all levels of the organization can share documents, reports, notes, and insights without delay. Since important information is just a few clicks away, users can respond to complex questions by utilizing the database’s available documentation at all times.

Businessman using management software

Which is The Better One?

Choosing between CRM and CMS can be a confusing task. Before choosing, it is important to understand the requirements of your business. Smaller businesses with uncomplicated products have a simple sales structure. In such cases, a CMS system is sufficient. But for larger organizations, it is advisable to invest in a CRM system. Also, use the feedback of the marketing and sales team before deciding on a CMS or CRM system.

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Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by Finopulse.
Publisher: Neil Duncan

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