Contact Management Versus CRM
From Ask the CRM Expert
What are the differences between contact management and CRM?
The ease of online acquisition, near real time provisioning and rapid implementation of cloud CRM solutions has caused some to believe that they can achieve a customer relationship management strategy with an online purchase and the import of their customers to an Internet-based system.
In reality, migrating your Rolodex or Outlook contacts to a browser-based CRM application, without accompanying CRM strategy, and without integrating customer activities at every touch point and in every channel, is probably at best contact management.
For some small businesses contact management may be sufficient, or may be a segway to a longer CRM journey. However, confusion persists in the tangible differences between contact management programs and CRM applications. The two program types are differentiated by customer strategy, application scope, business purpose and software utilization.
In determining the scope of a desired solution, users must identify up front whether their goal is to manage contacts or achieve an enterprise and customer centric CRM strategy. Buyers must recognize that basic contact managers offered via the Internet still only provide basic contact management — and generally do not fulfill a CRM strategic business opportunity. Tactical differences between contact management systems and CRM applications are illustrated below.
Contact Management | Customer Relationship Management |
| Customer Scope Differences: | |
| Provides quick access to account names and contact information. Often used with calendaring, email integration and activity management. Often referred to as an electronic rolodex. | Includes more comprehensive and detailed customer information. As opposed to just displaying contact information, CRM applications deliver a more holistic view of the customer relationship, categorized histories of interactions and correspondence from throughout the organization, audit trails of activities, customer segmentation attributes and account profile information such as the account's buying hierarchy, procurement history, product inventory and satisfaction surveys. |
| User Community Scope Differences: | |
| Supports individuals or small teams. Generally exists for the benefit of an individual. | Supports team selling, business processes among multiple people or departments, account management across various organizational boundaries and opens up customer information to any one in the organization who can benefit from it or add value to the customer relationship. The customer relationship exists with the organization, not just an individual. Activities and tasks can be allocated between team resources and scheduled among team members with automated follow-ups and reminders. Account progression or customer resolution is visible to anyone whom can aid or influence the account relationship, such as the person who generated the customer lead, the person that's selling to the customer or the person who's assisting the customer with an incident or support request. When each team resource is aware of all other customer interactions while speaking with the customer, fewer mistakes are made, fewer toes are stepped on, the company speaks with a common voice and the organization appears much more organized and customer-centric. |
| Software Scope Differences: | |
| Generally a piece meal system used in conjunction with other business applications. Multiple information systems normally result in overlap, redundant data, silo'd business processes, duplicate efforts, difficult information access, multiple versions of the same information and lack of big picture visibility. | CRM software seeks to integrate all customer touch points and customer information repositories. CRM must provide a holistic picture or 360 degree view of the customer relationship based on activities from across the organization and across social channels. The most cited CRM components used to provide the big picture account view include marketing automation, sales force automation and customer support. |
| Data Versus Information: | |
| More emphasis on data management and less prominence of informational reporting or business analytics. Information visibility or analysis is minimal. There is typically little information roll-up, trending, key performance indicators, customer analysis, online analytical processing or true business intelligence (BI). | Customer data from across the organization is consolidated and packaged into meaningful reports, data warehouses or other analytical tools. Data becomes information which becomes actionable by getting it to the right people at the right time. Sale opportunities automatically roll-up by territory, sales groups or other company structures. Sale pipelines and forecasts are automatically available in real-time without manual intervention or effort. Exception conditions can be detected early and understood by reviewing customer information from multiple perspectives and with easy to read graphical displays. |
| System Integration: | |
| Standalone systems which generally provide limited integration capabilities or data exchange with either desktop programs or legacy systems. Historically, these systems have tended to operate on single tenant architectures while CRM systems tend to operate on multi-tenant platforms. | CRM applications are normally designed with importing, exporting and data integration in mind. Tools should be provided to allow non-technical users to perform imports and exports. Most information can be easily exported to a spreadsheet for manipulation or modeling or a word processor for a mail merge in a few keystrokes. Contacts, emails and calendar activities can be easily synchronized with groupware or e-mail programs. Although spreadsheet integration has a place, users often upgrade from contact management systems to CRM applications in order to automate the many activities previously manually performed in spreadsheets. More sophisticated integration needs can be accomplished with API's (Application Program Interfaces) or Web services. |
| Software Customization: | |
| Generally limited to configuration settings and cosmetic adjustments. No real ability to construct or modify programming logic. | Normally include sophisticated but relatively easy to use customization tools. These tools often fall within a Platform as a Service (PaaS) offering and permit development without source code changes to the CRM solution, thereby, facilitating continued upgrades and support. |
| Mobility: | |
| Hosted contact management systems often do not support mobile devices or offline operation. | Decentralized organizations, staff who work from home offices and traveling professionals fall into the sweet spot of the SaaS value proposition. CRM applications not only provide anytime, anywhere browser access but also provide offline system availability with or without Internet connectivity and with various mobile and wireless devices such as iPhone, Android and Blackberry. |
Beyond the customer strategy difference, possibly the most significant tactical differences between contact management programs and CRM applications are the significant differences in feature sets and automation capabilities. The acquisition of a customer management application which turns out to be functionally deficient will result in increased manual activities, more difficult user adoption, unplanned software customization and multiple shadow (duplicate) systems.
CRM applications exceed the basics of contact management data capture functionality by identifying accounts with flexible segmentation attributes such as user-defined account types, account families and account categories. The more flexible elements will permit tree controls or multiple tier hierarchical structures to visually display account types and their relationships as well as recognize that a single account may belong to more than one type, family or category.
Other data capture basics which are all too often forgotten include the ability to retain multiple telephone numbers, physical addresses and e-mail addresses for every organization and every contact. When was the last time you communicated with some one who only retained one e-mail address? As organizations decentralize, telecommuting continues to grow and more and more staff work from home offices, the ability to retain a virtually unlimited number of addresses becomes more critical. Contact management applications that only accommodate a few telephone numbers, one physical address and a single e-mail address are generally deficient from the first day.
Once all necessary account information is captured and retained, the information must be presented logically, intuitively and based upon individual or role presentation definitions. Sales professionals, marketing staff, account managers and customer service representatives (CSRs) all view account information differently. CSR's may choose to group, view and prioritize accounts by customer size, product type, service level agreement (SLA) type or an incident type.
Sales professionals should be able to create various groups of accounts by business development criteria such as territory, revenues, headcount, industry or other user-defined segmentation. Whatever the criteria, every user should be able organize and view multiple individual groups of accounts so that they can efficiently proceed through whatever designated accounts or activities are next in their sequential priority.
CRM applications which can present user-defined viewing of accounts, activities or incidents in grouped subsets and in a sequential work-order fashion greatly facilitate user productivity by working through various account groups and activities in an efficient, organized and productive method. CRM utilization studies show a significant productivity difference between accounts or activities presented in a grouped, sequential or list order fashion versus a larger and seemingly unorganized listing which requires the user to hunt and peck through a global population.