By CommenceCRM

Contact Management vs CRM Software

Companies seeking a contact management or customer relationship management solution need to consider one aspect of their business before diving into the evaluation of products. Ask yourself one simple question – do you work with individual people, companies, or both? The answer will put you on the right track.

Contact management software is designed to manage individual contacts, hence the name contact management. You run reports by contact and search information by contact. Everything you do is related to that person or contact. This can create limitations that CRM software simply doesn’t have. For example, how do you track referrals and relationships between contacts? Are you able to store multiple physical addresses and email addresses for each contact?

How CRM is different

CRM software is designed to manage accounts or customers.  An account can be any business entity with one or more contacts. Contacts are often associated with a company name, but this may not always be true.  Here are some recent examples of customers that expressed an interest in contact management software then determined CRM software would be a more flexible and better fit for them.

  • a university that wanted to manage students and do fund raising
  • a chain of Health Clubs that wanted to manage memberships

The University only deals with people or contacts so they felt that contact management software would be the best suited for them. They could simply enter the student name “Michael Jones” and they’re done. What they did not initially consider however is that they are also doing recruitment and fund raising. Michael has two younger sisters that may be candidates to attend the University in a few years. They also want to solicit Michael’s parents for what are referred to as “boosters”.


CRM software offers the flexibility to manage groups and relationships that contact management software does not.

With CRM software they are able to enter the family name as an account, list the siblings under the account name and keep track of any donations the family may have made. Everything is all under one umbrella. In addition, reporting also becomes more flexible allowing you to generate reports by individual contact or by the account (or family name).

The Health Club while a completely different business was able to do the same thing. Contact Management software would have addressed these organizations’ basic needs, but what they discovered was that CRM software offered more flexibility today and into the future.

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