By CommenceCRM

What Is the Difference Between Contact Management Software and CRM

CMS vs CRM diagram

Plenty of articles online equate contact management software (CMS) and customer relationship management software (CRM), which doesn’t guide you in choosing between the two.

So, how is a CMS different from a CRM? Think of a CMS as a contact list: it gives you relevant information about people in your network. Now think of a CRM as a messaging app: it still has that information, but now you have the option to go through old messages, schedule new interactions, and access pictures, videos, and emails using just one app.

Still not clear? Read on as we delve into makes a contact management system different from a CRM, and how to determine which is right for your business.

Contact Management Software

Keeping track of ten leads a month is no big deal. You know exactly what each of those ten leads need and understand where they are in your sales pipeline. But multiply this number by the hundreds and you’ve got a problem in your hands.

A contact management system or software (CMS) is a tool that helps companies stay organized. It’s a database that hosts all key information about your clients – name, address, email, phone number, transaction notes – as well as a recorded history of their interactions with your business.

A contact management system is more than just a database for client intel. By incorporating this system into your business operations, your team can:

  • Share information on all clients and leads instantly
  • Prevent lead leakage by staying on top of every single lead
  • Promote brand loyalty by giving them a more personalized experience
  • Improve relationships with both sellers and buyers
  • Access history of interactions with a specific client
  • Optimize cross-selling and follow-up opportunities

Why It Matters

To the uninitiated, adding a CMS to your operations might feel like an unnecessary detail. “That’s what salespeople are for, right?”

In reality, a CMS does more than just store information. Certain platforms give you the ability to set up notifications so you never miss a client call again. Not sure when you’re supposed to send your next follow-up email? A CMS has a history of all the other emails you have sent and will help you understand how to move forward.

In today’s saturated business market, clients easily slip through the cracks; one little mistake – whether it’s answering their response late or failing to use personalized information – can push prospective clients away into the arms of your competition.

Having a customer management software allows you to maximize the opportunities you have, and minimize your losses from neglect, disorganization, and other forms of human error. It supercharges your organization and gives it the potential to serve every single customer or lead as if they were the only one you are serving.

Key Features

Not all contact management systems are built equally. With plenty of platforms entering the market, you’ll see a multitude of platforms that boast various features. Other CMS might be built for a specific industry, while others cater to general business needs.

Nevertheless, contact management platforms have foundational features that allow you to utilize its primary function:

1) Notifications and To-Do Lists

Most contact management systems will allow calendar integration. With this feature, your company can stay on top of calls, emails, follow-ups using the recorded transactions on the CMS.

Instead of relying on memory, the CMS will automatically set up notifications that will remind relevant individuals, making sure that all concerns and inquiries are managed promptly.

Calendar integration allows transparency in sales teams. Managers now have a better understanding of each team member’s relationship with their clients, and can distribute tasks more efficiently.

2) Interaction History

A contact management system keeps track of customer interaction. It includes timestamps as well as notes regarding the interaction, which will guide customer service reps on how to interact with clients.

For instance, if a customer is inquiring about repairs, you can look through their interaction history and see whether it’s their first time asking about repairs. This kind of information gives your team leverage in attending to customers, by giving them an overview of the customer or lead’s relationship with your company.

The interaction history also involves previous purchases and preferences, which is especially useful for upselling or cross-selling opportunities. Sales reps can push new products and services based on the customer or lead’s previous noted interests.

3) Client Database

A client database is may be the most basic aspect of a CMS but it also happens to be its most powerful feature. When you have your client’s information, you can:

  • Directly email or text clients regarding promos or new offers
  • Provide a completely customized level of service based on their information
  • Use current information to sell to relatives or acquaintances
  • Encourage brand loyalty and lessen customer churn

With a CMS, every single employee in your organization has access to customer information. This means that customers can always experience consistency in your level of service, regardless of who answers the phone or email.

CRM Software

One misconception you’ll see online is that the contact management and CRM software are the same thing. Some would even say that a contact management platform is alternatively called a CRM. While the two share some features, the CMS function is nowhere near as optimized as the CRM solution.

A customer relationship management software (CRM) does exactly what a contact management system does, and then some more. It goes beyond storing customer interactions and information and empowers your brand by allowing you to automate repetitive business functions.

In other words, a CMS gives you information while a CRM gives you the tools to act on that information. With a CMS, you have an overview of each lead or customer’s interaction with your business; with a CRM, you have that exact information and the option to automate email marketing through the platform.

What Is the Difference Between a CMS and a CRM?

A CRM is more advanced than a CMS in that it gives you more control over your relationships with customers. Here’s exactly how a contact management and CRM software are different from each other:

1) Automation

Some CMS automatically set up notifications for team members, but that’s the most it will do as far as automation goes. CRM platforms often have email integration features that allow you to set up entire drip campaigns with just one click.

Instead of sending every cold email or follow-up manually, you can set up a drip system that automatically triggers based on your set parameters. Your CRM platform will automatically send emails, promos, and relevant resources to your leads and customers based on actions they take.

Smarter CRM platforms equipped with AI can even implement machine learning so the system can craft responses to low-level inquiries by drawing from keywords and contexts from previous human support.

2) Report Generation

A CMS may give you customer information but it won’t consolidate that information into usable data. CRMs have the ability to translate interactions into reports and analytics, allowing you to understand what’s working in your sales strategy, and what isn’t.

A customer relationship management software can reveal weak points in your sales pipeline or sales funnel. This alone can help your sales team:

  • Predict lead volume every month
  • Forecast monthly sales
  • Understand month-by-month performance
  • Reveal most/least profitable marketing channels
  • Compare lead generation efforts

CRMs can generate instant insights that your team can implement on the spot, which they can share across the board so your business can enact smarter decision making every step of the way.

3) Segmentation

Lead segmentation is a form of customer relationship management that a CRM provides. Imagine hundreds of leads entering your funnel every week; how do you personalize your campaigns to improve your chances of securing their business?

Segmentation is the practice of categorizing leads according to interest, business value, and readiness to sell. With CRM segmentation, your sales and marketing team has a better understanding of what each and every lead needs, increasing your chances of winning their business.

4) Campaign Tracking

Campaign tracking in this sense has two functions: firstly, it tracks team/individual progress with each lead; secondly, it tracks your customer or lead’s campaign progress.

Campaign tracking answers the question, “how far along is my lead into the sales funnel?” Instead of guessing what to do next, the CRM tells you exactly where they are in your funnel or pipeline, and what they need to convert.

With the project management feature, team members can leave notes about each individual lead and allow other sales reps to pick up where they left off just by looking at the shared information.

5) Documentation

Customer relationship management software is especially useful for big companies because it also serves as a cloud-based storage for documentation. With level-based access, executives, managers, and employees can share notes, documents, reports, and insights instantaneously.

With crucial information available in just a couple of clicks, users can answer high-level inquiries using available documentation in the database, wherever and whenever they are. This eliminates delays and inconsistencies that prove detrimental to customer service.

Which One Should You Choose?

Choosing between a contact management and CRM software can be confusing. On the one hand, you want all the automation opportunities a CRM has to offer. However, more features doesn’t always mean better.

The software you choose should depend on two crucial things:

Sales Cycle

How long is your sales cycle? Smaller businesses or businesses with straightforward products and services tend to have a simple sales structure. Because decision making isn’t complicated, you don’t have to invest in a CRM system in order to keep track of interactions. Chances are you can use a CSM to lend your company that personal touch and do the rest of the work yourself.

On the other hand, if you have a big company with an impossible volume of customer interactions, a CRM software can help you isolate interactions and manage relationships effectively.

Sales and Marketing

Your sales and marketing teams will use the software of your choosing. Before introducing a new platform, ask them about their workflows, specifically the bottlenecks they encounter and the solutions they need to optimize their work.

Use your team’s feedback in deciding whether you need something as simple as customer tracking and information or something more comprehensive.

Still not sure what your business needs? Schedule a demo today and find out how Commence CRM can change your business for the better.