March 10, 2018

What Is the Difference Between CRM and Marketing Automation?


Some people think that the terms CRM and marketing automation refer to the same type of software. While there is some overlap in the type of information each system utilizes, the two systems are very different in terms of who uses each one and the tasks the systems support.

What Is a CRM?

The term CRM stands for Customer Relationship Management. A CRM system is one that helps a company manage their relationships and ongoings with all of their customers and potential customers. CRM software offers a number of useful features, including:

  • Contact management: The database in a CRM that stores contact information and tracks all the interactions with each contact.
  • Task management: Used to monitor any outstanding and incomplete actions related to moving transactions forward. For example, if a user needs to follow up with a customer after a meeting, the user can make a note in the CRM, and it will remind the user at the appropriate time.
  • Workflow management: Used to create a contact plan that consists of a list of emails to be sent to a contact or group of contacts at specified times. The plan may also include periodic telephone calls or other actions, and the system will remind the user at the appropriate time.
  • Group identification. Groups allow the user to classify contacts based on a variety of factors and send different information to each group. For example, one set of emails may be sent to contacts that attended a particular conference, while another set is sent to contacts that didn't attend.

A CRM is used to improve productivity for anyone managing customer interaction because it automates a number of tasks that are typically performed manually. It allows one user to manage a much larger group of contacts than they could manually.

Contactually is one of the premier CRMs being used today, specifically in the real estate space. Other CRM vendors include Salesforce, Zoho and Pipedrive.

What Is Marketing Automation?

While marketing automation systems store some information that is similar to a CRM, their main purpose is to bring leads into the top of the sales funnel.

  • Tracking and Analytics: A marketing automation system can track a lead's activities before they even come to the attention of a salesperson using a CRM. The system is able to gather information including things like when a lead visits your website, opens an email, reads your blog or completes a form on your website.
  • Market Segmentation: Based on tracking information, the system can automatically assign the lead to a marketing segment. It then interacts with people in that segment using very personalized communication. The system can also track results of the interaction to produce analytics that rate the success of the process and how likely individual leads would be to convert into customers.
  • A/B Testing: The system will test the effectiveness of different campaigns to determine the approach that is most effective.

Overall, a marketing automation system is great at nurturing leads to bring them to the point where interaction with the sales team is beneficial. The top marketing automation systems available include Marketo, Pardo and HubSpot.

What's the Difference Between CRM and Marketing Automation Systems?

CRM and marketing automation systems focus on managing very different types of interaction. However, the easiest way to understand the difference is to look at the users of each one.

CRM Users: CRMs are primarily used by sales and customer service representatives. It's a tool that manages and optimizes the interactions that the sales and customer service teams have with past, current, and future customers.

Marketing Automation Users: Marketing automation systems, as you would assume, are primarily used by the marketing department. Marketers can use the system to draw leads into the sales funnel, where they would then be transferred to the CRM system. The ability to respond to opportunities based on marketing initiatives gives your company a leg up on the competition and allows them to feed your sales funnel with qualified leads.

Which System Should You Choose?

It's not really a matter of CRM systems being better than marketing automation systems or vice versa. Each one has its place in business today and they can work cohesively together.

As a business grows, the need for a CRM system usually comes first. It's important for a business to support its sales team with tools that will improve productivity and effectiveness. The ability to manage a large number of contacts while minimizing manual tasks will result in higher sales and profitability.

In addition, a CRM system that can be shared between sales and customer service brings new opportunities. The salesperson will be aware of customer service issues that arise with a customer, and the customer service staff can quickly determine the actions taken by a salesperson to contact a customer or resolve an issue. If customer service handles a problem they can easily inform the sales team by updating the details in the CRM.

When a company's marketing operation grows and becomes more sophisticated, the usefulness of a marketing automation system increases. At that point, a company will typically implement a marketing automation system and integrate it with the CRM. The integration avoids storing redundant information, reduces costs and improves customer relationships because all information regarding a customer is available in one place.

Final Thoughts

Between CRM systems and marketing automation systems, it’s incredible how businesses can leverage technology to deliver huge improvements to their productivity, effectiveness, and bottom line. As a business manager, you have the opportunity to provide automated support for both sales and marketing operations. You can increase the number of leads you attract with a strong marketing automation system, then nurture them through to conversion via your CRM system. In addition, you'll also increase the effectiveness of personal relationships with your leads and customers. All of this results in more sales and higher profitability!