Automating success:
The Choice between Contact Management and Customer Relationship Management
The reality is that organizations are placing renewed emphasis on cutting costs and customer retention to combat our economic realities. Successful businesses are continually finding ways to meet the expectations of prospects and customers while improving the lifeline value of current customers. Solutions are being sought for ways of unifying fragmented customer data and making this customer and account information available to the organization at large.
What is CM and CRM?
Contact management (CM) and Customer Relationship Management (CRM) solutions are the two primary technology enablers allowing businesses to gain better control of their information assets and operational processes.
CM solutions are productivity and sales automation tools designed to allow individuals or teams to manage contacts, opportunities, or account information more effectively. CRM solutions contain the contact management functionality but take it a bit further. CRM is more company account focused and process-centric with multi-module solutions that serve as a system of record for all customer interactions. Some business go so far to state “if it is not in our CRM system then it did not happen”. Thus CRM becomes the single record of the truth.
Sales Model Influences CM or CRM choice
The choice between a CM or CRM solution is typically influenced by the organization’s interaction model. The Aberdeen Group had identified four common sales interaction models that require certain functionality from these technology solutions.
Where a Contact Management solution fits:
One-to-one interaction is where one individual is selling to a single job role; for example, insurance agents, financial advisors, small businesses, or specialty sales. Take for example the scenario: Dave, a sales person at a small business believes that Jane, the founder of her own business, could benefit from his offerings. Understanding that Jane is the owner of the company and therefore the head of a small employee staff, Dave targets Jane as the job role with decision making authority. A CM solution becomes Dave’s preferred solution because it allows his to keep accurate contact and company information on Jane’s business, as well as detailed notes surrounding their conversations.
One-to-many interaction is one individual selling into multiple job roles. For example, say that a number of years have passed in our scenario and Jane’s business has growing into a large national brand. No longer is Jane the one and only contact with purchasing power. So Dave targets the new CMO, COO and the Executive BP as he articulates his value proposition.
An added bonus of Dave’s CM solution is that it allows him to discern the relationship between contacts based on his notes or , in the case of more advanced CM solutions, through contact grouping or networking.
Where a Customer Relationship Management solution fits:
Many-to-one interaction involves multiple individuals, such as sales, marketing or service professionals, interaction with a single job role. For example, the growth of Dave’s business has resulting in the development of new product and services. In this example, Jane has placed a call into a service representative with a related question to a previous project.
The service representative sees alignment with Jane’s question and the latest product release; therefore, Jane is invited to a webinar that showcases the new product. By using a multi-module CRM solution, Dave’s service professional can log the activity around Jane’s account and leave detailed notes so other employees, such as marketing professionals or sales reps, know how and when to follow-up with Jane.
Many-to-many interaction involves multiple individual interaction with multiple job roles which requires collaboration and intradepartmental knowledge sharing. For example, marketing individuals or service individuals at an organization target their counterparts at other companies to sell into. Dave, whose work with Jane’s boutique has catapulted his business into the spotlight, has filled out his own marketing staff and professional services offerings. These individuals on the marketing side target similar job roles at Jane’s company.
This coordinated effort requires a heightened sense of internal visibility; therefore Dave has replaced his CM solution with an integrated CRM tool. He has moved from Sage ACT! to Sage SalesLogix CRM. Dave is now able to access customer service information, accounting and billing details, and marketing data through his SalesLogix CRM system. He has a integrated business.
The information presented in this article is intended to assist end-users and people like Dave or Jane, when deciding between contact management and CRM.
