The Difference Between Contact Management and CRM

Turn Prospects Into Customers and Opportunities Into Sales.

The Difference Between Contact Management and CRM

and why neither do the whole job for small businesses.

Understandably the world is awash with what people describe as “small business CRM“. The market for this type of software is virtually infinite, and demand is growing fast.

Legacy desk top applications are too complex, expensive and limited in scope. Big company solutions are also too complex and expensive.

New technologies enable good looking, simple software to be developed inexpensively and SaaS enables cost free distribution.

So small business CRM is a very attractive market, currently under served by established vendors.

Unfortunately the smaller businesses aren’t really benefiting from either the big company software or the new small company software, for different reasons.

The essence of CRM is an understanding of a businesses relationship with the customer, readily available to anybody coming into contact with anybody in the customer’s business.

This relationship has two dimensions a) the Company and its People and b) Plans, Actions and Schedules. The Plans need to be understood from the customer’s perspective, and managed from the users’ perspective.

Everybody understands the first dimension – this is little more than a shared address book with links to correspondence and documents.

The second dimension is less well understood.

For a CRM to deliver real value it needs to help align what the user actually does, interfacing with the internal processes. It needs to create a bridge between the external perspective – what the customer is expecting to happen, and the internal perspective – what the users need to happen in terms of their own business.

Big company CRM has this second dimension built in, with tools such as funnel and pipeline management, sales qualification, and forecasting. It’s about probabilities and weighted forecasts. It’s about making more sales, at better prices while keeping customers happy.

Typical small company CRM doesn’t have this second dimension. It might help users know more about the customer, but it won’t help sales processes be more efficient.

Typical big company CRM lets the smaller business down in a different dimension. It’s build for businesses with departments and is limited to the the revenue generating activities. There’s little concept of “delivery” in big company CRM – that’s somebody else’s problem.

Smaller businesses don’t work the same way. Everybody does a little of everything. They need process management that works “from first call to cash”. Choose a target customer, prospect, pitch, close, contract, deliver, service, collect the money.

Where small business CRM doesn’t provide for this process it’s just an Address Book, or a Prospect List, and only does half the job.

Where big business CRM doesn’t accommodate the “first call to cash” process it’s built for somebody else, by people who don’t understand how smaller businesses work.