The SMB Guide: CRM vs. Marketing Automation

Customer relationship management and marketing automation software deliver similar benefits to growing SMBs, but the difference is in the details. Learn which one you need and why.

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For small business owners, the wealth of business-related software options can be overwhelming. Most advisors say to start slow and be sure your tech purchases are relevant to your business, useful to your daily routine, and, most importantly, offer a return on your investment.

For any customer-facing business, both customer relationship management and marketing automation software sound useful, but business owners might wonder if one is more helpful than the other.

Not sure how the two differ? Take a closer look at how each could help your business grow and prosper.


What is CRM?

CRM, or customer relationship management, is cloud-based technology that helps you record and manage the customer journey from your first touchpoint through the present moment. The information it tracks helps you build strong, ongoing relationships with customers that can enhance your business.

CRM records customer purchases, buying habits, and preferences, along with personal information, such as gender, birthday, marital/family status, and other demographics that can influence the customer’s buying decisions.

Often, CRM systems will integrate with sales software or marketing automation tools to coordinate your customer outreach with other promotional campaigns.


5 benefits of using CRM software

CRM systems help you track your customers’ journey so you can build stronger and more loyal relationships with them.

1. Improved customer service

With all your customer information in one place, you’ll boost response time for marketing, sales, and service support. If a customer calls about a recurring issue, you can quickly access the case background and learn about the previous attempts to fix the problem. And, if you want to create a targeted marketing campaign to promote an event to singles, you can create a master list of all your unattached customers.

Rather than waiting for customers to contact you with a need or a problem, you can proactively touch base with them and anticipate their needs, making you their go-to vendor in your market space.

“In the same way that the data in your CRM platform can help automate more personalized outreach throughout the marketing funnel, it can improve a sales team’s outreach efforts or customer service’s ability to help customers,” says Muhammad Mateen Khan, digital marketing strategist, PureVPN. “If a sales team has the knowledge of what interests a particular customer most, they or a support representative can meet the customer’s needs and solve problems more proactively.”

2. Automate everyday tasks

The best CRM systems remove the burden of many transactional tasks from employees so they can focus on more strategic and creative work that helps the business, such as closing sales and resolving customer pain points.

“Completing a sale is never as easy as just getting a customer to agree to commit,” says David Toby, director, Pathfinder Alliance. “Along with the surface details of any sale, there are hundreds of smaller tasks that must be completed in order for everything to function properly. Forms need to be filled out, reports need to be sent, legal issues need to be addressed — these ancillary chores are a time-consuming, yet vital, aspect of the sales process that some CRM systems can address.”

CRM automation functions include data entry, contact updates, calendar management, opportunity updates, logging communications, and much more, freeing up staff to focus on higher-level activities that can translate into revenue.

3. Promote team collaboration

A robust CRM platform stores details of customer conversations and interactions, staff notes, contact information, buying history, and service and support records. This data store allows for easy handoffs between shift workers and facilitates faster onboarding for new employees. Some systems even allow multiple people to work on one file simultaneously, ensuring the most up-to-date information is always at their fingertips.

The information keeps all employees in the loop so they can see what co-workers have done for a customer and build on those actions, which is particularly helpful from a customer service standpoint. Rather than asking a return caller to repeat all the details of their malfunctioning widget, the service representative can read the call records and try something new rather than try the customer’s patience.

4. Insightful reporting

CRM systems offer comprehensive reporting capabilities that help you crunch numbers faster, providing customer analytics you can use to develop your next marketing campaign or sales push.

“Using a spreadsheet to manage your company means inputting or importing data manually, figuring out what’s important, and then creating a graphical way to present this data,” Toby notes. “CRM does most of this for you. Once you’ve invested in the platform, you can take advantage of another CRM benefit, the dashboard. You can set up a dashboard for every individual in your company who has login credentials for your CRM platform.”

The most effective CRM integrates with other systems, such as email, sales prospecting, social media, calling software, live chat, web forms and more, pulling data from related functions and producing a more holistic dashboard view.

5. Personalized outreach

Once you’ve collated data about your customers, it’s time to put that business intelligence to work through targeted sales strategies and segmented marketing campaigns. With a 360-degree view of your audience, market, and industry, you can create personalized promotions, CRM email marketing campaigns, and social media posts that could convert your audience to new sales or expanded business.

“CRM allows you to break down data by categories and criteria, making it easy to create focused lists,” says Maksym Babych, CEO, SpdLoad. “Used in sales and marketing, such segmented lists allow you to run specific customer marketing campaigns and account-based marketing initiatives and analyze your sales process and lead pool.”


What is marketing automation software?

Marketing automation (MA) software refers to software platforms and technologies that help marketing teams more effectively deliver messaging across multiple channels, such as email, social media, texts, and websites, by automating repetitive tasks.

We’ve all been targeted by marketing automation functions at one time or another. For example, when you receive an email from an online store reminding you that you left something in your cart, or if your favorite bookstore sends an email to alert you that an author whose books you’ve read in the past has a new novel dropping next week.

“The main objective of marketing automation is to figure out how best to engage the customer so that they will likely purchase an item,” says Joseph Chong, founder and CEO of Acxtron. “MA takes the customer through the journey from awareness to consideration to purchase. It can also be used for a variety of other stuff, such as seasonal sales and birthday discounts based on the information captured in the CRM. MA takes away a lot of the manual tedious processes to improve productivity and maximize impact.”

Chong notes there are many MA software options available, such as ActiveCampaign, GetResponse, Kartra, and Klaviyo. Many of these solutions already have some form of CRM in place.


3 benefits of using marketing automation software

Marketing automation software doesn’t need to be expensive, and for small businesses hoping to accelerate growth, the return on investment could be a game-changer for the lead-generation funnel. If your sales and marketing team is small, or nonexistent, these solutions facilitate multiple touchpoints across a variety of channels, making sure none of your potential customers feels shortchanged.

How do the benefits of marketing automation increase sales and accelerate growth?

1. Boost the marketing team’s efficiency

Today’s branding campaigns require omnichannel marketing and rely heavily on social media posting. Creating and posting several times a day on Instagram, Facebook, Twitter, LinkedIn, and other platforms can be time-consuming. If you’re a small business owner, keeping up with social media marketing could become a full-time job.

Marketing automation software helps you automate these tasks, as well as creates email campaigns, posts blogs, builds landing pages, and much more. For many small businesses, marketing automation software also streamlines staffing needs by executing the busy work that might have required many additional pairs of hands to do effectively and efficiently.

“Marketing automation tools do the job of multiple employees,” says Jerry Han, C-suite marketing executive at PrizeRebel. “If marketing tasks are done manually, companies would have to hire many marketers to engage with leads continuously. However, doing so is impractical and would unnecessarily drain resources.”

2. Personalized and targeted marketing strategy

MA software offers segmentation capabilities so you can target the variety of personas that comprise your potential customer base. MA solutions turn your visitors into leads, which allows you to segment them based on demographics and behavior.

With this information, you can create targeted campaigns delivered through media channels the group interacts with most, be it Instagram or email or Google display ads, and focus on the messages to which they are most likely to respond. Such segmentation and personalization ensure better value for your marketing buck.

3. More effective marketing via multichannel campaigns

There’s an old marketing rule that says a customer needs to see your message seven times before they act on it. Automated marketing makes sure you stay in front of your target in a variety of environments, so your brand stays top of mind.

According to Campaign Monitor, automated emails get an average of 86% higher open rates and produce 196% higher click-through rates. They also have the potential to generate 320% more revenue than the average promotional email.

In addition to those emails, however, you can automate social media and blog posts, search ads, and other elements of an integrated marketing plan to guarantee a steady stream of messaging that would be impossible for a small business owner to carry out manually.

By reaching customers through a variety of channels, you build a more comprehensive customer profile, execute much more targeted campaigns, and see much higher conversion rates of sales leads.


CRM vs. marketing automation: What's the difference?

Because CRM is primarily sales-focused, and MA is marketing-focused, they originated to serve two distinct functions within a large organization. But for small businesses, sales and marketing, and therefore CRM and marketing automation, go hand in hand.

“CRM and marketing automation are like two peas in a pod,” Khan says. “Sales is about trying to convince someone to buy a product or use a service. Marketing is, well, kind of the same thing, at least to some extent. Marketing uses a less direct method, but with the same end goal.

“The major difference is that while marketing brings in prospects, sales closes the deal,” he adds. “This is why it can be difficult for small businesses to decide whether they need a CRM or if they'd be better off using marketing automation software.”

While their benefits mirror each other, and their platforms often integrate with one another, CRM and marketing automation are not exactly the same solution.

“CRM and marketing automation are like [people], but digital,” says Chong. “We remember our family’s and friends' preferences, their birthdays, etc. That's CRM, the brain that stores information. Marketing automation comprises the things we do to build and sustain those relationships and, in times of need, get the support we require.”

Chong offers some guidance on whether you need CRM or marketing automation for your business:

  • Years in business: Established businesses should leverage MA to explore new revenue centers and/or business models. Newer businesses might get away with CRM in the beginning if they don't meet the criteria below.
  • Number of customers: Anything less than 100, and you don’t need MA. Remember this equation: Revenue = Customers x Average Basket Value x Conversion Rate. With a small number of customers, your average basket value is high and tends to include personal- or project-based interactions. Occasional emails or an e-newsletter should keep clients up to date.
  • Expected frequency of outreach: If you launch new products frequently or you want to keep reaching out to customers because it might be a long process to convert them, that's where MA shines.
  • Variety of products: Different categories and a wide variety play well for MA because of the variety of strategies it allows you to execute.
  • Competitiveness of industry: If many of your competitors have MA, you probably need it, too, because your number of touchpoints might be significantly reduced or comparatively less personal.
  • Budget: You can start CRM for free, but for MA, you will definitely need some budget.

CRM + marketing automation = winning strategy

The experts agree that, at some point, growing businesses will need both CRM and marketing automation because they complement one another and significantly reduce tedious manual tasks.

According to Michael Chammas, founder of Makro Agency, eventually you will need both.

“In the beginning, a CRM platform enables you to easily track your sales effort in an organized manner while creating customer/lead profiles on each interaction,” he says. “As your sales increase and the work managing your CRM and sending emails becomes a big part of your day, you will upgrade to replace some of these tasks with marketing automation.

“A simple task such as following up on unanswered emails can eventually eat up a big bulk of your time,” Chammas adds. “Automating these tasks can save you hours of work while ensuring you never miss another email.”

Or another sales opportunity.

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