The era of marketing automation has brought new and powerful tools to the hands of sales and marketing teams. Our arsenal today includes a means to collect customer and prospect data (we never use the term “spying” *wink*), personalization of offers and even the all-important ROI analysis.
But there may be some confusion or overlap in the minds of marketers about the differences between various kinds of software tools. You may wonder, “How do I compare apples to apples? Or am I lumping in grapefruits?
The comparison may get even more complicated when you consider that some marketing automation tools, such as HubSpot, may seem to overlap with tools such customer relationship management (CRM) systems. In fact, HubSpot recently added a CRM directly into its marketing software system. So where do you draw the line?
What is a CRM?
First of all, it’s important to consider that definitions of these tools can be highly subjective depending on who is using them. In fact, a CRM (typically considered a sales or customer support tool) could even be considered marketing software, because the marketing team uses it.
That being said, it might make sense to create a broad definition of what each of these tools are:
- A CRM – is a repository (database) of information for managing customer relationships
- Marketing software (and in particular, marketing automation software) – is used to take actions toward customers and leads
To make the distinction more clear-cut, we’ve outline five essential differences between CRMs and marketing software.
Five essential differences
What it’s used for: Database vs. control center.
A CRM is a repository of customer history and information such as addresses and phone numbers, while marketing automation software is used to perform specific actions. A marketing automation tool allows you to create workflows and send emails or offers to particular customers at a particular time, based on the information they have asked (opted-in) to receive.
How it’s used: Sales interactions vs. website tracking.
A CRM is useful for tracking sales and customer support interactions with a customer by logging individual email contact and phone calls. It keeps track of all customer purchases and preferences. A marketing system, however, will track a broader set of data about prospects BEFORE they become customers, such as web pages they have viewed, social media sites they have interacted with and ads they have viewed.
Who uses it: Sales vs marketing.
Again, there can be some overlap here, but a CRM records every instance of contact with a particular customer into one aggregated dataset. (Every sales, customer service, and marketing touch can be recorded). Marketing software is a tool designed to measure and collect information about marketing campaigns: which emails generate leads and clicks, which ads pull in the most website visitors, which blog posts get the most readership and conversion on offers, which social media posts or Tweets got responses and views.
When it’s used: After conversion vs before.
A CRM primarily collects information after a lead is known and helps identify the best customers. Marketing automation software aggregates information about the customer that begins before the person has any sales contact by using website forms and online analytics to gather data.
Why it’s used: Customer maintenance vs lead nurturing.
A CRM is used to foster and maintain customer relationships while a marketing automation system is primarily used to nurture leads at the top of the funnel in order to convert them to customers. Marketing software provides personalized content to the prospect in order to CONVERT the prospect to a lead, which is why it is primarily used by the marketing department.
As we mentioned, many of the tools in both a CRM and marketing automation system can overlap. And in fact, often both Sales and Marketing departments have access to and may use both sets of tools. The difference will be the kinds of information and actions they want to get from the systems.
Marketing will be more focused on using the tool to generate leads at the top of the funnel, and Sales will be more concerned with the activities that happen to convert the leads into customers --and what happens with the customers after the sale.
Marketing systems may increasingly be useful in the later part as well, because they can manage email campaigns and content that help upsell customers, support re-engagement or get customers to share information with their own friends and contacts.
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