Friday, January 23, 2015

Is There a Difference Between CRM and Marketing Automation?

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By now, customer relationship management (CRM) software has become a staple of how many sales teams operate. CRMs save a lot of time by automating much of the sales process, and many products now offer marketing features.

But if CRMs all offer salesforce automation, do these new marketing capabilities mean CRMs now offer marketing automation?

Are the two terms becoming synonymous?

The answer is no. CRM and marketing automation serve two distinct purposes, and although CRMs have begun to dabble in marketing, their offerings pale in comparison to true marketing automation systems such as Hubspot or Marketo.

The good news is you shouldn’t want CRM and marketing automation to be the same thing. Both types of technology can offer tremendous value to your company, but they have two distinct approaches and serve two different functions.

Let’s clarify this by examining the strengths and methodologies behind each software.

Where CRMs Excel

Customer relationship management software emerged in the 1980s and early 1990s as a combination of database marketing and contact management. Its origins are relevant because these features are still key to CRM’s purpose today.

In a nutshell, CRM software helps sales teams build databases about their company’s customers so they can provide better customer service or sell with more context. This not only makes sales or customer service representatives more effective at their job, but also provider a better experience for the customer.

For life science organizations this is crucial, because physicians are a particularly demanding market who often have limited time and patience. Being armed with relevant information about the physician’s preferences isn’t an option: it’s the standard.

CRM also has other uses, such as:
-          Call logging, appointment setting, and other KPI tracking that measure productivity
-          Social media integration for communicating with customers through Twitter, LinkedIn, and so on.
-          Storing financial data like sales numbers as well as administrative data, like contract information
-          Analyzing data to forecast future sales

Again, many CRMs are adding email and other marketing features to this list, but these are really just extras. The number of emails these systems can send are limited, as is the amount of personalization available.
Personalized marketing at scale is best left to marketing automation platforms.

Where Marketing Automation Works Best

Just as CRM evolved from the combination of selling tools, marketing automation tools emerged as a central resource for many of the features necessary for digital marketing.

These systems can be quite powerful and often require technical set up to integrate with your website. Their main functionality includes:
-          Automating and personalizing multiple email or “drip” marketing campaigns
-          Scoring customers or leads based on their activity on your site, your social media channels, and your email marketing
-          Building landing pages and other online resources that contain sign-up forms for acquiring customer information
-          Pay Per Click (PPC) advertising, such as Google Adwords and banner ads
-          Granular segmentation based on lead behavior rather than demographic data
-          Attribution models that measure the effectiveness of your marketing campaigns across channels

This list covers most of the common features, but check out this article by Marketo for a comprehensive list of marketing automation features.

The growing popularity of this software is being driven by the online behavior of consumers. In short, the buying cycle is changing, and customers are contacting sales at a far later stage because they’re doing more of their own research.

Marketing automation’s purpose is distinct from CRM in that it distributes content based on the interests and behaviors of prospects in order to move them closer to the buying stage. CRM works best on a one-to-one basis, and marketing automation is only worth your time once you’re ready to scale.

Despite the inclusion of the word “automation” in the name of these solutions, this technology doesn’t turn your business into a robot. When used correctly, marketing automation’s strong segmentation capabilities should allow you to distribute your content in a way that ensures maximum relevancy — which actually results in more personal communications.

For example, a number of physicians may have an interest in prescribing the same medication, but are their interests all uniform? No? Then they shouldn’t get the same email describing the product.

Marketing automation allows you to divide them up based on the pages they browsed on your website and send them more information that expands on the benefits in which they’ve expressed interest.

So marketing automation not only offers significantly different features than CRM software, but it also serves a significantly different purpose. CRMs help your sales teams become more effective at converting, while marketing automation ensures your sales teams have plenty of opportunities to close.


About the Author: Zach Watson is the content manager at TechnologyAdvice. He covers gamification, healthcare IT, business intelligence, and other emerging technology. Connect with him on LinkedIn.
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