What’s the Difference Between CRM and Marketing Automation Software?

Customer relationship management (CRM) software and marketing automation software are different.

If you’re surprised by this, that’s OK. At face value, they seem to be the same. In actuality? They serve two distinct purposes.

Marketing and sales leaders need to understand the differences between these software types to select the best system for their teams and improve company processes.

The wrong system can slow down or break a business’ funnel, and harm its bottom line.

Today, we’ll help you differentiate between CRM and marketing automation software, and figure out which your business needs.

What are the primary differences between CRM and marketing automation software?

One of the main differences between these software types is who they target. CRM software is primarily sales-focused, while marketing automation software is (aptly) marketing-focused.

• Marketo—a leading marketing automation software provider—describes marketing automation software as a system that “allows companies to streamline, automate, and measure marketing tasks and workflows.”
• Salesforce—a leading CRM software provider—defines CRM as: “A strategy for managing all your company’s interactions with current and prospective customers.”

In terms of where marketing automation and customer relationship management fall in the buyer journey, that looks like this:

A breakdown of the marketing automation and customer relationship management software funnel

Let’s dive a little deeper into the differences between CRM and marketing automation software.

What is marketing automation software?

These systems let you follow a prospect’s top-of-funnel activities (e.g., when they visit your website, open an email, read your blog, fill out a form).

Marketers typically use marketing automation software to schedule and track marketing campaigns—especially email campaigns and mass business-to-customer communications. Read more about uses for marketing automation software.

Benefits of marketing automation software include:

• The ability to segment prospects into appropriate mailing lists based on past interactions with your company or their interests and preferences.
• Lead nurturing functionality, letting you automatically send triggered emails at the time a person is most interested in your product or service. You can also schedule a series of emails in a “drip” campaign, so your company stays top-of-mind with prospects.
• Once a campaign has ended, the system generates analytics showing how successful the campaign was.

Marketing automation software helps foster leads and get them ready for your sales team. Once the lead has progressed to the bottom of the funnel to become a qualified sales lead (and eventually a customer), that’s when companies typically start tracking interactions with a CRM tool.

Signs your business needs marketing automation software:

• Your customer list is getting too big to manage manually. Are you lucky enough to have thousands of contacts on your email list? That’s great! But how are you handling all those emails? Marketing automation software ensures each contact goes through the right stages of your marketing funnel to nurture them into a good lead for your sales team.
• Your customer list is too small. If you need to feed more leads to your sales team (and let’s face it, what marketer doesn’t want to generate more leads?), using marketing automation to homogenize your outreach experience is a must.
• You have excellent content and no way to get it in front of your customers. Do you have a great blog or awesome research you wish potential clients could see? Marketing automation software can get your content in front of the right audiences, faster.

What is customer relationship management software?

CRM software stores information including how long a contact has been a customer, past purchase records, the dates and notes of any phone conversations with a contact, a record of inbound emails they’ve sent to your sales and/or customer service teams, and more.

Sales and customer service teams use CRM data to optimize one-on-one interactions between companies and their clients to increase sales and customer satisfaction.

According to recent research conducted by Capterra, 56% of small businesses already have CRM software.

Benefits of CRM software include:

• Sales personnel can see where a customer is in the sales process and help close the deal.
• Your business can offer targeted promotional material that’s more likely to lead to a sale and build good faith between you and your customer.
• When speaking to a customer, you can have a full picture of who they are and their history with your company, which helps make the conversation as personal and successful as possible.
• Many CRMs can also sync with social media platforms so you can keep track of which channels are driving the most traffic, and what people are saying about your company.
• CRMs can send internal alerts when a call is scheduled, when a client’s account is set to renew, or even when a customer’s birthday is coming up so that your sales and service reps know to reach out.

Simply put: CRM systems help secure sales by making the sales process a more personal experience for the customer.

Signs your business needs a CRM tool:

• Reports of bad customer service. Your customers report less-than-pleasurable interactions with your sales and customer service staff. Bad customer service is a business killer. CRM tools can help you reach out to unhappy customers and resolve their complaints.
• Customers get lost. It’s easy to lose track of your clients if customers are routed to different departments during their journey. CRM software can track them down and optimize customer experience.
• You’ve outgrown your lead data tracking system. If you have too many leads for a spreadsheet to handle, it’s time to use a CRM tool to track your customer’s data.

Does your business need separate CRM and marketing automation solutions?

The answer here is “maybe.” It depends where your customers are in the funnel.

Most marketing automation solutions let you sync your data with your CRM so all of a prospects’ activities are accessible through one solution.

Companies can sync the information both ways, so their marketing team knows what’s going on in sales while their sales and customer service teams know the marketing history of each prospect or customer they interact with.

If your don’t want to buy two separate systems, many CRM software vendors have developed or acquired marketing automation software, so there are a handful of single systems out there that include the functionality of both.