CRM vs Marketing Automation Tool: What Should You Pick?

A few weeks back, my friend and I went shopping for some kitchen appliances. I wanted a microwave while my friend insisted on an oven toaster grill (OTG). We explained our needs to the salesperson only to realize that an OTG actually met my needs and a microwave met my friend’s!

Does this scenario sound familiar to you? I mean, it’s not uncommon for many of us to purchase the wrong product without truly assessing our needs, budget, etc.

So, how can you make sure that as a business owner you don’t make that mistake when purchasing a software tool for your organization? Especially when it comes to purchasing tools that are misunderstood or thought of as being used interchangeably.

Marketing automation tools and customer relationship management (CRM) tools are two products that are often confused with one another because, for many, they seem quite similar.

To help you understand the difference, I have compiled some information about marketing automation and CRM tools.

A quick capture: CRM vs. marketing automation

It’s easy to get confused between CRM and marketing automation tools as both help you reach out to customers and nurture relationships with them. But the difference lies in how each tool helps you address specific customer needs and allows you to nurture relationships with them through different stages of the buyer journey.

Here’s a comparison snapshot to help you understand this difference:

With the fundamental differences covered, let’s deep dive into each software type and understand what problems can they solve for your business.

What is marketing automation software? What are its core features?

According to Gartner, marketing automation is software that assists marketers with customer segmentation, customer data management, and campaign management. It provides marketers with the ability to offer real-time, targeted, data-driven campaigns along with enhanced efficiency and productivity.

In other words, marketing automation software helps you automate and streamline marketing tasks such as campaign management, campaign tracking, and customer segmentation.

You can effectively communicate with prospective customers via emails or social media as part of your marketing campaigns and track customers’ responses to your efforts. The aim is to generate and nurture leads so they turn into paying customers.

Let’s look at the core features and functionalities of marketing automation software:

• The tool helps you capture and generate leads via PPC ads and web forms that can be embedded on your website, social media, or emails.
• You can qualify and segment leads into categories such as raw leads or sales-ready leads. You can nurture the raw leads by sending them relevant communication.
• Once a lead (website visitor/prospective customer) fills the web form, their contact details are stored at a central location.
• The tool segments leads based on attributes such as geographical location, preferences, product interests, and website engagement.
• You can send targeted marketing content with promotional offers to different customer segments to prompt them to purchase.
• The software offers email templates that can be used to send campaign-related communications. It also lets you track the email responses so you know how well your content performed.
• You can also create, manage, and track campaigns across channels such as SMSes and social media using a centralized dashboard.

Web form templates in EngageBay (Source)

Let’s look at some of the advantages of using a marketing automation tool:

• A marketing automation system allows you to qualify good leads for sales so sales reps don’t have to waste time with unqualified leads.
• The software makes cross-selling and upselling easier for marketers as they can send personalized emails to customer segments.
• to measure and scale their campaigns and initiatives. They can adjust their initiatives based on the performance insights.
• It offers a single view of all marketing initiatives at a centralized dashboard. This helps managers save time as they don’t have to toggle between different platforms.

What is CRM software? What are its core features?

According to Gartner, customer relationship management (CRM) is a business strategy that optimizes revenue and profitability while promoting customer satisfaction and loyalty. CRM technologies enable strategy, and identify and manage customer relationships, in person or virtually. CRM software provides functionality to companies in four segments: sales, marketing, customer service, and digital commerce.

Simply put, a CRM tool helps you manage and build customer relationships throughout the customer lifecycle. You can store customer information in a central place and segment the customer base into separate lists to send them targeted communication based on where they are at in their journey with your brand.

Let’s look at the core features and functionalities of CRM software:

• A CRM system lets you create a searchable database of customers and potential customers. It offers customer profiles that contain all conversations between you and customers (across phone, email, live chat, etc.) in a central location.
• The tool enables you to track and manage leads (potential customers). You can capture leads, store their details, and nurture them.
• You can also segment your customer base based on attributes such as age, gender, location, and preferences and send them targeted communication.
• You can choose to be notified about calls and meetings via emails, calendar notifications, and text messages.

CRM dashboard in NetSuite CRM (Source)

Let’s look at some of the advantages of using a CRM tool:

• The tool helps you consolidate customer data (such as contact details and a customer’s interactions with your brand) in one place, making the data easily accessible to your sales and customer service teams.
• It lets you communicate with your customers regularly and keep them engaged with your brand. Engaged customers are happier and tend to be more brand loyal.
• It offers actionable insights into customer behavior so predicting sales and preparing for them gets easier.

What does your business need: CRM tool or marketing automation tool?

Investing in a tool that you don’t immediately need can cause serious problems. You will end up wasting money and won’t even have your needs met.

Here are a few indicators you can factor in to make the right investment decision for your business.