November 18, 2022

CRM vs Marketing Automation: How are they Different?

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When you first begin searching for marketing software, two of the first options that you are going to come across are customer relationship management (CRM) software and marketing automation platforms. While there is definitely some overlap between these two types of platforms, they also offer their own distinct set of features.

Some businesses will benefit more from one than the other. Here’s everything you need to know when choosing between CRM and marketing automation for your business.

What Does a CRM System Do?

Customer relationship management systems are designed to grow and nurture the entire customer relationship, from initial interest to consideration to purchase and beyond. In a nutshell, CRM software organizes and sorts customer contact information to help businesses track their relationships and deliver superior service.

CRM platforms like Salesforce’s HubSpot are used by the marketing, sales, and customer services teams to increase customer engagement and can be integrated with other software tools used by departments across the company.

Most CRM platforms like HubSpot offer capabilities for sales, marketing, and customer service teams.
Most CRM platforms like HubSpot offer capabilities for sales, marketing, and customer service teams. Source: HubSpot

What is Marketing Automation?

Marketing automation refers to automating tasks that are normally done manually, such as sending lead-nurturing emails or reminding customers to schedule an appointment via text.

Marketing automation is integrated into pretty much every popular CRM platform these days, so it’s typically more of a function than a stand-alone product. However, you can also find platforms like Eloqua that are focused more exclusively on marketing automation.

Oracle's Eloqua platform focuses exclusively on marketing automation to provide sophisticated campaign management capabilities.
Oracle’s Eloqua platform focuses exclusively on marketing automation to provide sophisticated campaign management capabilities. Source: Eloqua

CRM vs. Marketing Automation: What’s the Difference?

There are certainly some similarities between CRM and marketing automation, considering marketing automation is a common feature of CRM platforms. However, these terms are not interchangeable. CRM and marketing automation have some distinct differences as well.

Sales cycle

First of all, marketing automation is focused more on the beginning of the sales cycle, nurturing leads and getting them ready for the sales team. On the other hand, CRM solutions like Pipedrive focus on nurturing the customer for the entire lifetime of their relationship with the company, even after they make their first purchase.

While marketing automation can be helpful for the later parts of the sales cycle as well — for instance, a lot of e-commerce companies use it to send customers reminder emails to re-buy their favorite products — its focus is on the earlier parts of the process.

Functionality

CRM is also more comprehensive than marketing automation in terms of functionality. Marketing automation is more of a single feature, whereas CRM is an entire suite of software that encompasses many different functions, including database management, reporting, and more. This is why marketing automation is often included as part of a total CRM package.

CRM vs. Marketing Automation: Who Are They For?

Various types of companies can benefit from both CRM and marketing automation, but they are tailored to different types of businesses, and some will find one more advantageous than the other.

CRM software audience

Companies of any size in any industry can benefit from CRM software, but they are usually designed to be used by medium to enterprise-level businesses with a large sales and marketing team and a wide customer base.

However, you can definitely find some CRMs like Freshsales that are tailored to small businesses. Additionally, some vendors offer more affordable packages with basic features for businesses that need the bare minimum CRM functionality, like Bigin by Zoho CRM.

Marketing automation audience

Meanwhile, marketing automation can benefit any business with a high volume of customer communications, such as emails, texts, and chats that are time-consuming and prone to error when done manually. While marketing automation platforms do offer a certain level of personalization, they can’t offer the same level of white glove service and customization as an actual sales rep.

If your company tends to have only a few big customers with huge contracts and longer sales cycles, keep in mind that marketing automation might not be as beneficial as it is for an e-commerce company with a short sales cycle but a high amount of churn.

Benefits of CRM vs. Marketing Automation

Both CRM and marketing automation help sales and marketing teams do more in less time, stretching marketing budgets, sourcing more potential customers, and converting more leads. In turn, this helps your company make more sales and boosts the bottom line overall. However, they each also offer distinct benefits that don’t overlap with each other as well.

Benefits of CRM

One of the biggest advantages of a CRM platform is the way it centralizes all sales and marketing functions into one platform, streamlining the process and encouraging collaboration. CRM platforms make it easy to segment current and potential customers in the database and to tailor marketing efforts to address their specific needs. CRM software such as Nutshell also includes features for forecasting future sales and reporting on current marketing efforts.

Reporting capabilities in CRM tools like Nutshell helps businesses make smarter sales and marketing decisions.
Reporting capabilities in CRM tools like Nutshell helps businesses make smarter sales and marketing decisions. Source: Nutshell

Benefits of marketing automation

On the other hand, marketing automation speeds up the marketing and sales process, reducing the need to spend valuable human effort on rote tasks like sending emails. Marketing automation tools like Mailchimp also provide deep insight into customer demographics, needs, and behaviors.

Marketing automation platforms like Mailchimp help businesses understand important details about their customers, which can help marketing teams implement more strategic and effective campaigns.
Marketing automation platforms like Mailchimp help businesses understand important details about their customers, which can help marketing teams implement more strategic and effective campaigns. Source: Mailchimp

CRM vs. Marketing Automation: Which Is Right For Your Business?

In most cases, businesses will benefit from choosing a CRM platform like Salesforce that includes marketing automation. The range of capabilities for sales, marketing, and customer service teams allows the platform to scale with your business without running into limitations down the road.

However, since most CRM suites are designed to be comprehensive solutions, some small businesses find them overly complex and expensive for their needs, especially when they are first starting out. Some marketing and sales departments may seek a simpler and more affordable alternative to a full CRM. In these cases, a dedicated marketing automation platform might be more suitable.

Specialized marketing automation software is also beneficial for businesses that rely mostly on digital communication channels like emails, texts, and chatbots since these can be easily standardized and automated. If you work at a small to medium-sized business that doesn’t have a long sales cycle — such as an e-commerce business where customers see an ad and then immediately buy the product — then a marketing automation platform such as emfluence might meet most of your needs without offering too many extraneous features.

Even some enterprise companies find it helpful to use dedicated marketing automation tools for specific functions. For example, you’ll usually get more sophisticated functions if you choose a dedicated chatbot platform like Appy Pie as opposed to a rudimentary one included in a CRM platform.

Although CRM and marketing automation software have distinct use cases, they are rarely mutually exclusive. This is especially true for businesses that are primarily focused on streamlining processes across marketing, sales, and customer service teams. When weighing your options, the best path forward may be to integrate CRM and marketing automation solutions.

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