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CRM vs Marketing Automation: The Difference
Written by: Victoria Yu
Victoria Yu is a Business Writer with expertise in Business Organization, Marketing, and Sales, holding a Bachelor’s Degree in Business Administration from the University of California, Irvine’s Paul Merage School of Business.
Edited by: Sallie Middlebrook
Sallie, holding a Ph.D. from Walden University, is an experienced writing coach and editor with a background in marketing. She has served roles in corporate communications and taught at institutions like the University of Florida.
Updated on November 1, 2023
CRM vs Marketing Automation: The Difference
If you’ve heard of CRM, you’ve probably heard of marketing automation, and if you’ve heard of marketing automation, you’ve probably heard of CRM. If you can’t talk about one without the other, is there really a difference between the two?
To the most discerning marketers and salespeople, yes, there is. Though CRM and marketing automation may be very closely related, understanding the distinction between the two can make a world of difference to businesses hoping to improve their marketing and sales operations.
If you’re interested in one or the other, this handy guide will walk you through the differences between CRM and marketing automation to ensure you’re getting the best tool for your business.
Customer relationship management (CRM) software tracks individual customer interactions throughout the sales process to build more personalized sales campaigns, driving sales and customer loyalty.
Marketing automation is a type of marketing software that automates repetitive marketing tasks, enabling more widespread and intensive marketing efforts to fill a business’s marketing and sales funnels with more potential customers.
Though both CRM and marketing automation tools work to increase sales, CRM does so by focusing on personalized sales, while marketing automation does so by enabling more widespread promotions.
What is CRM?
To start off, customer relationship management (CRM) is when a business tracks customer-company interactions and creates customer profiles so a company can derive data-driven insights and improve its customer experience through personalized interactions.
Though the term technically applies to all efforts to track and personalize customer experiences, CRM usually refers to a software solution platform that records, stores, presents, and manages all that data in one easily-accessible location.
As a customer progresses through the marketing, sales, and customer service departments on their sales journey, each of these departments uses the CRM to manage customer accounts, tracking each customer’s progress, actions, and preferences. This breaks down information silos and gives businesses a comprehensive understanding of their customer journey and customer base, helping to shape overarching marketing strategies, individualized sales tactics, and personalized customer service interactions.
CRMs can also automate routine tasks in the sales process, boosting employee efficiency.
Companies aim to use CRMs to improve their sales conversions and customer retention by using the customer profiles within to personalize their messages and interactions with customers, appealing to them on a personalized level.
On a macro level, a company can also use its CRM to analyze its customer database to segment customers and improve its strategies with data-driven insights.
What is Marketing Automation?
On the other hand, marketing automation is a category of software that automates repetitive processes in digital marketing campaigns, such as scheduling and sending out emails and texts, posting on social media, and implementing A/B testing on a website. It can also help marketers segment leads, analyze the most effective marketing materials for each customer, and use AI to deliver personalized content.
An example of marketing automation is how Amazon sends you emails about items you’ve put in your cart but haven’t purchased, gently nudging you to complete the sale and recommending other products similar to it. Obviously, there’s not a live person watching your basket – Amazon’s marketing automation handles it all for its millions of customers.
A marketing automation solution is most useful to companies that manage hundreds of thousands of leads at once – too many for a human marketing team to remember the individual preferences of each and create personalized marketing content. Not only will the automation software manage all of the marketing content simultaneously, but it can also use machine learning and AI to learn what each individual customer prefers, segment the lead into the correct target audience, and correctly display content that corresponds to that segment for a more appealing promotion.
To be clear, the features mentioned above aren’t ubiquitous to all marketing automation software – it’s entirely possible that a single software system only provides one tool and that a company has to purchase from several vendors to get all of the tools it wants. A company’s collection of marketing automation tools is called its marketing technology stack, or martech stack.
The goal of marketing automation is to reduce human error in marketing campaigns and free up marketers for more involved and strategic tasks, improving the efficiency of the marketing department as a whole. Customers are also provided with personalized content suited for their current purchasing journey, increasing both customer satisfaction and the business’s chances of making the sale.
On a macro level, utilizing marketing automation enables a business to coordinate and execute marketing campaigns on a much larger scale than they could’ve managed with a human-only team.
What are the Similarities Between CRM and Marketing Automation?
CRM and marketing automation are both software tools with the goal of improving a business’s operations by helping employees in the sales and marketing departments, respectively, manage their tasks, segment and analyze leads, provide personalized content, and guide more customers to the end of their purchasing journey.
Both CRM and marketing automation software can be sold as a standalone tool, but CRM is usually a bit more useful by itself; a company with marketing automation usually needs to augment it with other tools in its martech stack or integrate it into the company CRM.
Finally, both B2B companies and B2C companies can use CRM and marketing automation software. However, B2B companies with fewer leads might find more use in the one-on-one nurturing style of CRMs, while B2C companies with thousands of customers might find more use in the one-to-many tools in marketing automation.
What are the Differences Between CRM and Marketing Automation?
Though they might have the same goal of improving a business’s sales numbers, CRM and marketing automation diverge quite a lot in how they achieve that goal. In this table below, let’s take a quick look at the whos, whats, wheres, whys, and hows of CRM and marketing automation to highlight the differences between them.
|Who uses it?||Sales team primarily, can be used by all customer-facing roles||Marketing team|
|What does it do?||Helps sales reps manage individual sales leads||Automates repetitive marketing tasks such as email marketing|
|Where in the sales process is it used?||Sales funnel||Marketing funnel|
|Why do businesses use it?||Build stronger, more personal customer relationships to increase sales||Speed up marketing functions and market to a wider audience to increase sales|
|How else can these tools be integrated?||Other tools integrate into the CRM||Marketing automation integrates with and into other tools|
Who Uses CRM vs Marketing Automation?
Though marketing automation is used only by the marketing department, CRM is used by all customer-facing departments (marketing, sales, customer service) with a particular focus on the sales department. With access to the customer profiles in the CRM, any employee who interacts with a single customer will be able to pull up their file and make a personalized conversation with them, tailored to their background and purchasing journey.
What Does CRM vs Marketing Automation Do?
CRM serves as a live management system for current sales leads, as well as a historical database of all previous customers. Using the CRM, salespeople can track a single lead’s progress through the sales process and view more details on them to create a personalized sales pitch.
Meanwhile, a marketing automation tool automatically completes repetitive marketing tasks such as sending out emails, posting on social media, or collecting data from customer interest forms.
Where Are CRM vs Marketing Automation Used?
In the sales process, marketing automation presides over the marketing funnel, which generally covers how a consumer becomes aware of a brand to the moment they consider purchasing. They then proceed to the sales funnel to complete their purchase, overseen by the CRM.
Post-purchase, a customer’s data is kept in the CRM for the sales department to access in case they come back to make another purchase, or for the customer service department to handle any questions or complaints they might have.
Why Do Businesses Use CRM vs Marketing Automation?
A business uses a CRM platform to improve its overall sales management process, such as lead distribution, personalized sales conversations, and sales workflows, to help nurture and close each individual sale faster.
Meanwhile, a business uses a marketing automation platform to exponentially grow its marketing functions, sending out more marketing messages than could be feasibly handled by a human team. This would increase the business’s brand awareness and number of potential sales, as well as freeing up marketers for more strategic, higher-level tasks.
In other words, while both CRM tools and marketing automation tools increase a business’s total amount of sales made, CRM does so by increasing the velocity of each individual sale, while marketing automation does so by increasing the volume of potential sales.
How Else Can CRM vs Marketing Automation Be Integrated?
CRM platforms are usually used as a host platform for other tools to integrate into (such as marketing automation software or lead distribution software). But nevertheless, a CRM system is fully functional by itself as a standalone tool.
On the other hand, a marketing automation tool is usually just one piece of the puzzle in a whole martech stack: it might be integrated with a data integration tool, identity resolution tool, customer database, content management system, email service provider, web analytics tool, social media, SEO, and more. Though marketing automation can theoretically be bought by itself, it’s brought to its fullest potential when used in conjunction with a whole suite of other tools.
If you’re a small business looking to expand your operations beyond bootstrapping and pencil-and-paper, you might’ve considered both CRM systems and marketing automation to help you take your business to the next level. But the two aren’t interchangeable.
Though both of these tools can help you improve your total sales numbers, how they do it is quite different: marketing automation helps you draw in exponentially more leads, while CRM helps you pay personal attention to each individual lead, increasing your chance of converting them. By using this guide to choose the most appropriate tool for your business model, you can expect to see huge returns on your investment as sales start flooding in.
If you’re a small business just starting out and hoping to grow your sales, which software tool you buy first depends heavily on your business model.
If you’re a B2B business that focuses on only a few high-ticket sales at a time, a CRM would be more effective to help you track each individual account and nurture those sales to completion. On the other hand, if you’re a B2C business that relies on one-to-many marketing campaigns to fill your sales, a marketing automation system would be more effective in attracting hundreds of low-ticket accounts at once.
To help you put things into perspective, consider this tidbit: though only 56% of companies use marketing automation, 80% of organizations use CRM systems. Its smaller share of use means that, while certainly useful, marketing automation software is a bit more specialized than CRM software and might not be ideal for every business.
We mentioned earlier that CRM software could also include automation in the sales process, but that’s not a feature provided by every software provider. Additionally, note the words sales process – in other words, CRM automation usually does things like automatically scheduling calls, moving leads though the sales funnel based on certain criteria, and assigning leads – all one-to-one lead management tasks.
On the other hand, marketing automation automates one-to-many marketing functions such as sending mass emails or analyzing huge swathes of lead data.
To learn more about CRM automation, check out our guide on the topic, What is CRM Automation?
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