What Is the Difference Between CRM and Marketing Automation?

The key difference between a CRM and marketing automation is that a CRM is mainly concerned with managing a sales rep’s tasks, their pipeline, and collecting prospect information whereas a marketing automation platform is focused on engaging, optimizing, and measuring the prospect’s experience with your brand. As marketing automation platforms collect account and prospect data, they can act as a CRM. A CRM however, cannot function as a marketing automation tool.

Managing customer relationships properly and being able to hand off prospects and clients efficiently between marketing, sales, and customer success team members can make or break a company. Using spreadsheets and post-it notes is not a winning strategy; using properly deployed software can help a startup achieve unicorn status. 

So, what is a CRM? In short, a CRM serves three basic functions: 

• Lead management
• Task management
• Pipeline management

Different CRMs are optimized for each of the different functions. When a company is selecting a CRM, it is important to understand what functionality they want it optimized for, select a CRM that will best suit their needs, and then customize it for those needs. 

Recommended: Check out our articles on the benefits of CRM and the best CRM for startups!

A marketing automation platform is a software as a service (SaaS) that aids companies in how to best market to their clients. As marketing is a broad category and can comprise many different marketing functions, so too can marketing automation platforms. 

In short, a marketing automation platform helps companies with;

• Lead scoring
• Website visitor insight
• Chatbots
• Email marketing
• Social media marketing
• Landing pages
• Click funnels

Marketing platforms such as the following can be a single source for call marketing automation:

• HubSpot
• SharpSpring
• Marketo
• Eloqua
• Pardot 

Unlike CRMs however, there are marketing automation tools that specialize in only one aspect of digital marketing:

• Mailchimp and ConstantContact both focus solely on email marketing. 
• SproutSocial, Hootsuite, and Crowdfire only focus on social media marketing.

The choice for a company to implement a CRM, marketing automation platform, or both, entirely depends on the stage of growth of the company and the growth goals of a company. 

For example, an engineering company with one large client — and they only service that one client with no desire to grow — may not need either a CRM or a marketing automation platform. On the other hand, a software-as-a-service (SaaS) company that is in a high growth mode with a team of sales representatives will need both a CRM, marketing automation platform, and possibly several other tools to help round out their technology stack.

Once the decision has been made to implement either a CRM or marketing automation platform, the company needs to consider many factors. In order of importance the considerations would be as follows;

• Fit with go-to-market strategy
• Cost
• Functionality
• Usability

The fit with a company’s go-to-market strategy is key. Why? If a company’s go-to-market strategy is sending cupcakes to local retailers, a robust email blasting system such as Constant Contact or Mailchimp should not be in the cards, maybe they only need Sendoso. 

The second consideration is cost. The reason this is not the first consideration is that if the tool doesn’t fit, it doesn’t matter how cheap it is; it will not be cost-effective at any rate.

Functionality is an emergent property of go-to-market strategy fit. If your organization does do email marketing, there are a dozen or more marketing automation tools that can handle that. However, which one works best for your organization? Do you need a simple fire and forget platform or do you need more workflows that empower your team to fire off emails depending on if the respondent opens, clicks, or even visits your website?

Finally, usability. This is the last factor considered in this list since if the short list of platforms being reviewed fits the above criteria, the one selected should be the easiest to use. While it could be argued that usability should be prioritized higher on the list, a platform that cannot achieve your company’s goals, no matter how usable, will hinder the growth your team could achieve.