Storing customer information has been around since the dawn of trade, but that was a simpler time, when business owners could easily remember their local customers' names and if that person liked their flour finely milled or not.
Of course, where once we used detailed notebooks and filing cabinets; now, that data has been digitized and the system of recording customer information is completely rebranded into what we can now call contact management.
Choosing to stick to a small number of well-known clients is no bad thing, but many contemporary businesses want to grow and diversify their customer base, and it’s certainly easier to do that in today’s digital world than it was years before.
This really is where contact management truly comes into its own as a business concept. After all, if you don’t know who your customer is and if there there are no general rules to how you organize contact data, as well as no no security system to protect all that information, then your business growth won’t be sustainable.
As a result, sooner, rather than later, you’ll need a proper way to keep it organized and useful. Otherwise, you might find yourself overwhelmed with information that makes little sense to you, let alone to a new hire. Let's dive into what this really means.
What is contact management?
Contact management means creating a strategy for recording, editing, and storing details about an individual within the confines of a pre-defined system. On one hand, you have traditional, paper-based contact management tools like notebooks, Rolodexes, calendars – whatever you can think of – while on the other hand, you have your digital ones, like a mobile phone’s contact list, contact apps, or business-specific customer management software.
Customer contact management takes this concept and applies it to the world of business, where, as we all know, the customer is king. This means that good customer contact management is key to keeping said king happy, and this doesn’t simply mean recording a name and attaching it to an email address to make it seem personalised. Does that sound like a great experience, truly worthy of royalty?
Think about your local coffee shop. If you’re a daily customer, chances are you’re on pretty friendly terms with the barista; they know your order by heart - a latte with the milk steamed at exactly 167F, together with two espresso shots - and they alway spell your name correctly. They’ve recorded these details about your preferences and attached them to your mental customer profile in order to make sure your experience is remarkable every single time.
As soon as you end up in another shop, for whatever reason, and are faced with a barista who has no idea about your preferences (and doesn’t ask), and hands you a molten cup of dark brown disappointment, you’ll remember why you’re a loyal customer elsewhere.
And therein lies the main driver for businesses to acknowledge the importance of having a contact management strategy: winning over loyal customers.
Perhaps at first, like your favourite barista, you’re also able to remember everything about your customers, but as a company grows, diversifies, and hires more people, mental contact management becomes downright impossible and at best a labour intensive task to record and maintain, let alone make useful to new employees.
The systems of yesterday all revolved around paperwork and, later on, spreadsheets with endless lists of customer details, but nowadays they’ve evolved into complex software, both for personal and business use. And speaking of evolution...
Customer contact management vs. customer relationship management
To put it in simple terms, it’s the difference between having an acquaintance and a friend. A contact management system will tell you their name, phone number, email, and address as well as maybe a photo. A CRM tool will delve into a lot more detail, showing you their favorite color, restaurant, and drink, your text history together, as well as any other interaction between the two of you.
Contact management is a precursor of customer relationship management and, nowadays, appears as a feature of CRM tools. Due to the increase in complexity of the sales process driven by competition and diversity of buyer journeys, a customer contact management system can, at times, fall short of the demands of an extensive target market.
At the same time, customer relationship management encompasses a much wider variety of activities that aren’t simply related to storing information. Under the umbrella term of CRM, one can include more than contact details and notes; tracking, managing, recording interactions between a business, its prospects, and existing customers, as well as enabling communication via integrated tools. All of these fall under relationship management.
Now, think if both the acquaintance and the friend were your customers. Which one would you be able to treat better? Naturally, the latter, as you know a lot more about their likes and dislikes, as well as you’re able to predict their behavior better.
Do you need a customer contact management software or a CRM?
Like with many of these types of decisions, the answer is “It depends on your current situation.” It would be easy to think “Well, if CRM is a more advanced form of customer contact management, then why not get that and be done with it?”. The answer is for the same reason why an Etsy seller doesn’t buy Salesforce: there is simply no need for it and deploying software like that is a lot more trouble than it’s worth.
Buying software that’s too “big” for your company is just as bad for efficiency as buying software that’s too small. As with anything else in life, you want it to fit just right, with some wiggle room for growth.
To understand whether you need a contact management software or a CRM, ask yourself the following questions:
How many customers do you have?
How many people on your admin team?
What type of interactions do you have with your customers and is it necessary to record every one?
What kind of growth do you anticipate for your company in the next two to three years?
As you try to answer these, you’ll realize the temptation to add many caveats (“But 3-4 customers/month is normal for my kind of business!”), which leads us to our next point: deciding between a contact management tool and a CRM depends on your industry too.
Businesses selling services or products that come with a long decision process and complex buyer’s journey will need to learn more about their customers in order to anticipate their reactions and fulfill their expectations; this would make a CRM software a more suitable choice. At the same time, businesses who sell a wide variety of similar products with short shelf-life and rely on a high repeat-purchase rate (fast-fashion is a great example) will need more information on their customers in order to target them with the right items.
The size of the company plays an obvious role too. A local plumbing company with five technicians and two admins can easily use a customer contact management tool because they work with a smaller target market defined by their geographical location (e.g. they operate within 30 mile of their headquarters) which implies certain similarities between customers, and they rely on direct interactions in order to provide a good customer experience.
A complex CRM would collect data that would go unused in this situation, increasing the operational costs of the business, as well as putting the existing admin under unnecessary strain.
Now, if this company had a forward-thinking attitude and they aimed to grow in the next five years and diversify their customer communication methods to include email campaigns and social media, they would find themselves in a position to look for a customer relationship management tool.
This is where good software research comes into place. Being able to see at a glance if a software can grow with you is incredibly important.
To continue the story of the plumbing company mentioned above, a truly great business owner would go for a contact management software that comes with more complex field service solutions plans i.e. where the basic contact database would evolve into a relationship management tool. This applies to any industry and it’s one of the major reasons why many software providers have various subscription plans designed to suit a wide range of companies and their needs.
Now that you know the difference between contact management and customer relationship management, let’s have a look at the benefits of the former (and which apply to the latter as well!):
Benefits of having a great contact management system
It’s certainly challenging to find the best software for your business, especially considering the variety of options out there. Having a clear set of goals that you’re not willing to compromise on is a good strategy you can use to weed out the less suitable options and come up with an easier to manage shortlist.
When looking for the right contact management system, these are the top benefits you should keep an eye out for:
Bringing together all your contact information and organizing it is the essence of a database. When everyone on your admin team has access to the same streamlined collection of data that updates in real-time so every user sees the same information, it’s easy to see the benefits in terms of improved efficiency and communication.
Rather than sift through a variety of spreadsheets, screens, or, worse, notebooks, and wasting time deciphering every person’s way of recording information, and then getting everyone on the same page, with a digital solution all you have to do is log into your contact management software to have a complete view of your customer’s data. If you want to be more customer service oriented, centralizing your data is essential.
Many businesses make do with Google Sheets as a method of collecting contact information. The major benefit is obviously the fact that it’s user-friendly and offers real-time updates, but as soon as you want to gain some generalized insights on your contact, you’re faced with the lack of analytics features.
No matter the size of your business, what industry you’re in, or what your growth plans are, analytics can inform any decision you’re about to make and doing without them can be a major drawback and damage your success. Even the simplest generalization like which timezone your customers live in will lead to better calibration of online advertising, more engagement on social media (since you won’t be posting when it’s midnight for them), and more ideas on how to listen to their customer voice.
Potential for integrations
Integrations are a great way to boost the capabilities of a contact management software. The latter provides the raw data needed to inform a strategy, while the former bring more functionality to the table.
The easiest example and one that will work with any contact management software worth its salt is an email integration. Whether you go for Mailchimp or Outlook or any other solution, the quality of your contact database will seriously influence any email campaign you decide to run. For example, messy data can keep you from personalizing your communications and no one likes to be addressed as “Hello, customer”, especially when they know they’re being sold to.
How to find the best contact management software
Now that you know the most important facts about contact management, how do you go about finding the right tool? Well, we’ve mentioned that it’s important to set some clear goals and benefits you’d like to gain but, in the end, it all comes down to research.
Always check if the solution you have in mind has:
A wide variety of reviews. Five stars out of five is not always going to mean that’s the right software for you, but it’s a pretty good indicator: that is so long as they come from detailed, thoughtful reviews. At the same time, keep in mind that one person’s trash is another one’s treasure and what others see as benefits can actually be cons for your business. The bottom line is: Don’t skimp on the time you spend reading reviews! Three and four star reviews are often more honest and reliable as they indicate genuine concerns or successes that could be more relevant to your own mindset; more so than the the “5/5, no issues” that you’re bound to come across, too.
Excellent training. If you’re going to invest in good software, make sure you get your money’s worth by using it to its full potential and good training will guarantee that.
Responsive client services (which you’ll figure out from the reviews).
A thorough database for those problems that need solving but aren’t quite complex enough to contact support.
A free trial or live demo. Nothing else can convince you like a week or two of thorough use. Make sure to have other shareholders participate and ask for the opinions of anyone who might be affected by the decision of introducing new tools. They will be the most motivated ones to choose the right solution.
Knowledge is power, isn’t it? Then it makes sense that the more quality information you have about your customer, the better you can run your business and fulfil their expectations.
Improving your contact management strategy with the right tools, which will let you centralize information, store it security, and find relevant data in real-time, is paramount for companies with ambition. After all, happy customers make for a happy business!
Cristina Maria is a Marketing Executive at
Commusoft, a job management software company, where she helps field service businesses discover the potential of digital solutions. A curious hybrid writer and marketer, you'll usually find Cristina doing what she loves most: using her work experience to produce engaging content for those looking to make the most out of their business strategies. An Asimov fan since childhood, she gets much too fired up whenever the topic of AI comes into discussion.