What is contact management and why is it important?

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  • Contact management is the process of storing and tracking data about customers and prospects.
  • In addition to providing quick access to customer data, investing in contact management can help you grow and diversify your customer base.
  • Upgrading to customer relationship management software can provide advanced data that allows you to increase engagement between your business and its customers.
  • This article is for business owners who want to improve their customer relationships using contact management software.

Gone are the days of exchanging napkin notes and business cards. In today’s fast-paced business world, it can be difficult to remember each client’s name and their individual preferences. This is why it is essential to store data electronically, share it with team members when needed, and continuously collect information to successfully interact with customers and customers.

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Contact management, a digital method of storing data, can help you grow and diversify your customer base. As your business grows, it will become more difficult to collect data and determine what information is valuable to you, your employees, and the sustainability of your business.

But who has the time to enter all this information manually? Fortunately, contact management software can automatically collect and analyze data from purchases, marketing campaigns, and previous conversations.

Contact management is a way to enter customer and prospect data for storage, quick access, modification, and tracking. Contact management can be as simple as a spreadsheet or as complex as customer relationship management (CRM) software.

By digitizing contact management, you can give your employees access to valuable customer data. All departments can display the same data, allowing you to speed up communication and streamline processes. When you make communication more effective, you can focus less on business tasks and more on your customers.

In today’s business environment, you need to do more than just personalize a sales email with someone’s name in order to close a sale. Customers are loyal to businesses that remember their specific preferences, and they expect a great experience every time they place an order online or receive a package in the mail. Going above and beyond not only creates repeat sales, but also encourages referrals, which could dramatically lower your overall customer acquisition costs.

To remember : Contact management is how you enter data from your customers and prospects for storage, access, modification, and tracking. It is therefore essential to develop and diversify your clientele.

Contact management software can keep information about your prospects and current customers organized in a searchable format. The software can manage basic information, such as names, phone numbers, and email addresses. It can also track fundamental business-contact interactions, and track important calendar events.

Although contact management software and CRM software overlap in some areas, there is one difference: a contact management system offers basic functionality, while CRM software provides advanced tools to integrate the tasks of sales, marketing and reporting. Having the business goals in mind before comparing the two types of systems will help you decide which software is best for you.

For example, while a contact management system can use a few contact details and organize them for easy access and essential interactions, a CRM increases the amount of data you can collect about customers and prospects, and uses that data. to segment your audience and provide reports. that can improve your relationship with customers. While contact management allows businesses to store information about customers, CRMs allow businesses to go further by taking that stored information and creating and maintaining relationships in real time.

Here are some of the benefits of CRM software:

  • Access in real time The data. By choosing a cloud-based CRM, you can access real-time customer data and keep your entire team informed of any additional data or contact changes. In addition, you are not tied to the office; employees who travel or work remotely can also access real-time data.
  • Integrations. CRMs often have third-party integrations that automatically fill in the data gaps. You can even use third-party apps to analyze customers on their social media accounts. Integrations can be beneficial not only for managing customer service, but also for tracking where your customers are spending time online.
  • Collaboration. Often in business, brainstorming brings new ideas and can help close a complex sale. CRMs allow sales and marketing teams to collaborate and succeed together, for example by creating a higher level of personalization for the customer, A / B testing campaigns and measuring return on investment.

Did you know?Did you know? While contact management software and CRM systems collect and store data, CRMs give you advanced functionality for sales, marketing, and reporting.

If you are in the business planning phase or have just started your business, a CRM might not be the right solution. After all, using a contact management system to find out who your loyal customers first will help you narrow down your contacts when you’re ready to upgrade. Plus, you’ll save money on monthly software costs, integrations, employees, and training while continuing to build the foundation of your business.

But if you have an established business or have recently seen an increase in your income, you might be ready to make the switch from a contact management system to a CRM. Before signing a software contract, however, ask yourself these questions:

  • How many loyal customers do you have?
  • How many employees are available to enter and analyze the data?
  • Is it necessary to record detailed information and interactions with your customers?
  • Does your industry require long and complex sales?
  • Does your industry need quick, repeatable purchases?
  • Does your business sell in a large geographic area?
  • Do you expect higher business growth for the next few years?

Answer the above questions wisely to weigh the pros and cons of using a CRM. If you only have a few employees (although it’s common in your industry), a CRM can cost more than it’s worth. The same goes for customers; a small customer base may be easier to maintain through a contact management system, as a CRM can be complex, with details spanning multiple pages. Additionally, a business with fewer customers will need more periodic data recorded, as it may be more accessible to segment customers based on several factors.

If your industry requires long, complex sales or short-lived products that require quick sales, a CRM can help you collect data to increase your chances of successful sales. A CRM can also be of benefit statewide, nationally, or globally. Advanced data can segment customers by location so you can deliver the best products and services for each territory.

Check out our reviews of the best CRM software for small businesses to find an option that can help your business grow.

adviceAdvice: Analyze the current situation of your business using the questions above to choose between a contact management system and a CRM.

After reviewing your business goals, it’s time to narrow down the software options. Since most business software has many competitors, you will need to research them before choosing one. [See our more detailed guide on how to choose CRM software.]

Here are some areas to consider in your research:

  • Recommendations from colleagues. If you have a trusted colleague who works in the same industry or has a similar business plan, reach out to them for feedback on contact management and CRM software. For example, ask them which systems offer better customer service, payment plans, and integrations. Consulting with colleagues or mentors can save you time compared to trying out each system on your own.
  • Online reviews. Find the reviews of other users with a simple Google search. Look for positive reviews on customer service, frequent software updates, and ease of use. Beware of businesses that don’t have up-to-date reviews, complain about a broken feature that’s important to you, or have experienced billing issues.
  • Free try. Free trials give you the ability to explore a system’s dashboard, navigation, and customer service options before paying for it. Look for contact management software that offers this option so that you can try it out before you buy.
  • Excellent customer service. Choose software that offers responsive and professional customer service. A system with 24/7 service is ideal, but look for a company that can answer your question within hours or at least provide an online FAQ tutorial database for simple issues that may arise.
  • Integration. If you’ve never used contact management or CRM software before, you might want to choose a company that offers in-person or virtual integration to get the most out of the software. Asking someone to walk you through the features you plan to use can save you time and frustration. Additionally, you will want to have a good grasp of the software if you need to train other users.
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