Podcast Summary: The $100 MBA Show – MBA2366 Q&A Wednesday: What's the difference between a CRM and an Email Marketing software?

Release Date: September 20, 2023

Introduction

In episode MBA2366 of The $100 MBA Show, host Omar Zenhom delves into a fundamental question posed by a listener named Adam: "What's the difference between a CRM and an Email Marketing software?" This episode serves as an essential guide for budding online entrepreneurs navigating the complex landscape of business tools.

Understanding CRM and Email Marketing Software

Omar begins by demystifying the acronyms and clarifying their distinct functions within a business framework.

• CRM (Customer Relationship Management):
  Omar defines CRM as a comprehensive system that manages "relationship management for your customers from A to Z" ([01:12]). This includes everything from capturing leads, nurturing them into customers, and maintaining ongoing relationships post-purchase. CRMs track all interactions, purchases, communications, and behaviors of customers, providing a holistic view of the customer journey.

  Examples of CRMs mentioned include:

  • Keep
  • HubSpot
  • Intercom

• Email Marketing Software:
  In contrast, email marketing tools are primarily designed to "nurture your leads so they can become a customer" ([01:12]). They handle tasks such as sending newsletters, automations, and email courses aimed at converting leads into buyers and maintaining communication with existing customers.

  Examples of Email Marketing Software mentioned include:

  • Mailchimp
  • ConvertKit
  • Sendfox
  • Mailerlite

Omar emphasizes that "email marketing software is not going to serve you as much as a CRM" when it comes to managing customer relationships comprehensively. However, both tools are not mutually exclusive and can be used in tandem for optimal business operations.

When to Use CRM vs. Email Marketing Software

Omar shares his personal experience with using both tools in his business, Webinar Ninja, to illustrate their complementary roles.

• Using Both Tools:
  Omar explains, "We use ConvertKit to market... but once they become customers, we manage them inside of Intercom, that's our CRM" ([05:45]). This dual approach allows for specialized functions—ConvertKit excels in marketing automation, while Intercom provides robust customer relationship management.

• Cost Considerations:
  He points out that "CRMs are typically more expensive than email marketing software" ([06:10]). To manage costs, businesses often keep their bulk email lists, predominantly consisting of leads, within email marketing platforms due to their affordability per contact, while reserving CRMs for active customers.

• Type of Business Matters:
  The necessity of a CRM also depends on the nature of the business. For service-based businesses like agencies that require extensive interaction and data management with clients, a CRM is indispensable. Conversely, businesses focusing on selling products or informational courses might find email marketing software sufficient in the early stages.

Cost and Scalability

Omar advises entrepreneurs to "play with their pricing on their pricing page" ([07:30]) to forecast future costs as their business scales. He recommends evaluating how the pricing structure of a CRM or email marketing tool will adapt when the number of contacts or the business size increases, ensuring that it remains sustainable as the company grows.

Choosing the Right Tool

To aid in selecting the most suitable tool, Omar outlines a practical approach:

1. Utilize Free Trials:
   He encourages taking advantage of free trials to "make sure that it's user-friendly" ([08:15]) and aligns with the business's operational needs.

2. Involve Your Team:
   Including team members in the decision-making process ensures that those who will be using the tool are comfortable and invested in its adoption.

3. Assess Affordability:
   Omar stresses the importance of not overcommitting financially. If a CRM is too expensive initially, starting with an email marketing tool and gradually integrating a CRM as the business expands is a viable strategy.

4. Evaluate Essential Features:
   He recommends focusing on tools that "help you take action" and serve as effective leverage in the business operations, rather than getting bogged down by unnecessary features.

Final Recommendations

Omar concludes the episode by advocating for proactive decision-making:

• Start with Email Marketing:
  If unsure, begin with an email marketing software like ConvertKit, which "is essential" for marketing and can be a cost-effective starting point ([09:59]).

• Adapt and Expand:
  As the business grows, entrepreneurs can integrate a CRM to manage more complex customer relationships without regret, as it's merely an addition rather than a switch from their initial tool.

• Mindset on Tools:
  He reminds listeners that "all software is a tool to leverage your efficiency and velocity in your business" ([09:59]). The right tools should facilitate business operations and not hinder them.

Conclusion

Episode MBA2366 offers a clear and actionable differentiation between CRM and email marketing software, tailored for online business beginners. Omar Zenhom effectively breaks down the complexities, providing listeners with the knowledge to make informed decisions on which tools to invest in as they embark on their entrepreneurial journeys.

Notable Quotes:

• Omar Zenhom ([01:12]):
  "CRM stands for customer relationship management or manager... it's the total record of communication and actions your customer takes throughout the buying journey."

• Omar Zenhom ([05:45]):
  "We use ConvertKit to market and to turn leads into sales. But once they become customers, we manage them inside of Intercom, that's our CRM."

• Omar Zenhom ([07:30]):
  "Play with their pricing on their pricing page. How much is it going to cost when your business doubles, triples, quadruples in terms of number of contacts, sales..."

• Omar Zenhom ([09:59]):
  "Don't buy something you can't afford. If the CRM software that you need is expensive and you can only afford an email marketing software, go with the email marketing software because that's really essential."

Recommendation for Further Learning

For those interested in delving deeper into effective business tools and strategies, visiting The $100 MBA Show and exploring their extensive library of actionable business lessons is highly recommended.