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CRM Vs. CEM Software: Which is Right for Your Small Business?

4 Mins read

Customer relationship management and customer experience management are terms often used interchangeably. But they are two different types of software with overlapping features and objectives.

A common concern among small businesses is: which of the two will provide more value? This article will answer that.

First, let’s start with the definitions:

What is CRM Software?

Customer relationship management (CRM) is a tool that enables your organization to form relationships with your leads and customers.

It provides a holistic picture of all your customer interactions in one place for your workforce to see. Every CRM software user will have easy and direct access to all the real-time client data like conversation history, purchases, inquiries made, and more.

It also enables collaboration amongst departments and organizes their notes, activities, and metrics into one system which helps keep track of your sales and prioritize opportunities.

Moreover, it enables businesses to offer excellent customer experience through data-driven personalization. 

What is CEM Software?

Customer Experience Management (CEM) is a tool that helps businesses to track the “quality” of their interaction with customers, across departments.

The main focus of this system lies in reducing the gap between the customer experience you desire to offer and the actual customer experience you are offering. This is done through direct feedback, reviews, surveys, and other forms of communication that take place across customer journeys.

CEM is about gathering all these experiential insights to understand customer viewpoints and providing you with the knowledge and tools to take action on those insights. With these insights, you can pivot and optimize your customer experience efforts to form deeper and lasting customer relationships (increased customer lifetime CLV), and boost revenue.

CRM Vs. CEM. What’s The Difference?

Here are some of the main differences between the two software:

Customer Relationship ManagementCustomer Experience Management
It offers insights of a customer to the companyIt offers insights to the company regarding how a customer perceives them
Focuses on the customer’s journey across the sales funnelFocuses on the touch points across the customer journey ensuring great CX
CRM data is centered more on customer transactionsCEM data is centered more on customer experience and overall customer satisfaction  
CRM manages the customer  CEM enables a customer

Before knowing which software is best for your business, it is important to note its benefits.

What are the Benefits of CRM Software?

Here are some of its main benefits:

1. Lead management

A CRM system with its lead management feature can help you get ideal conversion rates and increase profitability. Here’s how CRM software can help you with lead management:

  • Identifying highly profitable leads from a pool of incoming leads.
  • Measuring ROI from your ad spend.
  • Nurturing promising leads to conversion promptly.
  • Analyzing and tracking key insights about leads.

2. Better Marketing Efforts

It helps you gather and analyze valuable information needed for a successful campaign including impressions, clicks, and purchases across new, existing, and prospective customers.

Moreover, it helps marketing teams offer campaign management, tracking response, and detailed analytics all under one roof.

3. Boosts Sales

With the ability to track the conversation with customers, CRM helps salespeople to know when to reach out to prospects and how, increasing both – timeliness and personalization. For instance, with CRM software you know whether a customer needs a product replacement, contract renewal, or is eligible for an upsell or cross-sell, all of which increases your chances to close a sale.

4. Enhanced customer support

Leading CRMs use AI and process automation to track online browsing behaviors, purchasing habits, and social interactions to offer quick responses to customer service inquiries and also social media posts.

Since CRM centralizes customer data and knowledge-sharing, organizations can act upon customer queries and complaints with a higher level of personalization that too quickly.

Now, let’s move to the benefits of CEM software.

What are the benefits of CEM Software?

The main benefit of CEM software is it helps you measure the quality of customer experience that you are providing to help you pivot and re-strategize for better outcomes.

1. Quantifying Customer Perception

A CEM software tracks, analyzes, controls, and helps you improve interactions with customers across their customer journey. A CEM software can gather and analyze data from all the places where a customer interacts with your business. This could be anything from your point of sale to bill payments to customer success agent interaction.

2. Helps You Become A People-Centric Brand

CEM is the best tool to help you create people-centric brand culture. This is because it constantly allows you to optimize your CX efforts to meet customer expectations and automatically create a culture that is customer obsessed. Moreover, you don’t need to guess how your customers feel. Thanks to CEM software you will have empirical and actionable insights, thanks to CEM software.

3. Increase Customer Loyalty

One of the major benefits of offering excellent customer service is customer loyalty. Loyal customers spend more on businesses they trust. 86% of buyers are willing to pay more for a great customer experience, according to SuperOffice.

Also, it is known that customer acquisition costs more than customer retention, and these loyal customers are your biggest word-of-mouth marketing machine, which proves that CEM software leads to big sales and a better brand image.

Now, coming to the question at hand.

Which software is right for your small business?

Regardless of your business size, the answer is – both!

CRM helps you create relationships while CEM helps you enhance them and make them last.

A combination of both would help you get a complete picture of customer expectations and how well you’re fulfilling them. Therefore, you can either go for CRM software with CEM features or invest in both.

We hope knowing the benefits of both these software will help you make the wise decision of investing in both CEM and CRM capabilities for your business.

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About author
Ryan Kh is a big data and analytic expert, marketing digital products on Amazon's Envato. He is not just passionate about latest buzz and tech stuff but in fact he's totally into it. Follow Ryan’s daily posts on Catalyst For Business.
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