With rising stakeholder engagement expectations, effective stakeholder engagement is now more critical than ever. Having a quality software solution can significantly simplify your stakeholder engagement efforts, and both CRM and SRM fit the bill.
But which tool would be a better fit for your organization?
With the business community’s love for confusing acronyms, understanding industry speak can be increasingly difficult. That’s exactly why we’ll cover the classic CRM vs. SRM debate in detail to help you better understand each tool’s functionality and suitability.
Let’s get started.
A Closer Look at CRM
CRM stands for Customer Relationship Management. As the name suggests, it helps a business perform various activities like managing customer queries, tracking orders, and communicating with customers.
It captures the personal information of customers (contact information, the products or services they purchased, how frequently they purchase), giving the sales, marketing, and customer service departments an organized overview of all leads and customers. This enables them to track potential customers, find new ones, and get useful data to better inform their business strategies.
Using CRM software will help you find and eliminate silos of sales and customer information that would otherwise be trapped in Excel spreadsheets, meeting notes, and mobile devices.
Some examples of top premium CRM softwares include Salesforce, HubSpot, Zoho, Microsoft Dynamics 365, and Pipedrive. There are also free CRM softwares that can be a good fit for smaller businesses with basic CRM needs and limited budgets.
Benefits of CRM
The main purpose of CRM software is to aid a business’s sales. Use it to automate sales, have effective communications with customers, and get easy access to insightful customer data.
Let’s take a closer look at why more than 60% of businesses adopt a CRM within the first five years of launch.
Seamless and Personalized Communication
A CRM software stores all customer data in a single place, making it easier to contact previous customers and target new ones. The fact that you know exactly where a prospect is in the sales cycle can help personalize your approach to deliver better service, too.
With 52% of consumers saying that they will switch brands if a business doesn’t customize communications to them, this is a solid advantage.
Time-saving Automation Capabilities
Another CRM benefit is it makes task execution time- and energy-saving.
Performing the same task every day can quickly get tedious and make it prone to errors. A CRM automates daily routine tasks (think: form filling, data analytics and reporting, resolving minor issues), allowing business representatives to focus on more critical tasks like finalizing deals and resolving customer issues and improving productivity.
Lower Manual Errors
Team members can make errors when recording customer data manually. We’re human after all. Luckily, a CRM system can reduce these errors by recording all customer data accurately, which can also help drive more sales.
Democratize Stakeholder Knowledge
Sales and customer service reps use their valuable knowledge to reach out to and nurture contacts for creating stronger outbound sales sequences.
The problem is that this information is stored in their heads, personal devices, and notes—places that are practically inaccessible to other team members. This also means that when these reps leave, they also take their knowledge along with them—knowledge that could help a lot to drive conversions.
A CRM system eliminates this problem by capturing and giving every individual in your company access, allowing them to take the proverbial button and speed ahead.
A Closer Look at SRM
SRM stands for supplier relationship management. It’s a systematic process that involves:
- evaluating vendors that supply your company’s goods, materials, and services,
- determining each supplier’s contribution to your company’s success, and
- developing effective strategies to improve performance.
Professionals commonly use an SRM tool to better manage supply chains. As they’re responsible for procurement management, project management, and operations, users find the tool handy to evaluate and strategize to improve their company’s performance.
This is why SRM is also known as supply chain relationship management. In fact, SRM is one of the many disciplines of supply chain management and similar to vendor management and procurement processes, albeit with key differences.
While vendor management focuses on establishing cost and service-level agreements between a company and its vendors, procurement prioritizes elements relating to the purchase, such as ordering, contracting, invoicing, and paying.
SRM also stands for stakeholder relationship management.
Stakeholders are key to the business and social environment in which your organization operates, and, therefore, affect its financial and operating performance. Stakeholder relationship management involves organizing, monitoring, and improving your relationships with them to achieve mutual benefits.
Your purpose here is to influence your stakeholders’ attitudes, judgments, and actions in a way that aids both your and their interests. After all, stakeholders will be more likely to cooperate if they have a mutually beneficial relationship with your organization.
What you need is a skillful approach to effectively balance the interests of all parties involved—something that stakeholder relationship management makes easier.
Benefits of SRM
Supplier relationship management offers several benefits that work together to contribute toward a healthier bottom line. After all, what better way to drive revenue than strategically managing suppliers and applying SRM best practices?
Here are some common benefits of using SRM for your organization:
Greater Cost Savings
Entering into deals with new suppliers usually involves significant costs.
Sure, a formal expense policy guide can help control unnecessary costs. But using a sophisticated SRM system works better as it seeks to create a mutually beneficial relationship with key suppliers and save money in the long run. This also reduces availability problems, delays, and quality issues, leading to better service for customers.
Reduced Price Volatility
Customers are easily spooked by huge price fluctuations, which are a consequence of the increased volatility of commodity prices.
A SRM system can eliminate this issue. When using the tool, you can set a fixed price for materials. This will prevent any fluctuations even when market price change. Vendors also willingly offer fixed pricing if you enter into long-term contracts with them.
Supply Chain Consolidation
Your and your supplier’s businesses work together in tandem. This enables both parties to better understand each other’s inner workings, plus adapt their own working styles and operations to accommodate others.
In turn, this will lead to greater efficiency and operational advantages and create more stable relationships. Consolidating a supply chain lets you reduce the number of suppliers you purchase from, simplifying the purchasing process and budgeting.
Learn more about logistics management and the best software for this process.
Continuous Operational Improvements
When you take the initiative to build a mutually beneficial connection with your suppliers, it builds trust and opens up feedback and the free flow of ideas. Having this kind of unrestrained communication promotes efficiency, streamlines processes, and improves customer service.
The greater the level of trust between you and your suppliers, the more streamlined and effective your supply chain.
CRM vs. SRM: Decoding the Differences
CRM and SRM are different—they have different purposes.
While both solutions offer you an organized space to store useful data, their embedded feature set, workflows, and language are poles apart.
A CRM is better suited for managing customers and sales. It’s primarily designed around a sales process, which also makes them fundamentally different from an engagement process.
Contrarily, an SRM helps manage stakeholder relationships and your engagement history with the said stakeholders. In fact, it’s designed specifically for stakeholder engagement and community engagement, monitoring and nurturing relationships, and grouping and categorizing stakeholders accordingly.
A CRM also tracks where a contact is in the pipeline whereas an SRM aims to understand stakeholder engagement—what are they trying to communicate, what are their needs, priorities, and concerns.
Can You Use CRM and SRM Together?
Today, a CRM has become an indispensable part of doing business. By implementing robust CRM systems, you can ensure effective customer segmentation, standardize sales processes, accelerate sales cycle time, and better manage customer communications.
Essentially, cover all the pillars of building a successful business to improve your startup’s success rate. But there are also a few things you can’t do with a CRM.
For starters, the tool falls short when it comes to nurturing close, cross-functional relationships with suppliers, which is necessary for your business’s long-term success. That’s where a CRM comes into the picture. You can use it to weed out non-performing suppliers, reduce costs and serve customers better.
Therefore, having a connected CRM-SRM environment can significantly enhance your business capabilities.
Suppose you receive a quotation request from customers. You can use an integrated CRM-SRM to minimize response time by immediately sharing these requests with your trusted group of suppliers. Thereafter, you can fine-tune your response with the combined inputs from the suppliers and your own expertise to land the deal.
With this level of shared knowledge and deeper relationships, you can make better-informed decisions concerning your business.
CRM-SRM Integration Is the Future
Strategic partnerships are the lifeblood of every business.
Considering the technology-intensive and skill-driven business community we’re a part of today, integrating CRM and SRM solutions to achieve greater visibility and control and managing business contacts is a no-brainer.
If you want your business to thrive in the future, you have to understand how to use a CRM in conjugation with SRM. This will give you a competitive edge over your competitors and enable you to identify more business opportunities. Link your diverse network of business relationships and create significant value for your customers, suppliers, and your organization.