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Web Based CRM Software 101: Choosing a Contact Format

When choosing your next Web Based CRM Software / Contact Manager for your small business, it is important to understand the difference between a Contact Centric system and an Account (Business) Centric system. This is one of the biggest mistakes companies make when choosing their CRM software provider for your business. Small Business CRM is an investment that will pay dividends to you for many years to come. Make sure sure to lay the right foundation for your needs as most CRM providers DON'T give you the choice.  They offer one format or the other and you are essentially stuck with their system format.

Contact Centric CRM 
In a Contact Centric CRM system, the database is organized around individual contacts. So, if you have dealings with 3 different people all from the same company, you would have 3 separate contact records and each individual contact record would contain it's version of the company information.

A Contact Centric organization makes sense if you are dealing with individuals and typically don't need to do such things as look at an organization's combined history. It is very difficult and clumsy to track company related information separately from contact information. For example, if you want to track information about a company (e.g. sic code, # employees, annual budget, etc.) separately from contact related information (e.g. favorite hobby, home phone number, spouse's name, etc.). There isn't an easy way to organize this information.

• Under which contact do you store the company information?
  
  
• Which contact becomes the primary record?
  
  
• Do you store the information under both contacts...which makes updating difficult?
  
  
• Do you create a "contact" record to serve as the company record and somehow link the contacts?

Account (Business) Centric CRM
Account (Business) Centric systems have a layer above the individual contact - the "account" or "business" that can link multiple contacts together. This has the advantage of being able to track company-related information entirely separately from contact-related information.

This approach is usually easier to:

• See all opportunities for an account/company.

• See combined history.

• Do address updates.

• See the organization and all its contacts in one view.

• Report on company vs. individuals easier.

My Recommendation
If you're working in an industry where you only work with one contact record per account, you may want the simplicity of Contact Centric option.

However, if you are going to want to track multiple contacts per account (business) then the Account (Business) Centric becomes the best option.