When managing relationships in your business, two acronyms often come up—CRM and SRM. They sound similar and might be used interchangeably, given that they both involve the strategies and tools that you use in relationship management.
However, they have different objectives.
Customer relationship management strategies and tools help you manage interactions with both existing and potential customers. On the other hand, stakeholder relationship management strategies and tools help you manage interactions with different stakeholders, such as suppliers, partners, investors, employees, and the community.
While both CRM and SRM involve managing relationships, they differ in terms of the parties involved. Understanding these differences helps you choose the right approach when managing both customer and stakeholder relationships.
In this post, we’ll provide a clear understanding of each of these terms, explain their similarities, differences, and when to use them.
CRM vs. SRM: What’s the difference?
Customer Relationship Management (CRM)
CRM involves collecting data on customer behavior to identify their needs and preferences so that you can deliver a personalized customer experience.
It focuses on lead generation, customer acquisition, campaign management, customer support, and post-sales relationship management.
In addition to having a CRM strategy, you need CRM software as it helps you to:
- Track customer interactions
- Manage leads and sales pipelines
- Automate marketing campaigns
- Provide personalized customer service
- Identify trends in customer behavior and preferences to improve your products and services
Stakeholder Relationship Management (SRM)
SRM, also known as stakeholder relationship management, involves managing interactions with stakeholders to improve communication and engagement between the company and its stakeholders.
SRM involves coordinating and collaborating across multiple departments and functions within the company to manage relationships with various stakeholders and achieve your company’s objectives.
In addition to having an SRM strategy, you need SRM software to help you build strong relationships with stakeholders at scale as it provides:
- A centralized platform where you store all relevant stakeholder information and track all interactions across multiple channels
- Analysis of stakeholder data to gain insights into their preferences, needs, and behaviors
- Tailored communication strategies to better meet the expectations of your stakeholders
Compared to CRM, SRM has a broader scope as it brings together a wider range of stakeholders beyond your customers.
SRM software handles the challenges that come with managing companywide stakeholder relationships, whereas CRM software focuses on customer-centric activities.
Similarities between CRM and SRM
At their core, both CRM and SRM are about building strong relationships with key stakeholders and your customers. Here’s how they’re similar:
| Similarities | SRM (Stakeholder Relationship Management) | CRM (Customer Relationship Management) |
| Relationship focus | SRM focuses on building relationships with multiple stakeholders. | CRM focuses on building and maintaining customer relationships. |
| Data management | It involves gathering, organizing, and analyzing data to understand stakeholders. | It involves collecting, organizing, and analyzing data to understand customers. |
| Communication and engagement | SRM uses communication and engagement strategies to work with stakeholders to achieve results. | CRM focuses on communicating and engaging with your customers. |
| Collaboration | Recognizes the value of collaboration and cooperation with stakeholders. | Recognizes the value of collaboration and cooperation with customers. |
How CRM and SRM work together to improve supply chain management
Here’s how customer relationship management and stakeholder relationship management work together to improve efficiency in your supply chain processes:
Improving accuracy in demand forecasting and planning
You need to align the capabilities of your suppliers with current and future customer demands to accurately predict demand and put the necessary plans in place.
When both CRM and SRM software work together, you can easily optimize inventory levels, reduce lead times, and improve the efficiency of your supply chain.
For example, your CRM software provides you with valuable insights into customer preferences, buying patterns, and demand trends.
When you share this information with your SRM team, they can plan how to meet this demand by selecting suppliers who can meet your needs, negotiate with them, and plan on delivering what you need on time.
Improving collaboration between teams
When you integrate CRM and SRM software, you allow seamless data transfer, communication, and collaboration between your sales, marketing, and procurement teams.
For example, once your sales team gathers customer feedback and insights through your CRM tool, they can update this inside the CRM software which triggers an automated notification. This notification notifies the SRM team to identify potential suppliers who can meet specific customer needs.
Similarly, once your SRM team updates information about supplier performance, pricing, and delivery, your CRM team sees these updates and is able to provide accurate information to your customers.
Integrating your CRM and SRM systems also improves the visibility of the entire supply chain. It allows your SRM team to access real-time data on customer orders, inventory levels, production schedules, and supplier performance that can be shared between systems.
This data empowers them to make proactive decisions, fulfill orders efficiently, and improve the coordination of customer demands based on supplier capabilities.
Monitor and improve supplier performance
CRM systems can track and analyze customer feedback, including complaints and satisfaction levels. This feedback can help identify product quality, delivery delays, or customer service issues.
By sharing this information with SRM teams, you can address any supplier-related issues promptly, work towards continuous improvement, and ensure that you consistently meet customer expectations.
When to use CRM software
CRM software helps you streamline different workflows that allow you to improve how you manage customer relationships. Here are a few instances when you need to use CRM software:
Lead management
CRM software allows you to capture, track, and prioritize the leads you generate so that you don’t miss out on any opportunities. It does this by tracking their activity and assigning leads to specific stages with relevant actions to help your sales team manage conversion workflows efficiently.
Sales and pipeline management
CRM software provides you with a centralized platform that allows you to track your B2B sales cycle to identify opportunities, monitor the progress of ongoing deals, and predict revenue.
Customer service and support
CRM software allows you to efficiently manage tickets, track customer inquiries and complaints, and ensure timely resolution of issues.
Marketing campaigns and automation
CRM software helps you improve your marketing workflows by segmenting customer data, tracking customer preferences and behavior, and integrating with other marketing automation tools.
When to use SRM software
When you want to manage and nurture relationships with different stakeholders, improve engagement, and collaborate more, you need SRM software to do it efficiently.
Here are three instances when you should use SRM software to achieve your business objectives.
Managing multiple stakeholder relationships
When managing relationships with multiple stakeholders, you need a centralized platform to store their information and collaborate effectively. This makes sure that you don’t lose data, keep up with different stakeholder needs, and improve productivity.
SRM software also helps you track your interactions with different stakeholders, measure engagement metrics, and identify areas for improvement. The data you collect helps you improve how you communicate with stakeholders by personalizing your interactions.
Enhancing stakeholder engagement
When you’re looking to improve engagement with your stakeholders, you’ll need to use SRM software.
For example, when managing a merger or acquisition using SRM software, you collaborate by sharing documents, create streamlined workflows to track revenue and sales KPIs and manage the entire process without losing critical information.
You can also use SRM software to improve employee communication within your company through cross-departmental collaboration and knowledge sharing, as well as improve alignment and teamwork.
Monitoring stakeholder satisfaction
SRM software allows you to collect feedback and measure the level of satisfaction. The insights you get from your analysis allow you to identify areas for improvement, address concerns, and proactively manage stakeholder relationships.
Are CRM and SRM systems interchangeable?
CRM and SRM systems are not interchangeable. Here are three reasons why:
Hidden costs
Using CRM software to manage stakeholder relationships leads to hidden costs. CRM software does not have the necessary features and functionalities to help you manage stakeholder relationships.
If you insist on using a CRM tool to manage stakeholder relationships, you’ll need to customize the tool and integrate it with other tools in your tech stack to help your CRM handle more stakeholders. It will lead to increased expenses and maintenance costs.
Low success rates
CRM software is designed to manage customer relationships and its capabilities are focused on outcomes such as customer retention and loyalty.
Trying to force-fit it to manage relationships with suppliers, partners, employees, and other stakeholders won’t lead to improved stakeholder engagement as this is beyond what a CRM software can do.
Slogging workflows
CRM comes with specific features such as lead management and sales forecasting that are lacking in SRM software. On the other hand, CRM tools don’t have supplier and partner management features.
Without using the specific features that come with SRM software, your workflows will be cumbersome, forcing you to use manual workarounds which affects your productivity.
Besides, you will face challenges when communicating, collaborating, and engaging with stakeholders.
FAQs
What is the difference between CRM and ECRM?
CRM is a strategy that helps you manage interactions with your customers. This involves using tools to organize, automate, and synchronize workflows for sales, marketing, customer service, and technical support.
ECRM is Electronic Customer Relationship Management. It uses digital channels, like email or social media, to manage customer interactions.
What is CRM and SRM in SAP?
Enterprise resource planning (ERP) has two key terms: customer relationship management (CRM) and supplier relationship management (SRM).
These terms refer to SAP ERP modules that help you manage interactions with customers and suppliers. CRM in SAP refers to a set of tools and processes that help you manage your customer relationships more effectively.
On the other hand, SRM in SAP refers to a set of tools and processes that help you manage your relationships with suppliers more effectively. It includes managing supplier data, tracking purchase orders, managing contracts, and ensuring timely delivery of goods.
CRM and SRM are both important to any ERP system. Using these modules within SAP, businesses can improve their interactions with customers and suppliers.
Conclusion
CRM software helps you manage and maintain a good relationship with your customers while SRM software helps you manage and maintain relationships with multiple stakeholders, such as employees, customers, and suppliers.
The choice between CRM and SRM depends on your organization’s focus, goals, and the extent of your stakeholder engagement and relationship management needs.
