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What Is Contact Management and Why Is It Important?


The objective of contact management is to be able to handle your contact lists effectively. Contact management is a crucial part of the business. However, it is often overlooked. This article aims to help you understand contact management further so that you can make the most out of it.

What is contact management?

Contact management refers to the system that allows you to store, access, and even share your people database and their communication information for better team collaboration. The people database includes your business target demographics- your leads, prospects, and clients. Your business contacts include your business partners, employees, creditors, vendors, and other stakeholders.

Contact management tools come in different forms. How you choose one is dependent on the size of your network, and budget, as well as the add-on features to it.

What are the types of contact management?

Choose the contact management system that best suits your organization. This would all be depending on your company’s requirements.

Communal spreadsheet

The trusty old spreadsheet can be the initial go-to of budding entrepreneurs who are not using special tools to automate their lead management. It costs nothing to learn and maintain. However, as your database grows, this would be no longer an ideal contact management system. It is too primitive especially since there are other more effective contact management platforms.

Directory services

This refers mostly to an Active Directory, LDAP, or Google Workspace domain directory. This type of contact management commonly contains the employees’ information, mailing lists, and some external contacts. These contacts are generally accessible in emails and intranets but rarely on mobile contact apps or other applications.

Unfortunately, the contacts are typically not available when the user is offline or on mobile devices. Besides, it is a rigid system wherein only IT personnel can create, edit, and update the database.

Contact management platform

A stand-alone contact management app is built for the sole purpose of managing contacts. It organizes the phone numbers, email addresses, and even social media accounts of your people network.

Usually, these types of contact management software integrate with a wide array of messaging platforms. This feature allows them to provide a centralized address book for the user. Furthermore, it generally costs just a fraction of CRM.

Customer relationship management (CRM)

CRMs are developed to manage all the company’s relationships and interactions with leads and clients. Contact management is one of its core features but it also encompasses lead management, sales analytics, and marketing automation.

Of course, these extra features didn’t come in cheap. Hence, CRM is more expensive than dedicated contact management platforms. It is unwise to invest in CRM if you only needed it for contact management for now Furthermore, it also has indirect costs like integration and learning period that must be accounted for.

Composite system

You can have a contact management add-on for your existing CRM. This is useful as you don’t have to pay for extra CRM seats for other employees. Not everyone in your team needs to utilize analytics and other advanced CRM features in the first place.

This translates into significant savings not only for the cost of the CRM seat. It also cuts the onboarding and training costs.

Why is contact management important?

1. Organized contact data

Typically, address books are listed from A to Z regardless of how they are associated with you. This ends up in a melange of contacts.

Contact management apps allow you to classify your contacts accordingly. Separate your leads, customers, and loyal clients so you know whether to email promotional materials or affinity program freebies.

2. Accessibility

Contact management software gives your team a centralized directory. This means you and your team have a synchronized contact database that you can tap from any authorized device. It offers convenience for the team, especially if running around the country is involved in the business.

3. Collaborative database

Good contact management software gives you and your team the ability to write notes regarding contacts. This allows you to consolidate all the information gathered from the contact by different team members. In turn, a better insight can be formulated which can translate to hitting the right notes to close a deal.

4. Efficient communication

Having a centralized company directory allows easier inter-department transactions. No need to ask around for updated contact numbers or the number of the new guy.

  1. Back up

Your contact database is one of the most important assets of the business. Hence, there should be an indemnity plan for it. Data corruption can happen be it intentional or accidental. In any case, it would be a tragedy if there would be no recovery program should it occur.

6. Security

Select a contact management software that adheres to well-established security protocols such as GDPR, CCPA, and Google Technology Premier. Those programs ensure that data is processed with the utmost confidentiality guidelines.


Contact management is an important aspect of the business. Proper contact management can translate into better conversions. There are various ways to optimize this system and choosing the right app is critical to achieving it.

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