There are two basic paradigms for CRM systems: Contact centric or Account Centric. In Contact Centric systems, the primary organization is around independent contacts. In Account Centric systems, there are two levels to the basic organization: a company or account layer to which multiple contacts can be related.

Contact Centric

In a contact centric 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 different contact records and in each record would be the company
name. There may be ways to relate different contacts together, but these will be in the “workaround” class.

A Contact centric organization makes sense if you are dealing with individuals and you do not need to do such things as look at an organization’s combined history. It is very difficult/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. favourite hobby, home phone number, spouse’s name, etc.). there isn’t an easy way to do that:

• 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 relate the contacts to it?

Account Centric

Account centric CRM systems have a layer above contact, the organization or account, that can tie 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 need one contact record per account,
you may want the simplicity of contact centric. However, if you are going to want
to track multiple contacts per account then contact vs. account centric becomes
a very important consideration and you should give heavy weighting to systems
that are truly account centric. This is just one of many considerations that must
go into determining whether or not a particular CRM software fits your needs.
For a complete step-by-step process for evaluating CRM software, see the Insider’s
CRM Success System.

Scott Gingrich, founder of The CRM Coach (http://www.thecrmcoach.com) is the creator of “The Insider’s CRM Success System” (http://www.crminsidersguide.com), the world’s most complete and only CRM Success System guaranteed to save thousands, developed specially for small business.

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