Should Investors Use A CRM That Runs Right Inside Their Email Service?
Investors have an important choice to make when choosing a CRM system. Do they want a stand-alone system with integrations into their email service or do they want a CRM that is fully integrated with their email service?
The needs of most investors are not the same as the typical sales or marketing CRM user, and so we’ve looked at the pros and cons of these two types of CRM systems from the perspective of dealmakers, including those in corporate development, M&A, private equity, venture capital, search funds or family offices.
Traditional CRM vs Email-integrated CRM
Traditional CRM systems are what most people think of when they think of a CRM system. These are systems like Salesforce, Pipedrive or Hubspot CRM. They typically have a dedicated web application that provides the user interface and all of the functionality to manage, track and store relationship information.
A fully integrated CRM extends and enhances an existing email service like GMail or Outlook.
The idea (and potential appeal) is that you can manage any relationship workflow directly from your inbox. All of the contacts in your email database and the email functionality itself (e.g., mail merges, email templates, etc.) are automatically available to the CRM. These types of CRM systems typically do not have a separate, dedicated web application at all, as they operate as a plug-in to an already established email service.
Streak is probably the most popular email-integrated CRM. It runs inside GMail. Sales Outlook is one of the more popular CRM systems that runs inside Outlook.
Investors Are Unique
Like sales and marketing teams, investors typically have lots of outbound activity that is a mix of email, calls and meetings. They also often have a relatively low ratio of actual deal activity to total outbound activity (e.g., many emails go unread or unanswered).
However, for investors, understanding the context of each relationship and opportunity is of paramount importance. Investors aren’t just tracking leads, they’re also tracking activity with other investors, brokers, partners and business professionals (i.e., introductions). The history of all interactions needs to be kept available (potentially for decades) as the time from initial meeting to close can be quite long.
Capturing key data points on the lead itself is also of critical importance to most investors because they typically need to do diligence on the target entity. Investors need to be able to store entity information in a way that enables them to filter, sort and find data based on certain criteria.
For example, an investor will likely want to store data like company size, investment type, deal terms, revenue, etc. for each entity in the CRM. Having to customize a bunch of default fields that were designed for sales and marketing teams is a waste of time for investors.
Most investors usually exchange lots of documents as part of their process (e.g., NDAs, BIRs, Excel files, slide decks, etc.). In order to keep those documents organized, they want them to be associated with the relevant lead so that everything is stored in a central location and easily retrievable.
Finally, few investment teams, particularly those that aren’t operating within a large corporation, have access to an IT team for support. They need a CRM system that they can roll-out and maintain by themselves.
Why This Matters
If you already spend most of your day staring at your email inbox, you may be thinking it’s a great idea to just plug-in a CRM to take the email service to the next level. Some investors even use their inbox and its folder structure as a way to prioritize and stay organized (e.g., everything left in the main inbox is top priority), so adding a CRM makes sense, right?
We’re not so sure.
One of the obvious advantages of your email service also being your relationship management tool is that you never lose the detailed context of each relationship. You always have the entire written history and timeline of every interaction with every contact. But is that too much context?
How often is it actually important for you to take the time to read through the email threads you’ve had with leads? We believe that most investors only get value from this when they are engaged in a particular opportunity, which is usually a small subset of all the leads and email activity in the CRM system. We also think that for the few times when it’s worth it to go through the history of the email threads on a particular lead or deal, there’s no need for an integrated CRM, one could just use their standard email client to find what they need.
Likewise, we think most investors have (or should have) so much activity in their CRM that they need to focus on summary pipeline views to understand what’s going on in aggregate in order to spot trends. Traditional CRM’s typically so this fairly well but as we will discuss, email-integrated CRM systems tend to shift the investor’s focus further down into the weeds of the activities themselves.
Let’s discuss the advantages and disadvantages of CRM systems that run inside an email service.
Advantages of CRM Systems That Run Inside An Email Service
The biggest advantage touted by most CRM’s built inside an email service is that for the most part, you don’t need to learn a totally new user interface. You just need to learn a few new components of an interface you’ve already been using.
The other big advantage is that you will likely spend less time inputting data. All inbound and outbound email activities are automatically stored in a database accessible by the CRM functions. This can greatly reduce the time required to copy and paste email threads, activities and other data into a separate CRM interface. It can also provide a seamless view of all email activity for each lead in the CRM database.
All of your email and CRM contacts are stored in the same place and so there is no duplicate data entry there as well.
Calendars are always up-to-date with a built-in CRM and so there is no need to separately record that a certain lead was ‘contacted’ or that a meeting occurred. All of this information is automatically synced with the CRM.
Document management is typically handled by whatever document management tools are provided by the email service provider. GMail users would use Drive or Google Workspace for document management and Outlook users would use OneDrive, Teams or Sharepoint. For this reason, attachments sent through the email service are automatically accessible to the integrated CRM.
Most email-integrate CRM applications make it fairly easy to pull activity data into Excel, Google Sheets or PowerBI for reporting because they don’t have their own built-in reporting interface. This could be seen as an advantage (e.g., flexibility to use other apps) or a disadvantage (e.g., extra work to create reports), depending on your perspective.
Some users may find that with a CRM running within their email service, they don’t need a separate application for email automation (like MailChimp). Some email services include mail merges, although there are usually volume limits (GMail limits this to 400 emails per day). Investors looking to send a high volume of emails will likely need a separate email automation service.
Our favorite feature of Streak was the ability to track the open rate of outbound emails. While this is a feature available through most email automation tools, it is built into Streak CRM and it’s a nice data point to have regarding the effectiveness of your email campaigns.
Finally, the two most popular email-integrated CRM applications are relatively inexpensive. Probably because they are fairly generic and intended for a very large target market (virtually anyone in sales or marketing). The monthly plan for SalesOutlook is $35 per user per month (USD) and Streak’s Pro plan is $49 per user per month (USD).
Disdvantages of CRM Systems That Run Inside An Email Service
Aside from the fact that there are few options for CRM systems that operate within an email service, there are several other disadvantages as well.
One of the biggest disadvantages of a CRM system built inside an email service is that it can be difficult to separate real business activities from prospecting activities or even social activities. One would need to tag everything or file emails into folders in order to stay organized, otherwise you’d be totally reliant on ‘search’. Imagine the volume of sent emails and potential replies you’d have in your email application after running an email campaign to 1000 contacts. If you’re working on an active deal, it can be quite frustrating to separate the outbound campaign activities from the deal activities.
Likewise, if you have all of your contacts in the same place, including everyone you’re working with on a deal as well as everyone you’ve ever included in an email campaign, it can be difficult to keep all of these contacts organized. Investors likely want to separately categorize target contacts from portfolio contacts or from contacts with partners. Few CRM systems that run in an email service, or traditional CRM systems for that matter, enable you to categorize, organize and slice and dice through contacts in this way.
Overall CRM systems that run within an email service have less functionality because they don’t usually come with a dedicated web application. The user interface is also quite limited because what functionality is included, had to be squeezed into the email service interface via a plugin. Keep in mind that email clients were not designed to be CRM systems and so the result of adding this functionality usually makes the interface feel cluttered, especially for views that need to show a lot of data in table form.
As noted above, these types of CRM systems are designed for sales and marketing use cases and tend to offer fairly generic functionality. This is probably because it’s much harder to tailor a CRM to a specific industry or niche use case when the interface must fit within an email service that has been designed for virtually any industry. There are also limitations of what the CRM vendor can do with the email service APIs. We couldn’t find a single vertical market CRM that was built into an email service.
An example of the UI limitation is the generally poor experience in Streak and Sales Outlook when it comes to seeing dashboard overviews of the pipeline or deal status. Sales Outlook doesn’t even have its own interface for dashboards and reports; rather it loads in Excel.
Perhaps exporting to Excel is useful for detailed analysis but most investors we’ve spoken with want to see a quick overview of the pipeline and deal status in a pre-formatted, visually appealing way. They don’t want to have to fiddle around with Excel to get a snapshot of the status.
As an investor, we would want to see functionality out-of-the box that is tailored specifically to our needs. For example, the ability to track, manage and monitor company financial data, the ability to compare valuation metrics, sort and filter by deal type, deal size, etc. etc. The way the data needs to be organized and presented for an investor is completely different than for a sales or marketing team.
While it’s nice that email attachments are automatically stored in CRM systems that run in an email service, we believe this can be a problem because the documents aren’t stored in the right way. Documents should be explicitly connected to the entity or organization to which they relate so that an investor can easily find them without having to sift through the history of email threads and their attachments.
We think that most investors operate within their own tech ‘ecosystem’ that includes a bunch of different applications from multiple vendors, each selected as the best solution for a particular problem.
In addition to an email service, they may have software for: deal sourcing, document storage, secure document sharing, spreadsheets, document writing, relationship management (CRM), marketing automation, internal and external communication, reporting and analytics. Each of these tools is purpose built to serve a specific function and there are many integrations (offered by 3rd parties such as Zapier) available to move data between them.
If you’re going to need a marketing automation tool anyway, why sacrifice functionality to run your CRM in the email service? Pick the best technology stack for your business and only integrate where necessary.
It is for this reason that we don’t think the advantages of a CRM system that runs inside an email service outweigh the disadvantages. A stand-alone CRM system designed for investors is the best of all worlds. The investor can integrate the data they need from other systems in their ecosystem while enjoying the full breadth of capabilities of a CRM.
There are many traditional CRM systems with dedicated web applications that do a good job of reducing data entry through integrations with email clients, as well as many other data sources. Salesflare for example, has a stand alone web CRM that includes out-of-the-box integrations with Gmail, Outlook, iCloud, Linkedin and Zapier.
In our view, the user experience of the CRM in the email client is also too much of a problem to overlook. Have a quick look atCRM systems like Pipedrive or Copper CRM and you will see what you are missing.
Galaxy is a stand-alone CRM designed specifically for investors, by investors. We’re going to give dealmakers in corporate development, M&A, private equity, venture capital, search funds and family offices the affordable CRM system they’ve always wanted.
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