Museum:History of CRM

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The first CRM (Customer Relationship Management) software programs were one-dimensional where filing cards with customer details were filed and used.[1] CRM hasn’t always been the robust, stand-alone software that so many businesses rely on today. Over the past four decades, it has evolved out of a variety of other business programs. During that time, the CRM industry has undergone sea-changes and shakeups that could have derailed the entire concept.[2] Today, information technology has revolutionized this type of software. But its basic goal remains the same: using customer data to create sales.[1]

There have been five milestones thus far in the evolution of CRM software:[1]

  1. Enterprise products
  2. Web-based solutions
  3. Cloud-hosted technologies
  4. Social media applications
  5. Mobile technologies

1950s & 1960s - pre-CRM era[edit]

Fast forward through the various forms of record-keeping, accounting methods, and devices and jump to the first commercial computers. Automation was eagerly adopted by anyone with record keep concerns and lots of money to spend, starting in the late 1950s and early 1960s. The main focus was on maintaining accounting records, either on accounting machines or computers, in banks, stock exchanges and government departments. As the price of computers decreased dramatically, by the 70s, even small business could afford to join the computing revolution.[3]

1970s – The age of independent mainframe solutions[edit]

In the 1970s, stand-alone mainframe systems were used for sales automation systems and customer data files. These systems were mainly used to digitize manual files to facilitate quicker search and save storage space. Relational database software was used to create customer databases and manage the data.[1]

Mid 1980s – The age of database marketing[edit]

In the 1980s, direct marketing was changing into database marketing leaded by by Robert and Kate Kestnbaum. Marketing professionals started to communicate personally with customers for higher conversions. It was the early days of integrating customer info with sales strategy.[1] Using statistical modeling, that data was then used to help customize communications with other potential customers.[2] The concept took off and Kestnbaum, together with Robert Shaw, brought us new concepts and methodologies, ranging from customer lifetime value to channel management. There is a lot of debate about who invented CRM, but, if you take Bob Kestnbaum's contributions to modern marketing and strategy, he probably has earned the crown.[3]

Mid- to late 1980s – The age of contact management software[edit]

Marketers started consolidating and integrating various platforms like analytics, transactional databases, and customer data. Various business units like sales, marketing, accounting, and customer service were connected through back office applications. Insurance firms and banks were the pioneers. This period saw the advent of marketing calls where outbound marketers cold-called customers to upsell their products.[1]

In 1986, Conductor Software launched ACT! which was the first contact management software. To use this CRM, companies had to invest a lot in the on-premise system, employ in-house IT employees, and buy expensive hardware and software. Customers were getting familiar with CRM as companies in many industries like health care, consumer goods, and utilities started using the concept for better customer contact and service.[1] Near the close of the decade, the proliferation of personal computers and the advent of client/server architecture paved the way for an explosive growth in software development.[2]

Early 1990s – The age of enterprise resource planning[edit]

In the early 1990s, database marketing transformed into sales force automation pushed by early innovators like Brock Control Systems. Sales force automation took many of the features of database marketing, automated them, and combined them with contact management. The CRM framework consolidated contact, lead, and opportunity management as well as deal tracking in one CRM system. The term “customer relationship management” was coined in 1995 by Pivotal Software, according Sharka Chobot Stuyt. By 1997, CRM moved away from customer solutions to enterprise resource planning (ERP) that included business operations like product planning, manufacturing, and shipping in addition to sales, marketing, and payment functions. In 1993, Thomas Siebel left Oracle to create Siebel Systems. While at Oracle, Siebel tried unsuccessfully to convince CEO Larry Ellison to package and sell their internal sales application as a standalone product. Siebel Systems quickly became the leading SFA provider on the market.[1][2] However, not all companies were offering megalithic and expensive solutions. Companies such as GoldMine (1990) and Maximizer (1987) provided off-the-shelf software that was affordable for small businesses, but had enough features that made them attractive to large multinationals. Both companies are still around today.[3]

Late 1990s – Online CRM is launched[edit]

The last half of the decade brought huge changes to the CRM industry. Enterprise resource planning (ERP) vendors like Oracle and Baan entered the CRM market, hoping to use their size and ERP in-roads to dominate the industry. Unlike other software companies that were transitioning to CRM, SAP entered the market with the sole purpose of capitalizing on emerging applications. All of this competition pushed CRM vendors to provide a broader suite of services. More marketing, sales, and service applications were added to CRM on a near-constant basis.[2]

1999 was a busy year for the CRM industry. A number of notable, high-value acquisitions consolidated the overall market, while emerging e-CRM vendors provided fierce competition. Using intranet, extranet, and internet, e-CRM vendors offered a level of intra-organizational collaboration that hadn’t previously been available in the CRM industry.[2] This was a year when Siebel launched the first mobile CRM which was the Siebel Sales Handheld. PeopleSoft, SAP, and Oracle launched their own mobile versions. But, mobile adoption was not popular due to lack of devices.[1]

1999 saw the advent of cloud CRM. Companies found cloud services a cheaper alternative to expensive on-premise systems. Salesforce.com introduced the first Software-as-a-Service (SaaS) CRM. Initially, SaaS CRM was suitable only for small businesses. But later it scaled up to more powerful systems and large enterprises also started using cloud software.[1] Under the leadership of Marc Benioff, Salesforce eventually grew to rival CRM industry giants like Siebel Systems.[2]

Early 2000s – Many dotcoms go bust[edit]

The dotcom bubble burst in the early 2000s which affected the sales of CRM products as well as their development. The entire industry retracted, with giants like Oracle reporting license losses of more than twenty-five percent. Due to a reluctance to use “dot-com” technologies, e-CRM vendors were hit the hardest. By 2003, Microsoft merged CRM with its legacy systems MS Office and Outlook to create its own CRM program. Microsoft Dynamics has become a leading player in the CRM industry.[1][2]

In the early years of the 00’s, Paul Greenberg’s book “CRM at the Speed of Light” suggested a more comprehensive CRM system that manages all business relationships. By the end of the decade, this became the common thinking across the CRM industry.[2]

Mid- to late 2000s – Cloud-based CRM becomes popular; open source CRM is launched[edit]

SugarCRM pioneered open-source enterprise systems in 2004. This enabled companies to use CRM much more cheaply compared to the cost of on-premise applications. SugarCRM later launched a cloud-based version which has become a standard feature in the CRM industry[1]

In 2006, Amazon introduced EC2/S3 and even rented out computer power to companies that helped them save money by not spending on expensive powerful servers.[1]

In 2007, Salesforce.com’s combined its cloud-based application development program with SaaS developer partners to convince users that web-based CRM could be customized and used for specific business requirements.[1] Force.com addressed the criticism that cloud-based applications weren’t customizable.[2]

Late 2000s – The age of social CRM[edit]

This period saw CRM shifting from the transactional model to interaction relationship. Businesses started using social media strategies to interact more closely with their customers. With quicker internet connectivity and more robust cloud infrastructure, more small players from different countries started entering the CRM market.[1] Social CRM exploded onto the market with the introduction of ComcastCares—an application that focused more on interaction than transaction. Most large corporations quickly followed Comcast’s example, solidifying the place of social CRM. Through the end of the first decade, and up to the present day, cloud-based and SaaS CRM solutions continue to integrate more features like customer service and social CRM. Cloud-based and SaaS CRM solutions continue to gain popularity, largely due to their lower initial cost and easy integration with mobile devices.[2]

The Present and future[edit]

Today’s CRM software is focused on three main areas that could well be the future of this type of software:[1]

  • First, CRM has gone social and many software programs provide social media analytics beyond monitoring the number of shares and likes. CRM software programs are likely to focus on developing deeper customer profiles that includes their digital behavior across social networks.
  • Second, social CRM enables companies to improve their content marketing to offer relevant content to specific customers on a case-by-case basis.
  • Finally, mobile CRM is likely to take off as more and more users access CRM data on their smartphones and tablets on the go. Thus, mobile CRM is likely to be the next wave in the continuing evolution of CRM software.

Museum of ERP companies and solutions[edit]

See also[edit]

References[edit]

  1. 1.00 1.01 1.02 1.03 1.04 1.05 1.06 1.07 1.08 1.09 1.10 1.11 1.12 1.13 1.14 1.15 Arthur Zuckerman (March 31, 2015). "History of CRM software". Compare Camp.
  2. 2.00 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 "A Brief History of Customer Relationship Management". CRM Switch. September 12, 2013.
  3. 3.0 3.1 3.2 "The Complete History of CRM". Salesforce.com.