The first CRM software programs were one-dimensional where filing cards with customer details were filed and used. Today, information technology has revolutionized this type of software. But its basic goal remains the same: using customer data to create sales.
There have been five milestones thus far in the evolution of CRM software:
- Enterprise products
- Web-based solutions
- Cloud-hosted technologies
- Social media applications
- Mobile technologies
1970s – The age of independent mainframe solutions
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.
Mid 1980s – The age of database marketing
In the 1980s, direct marketing was changing into database marketing. Marketing professionals started to communicate personally with customers for higher conversions. It was the early days of integrating customer info with sales strategy.
Mid- to late 1980s – The age of contact management software
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. 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.
Early 1990s – The age of enterprise resource planning
In the early 1990s, database marketing transformed into sales force automation. 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 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.
Late 1990s – Online CRM is launched
In 1999, 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.
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.
Early 2000s – Many dotcoms go bust
The dotcom bubble burst in the early 2000s which affected the sales of CRM products as well as their development. 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.
Mid- to late 2000s – Cloud-based CRM becomes popular; open source CRM is launched
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
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.
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.
Late 2000s – The age of social CRM
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.
The Present and future
Today’s CRM software is focused on three main areas that could well be the future of this type of software.
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.