The Evolution of CRM’s Functionality

Published on May 23, 2022
3 min read
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Icon Saphyte Team
3 min read
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In the age of technology, Customer Relations Management (CRM) software has been integral in modernizing and optimizing businesses management in their company-customer/lead relationships and interactions. But over the years since its inception, CRM has been expanding its capabilities and services while effectively improving its core function: contact management.

Customer Relationship Management (CRM) systems are essential tools within business organizations. The system has evolved from a mere contact management system to something more in terms of functionality. Aside from being dynamic storage for data centralization, CRM has proven itself as an effective customer relationships manager across the entire customer lifecycle, ranging from marketing to sales and even teams and customer service interactions in the last few years.

Summary of what CRM could be and examining the roots of CRM to utilize it to its utmost potential

With the unrelenting evolution of technology itself, like Artificial Intelligence and Machine Learning, the CRM system’s future shows boundless possibilities. Even now that CRM is among the fastest-growing sector in the Software as a Service(SaaS) space. But in order to utilize CRM to its optimal potential, we have to understand and appreciate what it is and what it could be by knowing what it used to be. To do that, let us examine the transition of CRM from its very roots to the efficient tool that it is now.

Periodic history of CRM by decade

The 1950s

Businesses in the 1950s relied on pen and paper to document tasks. In accompaniment, folders and file cabinets in large amounts are procured to sort and organize the recorded written data. Filing systems are incorporated to manage and track customer information. Its downfall is the slow accessibility and information/update tracking. Innovators became aware of this business problem, and in 1956, Rolodex, the first rolling index, was invented by the Danish engineer Hildaur Neilsen for a manufacturing company in New York to store the contact information of business prospects and provide easier access.

The 1960s

Not much has changed from the data documentation and organization in businesses, but in this decade, companies began reaching out to their clients through scheduling physical meetings. Sales executives also started selling products via one-on-one sessions or cold calling as an attempt to personalize their customer/prospect service.

The 1970s

The rise of early mainframe computers paved the way for a standalone digital database. Now, businesses are able to record customer information, i.e., names, addresses, and even transaction history, digitally. Database marketing stimulated businesses to customize company-customer communications through a screen with message targetting and transaction monitoring throughout the entire business relationship process and progress. It helped automate sales but is still limited to classifying customers in lists and organizing them in spreadsheets.

The 1980s

Conductor Software, in 1987, took the initiative and launched a digital version of the Rolodex called ACT!. Built inside ACT! is a contact management tool that inspired the development of Content Management Systems (CMS) prototypes.

The 1990s

Database marketing extended its functions and is now used in applying statistical methods and analyzing customer data aside from merely gathering and storing them. It now also allows small tasks to be automated, transforming into the Sales Force Automation (SFA). Siebel Systems, founded by Tom Siebel, became the most prevalent SFA provider at that time. Come 1995, the term Customer Relationship Management (CRM) is coined. SFAs have also evolved dramatically. With just a click, SFA has become capable of converting leads and automating marketing campaigns. In 1999, Siebel Systems launched the first CRM called Siebel Sales Handheld. The company SalesForce, on the other hand, released the first-ever cloud-based CRM as a much more affordable option than on-premise CRM.

The 2000s

The cloud-based CRM has become a phenomenon in the 2000s. It generated substantial cost reductions, making CRM accessible for all types of businesses. It also enabled companies to instantly update customer data on multiple devices and access the system anywhere. Following the Y2K bug fiasco, which razed online service providers and CRM vendors, the book ‘CRM at the Speed of Light’ by Paul Greenberg proposed a more coherent CRM system as a solution. Shortly after, the first open-source CRM was launched by SugarCRM in 2004. In the very same year, Vtiger launched an open-source CRM as well.

The 2010s

The birth of Big Data and mobile computing made CRM solutions fully equipped to handle sales pipelines while delivering outstanding customer experiences for businesses of all sizes. With the built-in tools for data analytics, the CRM can also project useful sales predictions. It can be integrated with social media platforms, even to applications like Gmail and many more. Worldwide CRM software revenue overtook Database Management Systems (DBMSs) by 2017. Its market also grew 15.6% in 2018, making CRM the most prominent and fastest-growing enterprise application software category worldwide. Worldwide spending on CRM is expected to reach USD 114.4 billion by 2027.

The Evolution of CRM’s Functionality and its Future Has only just Began

CRM evolution did not necessarily revolve around contact management alone. Along with the many mind-blowing innovations of today’s technology, CRM continues to evolve further. From manual to digital to cloud-based, technology has continually enhanced CRM into a one-stop shop for business optimization needs. A data silo, a sales and service automation tool, a dynamic scheduling tool, an external app/software integration tool, and a data analysis tool in one. With a proper sales strategy and dexterity with CRM functions, greatness in business is within reach.

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