Technology is the basis of the future of work. Nowhere is this truer than in Customer Relationship Management (CRM), a term referring to technologies that manage customer interactions and data throughout the customer lifecycle. Over the past three decades, technology has revolutionized how organizations optimize important customer data—and advances such as AI and machine learning continue to refine how businesses track, manage, and sell to their customers. CRM adoption rates reflect businesses’ faith in those platforms to revolutionize the future of work; in 2008, only 12% of companies used these solutions. Today, that figure has skyrocketed to a whopping 87%.
But to fully understand how CRM platforms will continue shaping the modern workplace, you first need to understand their storied history. How did the first CRM platform come about? Why did businesses first adopt them, and what key developments happened along the way? As we look towards the future of work, let’s first take a step back to see how CRMs have changed since their humble beginnings in the early 1970s.
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The 1970s: The Birth of Mainframe Solutions for Direct Marketing
Before the advent of cloud-based technologies, independent mainframe systems stored customer data files. Their purpose? Digitizing files helped eliminate manual data entry and to save storage space. Direct marketing took precedence during this time, with business users tracking leads and forecasting sales mainly with paper, spreadsheets, and Rolodexes.
The Early 1980s: Database Marketing Reigns
The 1980s saw marketing professionals start to harness the power of customer data to supplement their sales strategy. The decade was the age of database marketing, a process pioneered by Robert and Kate Kestnbaum, where contacts were more efficiently organized in a single database, compared to using mainframe systems. During this time, many companies discovered the value of personalized interactions with their customers for a higher conversion rate. By collecting and analyzing customer information using a statistical model, data can humanize and customize sales and marketing communications with leads. Despite being helpful a helpful process, files in databases often remained unorganized and outdated.
The Late 1980s: Contact Management Software
To combat customer data inefficiencies, marketers and sales teams recognized a need to consolidate and integrate customer data with back office applications. In 1986, the first contact management software was created when Conductor Software launched ACT, a digital Rolodex which enabled more efficient storage and organization of customer data. Companies could now integrate contacts and calendars for sales and marketing automation processes.
Other vendors such as Goldmine quickly followed suit throughout the decade. According to Goldmine’s co-founder Jon Ferrera, Goldmine was conceptualized from the customer engagement pain points he faced as a sales agent in Banyan Vines, a Network Operating System, in 1989. “I envisioned a need for a unified relationship platform for the whole company so salespeople can sell, marketers can market, and customer-facing team members can interact with their customers from a single platform,” he says
In 1995, the term “customer relationship management” was formally coined after years without a standardized name. Click To TweetAs the decade came to a close, personal computers became more accessible to the public, and software development grew rapidly with the rise of server architecture.
The Early 1990s: Enterprise Resource Planning
The 1990s saw the transition of contact management to sales force automation (SFA), a framework which could effectively consolidate contact, lead, and opportunity management into one system. This upgrade allowed companies to automate their database marketing efforts, save time, and reduce costs. Enterprise resource planning (ERP) software helped automate business operations in manufacturing and distribution industries—and SFA solutions were used in conjunction with those products, as well.
In 1993, Siebel Systems, founded by Tom Siebel, became the leading SFA provider on the market. Two years later in 1995, the term “customer relationship management” was formally coined after years without a standardized name—winning the battle over the less popular moniker Enterprise Contact Management (ECM).
Related: How to integrate your CRM with the rest of your tech stack
The Late 1990s: The Launch of The First Online CRM Platform
1999 was a busy year for the CRM industry. Siebel Systems launched the first mobile CRM in 1999: the Siebel Sales Handheld. Although PeopleSoft, SAP, and Oracle created platforms of their own, the tech space struggled with a low mobile adoption rate simply because of the inaccessibility of these emerging devices. The same year, Siebel Systems was also named Fortune magazine’s fastest-growing company.
More importantly, 1999 saw the advent of cloud CRM—a cheaper alternative to traditional on-premise systems which were significantly more expensive. Salesforce, founded by former Oracle Executive Marc Benioff, made its industry debut with Salesforce.com, the first Software-as-a-Service (SaaS) platform. Eventually, Salesforce overtook Siebel Systems as a category king.
The Early 2000s: The DotCom Bubble Finale
The CRM industry endured significant fallout from the burst of the dotcom bubble in the early 2000s. With a public hesitant to adopt new technologies, big tech companies like Oracle reported losses of more than 25%.
As the market recovered, CRM companies experienced success with the increasing flexibility and agility of new CRM developments. CRMs became a strategic tool to support overall sales and marketing efforts. In 2003, Microsoft Dynamics became a leading player by marrying the CRM concept with its existing legacy systems (MS Office and Outlook) to create a CRM platform of their own.
The Mid-2000s: The Birth of Open Source CRMs
Cloud-based CRMs surged in popularity in the mid-2000s. Many companies became CRM providers and introduced a variety of additional features. Users could now store data in the cloud and access their CRM platform on mobile devices, for example.
In 2004, SugarCRM pioneered the first open-source enterprise CRM system. Their cloud-based version soon became a standard feature in the CRM industry. Shortly afterward in 2007, Salesforce’s Force.com introduced the world to customizable, cloud-based CRM. By 2010, most CRM software providers offered tiered subscription models, making those platforms an affordable solution for businesses of all sizes and verticals. CRMs had become indispensable to all companies.
The Late 2000s: CRMs Become Social
Social media exploded onto the scene in the late 2000s, especially with the launch of Twitter and Facebook’s introduction of newsfeeds in 2006. Marketers began to leverage social media marketing to attract customers. The first social CRM software was ComcastCares, an application which focused more on an interaction relationship with customers, rather than a transactional one. Its subsequent popularity validated the need for social CRM in the industry, with various players entering the CRM market. Cloud-based and SaaS CRM solutions increased in popularity due to their competitive pricing and mobile capabilities.
The Present Day: The Future of Work and CRMs
The state of CRM tools over the years has laid the right foundation for a thriving worldwide industry valued at over $40 billion as of 2017. Salesforce remains a top industry player in the CRM space today, with a unique business model and loyal brand community that have profoundly shaped the tech industry.
Many software platforms have already added big data and social media analytics into the mix, allowing companies to chart their digital customer journeys strategically. As more users access CRM platforms on their smartphones in the BYOD age, they can expect to see more developments in the mobile CRM sphere. Artificial intelligence (AI) and machine learning innovations will continue to push the boundaries of CRM. Gartner predicts that by 2020, 30% of all companies will employ AI to augment at least one of their primary CRM sales processes.
As we look towards the future, we can anticipate the burgeoning of even greater CRM features that will serve as a stronghold for forward-thinking companies. AI and machine learning will continue to enhance the CRM experience, and only those committed to achieving digital transformation will be able to effectively leverage this emerging technology.
For example, when Box, the popular online file sharing and content management service for businesses, started their new Partner Program, they immediately experienced an overwhelming number of applicants. The process to approve a partner required many back and forth emails and context switching between their CRM, Salesforce, and other apps like Marketo and Box. Box created intelligent workflows using Workato to take their 12 step onboarding process down to only 4.
Their automations extend the power of Salesforce using Workato to bring the applicants from Marketo into Salesforce automatically, where they can accept or reject inside the CRM. Once the applicant is accepted or rejected, Workato automatically carries out a set of follow up steps, like creating a Box folder for the partner, adding them as a collaborator, emailing them an acceptance email, and putting the Box link back into Salesforce under the correct profile.
Digital-first companies like Box and others will continue creating automations that enhance and empower their CRM. Whether you’re triaging support cases with AI or using Slack to approve sales deals, the future of work undoubtedly includes an extending your CRM.
