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The History of CRM — Moving Beyond the Customer Database

Customer Relationship Management (CRM) is one of those great concepts

that swept the business world in the 1990s with the promise of permanent change

the way small and large businesses interacted with their customer bases. IN

short term, however, it proved to be a difficult and better process

theory than in practice for a number of reasons. The first among these was that she

it was just so difficult and expensive to track and maintain the high volume of

necessary data with accuracy and their constant updating.

In the last few years, however, newer and more advanced software systems

tracking features have greatly enhanced CRM capabilities and the real promise of

CRM is becoming a reality. As the price of the newest, most customizable web

solutions have come to market; competition has driven prices down thus

that even relatively small businesses are reaping the benefits of some habits

CRM programs.

In the beginning…

The 1980s saw the emergence of database marketing, which was simply a catch

phrase to define the practice of creating customer service groups to talk about

individually for all customers of a company.

In the case of larger, mainstream clients, it was a valuable tool to keep

open lines of communication and tailoring of service to customer needs. IN

case of smaller clients, however, he tended to offer repetitive, survey-like

information that cluttered databases and didn’t provide much insight. like

companies started tracking database information, they realized that the bare bones

were all that was needed in most cases: what they buy regularly, what

spend what they do.

Advances in the 1990s

In the 1990s, companies began to get better at managing customer relationships

making it more of a two-way street. Instead of just collecting data for

their use, they began to return to their customers not only in the direction of

the obvious goal of improving customer service, but in incentives, gifts and

other customer loyalty benefits.

This was the beginning of the now popular frequent flyer bonus programs

points on credit cards and a host of other CRM-based resources

tracking customer activity and spending patterns. CRM was now being used as one

way to increase sales passively as well as through active improvement

customer service.

Real CRM comes of age

True customer relationship management, as it is thought of today, really began

seriously in the first years of this century. As software companies began

releasing newer, more advanced solutions that were customizable across the board

industries, it became possible to actually use information in a dynamic way.

Instead of entering information into a static database for future reference,

CRM became a way to constantly update the understanding of customer needs and

behavior. Branching information, subfolders and custom features

enabled companies to break down information into smaller subsets so that they

could assess not only concrete statistics, but information on motivation

and customer feedback.

The Internet has greatly aided the development of these large databases

enabling the storage of information abroad. Where before companies had difficulties

supporting large amounts of information, the Internet provided new

opportunities and CRM arose as providers began to move to the Internet

The solutions.

With the increased fluidity of these programs came a less rigid relationship

between sales, customer service and marketing. CRM enabled the development of

new strategies for more collaborative work between these different divisions

through shared information and understanding, leading to customer growth

satisfaction from the order to the final product.

Today, CRM is still used more often by companies that rely heavily on it

in two distinct characteristics: customer service or technology. The three sectors of

the businesses that rely most heavily on CRM — and use it to great advantage — are

financial services, a variety of high-tech corporations and

the telecommunications industry.

The financial services industry in particular follows the customer level

satisfaction and what customers are looking for in terms of changes and

custom features. They also track changes in investment habits and spending

patterns as the economy changes. Industry specific software can deliver

financial service providers really impressive feedback in these areas.

Who’s in the CRM Game?

About 50% of the CRM market is currently shared between five major players

in the industry: PeopleSoft, Oracle, SAP, Siebel and a relative newcomer

Telemation, based on Linux and developed from an old standard, Database Solutions,

Inc.

However, the other half of the market belongs to a number of other players

Microsoft’s new entry into the CRM market may cause a change soon. whether

Microsoft can capture a share of the market remains to be seen. However, theirs

Brand name recognition can give them an edge with small businesses considering a

CRM package for the first time.

PeopleSoft was founded in the mid-1980s by Ken Morris and Dave

Duffield as a client-server based HR application. In 1998,

PeopleSoft had evolved into a purely web-based system, PeopleSoft 8.

There is no client software to maintain and it supports over 150 applications.

PeopleSoft 8 is the brainchild of over 2,000 dedicated developers and $500

million in research and development.

PeopleSoft branched out from their original HR platform into

1990s and now supports everything from customer service to supply chain

management. Its user-friendly system requires relatively minimal training

free to deploy. .

One of PeopleSoft’s major contributions to CRM was their detailed analysis

program that identifies and ranks customer importance based on amount

criteria, including the amount of purchase, the cost of their supply and their frequency

the service.

Oracle built a solid base of high-end customers in the late 1980s,

then burst into national attention around 1990 when, under Tom Siebel,

the company aggressively marketed a small and medium business CRM solution.

Unfortunately, they couldn’t follow through on the incredible sales they had

gathered and ran into some real problems over the years.

Oracle got back on its feet after a restructuring and refocusing

customer needs and by the mid-1990s the company was again a leader in CRM

technologies. They continue to be one of the leaders in the enterprise

market with Oracle Customer Data Management System.

Telemation’s CRM solution is flexible and user-friendly, with a

toolkit that makes changing features and settings relatively easy. system

it also offers a quick learning environment that newcomers will appreciate. Her

the uniqueness lies in the fact that, although compatible with Windows, it was developed as one

Linux program. Will Linux be the wave of the future? We don’t know, but if it is

is, Telemation is ahead of the game.

Last years…

In 2002, Oracle released their Global CRM package in the promised 90 days

rapid implementation of CRM across the company’s offices. Available in packaging

was a flat-rate service for onboarding and training for core business needs. .

Also in 2002 (a stellar year for CRM), SAP America’s mySAP began using a

middleware center that was able to connect SAP systems with external and

front and back office systems for a unified operation that connects partners,

employees, processes and technologies in a closed function.

Siebel

consistently based its business mainly on the size of the enterprises they want

to invest millions in CRM systems, which worked for them to the tune of $2.1

billion in 2001. However, in 2002 and 2003 revenues fell to somewhat smaller

CRM firms joined the fray as ASP’s (Application Service Providers). THESE

companies, including UpShot, NetSuite and SalesNet, offered CRM-style businesses

tracking and managing data without the high startup cost of traditional CRM.

In October 2003, Siebel launched CRM OnDemand in collaboration with IBM.

Their entry into the monthly CRM solution niche hit the market

storm force. For some of the monthly SHPs it was a call to arms, for others it was

a sign of Siebel’s growing confusion over brand identity and growing loss

of market share. In a stroke of genius, Siebel acquired UpShot a few months ago

later to initiate and smooth their transition into the ASP market. it

it was a successful move.

With Microsoft now in the game, it’s too early to tell

what the results will be, but it looks like they might get some of it

small businesses tend to buy based on familiarity and usability. the will of the PSH

continue to grow in popularity as well, especially with medium-sized businesses, so

companies like NetSuite, SalesNet and Siebel’s OnDemand will thrive. CRM in

the web has come of age!

This article on “History of CRM” reprinted by

leave.

Copyright © 2004-2005 Evaluseek Publishing.

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