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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
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
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
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,
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
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.
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.
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
Copyright © 2004-2005 Evaluseek Publishing.
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