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A misconception is that CRM, or customer relationship management, is a new idea that originated towards the end of the twentieth century. While it’s true that the term is fairly recent, but the practice is older than money itself.
The first recorded example of trade dates back 20,000 years, during this time obsidian knives were traded in what is now Papua New Guinea, between islands that had valuable obsidian deposits and those that did not. Obsidian was prized globally in those early times for its suitability for knives and other cutting implements and was traded in early Europe and Asia as well as the Americas.
Take into consideration what was required to be a successful trader and maintain a sustainable business then and now, and you realise that very little has changed over the centuries. Here are 3 things you need to know:
- Your buyers and sellers in the supply chain
- Their location
- What they wanted to buy or sell
Even in Paleolithic times, there must have been an understanding that it is easier to sell to an existing customer than find a new one, and that it was advantageous to nurture the relationship. We are not sure how this information was stored, whether it was simply committed to memory (where competitors could not access it), or whether some early customer list was maintained. When you consider the risks involved in traveling across the Gobi Desert with camels or taking to the seas in small ships, it makes sense that these early traders were experts in marketing and sales, with excellent customer knowledge.
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Where there is trade, there must be accounting
Maintaining a recording of who owned what, and who owed what to whom required some form of notation and permanent record, and some form of accounting that has been practiced for thousands of years. Naturally names and locations were part of the accounting records and were the earliest form of a customer database. There would have been some early form of segmentation applied too, probably based on personal wealth and ability to pay. So, when we discuss when the concept of CRM was introduced, we need to be less myopic; CRM started a long, long time ago, that's how successful businesses, governments, and countries arose.
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Moving to the twentieth century
Fast-forward through the various forms of record-keeping, accounting methods, and devices and jump to the first commercial computers. Automation was eagerly adopted by anyone with record-keeping concerns and lots of money to spend, starting in the late 1950s and early 1960s. The main focus was on maintaining accounting records, either on accounting machines or computers, in banks, stock exchanges and government departments. As the price of computers decreased dramatically, by the 70s, even small businesses could afford to join the computing revolution.
The customer list belonged to the accounts department; salespeople kept their own records on index cards, either in a tray or held by a Rolodex, and believe it or not, you can still buy this 1950s invention on Amazon
today, maybe there are more Luddites
out there than we realise, and maybe we should take them more seriously.
It gradually became apparent that automation could be useful in other areas of the business, especially in sales, and in a few short years, CRM, in its digital format, emerged.
Automating sales and marketing
The beginnings of CRM as we know it started in the 1980s. Robert and Kate Kestnbaum were pioneers of database marketing. Which was a form of direct marketing that analysed the customer database statistically to identify which customers would be most likely to react to a marketing campaign. The concept took off and Kestnbaum, together with Robert Shaw, brought us new concepts and methodologies, ranging from customer lifetime value to channel management. There is a lot of debate about who invented CRM, but, if you take Bob Kestnbaum's contributions to modern marketing and strategy, he probably has earned the crown.
Others who argue when CRM was introduced will suggest that two Texans, Pat Sullivan and Mike Muhney, were the guys who invented CRM, with their product, ACT. While the acronym ACT stood for "Automated Contact Tracking" early in its product life, it could well be regarded as the first automated CRM.
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The emergence of CRM as a product
Where these pioneers led, there were many early followers, and the 1990s saw many new products that managed customer data. The acronym "SFA" (Sales Force Automation) described these products, that were an amalgamation of database marketing and contact management. One of the early products from a pioneer, Tom Siebel, who was working at Oracle at the time, left to form Siebel and sell his solution, which became the market leader in its day. The ERP companies also saw an opportunity and the market became very competitive. However, not all companies were offering megalithic and expensive solutions. Companies such as Goldmine (1990) and Maximiser (1987) provided off-the-shelf software that was affordable for small businesses, but had enough features that made them attractive to large multinationals. Both companies are still around today.
By the mid-90s this market skyrocketed into product offers of all shapes and sizes, now known as CRM systems. Customers were spoilt for choice, although aggressive acquisitions made it hard to work out who your vendor would be in a year's time.
Then in 1999, there were two major changes:
- Mobile and e-CRM was offered by companies such as Siebel
- Salesforce
hit the scene with its cloud CRM offering
Electronic and mobile CRM
Technological advancements impacted the CRM market with new devices and new channels, both for internal and customer-facing use. When Siebel launched its "Siebel Sales Handheld'', the other vendors soon followed suit with products of varying consistency and reliability. Market demand created the need and the vendors were quick to respond.
Software as a Service: Salesforce becomes the CRM leader
Salesforce did not create a great stir when it launched in 1999. Most competitors regarded SaaS (Software as a Service) as a fad and not a good vehicle for CRM. Salesforce's initial attention was directed at small to medium businesses and by the time competitors woke up to the migration of customers to the cloud, Salesforce had become the world's #1 CRM with the industry-leading Einstein 1 CRM.
CRM in the 21st century
As of now, the market for new CRM products does not seem to have reached it’s saturation point. New companies continue to come to market with cloud products, while existing vendors have changed their licensing models to offer cloud alternatives to traditional site licenses. The latest shift is the rise of social data and the need to interact with customers on the various social platforms.
Mobile CRM has become even more imperative as an offering with the advent of the smartphone. The pace of change is so rapid that many vendors are battling to keep abreast of the latest developments, ranging from chatbots to big data and AI.
Whatever comes next, you can be sure that Salesforce will continue to lead the way. Want to know more about the world's #1 AI CRM? Try it for free today.
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