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The Evolution of CRM Systems and CRM Technology

In this blog post, you'll learn about the maturity stages and milestones that CRM technology has gone through.

3 min read

Eric Hansen

Eric Hansen

Nov 05, 2020

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The Evolution of CRM Systems and CRM Technology

Customer relationship management has been around since the first customer returned to the place they purchased something to buy something else. There is no monument to this occurrence, but it is worth thinking about just how different “CRM” used to be. Yet the underlying question has always been the same: What do my customers want? Today, we might see a CRM as just a fancy spreadsheet, but it’s much more. Through modern analytics we’re able to know, understand, and even anticipate our customers in ways unimaginable just a few years ago.

The CRM space may not grab headlines, but it is growing as businesses realize what a power tool a proper software suite can be. In 2018, Gartner reported over 15% growth around the world in CRM solutions, and in 2019 companies expected to spend 75% of their CRM budgets on cloud-based systems. In fact, that same report states, “Since 2016, sales software has the highest proportion of CRM software spending in the cloud.” Not only are businesses investing in CRM solutions, they’re picking agile, modular approaches that provide maximum flexibility. That’s quite a change since 2000, when Y2K and the dot-com meltdown sent CRM investment scurrying for the hills, and innovation practically dried up.

Long before the year 2000, the basic concept of CRM was simply maintaining a list of customers. Perhaps someone bought something, and the business would send them a little note later. Once stores began seeing customers who weren’t local to their area — when transportation technology sufficiently evolved — businesses had to have some way of keeping track of who they were seeing.

Long before the year 2000, the basic concept of CRM was simply maintaining a list of customers.

Sears pioneered this model with mail order catalogs, and big books of customers and their purchasing history at Sears Roebuck headquarters. Now think about those books languishing on shelves, full of unprocessed customer data. Today no business would collect such information only to put it on a hard drive and lock it up in a basement, would they?

Through the 1980’s it was really a basic database at work, but CRM leveled up in the 1990’s with things like referral and reward programs. Businesses were able to analyze more granular shopping data, and a clearer picture emerged of customers. Many of these systems became the bare minimum for today’s customer interactions online. Think about how often you’re encouraged to sign up for special offers when you first visit a website, for example.

Thus, when computers made it possible to crunch numbers that would take humans years to process, the notion of using a database to collect customer information became relevant. These databases could store increasing amounts of user data, like their purchase histories, to inform marketers about their spending habits. As computers became more powerful, and marketing became more adept, we began to learn more about the customer than ever before. We could even predict what they might buy next!

Today CRM solutions go far beyond sales, however. They are team-focused, and work across the business to coordinate marketing, sales, even product and R&D. The best CRM tools enable cross-team cooperation, and facilitate communication within the organization. Plus, the modern CRM isn’t just a database where information goes to die — it’s a living tool that can adapt and expand to meet your needs. Want to whip up some customer profiles to inform a new product line? Today’s CRM tools aren’t just about listing customers, but understanding them. And sharing that understanding across the organization, whether it’s at your desk or on mobile.

The best CRM tools enable cross-team cooperation, and facilitate communication within the organization.

When we receive a hand-written note from a craftsperson who made something we purchased, we’re especially thrilled because of the human touch. Today we can leverage the best of what computers can offer in their raw analytical power, plus the human touch of someone who understands how and when to use CRM technology. The customer’s needs are first, and knowable in ways we could not imagine before. Businesses would do well not just to anticipate their product needs, but their human ones as well.

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