CRM has been around for a long time in one form or another, but it didn’t become truly recognized until the 1990s. In its early format, CRM was mostly used to help businesses automate the management of their sales force and customer contacts.
Over the years, it has become one of the most critical tools for any business.
I’m going to take you back in time to when it all began.
Most sales professionals today have grown up CRM software as an integral part of their jobs, but in the early days, customer data had to be manually managed. The first CRM system was an “analog” version – the good old Rolodex.
In its day, this was considered the piece-de-resistance for any successful business, a set of rings with cards on them where each customer’s contact information was recorded.
A Rolodex would typically be organized alphabetically by company name or the contact’s last name. This made it easy to flip through and find the information needed for a sales call. Today, that information is integrated into a CRM and easily searchable.
CRM software manages multiple types of data, including contact, purchase history, conversations, and so on. Even better, everyone on the sales team has access, which ensures clear communication and transparency.
CRM evolved from two important inventions: analog and digital, both of which appeared in the 1950s and long before anyone had even thought of using the terms CRM, mainframe computer, or Rolodex.
The Mainframe Computer
While the Rolodex was considered a fantastic invention that revolutionized how companies worked, something even more revolutionary was just around the corner – the mainframe computer.
Konrad Zuse was a German engineer who designed the Z4, and in 1950, one was sold to ETH Zurich, quite possibly the first ever digital computer available commercially. However, it was never hugely successful, thanks mostly to the first mainframe available at the time becoming more commercially viable.
1n 1944, that mainframe went into operation, and it was called the Harvard Mark I. After 7 years of building, the mainframe was huge – it filled up one room and weighed an impressive 5 tons. However, it had less computing power than today’s school calculators.
Following this, more companies began to develop the technology, the best-known being IBM. Over time, they became more practical and affordable, ensuring more businesses adopted the technology.
During the 1970s, some companies began to digitize information they held about their customers, designing systems for their mainframe computers to hold contact details, addresses, and other basic information.
Everything was stored in a central place, ensuring everyone in the organization could access it. These were the first basic CRM systems, and while they improved on the Rolodex, they had a long way to go.
The mainframes were still huge, and users needed to log in to a terminal to access them. The terminal was a keyboard and monitor wired directly into the mainframe, which meant users had to be physically onsite to do it.
Access requires users to know how to use text-based prompt systems, which meant they needed to learn a whole heap of commands and know how to input them correctly to get what they wanted.
This meant most companies had to invest in training their staff, and because the mainframe technology was so cumbersome, few salespeople wanted to use it.
And because customer contact information was considered valuable to a salesperson, they rarely wanted to share it with anyone else – entering the details into the computer system meant the company owned it, and most didn’t want that. This all changed when CRM systems evolved again in the next couple of decades.
During the 1980s, computers shrank in size, and it became more feasible for anyone to have one in their own home. However, they were painfully slow, and companies struggled to incorporate them.
However, some companies did provide their sales teams with personal, portable computers, allowing the reps to take them wherever they went; this also meant they could input customer information into basic CRM systems.
In 1987, ACT! was developed and released by Pat Sullivan and Mike Muhney. Installed on personal computers, it gave the reps access to a system similar to a CRM system, allowing contact information to be maintained in digital format and allowing the reps basic analytics and search capabilities.
ACT! is considered by many to be the first real CRM system, even though the term wasn’t being used at the time. However, adoption stayed at a low rate until the 1990s.
Throughout the 1990s, CRM advanced significantly. This was partly due to more people owning computers at home and work and a significant uptick in the number of people connecting to the internet.
Companies began to create websites, even though some still didn’t see the value in them, and email changed how people communicated with one another. Phone calls were still the most common form, but email use became popular with sales reps because they could communicate in writing instantly with their customers.
As the 1990s drew to a close, the Blackberry mobile phone became popular, especially for business users. Because it could access the internet, salespeople could communicate with one another and their customers no matter where they were.
With the internet becoming more popular, more sales reps found that they could find information about customers before they even contacted them. Siebel Systems developed the first SFA (Sales Force Automation) tool, building on ACT! and similar systems.
They could look companies up and find out their organizational structure easily.
Technology enabled a more simplified method of tracking contact details and automating tasks previously done manually, such as tracking interactions with various customers. Throughout the 1990s, these database systems evolved, and CRM became a common term.
Large companies involved in developing CRM software began to consolidate their work with other technology companies, developing whole suites of business tools. By linking CRM and ERP tools, companies could connect sales and inventory. However, this introduced a level of complexity that a large number of users dismissed.
This led to small CRM companies offering smaller and simpler solutions. Some provided users with collaboration tools via the internet, allowing data to be shared throughout the CRM system and easier communication.
Late in the decade, the largest CRM company, Salesforce, became the first to launch a SaaS CRM – Software as a Service. While it was a bit scrappy to start with, it soon became the biggest player in the sales arena.
As the year 2K rolled in and passed without incident, something was happening – cloud-based storage was becoming a huge deal. Salesforce took the plunge, introduced the first CRM platform based in the cloud, and became the pioneer behind the software industry relocating to the cloud.
It also used ideas from the tab feature Amazon offered that allowed people to flick between tabs and created their own system whereby users could move between data lists and modules easily.
In short, they made CRM simple for small companies that could get started without a huge investment and the need for a massive maintenance budget.
This was also the decade of the smartphone, and developers began producing apps salespeople could use on their phones, turning them into smaller computers they could take anywhere.
While Salesforce continued to dominate the CRM market, smaller companies began to join the market, offering simplified and cheaper versions of a CRM system based in the cloud.
2010s and 2020s
This was the decade when CRM grew into a massive business.
While Salesforce was still one of the biggest, other sales tools arrived en-masse, some of them in direct competition with Salesforce, while others added tools that allowed users to analyze their data, create charts, automate emails, and many more functions not offered by traditional CRM tools.
Today CRM tools still dominate the business world, offering plenty of benefits and making life much easier for companies and their salespeople. And the software systems continue to evolve, gradually becoming more streamlined, simple to implement, and easy to use.