The history of CRM software: How did we get here and where are we headed?
Happy New Year! In the past, we've talked about why it's important to connect live chat with a CRM: it helps keep sales leads and customer records in order; and will make future customer conversations more personalized, increasing the likelihood of closing a sale or keeping a customer. In short, a live chat CRM integration will help you achieve your business goals. If one of your resolutions this is to integrate with a CRM then it's best to start at the beginning, with a quick overview of the history of CRM software.
In our increasingly over connected world, there are more opportunities for business people to develop relationships with prospects, customers and their influencers than ever before. Therein, however, lies a daunting challenge: how do businesses cut through the noise to effectively develop relationships with customers, prospects and their influencers that help them grow?
How do you cut through the crowd to connect with the right customer?
Advancements in Customer Relationship Management (CRM) software are helping us find answers to this question.
“Relationships are critical to your business success and if you can effectively identify people that matter, reach out and build relevant and authentic, pay-it-forward relationships, not only will your prospects turn to you when they need the products and services you sell, but they’ll drag their friends with them. But in today’s over-connected and over-communicated world, it’s getting harder and harder to do,” says Jon Ferrara, CEO of Nimble, which integrates simple smart CRM, social media and marketing tools into a single SaaS (Software as a Service) solution.
Ferrara is a pioneer of CRM software, having co-founded the award winning GoldMine Software in 1989. GoldMine is widely recognized as one of the first CRM software solutions to integrate contacts, email accounts and calendars with sales and marketing automation for business teams, along with others like ACT!
“GoldMine was created from my own personal needs as I struggled to manage prospect and customer engagement while working in sales for a technology company, Banyan Vines, in 1989. Outlook didn’t exist, Salesforce didn’t exist. The terms CRM, SFA and Marketing Automation didn’t exist. Sales people were tracking leads and forecasting sales with paper, spreadsheets, DayTimers and Rolodexes.” Ferrara notes. “I envisioned a need for a unified relationship platform for the whole company so salespeople can sell, marketers can market, and customer-facing team members can interact with those customers, all from a single platform.”
What is a CRM?
While the emergence of companies like GoldMine broadened the targets of CRM to include prospective customers as well as existing ones, the definition of CRM is still unclear, even to the experts.
“CRM is such a vague, all-encompassing term. What isn’t customer relationship management? Today it’s not just sending emails, it’s things like recording purchase histories and interacting with people as they’re making a purchase,” says Nathan Kontny, CEO of Highrise, a CRM tool designed for small business and a subsidiary of Basecamp.
“I don’t really like the term ‘CRM’ because I’d argue that most CRMs aren’t even about relationships, they’re about reporting, and it’s a huge time expenditure for the people using it,” Ferrara adds. “The reason they call it Salesforce is that you have to force salespeople to use CRM”
There is no confusion, however, about the impact of social media on the industry, which has dramatically changed the way people build relationships.
“Relationships today happen in your inbox and on social media sites like twitter, LinkedIn, Facebook and Instagram,” Ferrara says. “Today sales is a four-letter word, because we went through a stage of Mad Men marketing and ‘bag ‘em, tag ‘em’ sales reps when mass manufacturing emerged in the 1920s and 1930s. But if you go back to the 19th century, we all lived in small villages and your reputation was built on the promises you made and kept, and if you did that well, you had a business forever. I believe social media is increasing transparency, it’s changing the way we work, play and communicate making the world a small village once again. Your relationships are critical to your success and social networking is an amazing way to cultivate those relationships. People buy from people they like, know and trust.”
In addition, social media has impacted the way CRM software providers design their interfaces, dating back to 2006 with the launch of Twitter and Facebook’s introduction of its news feed. “Both of those developments really influenced the design of platforms like Highrise, which launched in 2007,” Kontny says. “We had a news feed based on all activities on the system, recording which deals took place, which task had a new note today, and that mostly came from the popularity and familiarity of social media interfaces.”
The history of CRM software
Of course, between the CRM software breakthroughs of the late 1980s and the emergence of social media, a few significant developments occurred along the way.
In 1993, Siebel Systems began as a sales force automation (SFA) software company, integrating contact management features while offering a central resource of information about clients and competitors. In 1999, Siebel Systems was named Fortune magazine’s fastest-growing company, and was acquired by Oracle in 2006.
In 1999, former Oracle executive Marc Benioff and a team of software developers founded SalesForce, offering web-based CRM services and quickly expanding to provide a variety of other cloud-based functions. It continues to be one of the most highly valued cloud computing companies in the world.
In addition to the advent of social media, an increased emphasis on scalability over the past several years has changed the CRM landscape. Platforms like Nimble are designed to accommodate companies of all sizes, while Highrise offers a specialized focus on small businesses.
While the evolution of CRM software and the number of users continues to grow, Ferrara points out that less than one percent of the 225 million global businesses are using CRM software—a troubling statistic for software providers, perhaps, but also a signal of future opportunity.
So, how best for CRM software companies to make the most of this opportunity? According to Kontny, ease of use will always be a priority.
“Our users don’t want something that requires a manual to understand,” Kontny says. “They don’t want too much handholding when learning the system, so it needs to be intuitive and something they can easily become familiar with.”
Another demand in the marketplace is for more automation, which would reduce the time users spend on manually inputting data while offering more comprehensive analysis tools.
“The main cause of failure of CRM is lack of use. Salespeople work for their CRM typing in what they know about customers and what they did and they have to goto the CRM to do that data entry,” Ferrara says. “Our simple smart Nimble CRM works for you by building the CRM data for you and then working with you everywhere you work including email inbox and social.”
“There are many tools required in the sales and marketing technology tech stack in businesses right now and they don’t talk to each other. There’s market automation, CRM, customer service, accounting software, social software, and contact tools—and none of them can communicate with each other,” Ferrara says. “So no wonder people aren’t on the same page as a business. I believe the future of relationship management platforms will be a blend social, sales and marketing into a single customer engagement platform.”