History of CRM for SMBs: 1950 – 2023

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.elementor-widget-text-editor.elementor-drop-cap-view-stacked .elementor-drop-cap{background-color:#69727d;color:#fff}.elementor-widget-text-editor.elementor-drop-cap-view-framed .elementor-drop-cap{color:#69727d;border:3px solid;background-color:transparent}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap{margin-top:8px}.elementor-widget-text-editor:not(.elementor-drop-cap-view-default) .elementor-drop-cap-letter{width:1em;height:1em}.elementor-widget-text-editor .elementor-drop-cap{float:left;text-align:center;line-height:1;font-size:50px}.elementor-widget-text-editor .elementor-drop-cap-letter{display:inline-block} Customer relationship management software has been gaining popularity among businesses of all sizes. But what’s the history of CRM? Understanding where CRM software originated shows how far technology has come and why business owners have more than enough tools to thrive.  Hi, I’m AJ! I’ve built several profitable businesses with the help of CRM systems. And I ensured my team constantly updated our strategies as CRMs changed. Are you curious about the history of CRM and why the systems were created? I’ve spent years learning CRM systems and compiled this guide to answer all your questions. Let’s dive into the history of CRM software!









Key Takeaways







Half of small businesses use CRM software to improve productivity and boost sales.




Customer relationship management began by simply storing contact details in a Rolodex.




The better your company can understand and utilize customer information, the better you can market and sell to them.




Multiple CRMs provide specialized services for specific industries, thanks to technological advancements.








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/*! elementor - v3.14.0 - 26-06-2023 */
.elementor-heading-title{padding:0;margin:0;line-height:1}.elementor-widget-heading .elementor-heading-title[class*=elementor-size-]>a{color:inherit;font-size:inherit;line-height:inherit}.elementor-widget-heading .elementor-heading-title.elementor-size-small{font-size:15px}.elementor-widget-heading .elementor-heading-title.elementor-size-medium{font-size:19px}.elementor-widget-heading .elementor-heading-title.elementor-size-large{font-size:29px}.elementor-widget-heading .elementor-heading-title.elementor-size-xl{font-size:39px}.elementor-widget-heading .elementor-heading-title.elementor-size-xxl{font-size:59px} When Was the CRM (Customer Relationship Management) Invented?




The first step in understanding the history of CRM is knowing when CRM began. The term “customer relationship management” was initially coined in the 1980s. Patrick Sullivan and Mike Muhney developed the first CRM system, ACT!, that enabled companies to organize and store customer lifecycle information correctly and efficiently.  The first CRM was essentially a digital Rolodex, far less advanced than CRM applications today. Still, Sullivan and Muhney invented CRM to organize customer lifetime information and use the information to develop better relationships with customers. Although CRM data has advanced over the past few decades, the mission and purpose remain the same.

















Pro Tip #1: Consider why your company needs the software before implementing a CRM into your business processes.

- AJ Silber


















Why was CRM Developed?



Customer relationship management software was created to organize customer and business information. As a result, businesses realized they could offer their customers more personalized marketing and sales campaigns because they understood their needs. Additionally, CRM software was developed for the following purposes: To build longer-lasting relationships with old and new customers To streamline business operations To automate repetitive tasks To create better communication and collaboration tools To improve pipeline management for sales professionals To increase revenue CRM was created to form better customer relationships and organize company data. 















Full Evolution of CRM




The complete history of CRM stretches farther back than you may have assumed. In fact, the first customer relationship management tool was invented in the 1950s!  Since then, the industry has advanced tremendously, and CRM solutions help large and small businesses alike. The 1950s: Invention of the Rolodex The first customer relationship management system filed customer information so businesses could organize their data. The Rolodex is a rotating filing tool invented in 1956 by Danish engineer Hildaur Neilson.  A Rolodex stored a collection of index and business cards alphabetically, allowing users to spin and flip through the letters until they found the contact they needed. Before the Rolodex, contacting customers was more challenging than it needed to be because their information was disorganized.  The 1960s: The Mainframe System The history of CRM continues with the mainframe system, which became available to businesses in the 1960s. Although mainframe computers were invented earlier (between the 1940s-50s), they weren’t available to businesses until much later.  Mainframe systems are large, bulky computer systems that businesses use to store and process customer data, including the following information: Names Addresses Contact details Although digitizing customer information was forward-thinking at the time, mainframe systems took up considerable space, often an entire room! Therefore, if you were running a small business in the 1960s, you  probably  weren’t using a mainframe system to organize customer data. The 1980s: Database Marketing & Contact Management Software In the 1980s, the history of CRM changed drastically as businesses utilized technological advancements. That said, companies started using customer information collected via database marketing. Database marketing is simple.  Companies would contact existing customers in their database and offer them products or services.  Typically, businesses used the postal system to send product catalogs to entice customers to purchase products. Toward the end of the 1980s, businesses began calling customers directly to sell products and services. And because computers were more widely available, filing customer data was more accessible. The 1990s: Sales Force Automation & Mobile CRM SaaS After the history of CRM saw its first contact management software, sales force automation was quickly invented.  In 1993, Tom Siebel founded Siebel Systems, offering sales automation tools. Later Tom Siebel expanded Siebel Systems and developed marketing automation and customer service applications called Siebel Sales Handheld. After Siebel Sales Handheld, Siebel Systems quickly became the market leader in sales force automation. This technology made it easier for sales teams to do their jobs and sell from anywhere rather than being tied down at a desk.  The 2000s: Cloud-Based CRM & Social CRM In the 2000s, the history of CRM saw the first cloud-based CRM software and the utilization of social media. Cloud-based CRM systems enable companies to access sales and customer data from any connected device. By 2004, a group of technologists introduced the first publicly available internet-based software on the CRM market called Sugar Open Source. By the late 2000s, companies began using social media platforms to improve customer relationships. As a result, social media sites like Facebook and Twitter created more interactive client relationship management rather than transactional. Social media drastically altered the sales process and how companies improved the customer experience.  For instance, social media allows businesses to gather more customer information and analyze which marketing techniques work best through engagement statistics.  The 2010s: Rise of CRM Providers (Modern CRM) The 2010s saw the CRM market expand rapidly, welcoming numerous CRM providers. CRM systems advanced as technology became mobile, allowing businesses to access their data from mobile phones and tablets rather than just desktops. As technology advanced, CRM providers started to offer unique software, specializing in meeting specific business needs and industries, including: Construction Social media Real estate Insurance Accounting Rather than handling all CRM needs the same way, providers created unique selling tools to improve customer interactions based on the industry.  This individualized approach to CRM allowed more businesses to take advantage of the technology and implement it faster.  The 2020s: Further CRM Sophistication Companies continue to advance customer relationship management software each year. Today, CRM users enjoy various advancements, such as: Automated contact tracking Marketing automation Reporting capabilities Data Intelligence Advanced analytics The data CRM systems collect is incredibly detailed and precise, allowing businesses to make more data-driven decisions that lead to more sales.  The CRM market attempts to offer more all-in-one products to reduce the need for several third-party integrations.  The Future: AI & CRM The future of CRMs will implement more artificial intelligence (most programs have already started using this technology). Artificial intelligence offers more automation for business owners, allowing them to focus on other projects rather than repetitive tasks.  As a result, artificial intelligence can help with marketing campaigns, organizing customer information, and communication tasks. Some of the more popular AI systems currently in use generate written and visual content.  However, in the future, AI specialists aim to make the technology more advanced and capable of additional business operations. 














Pro Tip #2: Start utilizing AI tools within your CRM because the technology is only growing in popularity. It's wise to get a jump start and learn the functionality.

- AJ Silber


















What is the Origin of CRM in the US?




The history of CRM in the United States started with the Rolodex. As technology advanced, mainframe computers were the primary tools to store customer data. Businesses quickly discovered that finding and organizing information is simpler when they transitioned customer data to a digital format. Before long, CRMs became what we know today; advanced software with multiple functionalities.















Common Features of a Modern CRM System




Now that you understand the history of CRM let’s look at the popular features CRM software has today. CRMs have many more functions than the ones I will list below. However, the four that are listed are the most popular. Automation Software Automation software is applications and technology that reduce the need for manual input. Therefore, sales reps and other team members spend less time completing manual, repetitive tasks and more time on other projects. As a result, automation software helps improve efficiency and drive more sales.  My company utilized automation technology all the time. The most significant advantage I noticed was my team’s increased number of ideas. Rather than spend time and energy doing mundane tasks like data entry or creating forms, my team had more drive to find other ways to increase revenue. Sales Pipeline Management Sales pipeline management is another popular CRM function that your business must take advantage of to drive more sales and better understand your customer base. Sales pipeline management is an estimated revenue your company will earn from your current customers.  A sales pipeline presents the various stages customers go through before purchasing a product or service. When businesses understand their sales pipeline’s strengths and weaknesses, changing it to meet customer needs is easy. Effective sales pipeline management includes the following benefits: It allows sales reps to organize and monitor potential customers Understand your customers better, including shopping habits, communication techniques, and effective sales tools Identify weak spots in your sales process Improve customer satisfaction Improve customer retention Customer Data Management Customer data management (CDM) collects, manages, and analyzes customer data from various sources. As a result, businesses get a better understanding and form a unified view of each customer. Why should businesses use customer data management? CDM delivers a personalized, real-time view of customer experiences. And when you understand your customers, you can create better marketing and sales tactics.  Today, customers interact with various brands and businesses across multiple platforms, including email, social media, and advertisements. Through these interactions, businesses have several opportunities to collect information about potential customers. As a result, customers receive more personalized sales experiences that boost business sales. Analytics & Reporting The last CRM feature that’s commonly used is analytics and reporting tools. CRM software allows companies to monitor the performance of their CRM system and other customer-related activities. The reporting tools are valuable for businesses that want to improve customer relationships and save time.  For example, most CRMs offer automated report creation or templates to build customized reports. As a result, teams spend less time creating reports and inputting data because the software handles it. Analytics and reporting also provide vital insights about customer behavior, marketing campaigns, sales opportunities, and more. When used correctly, businesses use detailed analytics and reports to create better marketing and sales strategies to increase their revenue.















CRM Statistics




CRM statistics provide a better understanding of how far the technology has come and how popular it is. From small to large businesses, CRM systems play an important role in analyzing data, providing a better customer experience, and boosting revenue.  Let’s take a look at some interesting CRM statistics: 47% of sales management leaders say CRM usage is a top indicator of productivity 50% of small business sales teams utilize a CRM system 49% of small business sales teams integrate CRM software with a customer service application 47% of CRM users say they have improved customer retention rates 65% of salespeople who utilize mobile CRM reach or surpass their sales quotas The CRM market is valued at over $65 billion CRMs can boost sales by 29% If these statistics aren’t enough to convince you to find a new CRM for your business, then I don’t know what is!















CRM Examples




If CRM software is new for you and you need clarification on which companies are best, I’ve provided two popular companies to get you started.
While there may be a better fit, these CRMs are a great starting point and offer valuable tools to consider using.
Monday.com
Monday is a cloud-based open CRM that allows companies to customize their work management tools and applications.
Monday has several functionalities, including CRM, project management, software development, marketing tools, and more!
Also, this CRM is an excellent option if you’re on a tight budget because there’s a forever-free plan that allows up to two users. 
Another awesome feature of Monday is over 200 templates for creating boards and automations.
So, if you need a customizable, easy-to-use, and easy-to-implement CRM, Monday is the way to go. Additionally, new and small businesses utilize Monday because it’s cost-effective.
HubSpot CRM
HubSpot is another cloud-based CRM that nurtures leads and analyzes business metrics on a single platform.
This CRM is best for business-to-business and business-to-consumer focuses and works in multiple industries, including:

Real estate
Retail
Marketing
Sales
Construction
Accounting

HubSpot monitors outbound and inbound leads, sales pipeline management, contact management, and email campaigns.
HubSpot is an excellent CRM choice if you need real-time lead notifications and personalized approaches to your sales pipeline.















The Bottom Line



CRM software has been around for a long time. What initially started as a Rolodex with index cards for customer information has transformed into detailed customer data. Today, businesses have access to more features than ever, allowing them to improve customer experiences and drive more sales.  Whether you’re just starting or your business is established, CRMs are a must-have because they improve productivity, boost sales, and give you a clearer picture of your customers. Were there parts of the history of CRM that we missed? Let us know in the comments section. Good luck finding the best CRM system for your business!




The post History of CRM for SMBs: 1950 – 2023 appeared first on Small Business Bonfire .