Customer Relationship Management (CRM) is one of those great concepts

that swept the corporate world in the 1990s with the promise of forever changing

the way small and large companies interact with their customer bases. At

In the short term, however, it turned out to be an unwieldy process that was best at

theory than in practice for various reasons. The first one was that

it was just so difficult and expensive to track and maintain the high volume of

records necessary to update them accurately and constantly.

In recent years, however, newer and more advanced software systems

Tracking features have vastly improved CRM capabilities and the real promise of

CRM is becoming a reality. As a price for a newer, customizable Internet

the solutions have reached the market; Competition has driven prices down

that even relatively small businesses are reaping the benefits of some

CRM programs.

At first …

The 1980s saw the rise of database marketing, which was simply a trap

phrase to define the practice of setting up customer service groups to speak

individually to all customers of a company.

For larger key customers, it was a valuable tool in maintaining

open lines of communication and adapting the service to the client’s needs. At

For smaller clients, however, it tended to provide repetitive information, similar to a survey.

information that cluttered the databases and did not provide much information. Ace

companies began to track the information in the database, they realized that the basic

were all that was needed in most cases: what they buy regularly, what

they spend, what they do.

Advances in the 1990s

In the 1990s, companies began to improve customer relationship management.

making it more of a two-way street. Rather than simply collecting data to

for their own use, they began to give back to their customers not only in terms of

the obvious goal of improving customer service, but in incentives, gifts and

other advantages for customer loyalty.

This was the beginning of the now familiar frequent flyer programs, bonus

points on credit cards and a host of other CRM-based resources

tracking customer activity and spending patterns. CRM was now being used as a

way to increase sales both passively and by actively improving

Customer service.

True CRM Comes of Age

Real customer relationship management, as thought about today, really started

seriously in the early years of this century. When software companies started

launching newer and more advanced solutions that could be customized in

industries, it became feasible to actually use the information dynamically.

Instead of entering information into a static database for future reference,

CRM became a way to continually update the understanding of customer needs and

behaviour. Information branching, subfolders and custom functions

allowed companies to divide information into smaller subsets so that

could evaluate not only concrete statistics, but information about motivation

and customer reactions.

The Internet provided a great help in the development of these huge databases.

enabling off-site storage of information. Where before companies had difficulties

supporting the enormous amount of information, the Internet provided new

possibilities and CRM took off as vendors began to move to the Internet

solutions.

With the greater fluidity of these programs, a less rigid relationship emerged

between sales, customer service and marketing. CRM allowed the development of

new strategies for more cooperative work between these different divisions

through shared information and understanding, leading to increased customers

satisfaction from order to final product.

Today, CRM continues to be used more frequently by companies that rely heavily on

in two different characteristics: customer service or technology. The three sectors of

Companies that rely heavily on CRM, and use it to great advantage, are

financial services, a variety of high-tech corporations, and the

telecommunications industry.

The financial services industry in particular tracks the customer level

satisfaction and what customers are looking for in terms of changes and

custom features. They also track changes in spending and investing habits.

patterns as the economy changes. Industry specific software can provide

Financial service providers really impressive reviews in these areas.

Who is in the CRM game?

Roughly 50% of the CRM market is currently divided among five major players

in the industry: PeopleSoft, Oracle, SAP, Siebel and a relative newcomer

Telemation, based on Linux and developed by an old standard, Database Solutions,

INC.

The other half of the market falls to a variety of other players, though

Microsoft’s new appearance in the CRM market may cause a change soon. Yes

Microsoft may capture a piece of the market that remains to be seen. However, their

Brand familiarity can give them an edge over small businesses that

CRM package for the first time.

PeopleSoft was founded in the mid-1980s by Ken Morris and Dave

Duffield as a client-server based HR application. In 1998,

PeopleSoft had become a purely Internet-based system, PeopleSoft 8.

No need to maintain any client software and supports more than 150 applications.

PeopleSoft 8 is the brainchild of over 2000 dedicated developers and $ 500

millions in research and development.

PeopleSoft branched out from its original human resources platform into the

1990 and now supports everything from customer service to supply chain

administration. Its easy-to-use system required minimal training is relatively

economical to implement. .

One of PeopleSoft’s main contributions to CRM was its detailed analysis

program that identifies and ranks the importance of customers based on numerous

criteria, including purchase amount, supply cost, and frequency of

Service.

Oracle built a solid high-end customer base in the late 1980s,

then burst into national attention around 1990 when, under Tom Siebel, the

company aggressively marketed a CRM solution for small and medium businesses.

Unfortunately, they were unable to keep track of the incredible sales that

accumulated and ran into a few years of real trouble.

Oracle landed on its feet after a restructuring and its own reorientation in

customer needs, and in the mid-1990s the company was once again a leader in CRM

technologies. They remain one of the leaders in the company.

marketplace with Oracle Customer Data Management System.

Telemation’s CRM solution is flexible and easy to use, with a

Toolkit that makes it easy to change functions and settings. The system

it also provides a fast learning environment that newcomers will appreciate. its

The uniqueness is that, although it is compatible with Windows, it was developed as a

Linux program. Will Linux be the wave of the future? We don’t know, but yes

that is, Telemation is ahead of the game.

The last years …

In 2002, Oracle launched its 90-day global CRM package that promised

rapid implementation of CRM in all offices of the company. Offered with the package

It was a flat-rate service for setup and training for basic business needs. .

Also in 2002 (a stellar year for CRM), mySAP from SAP America began using a

middleware hub capable of connecting SAP systems to external and

front and back office systems for a unified operation that links partners,

employees, processes and technologies in a closed loop function.

Siebel

consistently bases its business primarily on enterprise-sized companies that want to

to invest millions in CRM systems, which worked for them to the tune of $ 2.1

billions in 2001. However, in 2002 and 2003 revenues fell as several

CRM companies joined the fray as ASPs (application service providers). Thesis

companies, including UpShot, NetSuite, and SalesNet, offered businesses the CRM style

Track and manage data without the high cost of a traditional CRM startup.

In October 2003, Siebel launched CRM OnDemand in collaboration with IBM.

Its entry into the hosted monthly CRM solutions niche hit the market with

equal strength. For some of the monthly ASPs it was a call to arms, for others it was

a sign of Siebel’s growing confusion about brand identity and growing loss

market share. In a stroke of genius, Siebel acquired UpShot within a few months

later to get started and ease your transition to the ASP market. That

it was a successful move.

With Microsoft now in the game, it’s too early to tell

what the results will be, but it seems likely that they will get a share of

small businesses that tend to buy based on familiarity and usability. Will of ASP

continue to grow in popularity too, especially among midsize companies, so

Companies like Siebel’s NetSuite, SalesNet, and OnDemand will thrive. CRM in the

The web has come of age!

This article on “The history of CRM” reprinted with

Excuse me.

Copyright © 2004-2005 Evaluseek Publishing.