While the term Customer Relationship Management (CRM) wasn’t spawned until the mid-1990s, businesses have been performing many of the functions of CRM since the dawn of commerce. From the customer account notebook that mom and pop maintained of their customers on credit, to rolodexes, the advent of home computers and the use of Lotus 1-2-3 in the 1980s, these primitive forms of CRM were all about keeping track of all of the relevant contact information of current customers and potential prospects.
The immediate predecessors to CRM were commonly known as Contact Management or Sales Force Automation (SFA) systems. The most well-known of the early software products in this domain were Goldmine Software and ACT!, both of which came out in the late 80s. These products advanced the functions of CRM by providing a friendly user interface and integrating email accounts and calendars.
But the concept of a CRM system really began when ex-Oracle executive Tom Siebel founded Siebel Systems in 1993 to “address the growing need of organizations of all sizes to acquire, retain, and better serve their customers.” Tom is often credited for spawning the industry with his favorite mantra of “customer service.” He felt that “if you build a company and a product or service that delivers high levels of customer satisfaction, and if you spend responsibly and manage your human capital assets well, the other external manifestations of success, like market valuation and revenue growth, will follow.”
Wikipedia defines CRM as “an approach to manage a company’s interaction with current and potential customers. It uses data analysis about customers’ history with a company to improve business relationships with customers, specifically focusing on customer retention and ultimately driving sales growth.” One of the most important tenets of a CRM is the concept of the 360° view of the customer. In other words, it’s important to have access to every single interaction that a customer has had with your company – whether it occurred by a phone order with your sales team, an online transaction, a meeting you had with them, an email inquiry you received, marketing communications you sent to them, calls they placed to a service center, etc. This holistic view of the customer provides the ability to perform one-to-one marketing via customized messages developed from analysis of customer profile and activity data.
So conceptually, CRMs sound pretty cool, don’t they? Look for my next blog where I’ll explain why using a CRM as a real estate agent makes a whole lot of sense.