How Did Customer Relationship Management Start?


Customer Relationship Management (CRM) is one among those magnificent concepts
that swept the business world within the 1990’s with the promise of forever changing
the way businesses small and enormous interacted with their customer bases. 

In the short term, however, it proved to be an unwieldy process that was better in
theory than in practice for a spread of reasons. First among these was that it
was just so difficult and expensive to trace and keep the high volume of
records needed accurately and constantly update them.

In the last several years, however, newer software systems and advanced
tracking features have vastly improved CRM capabilities and therefore the real promise of
CRM is becoming a reality. because the price of newer, more customizable Internet
solutions have hit the marketplace; competition has driven the costs down so
that even relatively small businesses are reaping the advantages of some custom
CRM programs.

In the beginning…
The 1980’s saw the emergence of database marketing, which was simply a catch
phrase to define the practice of fixing customer service groups to talk
individually to all or any of a company’s customers.
In the case of larger, key clients it had been a valuable tool for keeping the
lines of communication open and tailoring service to the clients needs. In the
case of smaller clients, however, it attended provide repetitive, survey-like
information that cluttered databases and didn’t provide much insight. As
companies began tracking database information, they realized that the bare bones
were all that was needed in most cases: what they buy regularly, what they
spend, what they are doing .

Advances within the 1990’s
In the 1990’s companies began to enhance on Customer Relationship Management
by making it more of a street rather than simply gathering data for
their own use, they began giving back to their customers not only in terms of
the obvious goal of improved customer service, but in incentives, gifts and
other perks for customer loyalty.
This was the start of the now familiar frequent flyer programs, bonus
points on credit cards and a number of other resources that are supported CRM
tracking of customer activity and spending patterns. CRM was now getting used as a
way to increase sales passively also as through active improvement of
customer service.

True CRM comes aged
Real Customer Relationship Management as it’s thought of today really began
in earnest within the early years of this century. As software companies began
releasing newer, more advanced solutions that were customizable across
industries, it became feasible to actually use the knowledge during a dynamic way.

Instead of feeding information into a static database for future reference,
CRM became how to continuously update understanding of customer needs and
behavior. Branching of data , sub-folders, and custom tailored features
enabled companies to interrupt down information into smaller subsets in order that they
could evaluate not only concrete statistics, but information on the motivation
and reactions of consumers .

The Internet provided an enormous boon to the event of those huge databases
by enabling offsite information storage. Where before companies had difficulty
supporting the big amounts of data the web provided new
possibilities and CRM took off as providers began moving toward Internet

With the increased fluidity of those programs came a less rigid relationship
between sales, customer service and marketing. CRM enabled the event of
new strategies for more cooperative work between these different divisions
through shared information and understanding, resulting in increased customer
satisfaction from order to finish product.

Today, CRM remains utilized most often by companies that rely heavily
on two distinct features: customer service or technology. The three sectors of
business that rely most heavily on CRM — and use it to great advantage — are
financial services, a spread of high tech corporations and therefore the
telecommunications industry.

The financial services industry especially tracks the extent of client
satisfaction and what customers are trying to find in terms of changes and
personalized features. They also track changes in investment habits and spending
patterns because the economy shifts. Software specific to the industry can give
financial service providers truly impressive feedback in these areas.
Who’s within the CRM game?

About 50% of the CRM market is currently divided between five major players
in the industry: PeopleSoft, Oracle, SAP, Siebel and relative newcomer
Telemation, supported Linux and developed by an old standard, Database Solutions,

The other half the market falls to a spread of other players, although
Microsoft’s new emergence within the CRM market may cause a shift soon. Whether
Microsoft can capture a share of the market remains to be seen. However, their
brand-name familiarity may give them a foothold with small businesses considering a
first-time CRM package.

PeopleSoft was founded within the mid-1980’s by Ken Morris and Dave
Duffield as a client-server based human resources application. In 1998,
PeopleSoft had evolved into a purely Internet based system, PeopleSoft 8.
There’s no client software to take care of and it supports over 150 applications.
PeopleSoft 8 is that the brainchild of over 2,000 dedicated developers and $500
million in research and development.

PeopleSoft branched out from their original human resources platform within the
1990’s and now supports everything from customer service to provide chain
management. Its user-friendly system required minimal training is comparatively
inexpensive to deploy. .

One of PeopleSoft’s major contributions to CRM was their detailed analytic
program that identifies and ranks the importance of consumers supported numerous
criteria, including amount of purchase, cost of supplying them, and frequency of

Oracle built a solid base of high-end customers within the late 1980’s,
then burst into national attention around 1990 when, under Tom Siebel, the
company aggressively marketed a small-to-medium business CRM solution.
Unfortunately they couldn’t follow up themselves on the incredible sales they
garnered and saw a couple of years of real problems.

Oracle landed on its feet after a restructuring and their own refocusing on
customer needs and by the mid-1990’s the corporate was once more a pacesetter in CRM
technologies. They still be one among the leaders within the enterprise
marketplace with the Oracle Customer Data Management System.
Telemation’s CRM solution is flexible and user-friendly, with a
toolkit that creates changing features and settings relatively easy. The system
also provides a fast learning environment that newcomers will appreciate. Its
uniqueness lies therein , although compatible with Windows, it had been developed as a
Linux program. Will Linux be the wave of the future? we do not know, but if it
is, Telemation’s before the sport .

The previous couple of years…
In 2002, Oracle released their Global CRM in 90 Days package that promised
quick implementation of CRM throughout company offices. Offered with the package
was a group fee service for set-up and training for core business needs. .
Also in 2002 (a stellar year for CRM), SAP America’s mySAP began employing a
“middleware” hub that was capable of connecting SAP systems to externals and
front and back office systems for a unified operation that links partners,
employees, process and technologies during a closed-loop function.

Siebel consistently based its business totally on enterprise size businesses willing
to invest millions in CRM systems, which worked for them to the tune of $2.1
billion in 2001. However, in 2002 and 2003 revenues slipped as several smaller
CRM firms joined the fray as ASP’s (Application Service Providers). These
companies, including UpShot, NetSuite and SalesNet, offered businesses CRM-style
tracking and data management without the high cost of traditional CRM start-up.
In October of 2003, Siebel launched CRM OnDemand together with IBM.
Their entry into the hosted, monthly CRM solution niche hit the marketplace with
gale force. To a number of the monthly ASP’s it had been a call to arms, to others it had been a sign of Siebel’s increasing confusion over brand identity and increasing loss
of market share. during a stroke of genius, Siebel acquired UpShot a couple of months
later to urge them started and smooth their transition into the ASP market. It
was a successful move.

With Microsoft now within the game, it’s timely to inform
what the results are going to be , but it seems likely that they’ll get some share of
small businesses that tend to shop for supported familiarity and usefulness . ASP’s will
continue to grow in popularity also , especially with mid-sized businesses, so
companies like NetSuite, SalesNet and Siebel’s OnDemand will thrive. CRM on the
web has come of age!

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