The Evolution of Customer Relationship Management: A Look at the Last Five Years

customer relationship management

When you think about Customer Relationship Management (CRM), sales and contact management may be the first thing you associate with it. But what was once an island occupied only by your sales team, CRM use cases have grown beyond the sales org and started to be integral parts of your day-to-day marketing and customer service operations.

The ability to track individual customer interactions and analyze that data is a game-changer, especially in an age where customers crave a personalized experience. This sort of data-driven approach to business relationships is still relatively new, though.  In just the last few years alone, CRM has evolved far beyond being just a tool for contact management. The features of today’s CRM solutions are a far cry from what they were a few years ago, let alone a few decades ago. While contact management is still a core function, sure, CRM now has something for every team and individual in your organization. 

What we'll Cover:

    The History Of CRM: A Brief Overview

    1950s – 1970s: Pre – PC Era

    In the pre-PC era from the 1950s to the 1970s, businesses relied on pen and paper for recording customer data, which was both time-consuming and prone to errors. The introduction of the Rolodex in 1956 revolutionized this process by offering a physical method to organize and retrieve customer information efficiently. This period also saw the advent of mainframe computers, which enabled the creation of digital databases. These early digital systems significantly improved the management of customer data, laying the groundwork for more sophisticated data-handling methods in the future.

    1980s – Mid 90s : Origin of CRM 

    ​​The 1980s and early 1990s marked the origin of Customer Relationship Management (CRM) systems. Initially, Contact Management Systems (CMS) emerged, designed to store basic contact details like names, email addresses, and phone numbers, with a primary focus on sales management rather than fostering customer relationships. The 1990s introduced Sales Force Automation (SFA), which automated sales-related tasks such as tracking, recording, and pipeline management, thus boosting productivity. In response to the need for a digital Rolodex, Conductor Software launched ACT!, a popular contact management tool that integrated sales leads, customer contacts, and calendar events for small businesses. Siebel Systems, founded in 1993, pioneered comprehensive CRM solutions, integrating sales, marketing, and customer service functionalities. Towards the late 1990s, the first web-based CRM was created, signaling a shift away from traditional CRM systems.

    2000s – 2020s : Modern CRM Systems

    The 2000s to 2020s saw the widespread adoption of web-based CRM systems, which integrated seamlessly with various business systems and platforms to streamline daily tasks. The rise of social media in the 2000s led to CRM integration with platforms like Facebook, Twitter, and Instagram, enabling businesses to gain deeper insights into customer preferences through social interactions. This era introduced Social CRMs, essential for building a robust social presence and enhancing customer engagement. The rapid development of mobile CRM versions allowed sales representatives and users to access CRM applications from anywhere, improving flexibility and responsiveness. In the late 2010s, the integration of Artificial Intelligence (AI) into CRM systems enhanced data analysis capabilities, offering benefits such as improved sales tracking, automated content suggestions, and personalized customer insights. AI-powered CRM solutions continue to evolve, effectively managing customer inquiries and providing timely responses to align with changing business needs and technological advancements.

    5 Ways Customer Relationship Management Has Evolved Over The Past Five Years 

    1. Inclusion of Marketing and Customer Service Teams into the CRM Platform

    Without a tool that prioritizes collaboration, many organizations, unfortunately, operate in silos with windows—each department performing its own tasks in isolation, only equipped with a limited view of other departments’ plans. And in a world where more organizations are working virtually, this trend has only been exacerbated.

    CRM should be viewed as a collaborative place that your entire organization both contributes to and benefits from. Nowadays, one of the main purposes of having an operational CRM system is to help sales, marketing, and service teams better streamline customer interactions. As part of your sales strategy, leadership would encourage all teams in your organization to access and get familiarized with your CRM. When sales, marketing, and customer service all have access to one singular source of truth, these departments can align their processes, collaborate effectively and, in turn, drive more sales.

    2. Prioritization of the Customer Experience by Enabling Personalization and Personalized Experiences 

    According to a recent SugarCRM research report, 73% of customers agree that the customer experience (CX) helps drive their buying decision, and 86% say they will pay more if it means getting a better experience.

    With a greater emphasis on delivering exceptional customer experiences throughout the entire customer journey, personalization and tailored interactions have become crucial for businesses to build stronger relationships with customers.

    In order to keep up with increasing customer demands, marketing and sales are turning to intelligent CRM platforms. These platforms can collect and store massive amounts of customer information, including prior conversations, interactions, purchase history, preferences, questions, concerns, etc. Brands, using a CRM, can leverage the insights gained to craft personalized customer experiences.

    And in a world where companies that provide best-in-class customer experiences are 80% more likely to retain customers over the long haul, having a one-size-fits-all approach to customer relationships can not and will not cut it. For the customer’s sake, brands need CRM platforms if they want to communicate effectively, address concerns in a timely manner, and prove time and time again why they value their business.  

    3. The Rise of Artificial Intelligence and Automation

    AI-powered CRM tools have gained traction, offering features such as predictive analytics, lead scoring, and chatbots. It enables marketers to score and qualify leads without lifting a finger, sales to spend time on deals most likely to close, and service agents prepared to help by knowing a customer’s disposition ahead of time.

    CRM platforms that have embraced AI and automation help teams to streamline processes and workflows. Repetitive tasks like data entry, lead nurturing, and follow-ups can now be automated, freeing up time for employees to focus on higher-value activities.  AI-driven workflow optimization features ensure smoother operations and enhanced efficiency.

    It’s important for organizations to remember that AI and automation are not about removing the one-on-one interactions from sales but rather making more time for it. When teams automate manual or repetitive tasks, it allows them to stay on top of their pipeline with greater ease, pick up quickly where they left off with each prospect, remember each customer interaction, and spend less time organizing and setting up their schedules. 

    4. Enhanced Data Analytics

    CRM platforms have become more sophisticated in terms of data collection, storage, and analysis. By analyzing this data, businesses can gain a better understanding of their customers and identify opportunities for growth and improvement. Companies that leverage advanced analytics are able to gain insights into customer behavior, preferences, and trends, enabling them to make informed decisions and personalize interactions. 

    CRM platforms have come a long way. They can now analyze large volumes of customer data, identify patterns, and generate actionable insights. Enhanced analytics helps businesses anticipate customer behavior, optimize marketing campaigns, and make data-driven decisions—something they weren’t able to do, at least not effectively or efficiently, before CRMs. 

    5. Built-In Integrations with Other Systems

    Your software should integrate with each other—we live in a connected world, and connecting technologies is a requirement, not a luxury or nice to have. We often invest in technology for its integration capabilities to maximize its internal contribution and role. Because of this, integration is a key capability of any software product you buy.

    CRM platforms have evolved into comprehensive ecosystems, offering an array of third-party integrations and add-ons. This allows businesses to customize and extend their CRM functionality based on their unique needs. When you have a platform that prioritizes ease of integration, you can expect to benefit from streamlined processes, increased data accuracy, and enhanced visibility into all customer interactions.

    Conclusion: 

    CRM has become more customer-focused, technologically advanced, and interconnected over the past five years. The integration of AI, automation, and analytics has transformed the way businesses manage customer relationships, enabling them to deliver personalized experiences and build long-term customer loyalty.

    In fact, according to a recent SugarCRM research report, 74% of sales professionals agree that a consolidated view of customer information across the whole organization is critical in delivering an optimal customer experience. When used most effectively, CRM software is the heart of every software stack. As your organization scales and your networks of customer analytics grows, organizations need to make sure that their operational infrastructure remains strong in order for data to flow between apps, teams, and people. By placing your CRM front-and-center in your sales strategy, this becomes much simpler.

    While these are the top five ways we’ve noticed CRM change over the past five years, there may be more new, innovative ways companies are using their platforms to increase their sales, marketing, and customer service reach. Are you one of those companies? If so, we want to hear from you!

    Take our 2023 State of CRM Survey and tell us how your usage of CRM has changed and what you’ll be prioritizing in the next five years!

    Emily Jahn
    Emily Jahn Emily is the Manager of Content Marketing at SugarCRM with years of experience working in the SaaS industry. Her strong suits include long-form and short-form content creation, SEO-optimized writing, and editorial planning and promotion. When she's not reading, writing, or editing, Emily enjoys everything the outside world has to offer—hiking, camping, backpacking, and most importantly, skiing!
    X

    Sign up for the newsletter.

    We're committed to your privacy. SugarCRM uses the information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For more information, check out our privacy policy.

    Business Email
    required
    GET A QUOTE

    Need Help Figuring Out Pricing?

    It can be hard to figure out the total cost of a CRM solution. Fill in the form below, and one of our team members will get back to you within an hour to discuss your pricing needs.

    Name(Required)
    Hidden
    Hidden
    Hidden
    Hidden
    This field is for validation purposes and should be left unchanged.