Customer Relationship Management (CRM) is one of those magnificent concepts
that swept the business world in the 1990s with the promise of changing forever
the way small and large businesses interact with their customer bases. In the
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 of these was that
it was just so difficult and expensive to track and maintain the high volume of
necessary records accurately and update them constantly.
In recent years, however, newer and more advanced software systems
Tracking features have greatly enhanced the capabilities of CRM and the true promise of
CRM is becoming a reality. As the newest and customizable internet price
solutions have reached the market; competition has lowered prices so
that even relatively small businesses are reaping the benefits of some customs
CRM programs.
At first…
The 1980s saw the rise of database marketing, which was just plain gimmicky.
phrase to define the practice of establishing customer service groups to talk
individually to all customers of a company.
For larger key clients, it was a valuable tool in keeping the
open lines of communication and service tailored to the needs of the client. In the
However, for smaller customers, it tended to provide repetitive survey-like information.
information that saturated the databases and did not provide much information. ace
companies began to track the database information, they realized that the basic bones
were all that was needed in most cases: what they buy regularly, what
spend, what they do.
Advances in the 1990s
In the 1990s, companies began to get better at managing customer relationships.
making it more like a two-way street. Instead of just collecting data to
for their own use, they began to give back to their clients not only in terms of
the obvious goal of improving customer service, but on 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 series of other resources that are based on CRM
Track customer activity and spending patterns. CRM was now used as a
way to increase sales passively as well as through active improvement of
Customer service.
True CRM comes of age
Real customer relationship management, as it is thought of today, really began
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 in a dynamic way.
Instead of entering information into a static database for future reference,
CRM has become a way to continuously update the understanding of customer needs and
behaviour. Information Branching, Subfolders, and Custom Features
allowed companies to break down information into smaller subsets so that
could evaluate not only concrete statistics, but information about the motivation
and customer reactions.
The Internet provided a great help in the development of these huge databases.
by enabling off-site storage of information. Where before companies struggled
supporting the enormous amounts of information, the Internet provided new
possibilities and CRM took off when vendors started moving to the Internet
solutions
With the greater fluidity of these programs came a less rigid relationship
between sales, customer service and marketing. CRM enabled the development of
new strategies for a more cooperative work between these different divisions
through shared information and understanding, leading to increased customers
satisfaction from the order to the final product.
Today, CRM is still used most often by companies that rely heavily on
into two well-differentiated characteristics: customer service or technology. The three sectors of
The companies that rely the most 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 investment and spending habits.
patterns as the economy changes. Industry-specific software can give
Truly impressive financial service providers reviews in these areas.
Who is in the CRM game?
Around 50% of the CRM market is currently split between five major players
in the industry: PeopleSoft, Oracle, SAP, Siebel and relatively new
Telemation, based on Linux and built on an old standard, Database Solutions,
Inc.
The other half of the market falls to a variety of other players, although
The new appearance of Microsoft in the CRM market may bring about a change soon. Either
Whether Microsoft can capture a piece of the market remains to be seen. However, their
Brand familiarity can give them an edge with small businesses considering a
CRM package for the first time.
PeopleSoft was founded in the mid-1980s 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 is no client software to maintain and it supports over 150 applications.
PeopleSoft 8 is the brainchild of over 2,000 dedicated developers and $500
million in research and development.
PeopleSoft built on its original human resources platform in the
1990 and now supports everything from customer service to supply chain
management. Its easy-to-use system that requires minimal training is relatively
economical to implement. .
One of PeopleSoft’s major contributions to CRM was its detailed analysis
program that identifies and classifies the importance of customers based on numerous
criteria, including the amount of purchase, the cost of supplying them, and the frequency of
Service.
Oracle built a strong base of high-end customers 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-sized businesses.
Unfortunately, they were unable to keep track of the incredible sales that
harvested and ran into a few years of real trouble.
Oracle landed on its feet after a restructuring and its own refocus on
customer needs, and by the mid-1990s, the company was once again a leader in CRM
technologies continue to be one of the leaders in the company.
market with Oracle Customer Data Management System.
Telemation’s CRM solution is flexible and easy to use, with a
toolkit that makes changing features and settings relatively easy. The system
it also provides a fast-paced learning environment that newcomers will appreciate. Their
The uniqueness lies in the fact that, although compatible with Windows, it was developed as a
Linux program. Will Linux be the wave of the future? We don’t know, but yes
I mean, Telemation is ahead of the game.
The last years…
In 2002, Oracle released its Global CRM package in 90 days that promised
rapid implementation of CRM in all company offices. Offered with the package
it was a flat fee service for setup and training for major business needs. .
Also in 2002 (a stellar year for CRM), SAP America’s mySAP began using a
middleware hub that was capable of connecting SAP systems to external and
front and back office systems for a unified operation linking partners,
employees, processes and technologies in a closed-loop function.
siebel
consistently based its business primarily on enterprise-sized companies 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 fell because several
CRM firms joined the fray as ASPs (Application Service Providers). Thesis
companies including UpShot, NetSuite and SalesNet offered CRM-style business
tracking and data management without the high cost of traditional CRM startups.
In October 2003, Siebel released CRM OnDemand in collaboration with IBM.
Their entry into the hosted monthly CRM solution niche hit the market with
mange strength. For some of the monthly ASPs it was a call to arms, for others it was
a sign of Siebel’s growing confusion over brand identity and growing loss
of market share. In a stroke of genius, Siebel acquired UpShot a few months
later to get them started and smooth their transition to the ASP market. It’s
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 can get a piece of
small businesses that tend to buy based on familiarity and usability. asp will
will continue to grow in popularity as well, especially among midsize businesses, so
companies like NetSuite, SalesNet, and Siebel’s OnDemand will thrive. CRM in the
The web has come of age!
This article on “The Story of CRM” reprinted with
permission.
Copyright © 2004-2005 Evaluateek Publishing.
