History of CRM

The story

1. Today· Your shop

   Where it starts

   Every shop has customers. Someone asks for a price. You send a quote. They place an order, and you build it, ship it and send the invoice. Somewhere, someone keeps track of who that customer is: the buyer’s name, what they paid last time, the job they are waiting on. That list has moved from paper cards to desk computers to rented websites. This is the story of where your customer lives.

2. Before 1956· Tickler files

   The card in the box

   Before software, a salesperson kept customers on paper. A notebook for names and orders. A tickler file for follow-ups: a box with a tab for every day of the month and one for every month. Write a card that says call the buyer about the reorder, and file it under the 14th. When the 14th comes, the card comes up. Filing textbooks drew this box by 1932. It worked as long as one person kept it.

3. 1956· The Rolodex

   A wheel of cards

   In 1956, Hildaur Neilsen, chief engineer at Arnold Neustadter’s stationery company in New York, designed a rotating card file. They called it the Rolodex, and it went on sale in 1958. One card per contact, turned by a knob. For 30 years, the Rolodex on the desk was the customer list. If the salesperson left, the wheel could leave too. Sources still differ on the exact year it was invented.

4. 1967 to 1989· Database marketing

   Customers as data

   Mail-order companies had long rented lists of names. In the 1980s, marketers started keeping their own customer databases instead. Bob and Kate Kestnbaum, consultants since 1967, taught them to measure what each customer is worth over many years of orders. Who bought, how recently, how often, and how much. Sort by that, and you know who to call first. In Britain, Robert Shaw built databases like this for BT, British Airways and Barclays.

5. 1987· Contact managers

   Cards on a computer

   On April 1, 1987, a Dallas company called Conductor Software shipped ACT! for DOS. Its founders, Pat Sullivan and Mike Muhney, wanted the computer to do the work of the card file and the tickler together. A record for each contact, a history of every call, and a list of what to do today. In 1990, GoldMine followed, built to share contacts across an office network. The customer was on a computer now.

6. 1993· Sales force automation

   The whole sales team

   Tom Siebel first worked with sales software at Oracle in the late 1980s. In 1993, he and Patricia House founded Siebel Systems. Their software followed every deal through stages, from first call to signed order, so a sales manager could see the whole pipeline on one screen. The industry called it sales force automation. By 2002, Siebel held about 45 percent of the CRM market, by one count. It was built for big companies, and priced for them.

7. 1990 to 2001· Service and help desks

   After the sale

   Selling is half the job. After the sale, customers call. In 1990, Roger Sippl, who had founded the database company Informix, co-founded Vantive to run call centers and help desks. Clarify, in San Jose, built the same kind of system. Each call became a ticket with a number, an owner and a status. In 1999, both were bought. Nortel paid about $2.1 billion in stock for Clarify. Two years later it sold Clarify for about $200 million.

8. Mid-1990s· Customer relationship management

   A name for it

   By the mid-1990s, sales, marketing and service software were sold together as customer relationship management, or CRM. Who said it first is still argued. Siebel, the analyst firm Gartner and the marketing professor Jagdish Sheth each get the credit in different histories. The idea was one record per customer, shared by everyone who deals with them. The orders, the inventory and the invoices stayed in another system, the ERP.

9. 1999 to 2006· Rented in the browser

   No Software

   Marc Benioff had also worked at Oracle. In 1999 he founded Salesforce in a San Francisco apartment, to sell CRM in a web browser, paid by the month. In February 2000, Salesforce hired actors to picket outside Siebel’s user conference with signs against software. It went public in 2004 and opened the AppExchange, a store for add-ons, in 2005. In January 2006, Oracle completed its $5.85 billion purchase of Siebel.

10. 2003 to 2014· Smaller, cheaper, free

    CRM for every size

    Then CRM got cheaper. Microsoft shipped its first CRM in January 2003, aimed at small and mid-size companies. SugarCRM published open source CRM in 2004 that anyone could download and run. Zoho released Zoho CRM in 2005. HubSpot started in 2006, selling inbound marketing: be found online, then follow up. In 2014, HubSpot gave a basic CRM away for free. A 5-person shop could now track customers the way big companies did.

11. 1989 to 2019· Configure, price, quote

    The quote gap

    For a manufacturer, the hard part of selling is the quote. Which options fit together, what they cost, and when you can ship. Trilogy, founded in Austin in 1989, built software to check those rules. The category became known as CPQ: configure, price, quote. Salesforce bought SteelBrick, a CPQ company, in 2015. Microsoft put CRM and ERP under one name in 2016. Still, the price sat in one system and the cost and ship date in another.

12. Today· Your shop

    Three copies

    So here is a shop like many today. The customer’s name and open deals live in the CRM. The orders, prices and invoices live in the ERP. The quote lives in a spreadsheet and someone’s email. Three copies of one customer, each a little different, kept in step by hand or by a connector you rent. Seventy years after the Rolodex, the loop is still quote, order, build, ship, invoice. It can run on one record.

Key dates

Where reputable sources disagree on a date or on who was first, the row says how.

Questions

Sources

1. Tickler file, Wikipedia
2. Rolodex, Wikipedia
3. Arnold Neustadter, Wikipedia
4. Database marketing, Wikipedia
5. DMA Hall of Fame member Robert D. Kestnbaum dies at 70, Chief Marketer
6. Act! LLC, Wikipedia
7. GoldMine CRM vendor history, CRM Switch
8. Trilogy (company), Wikipedia
9. Vantive (software), Wikipedia
10. Siebel Systems, Wikipedia
11. A history of CRM, SAP blog
12. Salesforce, Wikipedia
13. Nortel sells Clarify operation, The Globe and Mail
14. PeopleSoft Form 10-K405 for 1999, SEC
15. The launch of salesforce.com and the end of software, Holmes Report
16. Microsoft Dynamics CRM: a history, Chorus
17. SugarCRM, Wikipedia
18. Zoho Corporation, Wikipedia
19. Oracle completes Siebel merger, eWeek
20. HubSpot, Wikipedia
21. Salesforce Form 8-K on SteelBrick, SEC
22. Dynamics 365 November launch, RCP Magazine
23. Oracle $9.3 billion acquisition of NetSuite, IFLR1000
24. Salesforce launches Manufacturing Cloud, Salesforce press release

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