The History of Social CRM

By Kyle Lacy, Stephanie Diamond, Jon Ferrara

Social customer relationship management (CRM) became part of the business world when business leaders decided they needed a better way to manage their contacts and customers through software. The idea of CRM is pretty straightforward: It’s the management of customer interaction with a brand or company. Many of you may think of CRM in the context of sales; however, CRM now touches almost every aspect of your business.

From dirt roads to the computer screen

Imagine yourself owning a small store in the wild West. You have customers, and they love to buy hard tack and flour. How do you keep track of their purchases? In the past, store owners used the ledger system to track purchases, and they remembered certain points about their customers. In a small town with a small group of people, it was easy to remember that Marge’s husband was Bill.

But what happens when the town grows? You expand your business and offer more locations, with more products and more customers. The mind is a powerful thing, but it’s hard to manage the names, faces, and relationships of thousands of customers.

The mind turned to notes and, beginning in the 1950s, the Rolodex. Ah, the trusty Rolodex. Spin through the names and find the next customer; add more customer information as that becomes available. It made remembering customer information easier; however, the elements of the earth (fire, wind, water, dirt) weren’t kind to the paper Rolodex, and the desktop computer changed everything.

The power of computing

The business world started witnessing the first hint of the CRM revolution in the late 1980s. This was based on the introduction of the server architecture and wide adoption of the desktop computer (fueled by major players like Apple and IBM). Simply put, the computer offered much more power and memory than thousands of Rolodex cards. Can you imagine sorting through all that ink and paper? No way.

The computing revolution brought forth companies like ACT! and GoldMine that released their own software platforms that helped individuals and large businesses manage hundreds of thousands of contacts.

The early nineties witnessed many companies such as Siebel Systems and Oracle building massive databases and ushering in the term SFA (sales force automation). SFA helped sales organizations streamline their sales processes and increased productivity. Think Rolodex on major steroids. The computing and software revolution led to the adoption of a data and networking strategy called CRM (customer relationship management).