Technological Impacts on CRM Software

CRM or customer relationship management has come a long way since businesses started to enter customer data in logbooks or conduct analog customer surveys and focus groups in the last century (history of CRM software). Thanks to advances in IT technologies, CRM software today provides sophisticated, analytical customer insights that can give your business a competitive traction. No longer is the market in black and white; it is, in fact, in full color and in varying shades; not unlike making review comparison to choose a good CRM software, if not the top or best vendor, is splashed with varying shades of factors to consider.

Understanding how technology has transformed CRM provides an interesting blueprint on what types of CRM software are for you, or how your small business enterprise may be adapting CRM strategies today and in the future. Here’s why—we can trace the technological evolution of CRM by looking at how a small company today may adapt CRM in various stages of the company’s growth. As your business expands so does your CRM strategy become more sophisticated; in fact, to a degree that a senior IT executive may play a key role in your business development processes.

In this University of Wellington research paper CRM researchers noted that even non-technology companies’ senior executives need to work closely with their IT senior colleague to identify functional areas and implement business solutions. That’s how far entrenched technology has seeped into businesses today.

But first, keep in mind that across the technological evolution, CRM objectives remain consistent:

  • Acquire more customers
  • Retain customers
  • Build customer loyalty
  • Increase profitability

It’s also worth noting the three areas where technology today is having the greatest impact on CRM:

  • Customer buying behavior. E-commerce provides small players a level playing field. With good CRM web traffic analytics and social media engagement campaigns, you can outsell big competitors online.
  • Communication between companies and consumers. Social media allows consumers to demand quick feedback, if not resolution, on their problem. Consumers are so used to CRM-level of customer service now. Delivering less than standard service, like replying back after a week or ignoring customer complaints, can spell a Public Relations disaster.
  • Collection of data. Social media and mobile technology combine to prod consumers today to reveal tons of their preferences, location, feedback signals and other personal information that CRM can consolidate to profile a three-dimensional customer with predictable buying patterns.

Technological evolution of CRM in 4 phases

CRM started as a simple data log of customer’s name, address and contact information (maybe birthday) in manual books or file documents. The main goal was often to keep tab of loyal customers and reward them with rebates or discounts on their next purchase, or simply to make the next buying process faster. This practice would be the norm until the first recognizable IT technological disruption in the eighties.

If you’re a small business and just starting out (especially a B2B), this manual approach may still be practical; that is, until you get bigger and more funds to allocate to a more serious CRM.  A logbook of thirty clients and their mobile numbers (and birthdays!) may be all that you need for now.

Read more:  List of CRM Software Benefits: 5 Reasons Why CRM Tools & Simple B2B Solutions Are Good For Your Business

1) IT-assisted CRM in the 1980s

Technological innovations like fax machines, spreadsheet databases and hotline numbers elevated CRM to a pro-active operation. Businesses started to man their frontlines with customer service representatives to address customer queries. With the help of database analysis, marketers could now read basic buying patterns of their customers. Spreadsheets, in fact, allowed the rise of database marketing, where customers were segregated according to their frequency of purchases.

Most of the technological advances in this period simply assisted customer-relation strategies. For example, database programming could shortlist frequent buyers, but the repeat-buy promotions or offers were implemented manually and separately like through direct mail. Reader’s Digest was one of the successful adopters of this strategy, upselling its print subscribers with books and other products based on collated return-mail order forms. The publishing company could tell which subscribers had which of its books and what books to further upsell them, all by browsing through its subscription base, order forms, frequent buyer database, and creating a direct response mail campaign.

As IT applications developed, the eighties brought in contact management software that promised to organize various customer personal and transactional data in one program. Retrieving information like a customer’s last purchase or address was easier and faster.

The late eighties would also usher in the client/server architecture that was already popular among collaborating university-based researchers in the U.S. This structure would elevate CRM into 1990s standards.

Many struggling small businesses today still treat CRM as IT-assisted.  For instance, a restaurateur using MS Excel to sort repeat customers it culled from its Facebook page, and sending them Thank You emails or SMS messages can be classified as IT-assisted CRM.

2) IT-automated CRM

The nineties would see a boom in on-premise CRM. More powerful servers and desktop computers allowed big businesses to set up their own client/server CRM architecture. Suddenly, different departments at once had access to a single customer insight. CEOs, sales managers, product development managers and logistics heads could now collaborate more seamlessly based on customer preferences and buying patterns, delivery schedules, market feedback and other key data, which in turn was based on information entered by various departments into the CRM infrastructure.

Most client/server CRM systems at this time would automatically consolidate disparate data (sales figures, warehouse inventory, pricing, etc.) and churn out reports that tie up everything together to make sense. In short, CRM transformed from simply assisting managers to retrieve or sort data, to analyzing the context.

The IT-automated stage also saw two main milestones within the period. First, the front-office setup gave key staff a convenient way to access client/server CRM. PC technology was on the rise; suddenly, employees could have their own individual “window” to the CRM processes right on their desks.

Read more:  5 CRM Online Software Questions To Ask Before Buying

Second, sales force automation made life easier for sales and logistics people. It routinely recorded all stages in the sales process. CRM could fast-track sales processes to follow leads, take orders, track delivery and much more.

Today, many large corporations still employ IT-automated CRM through their own intranet architecture managed by an in-house technical staff. Data security and privacy are the main reasons these companies prefer hosting their own CRM ecosystem.

3) SaaS CRM or online / cloud hosted / web based

SaaS (software-as-a-service) became popular by the late nineties. More reliable Internet connectivity and more powerful desktop solutions made SaaS or cloud hosted CRM a cheaper option to capital-intensive on-premise CRM. Today cloud CRM offers smaller companies a way to use robust CRM systems with technical support through a monthly fee.

Cloud CRM doesn’t really come cheap. However, the cost is spread out in tidbits of monthly subscription fees (as low as $10 per month per user) that small business owners can easily take out from their operating budget. Over time, these fees will add up, plus the nagging issue of your data hosted by a third-party turns off some companies. But in the world of connectivity and globalization, that issue may matter less today than five or ten years ago when cloud was introduced.

4) Social and mobile CRM

Today’s CRM software products are exploring ways to maximize social media data and the accessibility afforded by mobile technology. The latter was actually introduced in the late nineties when Siebel Sales Handheld was launched. But it’s only today that mobile technology truly became disruptive, expanding into customers’ online daily routine.  This network of digitally connected customers in their smartphones and tablets present a real-time access to their online footprints across social networks.

Social media also compels CRM strategies to shift from transactional to interaction relationship. Delivering targeted content is more important today than pitching offers. Likewise, converting customers into brand ambassadors to endorse your brand is a key element of the new CRM model. Plus talking to the right customers on individual basis is more than ever possible and a promising trend for Social CRM.


CRM, like most business processes, is closely intertwined with technological disruptions. The new CRM bells and whistles are great add-ons, even critical components to remain competitive in this age. But there lies a danger when business owners and their managers lose sight of their CRM objectives in favor of adopting robust CRM features for the sake of it. To put in another perspective, they may put the cart ahead of the horse and wonder why their CRM strategy didn’t work. So, here again are the objectives why, in the first place, you need CRM:

  • Acquire more customers
  • Retain customers
  • Build customer loyalty
  • Increase profitability
Category: CRM Software

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