PRODUCT-LED GROWTH
CRM history, market and future: the essentials
Published April 23rd, 2024
12 min read
Building customer relationships isn’t a fresh idea. Genius ad man, Lester Wunderman, coined the phrase ‘customer-centric’ in the late 1960s to signify the transition from mass media advertising to more personalized methods and channels. That movement became direct mail, then direct marketing. And like it or not, everything that's now done in customer relationship management can be traced back to its swinging sixties genesis.
Di Mace
Director, Content & Communications
Table of Contents
A trailblazer in the advertising industry, Wunderman focused on delivering sales to his clients. Long before anyone else, he understood the value of keeping frighteningly detailed records of a customer’s buying habits. He believed that a business was well served in knowing absolutely everything about its best customers, and to reach them in the places, at the times and in the ways most likely to make a sale.
He aimed to create a one-to-one relationship with them.
To keep that relationship going, throughout the 70s and 80s he counseled his clients that once a buyer’s business was earned, the company should endeavor to keep it. He designed groundbreaking campaigns for them, like the first customer rewards program (American Express), the first magazine subscription card, and toll-free 1-800 numbers (Toyota). Arguably one of his greatest inspirations was the use of the postal ZIP code system for direct marketing.
That single achievement fundamentally altered access to consumers within large databases and paved the way for many other search and analysis tools now routinely used in Customer Relationship Management (CRM) platforms.
While speaking at Forrester’s 2007 Marketing Forum, Wunderman (then aged 87) foretold the changes and innovations that have since come to pass within the far-reaching realm of CRM.
The business of advertising is to create relationships between buyers and sellers. We used to be in the business of direct marketing – now we’re in the business of relationship marketing. We will eventually move on to personal marketing, which will be facilitated by the use of data.
Lester Wunderman
Creator of modern-day direct marketing
Since then, CRM technology and software has streamlined customer communications, aided the segmentation of customer files, and made use of personal attributes captured during product and sales discussions, order processing and billing. Just like Wunderman manually once did, the value of each customer is tracked, the messages they’re responsive to are noted (along with the actions they take) and work is done to nurture and deepen those relationships.
Lester Wunderman would be proud.
Who’s Lester Wunderman?
He was named the Father of Direct Marketing after his 1967 speech at MIT where he identified, named, verbalized and defined the term ‘Direct Marketing’. Author of the books “Frontiers of Direct Marketing” (1981) and “Being Direct”(1997), he was also a Speaker, Chairman and founder of Wunderman (the original and largest global direct marketing advertising agency) and was named one of twenty “Advertising Legends and Leaders” by AdWeek Magazine. In the July 23, 2001 issue of Time Magazine, Mr. Wunderman (along with David Ogilvy and Sergio Zyman) was heralded as “Great Pitchmen over the Years".
What is a CRM system?
Customer relationship management (CRM) aims to organize your current and prospective client contact information so that you can improve your overall customer experience, monitor feedback and nurture relationships with your customers. Its implementation leads to greater organization and efficiency, better communication, more effective customer service and higher customer satisfaction.
However, CRM technology isn’t simply a contact list. It empowers your team to build more effective relationships and provide an exceptional customer experience throughout the customer journey – from evaluation to purchase and beyond.
CRM software
Today, when you hear about CRM, it mostly refers to CRM software (systems or platforms), which consolidate and streamline your customer communications and replaces the multitude of spreadsheets, databases and apps that many businesses use to track customer data.Using a CRM technology, your entire team can easily access customer details at exactly the right time, to deliver outstanding service, or close a sale.
The technology can be used in any kind of industry or service, with CRM products generally offering marketing, sales and customer service either as modules or an entire solution package – on-premise or via a cloud CRM system. With the growing movement to remote working, cloud systems are now often the preferred option, so it can be accessed through any browser and is quickly deployed, used and upgraded.
Origins of CRM software
Disorganized sales contact data isn’t new. For what seems like forever, the most important business data has been spread across multiple systems and people, making it difficult to leverage that information and collaborate on sales. At first, the information was carried in business owners' heads, then notebooks and as computers emerged, things started to change.
The modern CRM systems’ origins can be traced back to the late 80s and 90s, when Content Management Systems (CMSs) were developed. From there, specific contact management software was developed that answered the exact needs of sales and marketing. Here’s a quick snapshot of the timeline:
CRM history and evolution
Early 20th century
Book or ledger
→
Early 1950s
Rolodex
→
Early 1970s
Mainframe Computer
→
Early 1980s
Database Marketing
Late 1980s
Content Management System (CMS)
→
1993
Sales Force Automation (SFA)
→
1995
Birth of CRM
→
Late 1990s
CRM on mobile
Early 2000s
SaaS/Open Source/Cloud-based CRM
→
2008
Social CRM
More recently, CRM technology has shifted even further towards social and mobile interactions, where businesses are now having-and-tracking two-way conversations.
As Lester Wunderman predicted, companies have moved from transaction to interaction – coming full circle back to his roots as a delivery boy, where he made his wages through tips from customers. His unchanging ethos – whether a delivery boy or agency Chairman – was that increasing the value gained from your best customers was of the highest importance.
Today, CRM systems have transformed a simple contact management tool into complex programs that touch almost every aspect of the customer experience. Its powerful features and expanding integrations have positively grown the global CRM market size and usage.
Global CRM market size
According to Fortune Business Insights, the global customer relationship management market is projected to grow from US$63.91 Billion in 2022 to US$145.79 Billion by 2029, at a Compound Annual Growth Rate (CAGR) of 12.5% over the forecast period. As many of the major market players are located in the North American region, the US market is expected to show the greatest growth.
Growth drivers
Over the post-pandemic years, it’s expected that the rising demand for automated engagement with customers, improvement in the scope of digital operations, and the enhancement of customer experience and services will all drive the demand for CRM solutions globally across various industries.
According to a survey report by PWC Experience Center, around half of the organizations stated that digital transformation aided them in enhancing their customer experiences. As a result, organizations are deploying a CRM system as part of their transition to customer-centric services.
Growth limitations
The growing number of data breach incidents through CRM is of concern for software providers. CRM software stores vast amounts of critical personal and confidential information for business and people. Therefore the safety and security of such critical information is of critical importance to organizations.
In addition, governments are enacting stringent data rules, such as the General Data Protection Regulation (GDPR) and others, to protect consumer information.
Change insights
Key insights from a Grand View Research global report on CRM 2022-2030 include:
- “Emerging technologies, such as cloud computing technology, Artificial Intelligence (AI), machine learning, and the availability of various service models such as Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS) are projected to drive the market over the forecast period.”
- “According to industry estimates, over 91% of organizations with more than ten employees in their workforce use customer relationship management systems.“
- “... factors such as efforts to accelerate business content, shifting their strategy from push marketing to pull marketing, and providing real-time communication, will empower organizations to adopt customer relationship management solutions over the forecast period.”
SaaS CRM market statistics
According to a report by Technavio, the SaaS customer relationship management (CRM) market witnessed a YOY growth of 14.14% in 2021 and is expected to increase by US$44.17 billion from 2020 to 2025. However, the market’s growth momentum will decelerate at a CAGR of 14%.
Curious about Customer Relationship Management (CRM) trends?
Find out what the latest trends are in this fast growing segment.
The growth of the global SaaS CRM market is increasing due to the migration of business operations from on-premise models to cloud-based models for easier remote-base usage. The inherent benefits of cloud computing – such as scalability, reliability, and high-resource availability – are driving enterprises to adopt cloud architecture for their business models.
However, factors such as data security concerns may impede the market growth.
For small- and medium-sized enterprises (SMEs), the rise in the deployment of cloud computing and SaaS has made CRM applications more affordable. The increasing adoption of SaaS CRM by SMEs is one of the key SaaS customer relationship management market growth drivers.
CRM market leaders
Key providers include:
- Salesforce.com, Inc.
- Microsoft Corporation
- SAP SE
- Oracle Corporation
- Adobe, Inc.
- Zoho Corporation Pvt. Ltd.
- Creatio
- SugarCRM, Inc.
- Copper CRM, Inc.
- Insightly, Inc.
Market players continue to form strategic alliances with other players in order to increase their market position and generate greater brand awareness and usage. In the 2021 Gartner Magic Quadrant for CRM Customer Engagement, Salesforce, Microsoft, Pegasystem, Zendesk Oracle and ServiceNow were all named ‘Leaders’ in the market (see image below).
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CRM rich text editor advantage
The inherent power and data contained within a CRM is clear. What else affects the implementation of a CRM system or upgrade within an organization? The rich text editor that’s embedded in the CRM software.
Integrating the best CRM editor components in your tech stack can help you achieve your goal of customer centricity, increase your sales and in many cases increase both the engagement with and quality of the outputs from your CRM.
- Increase engagement
A WYSIWYG editor creates an experience that’s loved by users – with many reporting 85% increases in engagement and readability.
- Improve productivity
A WYSIWYG editor experience reduces content creation time by 90%. Over a year, your users could save thousands of hours in their workflow.
- Maximize developer output
Comprehensive documentation and customizability allows developers to mold rich text editor components into a CRM solution that perfectly fits their needs – saving up to six months' of developer time for each new feature.
CRM innovation
Prophetically, in his ground-breaking 1967 MIT speech on direct marketing, Lester Wunderman predicted the future of CRMs:
A computer can know and remember as much marketing detail about 200 million consumers as did the owner of a crossroads general store about his handful of customers. It can know and select such personal details as who prefers strong coffee, imported beans, new fashions and bright colors. Who just bought a home, freezer, camera, automobile. Who had a new baby, is overweight, got married, owns a pet, likes romantic novels, serious reading, listens to Bach or the Beatles
Lester Wunderman
Creator of modern-day direct marketing
To make the most of those details, Wunderman predicted that buying would evolve to a point where the breakpoint between a sales pitch and making a purchase would be almost invisible – or, as he put it, “where advertising and buying become a single action.”
We are close to reaching that point.
Some of the most forward-thinking CRM providers are integrating artificial intelligence (AI) into their software. As more data is gathered, it’s being more efficiently processed using machine learning (ML), and more accurately predicts how customers are likely to interact with your brand, based on their past experiences and behavior.
With the help of big data, CRM systems are now more closely focused on understanding the customer data that's been collected. It’s being turned into knowledge and actionable information that enables businesses to target campaigns and finitely personalize their offerings on a granular level, making it almost impossible to resist saying ‘Yes’.
Future of CRMs
In his book, “Being Direct”, Lester Wunderman pronounced:
A Data is an expense – knowledge is a bargain. Collect only data that can become information, which, in turn, can become knowledge. Only knowledge can build on success and minimize failure. A company is no better than what it knows
Lester Wunderman
Creator of modern-day direct marketing
As always, Lester was right. Since he initiated the concept of customer-centricity, customer relationship management has grown to become every company's essential tool and is considered the most valuable tool for every business. Together, they achieve remarkable customer experiences.
By embracing the ever-changing CRM trends, companies will flourish. Those who don’t, will fail to meet their customer’s expectations. That’s why CRM is the most valuable tool for every company.
It’s the knife to your fork 🍽
FAQ
What is the latest technology in CRM?
Most forward-thinking CRM providers are integrating artificial intelligence (AI) into their software. As more data is gathered, it’s being more efficiently processed using machine learning (ML).
AI-powered CRM is able to analyze, summarize, predict, recommend and cross-sell/up-sell based on the customer’s historical data. This removes a huge burden of manual tasks – with both AI and machine learning (ML) having a huge capacity to do tedious, time-consuming tasks.
Why is the CRM market growing?
The global CRM market size and usage have grown due to the rising demand for automated customer engagement, improvement in the scope of digital operations, and the enhancement of customer experience and services across various industries. CRM systems have transformed from what were simple contact management tools, into complex programs that touch almost every aspect of the customer experience.
Why is CRM more than a technology?
A CRM isn’t simply a contact list, it empowers your team to build more effective relationships and provide an exceptional customer experience throughout the customer journey – from evaluation to purchase and beyond. Using a CRM, your entire team can easily access customer details at exactly the right time, to deliver outstanding service, or close a sale.
Which industry requires CRM the most?
CRM technology can be used in any kind of industry or service, with CRM products generally offering marketing, sales and customer service either as modules or an entire solution package – on-premise or via a cloud CRM system. With the growing movement to remote working, cloud systems are now often the preferred option, so it can be accessed through any browser and is quickly deployed, used and upgraded.
author
Di Mace
Director, Content & Communications
Messaging strategist and copywriter whose passion lies in working with brands like Tiny, that have deep-seated values and embrace the power of their story. She gets a kick out of solving problems, loves learning new things and making stuff, every day. When she’s not thinking through clever copy lines or clarifying value propositions, she’s knitting amazing socks for everyone she knows.
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