History of CRM for SMBs: 1950 – 2023

The complete history of CRM stretches farther back than you may have assumed.

In fact, the first customer relationship management tool was invented in the 1950s! 

Since then, the industry has advanced tremendously, and CRM solutions help large and small businesses alike.

The 1950s: Invention of the Rolodex

The first customer relationship management system filed customer information so businesses could organize their data.

The Rolodex is a rotating filing tool invented in 1956 by Danish engineer Hildaur Neilson. 

A Rolodex stored a collection of index and business cards alphabetically, allowing users to spin and flip through the letters until they found the contact they needed.

Before the Rolodex, contacting customers was more challenging than it needed to be because their information was disorganized. 

The 1960s: The Mainframe System

The history of CRM continues with the mainframe system, which became available to businesses in the 1960s.

Although mainframe computers were invented earlier (between the 1940s-50s), they weren’t available to businesses until much later. 

Mainframe systems are large, bulky computer systems that businesses use to store and process customer data, including the following information:

• Names
• Addresses
• Contact details

Although digitizing customer information was forward-thinking at the time, mainframe systems took up considerable space, often an entire room!

Therefore, if you were running a small business in the 1960s, you probably weren’t using a mainframe system to organize customer data.

The 1980s: Database Marketing & Contact Management Software

In the 1980s, the history of CRM changed drastically as businesses utilized technological advancements. That said, companies started using customer information collected via database marketing.

Database marketing is simple. 

Companies would contact existing customers in their database and offer them products or services. 

Typically, businesses used the postal system to send product catalogs to entice customers to purchase products.

Toward the end of the 1980s, businesses began calling customers directly to sell products and services. And because computers were more widely available, filing customer data was more accessible.

The 1990s: Sales Force Automation & Mobile CRM SaaS

After the history of CRM saw its first contact management software, sales force automation was quickly invented. 

In 1993, Tom Siebel founded Siebel Systems, offering sales automation tools.

Later Tom Siebel expanded Siebel Systems and developed marketing automation and customer service applications called Siebel Sales Handheld.

After Siebel Sales Handheld, Siebel Systems quickly became the market leader in sales force automation.

This technology made it easier for sales teams to do their jobs and sell from anywhere rather than being tied down at a desk. 

The 2000s: Cloud-Based CRM & Social CRM

In the 2000s, the history of CRM saw the first cloud-based CRM software and the utilization of social media.

Cloud-based CRM systems enable companies to access sales and customer data from any connected device.

By 2004, a group of technologists introduced the first publicly available internet-based software on the CRM market called Sugar Open Source.

By the late 2000s, companies began using social media platforms to improve customer relationships.

As a result, social media sites like Facebook and Twitter created more interactive client relationship management rather than transactional.

Social media drastically altered the sales process and how companies improved the customer experience. 

For instance, social media allows businesses to gather more customer information and analyze which marketing techniques work best through engagement statistics. 

The 2010s: Rise of CRM Providers (Modern CRM)

The 2010s saw the CRM market expand rapidly, welcoming numerous CRM providers.

CRM systems advanced as technology became mobile, allowing businesses to access their data from mobile phones and tablets rather than just desktops.

As technology advanced, CRM providers started to offer unique software, specializing in meeting specific business needs and industries, including:

• Construction
• Social media
• Real estate
• Insurance
• Accounting

Rather than handling all CRM needs the same way, providers created unique selling tools to improve customer interactions based on the industry. 

This individualized approach to CRM allowed more businesses to take advantage of the technology and implement it faster. 

The 2020s: Further CRM Sophistication

Companies continue to advance customer relationship management software each year.

Today, CRM users enjoy various advancements, such as:

• Automated contact tracking
• Marketing automation
• Reporting capabilities
• Data Intelligence
• Advanced analytics

The data CRM systems collect is incredibly detailed and precise, allowing businesses to make more data-driven decisions that lead to more sales. 

The CRM market attempts to offer more all-in-one products to reduce the need for several third-party integrations. 

The Future: AI & CRM

The future of CRMs will implement more artificial intelligence (most programs have already started using this technology).

Artificial intelligence offers more automation for business owners, allowing them to focus on other projects rather than repetitive tasks. 

As a result, artificial intelligence can help with marketing campaigns, organizing customer information, and communication tasks.

Some of the more popular AI systems currently in use generate written and visual content. 

However, in the future, AI specialists aim to make the technology more advanced and capable of additional business operations.