The paradigms of CRMs - Sales-driven, Marketing-driven, and now Customer driven
Salesforce does revenues of $40 billion annually.
Being the primary CRM adopted S&P500, Salesforce continues to be the CRM used by enterprises.
From the late 80s when CRM software first launched to today, CRM has retained its original purpose - getting contact information of your prospects. However the capabilities have increased significantly, so that CRMs are now longer just a UI layer over your contacts database, but are actually a vital source of insights and action as you build your sales.
The First paradigm - A digital rolodex
The earliest CRM was called Act!, and was launched in 1987. It’s core value prop was that you can digitize your address book and never lose a contact’s information again.
The CRM offerings evolved in 1990s. Siebel Systems was an On-prem CRM provider. With Siebel, sales orgs could track opportunities through sales stages and generate basic reports on sales activities.
Cloud takes over - Saleforce
Salesforce launched in 1999, and was the first fully online CRM. The biggest benefit that Salesforce brought was easier accessibility. There were much lower upfront costs with using Salesforce, and had easier customization without coding.
With the launch of AppExchange in 2006, Salesforce transformed CRM into a platform, instead of just a tool.
Inbound marketing takes off with Google and Social Media
With Hubspot’s entry, CRM evolved from a sales-centric tool to a marketing-sales alignment platform. The core insight at Hubspot was that the sales process in the internet age is not just around outbound, but is about the customer finding you through inbound channels.
Leads therefore automatically come into the CRM, as opposed to being entered manually. With email marketing integration, automated workflows were now possible.
Hubspot calls itself the customer platform for scaling companies.
In 2024, Hubspot is valued at over $35 billion, and is doing annual revenue of $2.5 billion.
- You can use hubspot to create landing pages to your website
- Automate workflows around those leads - if a customer visits your website 3 times (after they have filled their contact details), send an automated email to them
- You can use Hubspot to do marketing automation - to send bulk emails to your customers
The AI-driven future of CRM
The next evolution focused on unifying customer experience across all touchpoints, and leveraging rich data across multiple channels.
There are ever increasing channels by which your business is acquiring customers. They are doing very different things on your website and in your application.
The new CRM is about keeping track of those diverse interactions across growth channels and with the product. And creating a unified view of the customer and capturing the relevant signals from them.
Web2.0 was fundamentally about tracking clicks and form submissions. This new paradigm is about capturing customer insights across multiple touchpoints.
Attio is the poster-child of this paradigm, and has raised a round of $33 million. Their vision for CRM is great reading
And now how to act across diverse channels - who better than an AI agent that has all your CRM data. Maybe it would suggest that those enterprise leads who were marked MQLs in December of last year but were dropped in BDRs diligence should be revived.
A marketing team would be taking a week to plan this campaign. With an agentic AI, you just to configure the pieces and the campaign would be live in a day.
AI is now able to understand multimodal inputs - what the user is saying on calls. What they are saying in an email.
References:
Hubspot analysis
- Series B announcement
- Series C announcement
- Series D announcement
- Quarterly results: