Customer Profitability: Fulfilling The Promise Of CRM

In virtually every industry, customers today wield greater power than ever before. They enjoy unprecedented choices, channels of delivery and accessibility. Firms have responded to this new reality by spending aggressively to protect existing customers and acquire new ones. In many cases, however, the latter activity has generated diminishing rates of return across channels like the Internet, where purchase and click-through rates have declined as the novelty of online purchases has faded. Given the high cost of acquiring new customers, increased efforts are being made to retain existing ones, particularly in areas of depressed demand.

As corporate concern over customer retention and acquisition has grown, so has executive interest in CRM. However, many companies have not realized real improvements from their CRM initiatives. This article investigates how companies can better achieve the promise of CRM and drive profitable customer relationships over time.

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