Customer Relationship Management: From Strategy To Implementation Adrian Payne, Pennie Frow, Cranfield School of Management, UK Abstract This paper examines Customer Relationship Management, or CRM, from the perspective of both strategy formulation and implementation. We commence by briefly reviewing the origins and role of CRM and highlighting the importance of adopting a cross-functional approach to CRM strategy formulation. We review alternative approaches to CRM strategy development and, using an ‘interaction research’ approach, propose a model that addresses both CRM strategy and implementation. We identify four critical implementation components of a successful CRM programme and examine these in the context of five key cross- functional CRM processes. Keywords: CRM, customer relationship management, relationship marketing Introduction The purpose of CRM is to efficiently and effectively increase the acquisition, growth and retention of profitable customers by selectively initiating, building and maintaining appropriate relationships with them. Developments in information technology can help improve customer relationships and make it possible to gather vast amounts of customer data and to analyze, interpret and utilize it constructively. However, there is often a gap between an organisation’s CRM vision and the results it obtains. The purpose of this paper is to propose an integrated model of CRM strategy and implementation that can help organizations realize their CRM vision more effectively. Specifically, the objectives of this paper are to: (1) briefly review the evolution of CRM and emphasise a cross-functional approach to CRM; (2) review the development of alternative approaches to CRM strategy development;(3) propose a model for both CRM strategy and implementation; (4) discuss initial experience of using the model in companies. The Origins and Evolution of CRM CRM is based on the principles of relationship marketing (RM) which is regarded as one of the key areas of modern marketing and has generated great research interest (Sheth 2000). We view RM as a paradigmatic shift in marketing (e.g. Grönroos, 1997; Gummesson, 1997; Parvatiyar and Sheth, 1997). The increased interest in ‘one to one’ marketing (Peppers and Rogers, 1993) raised the potential for shifting from a mass to individualized or ‘one-to-one’ marketing. Relationship-based approaches have been increasingly advocated over the last fifteen years (e.g., Grönroos, 1994; Gummesson, 2002b; Webster, 2002; Vargo and Lusch, 2004). With its roots in RM, CRM is a relatively new management discipline. Parvitiyar and Sheth (2001) point out the two terms are often used interchangeably. Contributors to this literature emphasize the key role of multiple stakeholders (e.g. Christopher, Payne and Ballantyne, 1991; Kotler, 1992; Buttle 1999; Gummesson, 1999). We adopt the perspective of Ryals and Payne (2001) who propose that RM is concerned with relationships with multiple stakeholders, while the focus of customer relationship management should be primarily on the customer. ANZMAC 2005 Conference: Business Interaction, Relationships and Networks 85