Customer relationship management is one of the hottest management tools today. But more than half of all CRM initiatives fail to produce the anticipated results. Why? And what can companies do to reverse that negative trend? The authors–three senior Bain consultants–have spent the past 10 years analyzing customer-loyalty initiatives, both successful and unsuccessful, at more than 200 companies in a wide range of industries. They’ve found that CRM backfires in part because executives don’t understand what they are implementing, let alone how much it will cost or how long it will take.

The authors’ research unveiled four common pitfalls that managers stumble into when trying to implement CRM. Each pitfall is a consequence of a single flawed assumption–that CRM is software that will automatically manage customer relationships. It isn’t. Rather, CRM is the creation of customer strategies and processes to build customer loyalty, which are then supported by the technology. This article looks at best practices in CRM at several companies, including the New York Times Co., Square D, GE Capital, Grand Expeditions, and BMC Software. It provides an intellectual framework for any company that wants to start a CRM program or turn around a failing one.


This article appears in the February 2002 issue of the Harvard Business Review. Cornerstone Business Solutions will be pleased to furnish you a reprint that we’ll purchase for you if you kindly notify us by telephone at (505) 325-4900.