The next step in the strategy development process is to translate the business vision into competitive strategy. Competitive strategy is about matching internal competencies to the external environment understanding the business landscape in which the organization operates and the core skills and competencies it has or can develop, and then matching the two. Important features in the CRM business landscape are existing competitors, potential competitors, customer needs and wants, and technology. Organizations often become involved in CRM because they understand that existing customer service levels throughout their industry fall far short of the ideal. This has particularly been the case in financial services, where banks, building societies and insurance companies have persistently sold products rather than build customer relationships. These organizations have grown into product-based structures in which information about customers is contained within silos that are impenetrable by other parts of the business. As a result some customers are offered unsuitable products or products that they already own, while other customers are neglected. Mortgage customers who move house find that the very organization that lends them money to buy a new house continues to send correspondence and bank statements to their old address. Customers who are overdrawn receive loan offers, while retired customers are inundated with offers of school fees insurance.

In the longer term, these low levels of knowledge about the customer can have a serious impact on the company. Customers become disillusioned about the service and are more likely to...