To implement the business strategy in a targeted way, companies need a customer strategy. The customer strategy outlines the kinds of customers that the organization wants to target, together with their key characteristics. The customer strategy must also address the issue of segment granularity how small the customer segments can be before there are too many for the organization to handle. Organizations sometimes implement CRM in the belief that it will help them achieve one-to-one marketing , but fail to consider issues of organization structure and marketing effectiveness.

The third case study in this chapter, Homebase.co.uk, charts the development of customer strategies on line. Homebase, an out-of-town retailer of do-it-yourself home improvement products, mapped its market place on two dimensions competitor and customer. Homebase found that its customers were interested in both the technical aspects of home improvements (the quality of the finished results) and the creative aspects. Competitively, Homebase was seen as being at the lower end of the market place and not a particularly good source of creative ideas. It wanted to move out of the lower, very price-competitive end of the market, where it would struggle to compete with large and powerful rivals, and to reach more of the creative customers who would look for quality, service and advice.

Looking at home improvements from the customer s perspective, Homebase organized its stores so that goods were placed together in project groups, with accompanying ideas, examples and advice. A natural development...