Reinventing Customer Management – Lessons from the Best of the Best [Archive.org URL]

At the invitation of Arthur D. Little, executives representing the “Best-of-the-Best” companies in customer management met to discuss their vision of the future customer-driven company, as well as the challenges that lie in the path toward that ideal.

While most companies recognize the need for a stronger external orientation, few have been able to realize it in practice. They know the value of customer loyalty. They are aware that a 5 percent increase in customer retention can generate a 25 to 85 percent improvement in profitability. They know that it costs five to ten times more to get a new customer than it does to retain an existing one. They recognize that their customers’ expectations are rising at unprecedented rates, competition is intensifying, and customers are becoming far more rigorous in choosing vendors. And they realize that as customer choice and negotiating power increase, they must find new ways to differentiate their offerings through characteristics other than price – while managing their costs. However, very few have succeeded in their efforts to institutionalize their customer-driven objectives.

Editor’s Note: this article was written back in 1995 before CRM was a household term…

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