With the forecasted expansion of electronic marketplaces and the Internet, opportunities for businesses will abound. However, the greatest challenge facing them lies in their ability to sustain their profitability as the competition among them draws keener. To help distinguish themselves, and gain or maintain their competitive advantage, many businesses have turned to customer relationship management (CRM). This study examines the relationships affecting CRM practices and their eventual effect on a business’ performance. The results of a survey suggest that investments in absorptive capacity and a commitment to the strategic between the business and IT strategies contribute to CRM practices, and significant boosts to CRM practices lead to greater CRM effectiveness, which in turn contributes to profitability (business performance). Also CRM effectiveness partially mediates the effects of CRM practices on business performance.