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Continual advances in information technology (IT) have opened new business opportunities in global marketplaces. As a result, many businesses have turned to CRM to gain greater insights into their customers and apply this knowledge toward forging long-term relationships with them. This study examines the relationships of CRM practices (marketing and operational programs) with three antecedent elements (IT investments, absorptive capacity, strategic alignment), CRM effectiveness and firm (business) performance. The results of a survey suggest the following: absorptive capacity and strategic alignment have positive effects on CRM practices, CRM practices affect CRM effectiveness, CRM effectiveness affects firm performance, and CRM effectiveness mediates the effect of CRM practices (marketing programs) on firm performance. Hence, the CRM practices a business adopts will have an impact on its performance.