Purpose – This paper aims to examine how customer relationship management (CRM) systems are implemented in practice with a focus on the strategic application, i.e. how analytical CRM systems are used to support customer knowledge acquisition and how such a system can be developed. Design/methodology/approach – The current practice of CRM application is based on examining data reported from a four-year survey of CRM applications in the UK and an evaluation of CRM analytical functions provided by 20 leading software vendors. A conceptual model of an analytical CRM system for customer knowledge acquisition is developed based on the findings and literature review. Findings – Current CRM systems are dominated by operational applications such as call centres. The application of analytical CRM has been low, and the provision of these systems is limited to a few leading software vendors. Practical implications – The findings shed light on the potential area in which organisations can strategically use CRM systems. It also provides guidance for the IT industry as to how an analytical CRM system should be developed to support customer knowledge acquisition. Originality/value – The latest findings on CRM systems application are reported, and an innovative analytical CRM system is proposed for customer knowledge acquisition.