This article describes the dimensions of relationship marketing and the manner in which it helps in implementing CRM in the organization. Individual account relationships are important in marketing, especially in industrial marketing, where successful relationship marketing can be extremely profitable. Many marketers will benefit from a thorough and explicit consideration of individual account relationships. Individual industrial marketing relationships can, but need not, last for extended periods. Understanding individual account relationships includes considering the lifetime value of the customerthe focus with which a customer makes commitment to a vendor; the interactions with the individual account; and the actual pattern of the relationship that follows over time.

Key principles involved in relationship marketing include gathering, coordinating and analyzing accurate data on customers. The development of marketing strategies should take into account the aspects of relationship to maximize the benefit to the organization. It should focus greater resources on higher value customers. Peppers, Roger and Dorf suggest four steps for putting such a ‘one-to-one marketing program’ to work: Identifying customers, differentiating among them, interacting with them, and customizing the products or services to fit each individual customer needs.

It involves identifying those customers whose retention probability is highest. It is not completely certain whether an account will remain with its current supplier at each purchase. There may be several external influences to switch over to from the in supplier to an out supplier1. We can assume that the account is characterized by a number between 0 and 1(0% and 100%), which is called the retention probability. The retention probability is the chance that the account will remain with the vendor for the next purchase, provided that the customer has bought from that vendor in the previous purchase. This discussion labels the retention probability by p.

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