(Skogland & Siguaw, 2004, p. 221)
Research has shown that in the United States, customer defection is high; this means that customers will not return for a second purchase of the product from businesses or firms. U.S. corporations lose half of their customers over a span of five years resulting in 25 to 50 percent reduction of corporate performance. Companies invest millions of dollars in customer retention programs. Skogland & Siguaw’s (2004, p. 221) study cite Marriott who spent $54 million in 1996 on its Honored Guest program, while Hyatt invested $25 million in its loyalty program that same year. Research on customer loyalty has primarily focused on customer satisfaction and involvement. However, findings on the linkage between repeat-purchase behavior and satisfaction have provided mixed results. Some report significant links, while others are doubtful.
In the past century, RM was a major trend and a controversial talking point in business management. Strategic competitive advantage could no longer be delivered with just product characteristics but with emphasis on satisfying customers. (Barnes, 1994, cited in Egan, 2003, p. 145)
Relationship marketing (RM) and customer relationship marketing (CRM) are two interrelated subjects. “Relationship marketing is marketing based on interaction within networks of relationship… CRM [includes] values and strategies of relationship marketing – with particular emphasis on customer relationships – turned into practical application” (Gummesson, 2002, p. 3).
Relationship marketing was first contributed by Berry (1983) as a new rubric for services marketing, with insights in the 1980s pointing to service risk points in the customer relationship life cycle. In the 1990s, relationship marketing became a key marketing issue (Ballantyne et al., 2003, p.159-160).
Due to constant changes in marketing, there have been departures from mainstream marketing