IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 1. Ver. II (Jan. 2014), PP 44-53 www.iosrjournals.org www.iosrjournals.org 44 | Page Impact of Relationship Marketing on the Performance of Service Companies: An Empirical Study on NCR Dr. Tushar Kanti, Ms. Shivani Dixit, Executive Director, IME Ghaziabad Research Scholar, Mewar University, Abstract: Today’s customers buying decisions are not based simply on the quality of the product but with the relationship they have with the company. So organizations will have to formulate marketing strategies in a way to not only woo customers toward them but also to retain them. The objective of the study therefore was to empirically investigate the effect of Relationship Marketing (RM) on the performance of service companies.This paper provides a comprehensive review on this concept of RM in the service sector, its foundation as well as its development.The type of research used for this study is descriptive research design. A well structured questionnaire was designed for service providers and administered to collect samples across NCR. Due to high population and need for variety of respondents, Convenience Sampling method was chosen. Data were collected from a cross-section of customers (consisting of 100 samples). Furthermore the paper provides a discussion on the nature and scope of RM and proposes some recommendations to assist firms in the implementation of this new marketing concept. The findings revealed that there are several measures of RM i.e. service quality, trust, price perceptions, complaint handling and customer satisfaction which are responsible for the performance of service companies like Telecom, Healthcare, Banking, Insurance, and Entertainment and so on. Finally the concluding note of this study reflects that the RM and service delivery are the factors responsible for the performance and the growth of service companies. Keywords: Relationship Marketing, Service Companies, Customer Satisfaction, Complaint Handling, Price Perceptions. I. Introduction ―As our economy becomes more service and technology oriented, the dynamics of the sales process will change. The on-going nature of services and the growing complexity of technology will increasingly necessitate lengthy and involved relationships between buyers and sellers. Thus, the seller‘s foc us will need to shift from simply landing sales to ensuring buyer satisfaction after the purchase. To keep buyers happy, vendors must maintain constructive interaction with purchasers – which includes keeping up on their complaints and future needs. Repeat orders will go to those sellers who have done the best job or nurturing these relationships…‖ Information gathered through communication with customers can enable organizations to develop a marketing mix that is more likely to create customer satisfaction. With the increase in the competition organizations realize that what customer‘s value, is not always just lower prices, but also aspects such as delivery, image and brand associations, the link with customers becomes increasingly important. When the market growth slows down or as the markets become more competitive, firms are more likely to attempt to maintain their market share by focusing on retaining the current customers. (Lee et al., 2001). Customer Relationship Management (CRM) Service is a marketing strategy that ensures the acquisition and retention of most profitable customers using the most effective method. Thus, tremendous growth of services sector implies the role of marketing in terms of vast opportunities and implications, marketing opportunities arising from new technology, in franchising from fewer regulations and professional restrictions, in servicing physical goods and international markets (Lovelock, 1999). The rapid growth of services industry has changed the conditions of business. Customer retention has been advocated as an easier and more reliable source of superior performance (Reichheld and Sasser, 1990). It has now become common knowledge that the value of all customers is not same, the 80/20 rule prevails whereby we have learned that 20 percent of customers generate more than 80 percent of revenues for most companies, and it is not uncommon to find that an even lower percentage of customers can generate more than 80 to 90 percent of the revenues. Under such circumstances, it is not prudent for a company to allocate equal resources to all customers. Customer segmentation and program differentiation is needed in order to match revenue potential with service offerings. Those with higher revenue potential deserve a greater allocation of costs and service. Otherwise, competitors will seize the opportunity by offering better service and a greater allocation of resources for the high-end customers. At the lower-end, attempts should be made to achieve cost savings through the reallocation of efforts based on less-expensive resources. This can be done with the help of RM strategy. It is based on the idea that the happier a customer is with a relationship, the greater the likelihood that they will stay with an organization.