With the growth of services sector, the scope of relationship marketing has also grown exponentially. It has a wider scope than CRM as it emphasizes not only on B2C transactions but on B2B and B2G transactions as well. The growth of services in India can be attributed to various factors like the post 1990’s liberalization, population growth, increase in the number of nuclear families and working women, increase in disposable income, lifestyle, health, fitness consciousness and growth in recreational facilities, era of guarantees and warranties and increase in standard of living. The paper is aimed to provide an insight into the body of knowledge and research work available on the subject of relationship marketing and customer retention in relation to the service sector and is expected to provide with the understanding of the need for building fruitful relationships with customers and other parties involved in delivering value to the customer. It will provide with an idea as to if it is worthwhile to invest in relationship marketing initiatives or not. Subject of relationship marketing has attracted the attention of researchers and many research studies have been carried out in this field in the last few decades. The literature review presented attempts to provide an overview of the theoretical and empirical literature.       

KEY WORDS: Relationship marketing, CRM, loyalty, customer retention.