Customer relationship management's definition is also its ambition: the development and maintenance of mutually beneficial long-term relationships with strategically significant markets. The focus is on creating value for the customer and the company over the longer term. The value perceptions of the customer serve as bonds, or exit barriers, which inhibit the search for alternative sources of supply. The great American circus entrepreneur, P T Barnum, once said 'There's a sucker born every day'. One customer departs, another customer arrives. There's little doubt that Barnum provided great, spirited and inventive entertainment for his customers but he didn't expect them to come back. Once the show was over, a new 'sucker' had to be recruited. Today's businesses compete with multi-product offerings created and delivered by networks, alliances and partnerships of many kinds. Retaining customers is critical to corporate performance. This shift away from the marketing's conventional focus on the Barnum-like transaction rather than the relationship is being driven by, and enabled by, a number of changing business conditions. First, competition for the customer is becoming more intense. Local and national suppliers' locational advantage is being eroded as trade barriers are removed and geographic boundaries are redefined by the established and emergent trading blocs. As access to markets is becoming less localised, demands on logistics management and distribution partnering are becoming more significant. Second, markets are becoming more fragmented. In the more developed economies, we have moved from mass marketing – always associated with the condition of demand exceeding supply – through market segmentation, towards individualised marketing. This so-called one-to-one marketing strategy is based on the premise that customers will be more loyal and utter more positive word-of-mouth if value propositions are customised to meet their particular, perhaps unique, requirements. Third, customers are becoming more demanding. Their expectations for reliable product and responsive service are becoming more extreme. Customers demand more and are much less tolerant of failures. Customers compare their experiences against best-in-class expectations. For example, if it takes no paperwork and two minutes' interaction at a desk to hire a car, customers will want to know why it takes fifteen minutes and form-filling to check into a hotel. Expectations are a moving target. What used to delight customers a year ago is only likely to satisfy them today. What was once a motivator is now a hygiene factor.
 

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