During the last three decades ‘relationship marketing’ has become more popular in the field of marketing. This marketing approach highlights the need of a company or business entity to maintain longterm relationships with customers. In the 1980s, the relationship marketing strategy was widely accepted as a new marketing paradigm as many companies began to shift their marketing strategy to one focused on maintaining existing customers (customer retention) rather than on acquiring new ones (Sheth, 2002). This strategy remains popular today as more companies continue to organise marketing campaigns geared towards establishing strong relationships with customers.
Scholars like McKenna (1991) opined that the focus of relationship marketing is to provide customers with enough information and not to manipulate them in order to sell products or services. This view is supported by Gummeson (1991; 1994), who further advocated that relationship marketing is contrary to traditional marketing because it involves three main aspects: relationships, networks and interaction, and all three are to be practiced in a buyer-seller relationship. Within the same decade, Morgan and Hunt (1994) popularized their definition of relationship marketing, which is “establishing, developing and maintaining successful relational exchanges” (p. 20).
Discussion on relationship marketing has been gaining popularity in Asian literature in recent years. However, research conducted on the subject, particularly on the Islamic insurance industry, is very limited. The need to engage and build strong relationships with customers is obvious in this industry. This is due to its nature; an industry that offers intangible financial services and products tailored to the customers’ needs would require the operators or their representatives (takaful agents) to cultivate direct relationships with customers. It is crucial to the industry in another way since its objectives include promotion of mutual benefits and a sense of brotherhood in the society based on the principles of tabarru? and ta?awun. This marketing strategy is complementary to traditional marketing approaches such the ‘marketing 4Ps’ (product, price, place, and promotion), the end result being to build long-term relationships with customers. This will eventually increase sales performance and at the same time enhance customers’ trust, commitment and retention.