The author has made an attempt to explore in depth the role of customer relationship management in the service sector. During the past decade services have increasingly assumed an important role in the Indian economy and virtually all companies view service as critical to retaining their customers to-day and in the future. The only factor, which gave companies the competitive edge, is the long-term relationship with customers, not just loyalty schemes, a help desk, or collection of customer data without undertaking detailed segmentation. CRM focuses more widely on the customers and on the entire fuctions connected with value creation and delivery chain of the service organizations. This is possible through the integration of fourimportantcomponents i. e. people, process, technology and data. We need to recognize that computers and packages are only the tools and it is up to us to decide our purpose and make use of mix of tools