While relationship marketing is viewed as an important driver in the development of the firm’s profitability, the condition of this profitability seldom receives much attention. In this study, we employ a dynamic exchange model between firm and customer to explore the conditions affecting the firm’s profitability from a relationship perspective. The application of this model reveals explicitly that relationship marketing is not always profitable. The firm-customer relationship profitability depends on the customer life value (margin and retention rate), the duration of the firm-customer relationship, and the marketing budget to retain the customer and the customer acquisition cost.