Development Economics

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Browsing Development Economics by Author "Aregaw Tadele"

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    Factors affecting customer retention in the Ethiopian Banking Sector (Study on Commercial Bank of Ethiopia customers in Addis Ababa)
    (A.A.U, 2025-12-01) Aregaw Tadele; Abera Legesse
    This study looked at how customer experience and quality service affect customer retention in the Ethiopian banking sector. It focused on the mediating roles of customer satisfaction, trust, customer loyalty, and corporate image. The study aimed to address ongoing challenges in customer retention that banks face, even with service improvements and growing competition. A quantitative, explanatory research design was used with a cross-sectional survey approach. Researchers collected data from 389 bank customers through structured questionnaires, using simple random sampling. They analyzed the data with descriptive statistics, correlation analysis, and multiple regression techniques. They performed mediation analysis following the Baron and Kenny method, along with Sobel tests to check the significance of indirect effects. The findings revealed that customer experience and quality service has a significant and positive effect on customer retention. Furthermore, customer satisfaction, trust, customer loyalty, and corporate image were found to significantly mediate the relationship between customer experience and customer retention, indicating both partial and full mediation effects across the proposed pathways. These results highlight the importance of managing not only service delivery but also relational and perceptual factors to enhance long-term customer relationships. The study adds to the existing literature by expanding customer experience and relationship marketing theories through a detailed mediation framework in the Ethiopian banking context. It offers practical insights for bank managers and policymakers, highlighting the need for overall customer experience strategies and quality service to boost customer retention and maintain a competitive edge. The study also suggests future research directions, especially in using longitudinal designs and comparing different sectors. Keywords: Customer Experience, Quality service, Customer Retention, Customer Satisfaction, Trust, Customer Loyalty, Corporate Image, Ethiopian Banking Sector