The Effect Of Customer Relationship Marketing On Customer Loyalty: In The Case Of Selected Banks In Addis Ababa

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Addis Ababa University


This research was conducted to investigate the effect of customer relationship marketing on customer loyalty: the case of selected banks in Addis Ababa. The research design was an explanatory research type. CRM as a strategy has gained tremendous interest among researchers and practitioners in recent times. Thus, the study tried to assess the status and ways CRM has been put in to practice by selected Ethiopian banks. In addition, this research considered different CRM dimensions such as trust, reciprocity, empathy, bonding and responsiveness. Data were collected through the five point’s likert scales of questionnaires and used mixed research approach. To achieve the objective of the study, questionnaire was physically distributed to 322 customers of Commercial Bank of Ethiopia, Awash International Bank and Dashen bank. Out of 322 customers 270 (84%) customers were completed and collected. Descriptive, correlation and regression analysis methods were used to analyze the collected data by using SPSS software version 20 and Questionnaires reliability was estimated by calculating Cronbach’s Alpha. Descriptive analysis tools such as frequency, percentage, mean and standard deviation and statistical analysis tools such as correlation coefficient was worked out and used to explore the relationships between variables. Regression analysis was performed to study the effect of independent variables on customer loyalty. Research findings indicates that there was a significant relation between customer relationship marketing components including trust, bonding, reciprocity, empathy and responsiveness on customer loyalty and also to regression testing that all variables were examined simultaneously on customer loyalty; results showed that all components have a significant effect on customer loyalty. The finding also suggests some measures which can be taken into consideration in order to enhance CRM practices of the three selected banks. The study also clearly revealed that the five CRM dimensions are strongly related. Thus, from customers of the three banks perspective, CRM has a significant influence on customer loyalty of the selected banks.



customer loyalty, customer relationship marketing