The Moderation Effect of Ownership in the Relationship between Customer Relationship Management and Customer Retention. (A Comparative Study of Dashen Bank S.C and Commercial Bank of Ethiopia)
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Date
2025-01-03
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A.A.U
Abstract
This study explores the effect of customer relationship management (CRM) practices on
customer retention, with a focus on the moderating role of ownership in the Ethiopian banking
sector. The study investigates four key CRM dimensions: employee behavior, interaction
management, relationship development, and customer engagement in technology, assessing
their impact on customer retention. A comparative analysis was conducted between Dashen
Bank and Commercial Bank of Ethiopia, utilizing both employee and customer perspectives.
Both descriptive and explanatory research designs were employed and data was collected from
employees and customers through a Five-point Likert Scale questionnaire. The data collected
was analyzed through SPSS and the findings were interpreted according to the regression,
inferential and descriptive statistics. The findings reveal that employee behavior and customer
engagement in technology are significant predictors of customer retention, with technology
having the strongest impact. Interaction management and relationship development, however,
did not show a significant direct effect on retention. The moderating role of ownership was
found to be weak, suggesting that CRM practices are equally effective across both public and
private banks. The study further highlights a perception gap between employees and customers,
particularly in the areas of helpfulness, sincerity, and relationship building, indicating the need
for improved communication and consistency in service delivery. The results emphasize the
importance of employee behavior and technological integration in driving customer retention
and suggest that banks should focus on refining these areas to foster loyalty. This study
contributes to the understanding of CRM's role in customer retention and offers practical
insights for enhancing CRM strategies in the banking industry.