Customer Loyalty: in The Case of Hibret The Effect of Customer Relationship Management on Bank S.C
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Date
2026-01-16
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Publisher
A.A.U
Abstract
Customer Relationship Management (CRM) has assumed importance as a strategic approach
for service-driven entities towards improving customer loyalty and creating a competitive
edge. The banking industry, which is characterized by high competitiveness, similarity in
products offered, and potential customer switch-over, is increasingly turning towards efficient
CRM practices for customer retention and long-term association. This paper investigates the
influence of CRM practices on customer loyalty in respect of Hibret Bank S.C. in Ethiopia.
The research methodology involves using a quantitative research approach and descriptive
and explanatory research design. Data was gathered using a structured questionnaire from a
population of customers who attended Hibret Bank S.C. branches in Addis Ababa in a
population of 384 customers. The researcher used Cochran’s formula in determining the
sample size and convenience sampling in view of accessibility. The analysis of data was done
using SPSS with descriptive statistics, correlation, and multiple regression analysis.
The current study identifies key CRM dimensions, such as key customer focus, knowledge
management, CRM organization, and technology-based CRM, which are considered
independent variables with customer loyalty as a dependent variable. Findings indicate that
CRM practices positively and significantly influence customer loyalty. It is found that key
customer focus and technology-based CRM have a strong influence on customer loyalty,
whereas knowledge management and CRM organizations follow suit.
In its conclusion, the paper asserts that CRM best practice implementation has increased the
behavioral as well as attitudinal elements of customer loyalty. The paper has implications for
bank managers due to its emphasis on the need to combine customer-driven approaches,
organizational efforts, and the role of CRM technology systems. The paper further bridges
the gap within the existing body of knowledge by filling the lack of empirical research on
CRM and customer loyalty within the Ethiopian banking industry.
Keywords: Customer Relationship Management, Customer Loyalty, Banking Sector, Hibret
Bank S.C., Ethiopia