The Application of Customer Relationship Management and its Effect on Customer Loyalty in Commercial Bank of Ethiopia
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Date
2016-06
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Addis Ababa University
Abstract
This paper presents the level of customer relationship management (CRM) dimensions(key
customer focus, CRM organization, knowledge management and technology based CRM) as
applied in the Commercial Bank of Ethiopia (CBE)-under credit process, examined from the
credit customers’ point of view. Then, it intends to measure their effect on customer loyalty from
the credit customers’ point of view. The researcher collects data from CBE-credit customers by
distributing questionnaires which measured their agreement and disagreement on CRM activities
of the bank credit process and their level of loyalty to the bank credit process by using five point
Likert scale. To obtain representative samples, in selecting the research respondents, stratified
sampling technique was applied, this sampling method helps for a population from which sample
has been constitute a heterogeneous group, therefore the study takes 16 and 369 trading and
none trading credit customers respectively respondents as target respondents from these
customers. The response rate was 78.96 %.The study was descriptive, explanatory and crosssectional
in nature. After the data was collected through structured questionnaire, computation
and analysis is done by using SPSS (Statistic Package for Social Science) version 20 software.
Descriptive statistics Mean Score, Standard Deviation and inferential statistics like Correlation
test using Pearson’s correlation and Multiple Regression analysis are used in order to address
the initial research question of the study. The findings show that the CBE-credit process applies
CRM dimensions but the level of application of each dimension differs. The results showed that
each CRM dimension has a significant positive effect in CBE-under credit process. The
researcher recommends that applying all CRM dimension will increase customer loyalty, so
CBE-credit process should work on applying CRM in a full scale and major concern should be
given to knowledge management dimension because it is the least applied dimension and it is the
one with highest effect on customer loyalty in CBE-credit process
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Keywords
Customer Relationship Management, Key Customer Focus, CRM Organization