The Practice of Customer Relationship Management and its Impact on Loyalty (The Case of Dashen Bank S.C)
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Date
2016-06
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Addis Ababa University
Abstract
Due to fierce competition in today’s business environment, many companies are required to
build long- term profitable relationship with customers and to achieve competitive
advantage. Therefore, CRM has become more and more important since last decade of 20th
century, especially in the service industry. As a result, this study is aimed to empirically
investigate the influence of CRM (key customer focus, customer knowledge management,
CRM organization and technology based CRM) on loyalty in banking industry with reference
to Dashen Bank. A theoretical framework was used as a guideline to test the influence of
CRM on loyalty. A quantitative research approach was implemented. Besides, a descriptive
research design was used. A questionnaire derived from previous studies and relevant
literature is completed by 384 customers and out of this 280 are returned and used for
statistical analysis. Correlation analysis assessed the relationship between CRM and loyalty
and multiple regression analysis assessed the influence of CRM on loyalty. The findings
confirm all the independent variables have a positive and significant relationship with loyalty
in Dashen Bank. Moreover, the study examines a positive and significant influence of CRM
on loyalty. Besides, it is found that customer knowledge management underpinning of CRM
has the highest influence on loyalty in Dashen bank. Therefore, the selected banks have to
implement CRM appropriately and continuously, as an indispensable tool for gaining
competitive advantage and building long – lasting and profitable relationships with its
customers in order to achieve customer loyalty
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Keywords
Customer Relationship Management, Key customer focus, Customer knowledge management