The Effect of Customer Relationship Management on Customer Loyalty (The Case of Dashen Bank s.c and Commercial bank of Ethiopia)

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Date

2017-06-06

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Addis Ababa University

Abstract

Banking is one of the service sectors where competition is stiff to attract new or retain the existing customers among commercial banks. Customer relationship management is one of the strategies whereby banks are using to be competitive in financial sector. Customer relationship management helps banks to retain customers as the practice of CRM pays attention to the need of individual customers and eventually contributes a lot to customer satisfaction and loyalty. The objective of this study was to examine the effect of customer relationship management on customer loyalty for the case of Dashen Bank and Commercial bank of Ethiopia. The researcher used the behavioral components of CRM i.e. Key customers focus, Knowledge management, CRM Organization and Technology based-CRM as independent variables to examine its effect on loyalty. The researcher was used descriptive and explanatory research design to meet the research objectives. The researcher was used convenient sampling method to get representative sample from the populations. The researcher collected data from ten branches of Dashen bank and CBE through structured questionnaire to assess customers’ level of agreement regarding CRM practice in their respective banks. A total of 384 questionnaires were distributed to collect data and out of the total 352 questionnaires were returned. The collected data was analyzed using statistical package for social science (SPSS) version 20.The descriptive statistics (mean, standard deviation) and inferential statistics (correlation and regression) were used to described demographic facts, to test hypothesis and to answer research questions. The statistical result showed that Customer relationship management which is represented by four behavioral components has a positive and significant influence on customer loyalty. The researcher suggested that Dashen bank and CBE have to pay attention to CRM Organization dimension as it has highest influence on customer loyalty.

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Keywords

Customer Relationship Management, Key customers focus, Knowledge management

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