The Impact of Relationship Marketing on Customer Loyalty in Banking Industry, The Case of Bank of Abyssinia
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Date
2011-06
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Addis Ababa University
Abstract
The survival of any organization depends on its customers. Customers are the source of profits to
be earned by a profit making organization. Due to the more and more fierce competition in
toads business, many companies are required to build long-term profitable relationship with
customers and to achieve customer loyalty. Therefore, relationship marketing has become more
and more important since last decade of 20th century, especially in service industry.
There are many different relationship marketing dimensions implemented for retaining
customers��. Therefore, this study is aimed to explore the impact of relationship marketing
dimensions (trust, commitment, conflict handling, and empathy) on customer loyalty, by
focusing on the Bank of Abyssinia. A theoretical framework was used as a guideline to test the
relationships between relationship marketing dimensions and customer loyalty.
A quantitative method which is cross-sectional study with deductive approach is chosen in this
research. In order to collect primary data, a self-completed questionnaire is designed and was
randomly given to the customers of the Bank of Abyssinia. In addition to questionnaire, semistructured
interview questions are prepared to get information from the organization which is
analysed qualitatively. The SPSS version 16.00 for windows is used to process the primary data
which is collected through questionnaire.
The findings show that relationship marketing dimensions have impact on customer loyalty. All
the independent variables are positively and directly related to customer loyalty particularly in
Bank of Abyssinia and in general in banking industry. The relationship between relationship
marketing and customer loyalty is significant. Therefore, banks should make the whole system
on work with customers, not in opposite of customers. And also they are expected to invest more
on attracting new customers and retaining the existed ones with regard to relationship marketing
to increase customer loyalty.
Key words: Relationship Marketing, Trust, Commitment, Conflict Handling, Empathy, and
Customer Loyalty.
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Keywords
Relationship Marketing, Trust, Commitment, Conflict Handling, Empathy, and Customer Loyalty