The Effect Of Relationship Marketing On Customers’ Loyalty In Commercial Bank of Ethiopia (The Case Of Burayu Branches)

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Addis Ababa University


Banking is one of the service sectors where competition is stiff to attract new or retain the existing customers among commercial banks. Customer relationship marketing is one of the strategies whereby banks are using to be competitive in financial sector. Customer relationship marketing 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 loyalty. The objective of this study was to examine the effect of customer relationship marketing on customer loyalty in CBE in the case of Burayu branches. The researcher used the behavioral components of CRM i.e. Trust, customer perceived value, Commitment, conflict handling and empathy as independent variables to examine its effect on loyalty. The researcher used descriptive and explanatory research design to meet the research objectives. The researcher used convenient sampling method to get representative sample from the populations. The researcher collected data from two branches of CBE through structured questionnaire to assess customers’ level of agreement regarding Customer relationship marketing practice in their respective banks. A total of 384 questionnaires were distributed to collect data and out of the total 320 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 marketing which is represented by five behavioral components has a positive and significant influence on customer loyalty. The researcher suggested that CBE has to pay attention to Customer perceived value dimension as it has highest influence on customer loyalty.



Customer Relationship Marketing, Trust, Perceived value