The Effect of Customer Relationship Marketing on Customer Retention: case of Nyala Insurance S.C

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Addis Ababa University


In today’s highly competitive market structure, winning customers' mind demand to think beyond the current sales volume horizon, and companies deliver superior value to their target customers and provide more satisfaction than its competitors. Otherwise, these customers switch to competitors who can satisfy them more. Reducing customer defections enables to increase future profits. Long-term relationship with customers reduces transaction costs. Thus, lifetime value of a customer is given immense attention. Hence the main purpose of this study is to examine the effect of customer relationship marketing on customer retention in case of Nyala Insurance S.C.. Customer relationship marketing can be measured using the following variables: Trust, Commitment, Satisfaction, Communication and Relationship Benefit. The research is explanatory by nature and it follows a quantitative approach, thus a deductive research approach was used. Data were collected through a five points Likert type summated rating scales of questionnaire. Relatively a large sample of three hundred fifteen was surveyed. Correlational and regression analysis has been deployed to determine the strength of association between the dependent and independent variables. Once the use of these regression and correlation analysis is warranted; that is, after the analysis test is qualified then the coefficient of regression analysis is used to substantiate or disprove the formulated hypothesis.



Relationship Marketing, Customer Relationship Marketing, Customer Relationship Management