Effect of Customer Relationship Management Effectiveness on Customer Satisfaction: Commercial Bank of Ethiopia Customers in Focus
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Date
2014-06
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Addis Ababa University
Abstract
In today’s intensely competitive, rapidly changing and highly complex business environment
characterized by diminishing customer loyalty, the need to be market focused and customer
centric is more critical than any other time for any organization. Customer relationship
management has emerged recently and become competitive advantage for firms in financial
sector. The importance of CRM is highly increasing to firms as they seek to improve their profits
through long-term relationships with customers. Despite the widespread adoption of CRM
systems by firms operating in financial sector researches have shown little concern regarding the
effectiveness of CRM and its effect on customer satisfaction. A model is tested to determine the
predictive power of the five CRM effectiveness dimensions on customer satisfaction. A survey
questionnaire adopted was employed to collect data. Accordingly data was collected from 209
Commercial Bank of Ethiopia customers. The research has found that the CRM dimensions
namely: organizational commitment, customer experience, process driven approach, reliability
and technology orientation are positively correlated to customer satisfaction with r value ranging
from 0.412-0.698. The findings also indicated that among the dimensions; process driven
approach, technology orientation and organizational commitment have strong effect on customer
satisfaction, Process-driven approach dimension being the highest to influence customer
satisfaction. Although the study has its limitations, the implications of the results allow providing
practical recommendations to the banking industry, and directions for further research in the
area
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Keywords
Customer relationship management, Customer Satisfaction, Commercial Bank of Ethiopia