The Mediating Role of Customer Satisfaction on the Relationship Between Customer Relation Management and Customer Loyalty: In Case Bank of Abyssinia
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Date
2023-07
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Addis Ababa University
Abstract
This study investigates the impact of Customer Relationship Management (CRM) on banking customer loyalty in Addis Ababa, Ethiopia, using customer satisfaction as a mediating variable. Most studies focus on the effect of CRM on loyalty, so there is less emphasis on using a mediating variable. This study is significant to academicians because it adds to the body of knowledge, and May fills a gap in the literature by referring to the major findings of this study. Customers of Abyssinia Banking in Addis Ababa were sampled for this study using both stratified and convenience sampling methods. Based on data from Abyssinia Bank in 2023, this study sampled 399 respondents who are registered as customers at 24 BoA branch offices. 374 (94%) of the 399 questionnaires were completed and returned. The close-ended questionnaire used five-point Likert scales to collect data. The researcher used quantitative data, which was coded and analyzed using SPSS 23 statistical software. The developed model aims to measure customer loyalty through the implementation of a customer relationship management (CRM) strategy in the banking services industry in Addis Ababa. According to the study's findings (a, B=0.925, p = 0.000), the CRM regression coefficient result has a favorable and significant impact on customer loyalty. Customer satisfaction is positively and significantly impacted by CRM (a, B=0.789, p = 0.000). Contrarily, customer satisfaction significantly and favorably influences customer loyalty (a, B=0.215, p = 0.000). Model 3 has less beta value than Model 1, implying that customer satisfaction support is partially mediated by the relationship between CRM and Customer loyalty. The implications of this research for practitioners are that companies can improve the effect of CRM on loyalty by improving customer satisfaction. CRM increases client loyalty, which is indirectly influenced by customer satisfaction, it is critical for bank management to implement a proper CRM strategy and maintain long-term relationships with prime customers
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Customer relationship management