FACTORS AFFECTING CUSTOMER RELATIONSHIP MANAGEMENT (CRM). CASE OF SELECTED COMMERCIAL BANKS IN ETHIOPIA

Abstract

Although the promising potentials of Customer Relationship Management (CRM) as a way of capturing comparative advantages in the face of the growing competition, the failure percentage of its implementations is still relatively high which causes increasing concerns for business organizations. The aim of this paper is to extend the line of knowledge about realizing the promising outcomes of CRM. To do so, the researcher conducted an extensive review of the literature in the field of CRM to identify the Critical Success Factors (CSFs) for CRM effectiveness and proposed conceptual implementation CRM model appropriate to Ethiopian banking sector. The paper assessed the feasibility and usefulness of the proposed model by evaluating through a real life case study methodology in three selected banks (Commercial Bank of Ethiopia (CBE), Bank of Abyssinia (BOA) and Zemen Bank (ZB)) in Ethiopian. The primary data were collected using close-ended questionnaires from Customer Service Officers (CSOs) and dichotomy questionnaires from managers and Customer Service Managers (CSMs). The selection of respondents was based on their involvement in the CRM practices. The sample size was 125 with 84.8% response rate. The findings indicate that the success rate of CRM in selected banks is not as expected and also the implementation model they followed is not uniform. Furthermore, the performance measurement practice of all banks is not satisfactory. The study contributed CSFs for CRM effectiveness derived from the conceptual model developed for CRM implementation. Besides, the study provides guidance for commercial bank managers wanting to understand the dynamics of customer expectations in Ethiopian banking sector and who are ready to implement CRM to improve customer relationship that enhance customer satisfaction and loyalty to improve profitability and shareholders value.