EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT ON BANKING PERFORMANCE:THE CASE OF TWO SELECTED BANKS IN ADDIS ABABA

Abstract

This thesis conducted on the title “EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT ON BANKING PERFORMANCE” in selected banks. The major objective of the study was to assess the relationship between effective customer relationship management practice and banking performance. The researcher selected two banks as a case study area and both grade four bank managers and some selected top level managers as defined target population the total sum of the respondents were 66. After selecting defined target population the researcher used judgmental (purposive sampling method) to gather all necessary information to see the relationship between predictors and dependent variables. The study utilized a descriptive research design to describe the overall customer relationship management practice and banking customer relationship management performance situation. The researcher used primary and secondary data as data source whereas, mean, standard deviation and percentage to show the distribution and frequency of variables. Tables and charts were used to present the fact. To differentiate the relationship the degree of their relationship among and between variables the research used different parametric analysis tools like correlation and regression as data analysis tools by using statistical package for social science version 20.0. This research finding show there was strong positive correlation between banking performance and effective CRM practice, compared with attracting new customers banks are given less attention to retain current valuable customers, process and strategy has statistically significant unique contribution in explaining variance of banking performance. To increase its performance banks should focus on retaining current valuable customers than attracting new customers because it enable to minimize organizational costs, and to use technology as CRM process implementation tools banks should give attention for both technology infrastructure and architecture the like were the major one.