THE IMPACT OF CUSTOMER RELATIONSHIP MANAGEMENT ON CUSTOMER RETENTION: IN THE CASE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

This research is carried out to examine the impact of customer relationship management on customer retention. It is causal research type. Data were collected through the five point’s Likert scales questionnaire and the study used mixed research approach which means both primary and secondary data collection techniques were used. The questionnaire was physically distributed to 322 employees and interview was made to 22 branch managers of selected branches. Out of the total distributed questionnaires 261 of them were collected. In order to meet the research objective collected data was analyzed through descriptive analysis techniques, correlation and regression analysis methods were used to analyze the collected data by using SPSS software version 20 and Descriptive analysis tools such as frequency, percentage, mean and standard deviation to present results statistical analysis tools such as correlation coefficient was worked out and used to explore the relationships between variables. Regression analysis was performed to study the effect of independent variables on customer retention. Research findings indicates that there is a significant relation between customer relationship management components including service quality, Employee behavior, solving customers problems, physical Environment and Social network interaction on customer retention and also to regression testing that all variables were examined simultaneously on customer retention; results showed that all components have a significant effect on customer retention. The researcher recommended that the bank should give more attention on all the components of customer relationship management to retain its customers.