The Application of Customer Relationship Management Practice and its Effect on Customer Loyalty: The Case of Dashen Bank S.C Addis Abeba Branches

Abstract

The purpose of the study was to examine the effect of CRM on customer loyalty. And the study will have significance for Dashen Bank S.C to identify the dimensions of CRM which are done properly and which need further improvement to a successful implementation of CRM. Accordingly the study investigates four determinant variables by collecting data from 308 customers using structured questionnaire and convincing sampling technique to select the sample. Both descriptive and inferential statistics methods used to analyze the data. And the analysis has two parts, the first part deals with descriptive data using mean and standard deviation ,while the second part were test of dependent and independent variable relation using correlation and regression analysis. And the study was presented in quantitative approach. In overall, the results of the correlation analysis revealed that all of the identified determinant factors affect loyalty negatively except technology based CRM practice of the bank. Furthermore, multiple regressions also identify which determinant variable more affect CRM practice of the bank in creating loyal customer; accordingly, Organizational culture of CRM, CRM related to customer Knowledge management and CRM based on Focusing on key customers highly and negatively affect customer loyalty. Based on the findings the study recommend, that, overall CRM of organizational culture should consider providing effective rule and regulation how CRM practiced in the bank, specifically, the bank should improve key customer management practice for instance, increasing its ability to meet its promises, fulfilling obligation, providing consistent quality services and finally the study recommend that, the bank should improve knowledge management practice.