THE EFFECT OF CUSTOMER RELATIONSHIP MANAGMENT ON CUSTOMER LOYALTY: THE CASE OF DASHENBANK S.C

Abstract

The purpose of this study was to examine the effect of CRM on customer loyalty and adopted a descriptive research and explanatory research design. Dashen bank customers who have banking relationship in Addis Ababa Branches were targeted as the population of this study. This study used a purposive sampling technique to select sample respondents. The sample size of this study was therefore 323corportate customers of Dashen Bank S.C. The study used primary data that was collected by use of questionnaires. Correlation analysis was conducted to know the strength of association between CRM dimensions namely: Trust, commitment, communication, customer focus and knowledge management and Customer loyalty. Multiple regression analysis was also conducted to analyze the effect of independent variables on customer loyalty. The study showed that all the independent variables have a significant effect on customer loyalty in the study area. Finally the research found that customer focus is the higher significant factor that affects customer loyalty in Dashen Bnak followed by, Trust and commitment. Therefore, the bank should have a good customer focus that can benefit both the bank and the Business customers in the long run and should build its reputation, and need to be reliable to create confidence on integrity.