EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT PRACTICES ON CUSTOMERS’ SATISFACTION: THE CASE OF UNITED BANK, BOMB-TERA BRANCH, ADDIS KETEMA SUB-CITY, ADDIS ABABA, ETHIOPIA.

Abstract

The main purpose of this study was the effect of customer relationship management practices on customer satisfaction at United Bank, Bomb-Tera Branch, Addis Ketema Sub-City, Addis Ababa, Ethiopia. The study was adopted mixed research approach and particularly explanatory and descriptive research design was applied. For this purpose, 301 bank customers for surveying and 5 bank management bodies (1 Branch Manager, 1 Assistance Manager, 1 Supervisor, 1 Credit division Manager and 1 International Trade division Manager) for interviews were drawn by using simple random sampling technique and through purposive sampling technique respectively. Self-administrative and somewhat guided questionnaire and interview guide were used to gather data. The data that were collected were analyzed by using SPSSVersion 20. Descriptive and inferential statistics were used for the data analysis. The descriptive statistics such as frequency distribution, percent, mean and standard deviation were used for describing the demographic characteristics of respondents and the whole perception of respondents on customer relationship management practices and customer satisfaction. The inferential statistics like Pearson correlation and multiple regressions were used to show the relationship between CRM practices and customers’ satisfaction and to determine the effect of CRM practices on the bank customers’ satisfaction. The findings of the study indicated that there were a positive, weak to strong and significant relationship between all the five CRM practices and the success of customers’ satisfaction at United Bank, Bomb-Tera branch. The regression results indicated that 65.0 % (R2 = 0.650) of the variations in United Bank, Bomb- Tera branch customers’ satisfaction are determined by the five CRM practices considered in this study and all the coefficients are statistically significant at 0.05 levels. Likewise, based on the regression results, empathy is the most influencing factor followed by bonding and responsiveness. Finally, the study recommended that the bank should implement CRM practices properly; which can enable the bank to attract and retain valuable customers.