THE EFFECT OF CUSTOMER RELATIONSHIP MARKETING ON CUSTOMER RETENTION: A CASE STUDY OF COMMERCIAL BANK OF ETHIOPIA

Abstract

This research is conducted to investigate the effect of customer relationship marketing on customer retention. . It is casual research type. Data were collected through the five point’s likert scales of questionnaires and used mixed research approach. The questionnaire was physically distributed to 322 customers and four interview questions to branch managers of those selected branches. Out of 322 customers 261 customers were completed and collected descriptive, correlation and regression analysis methods were used to analyze the collected data by using SPSS software version 20 and Questionnaires reliability was estimated by calculating Cronbach’s Alpha. 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 marketing components including trust,bonding,reciprocity,empathy and responsiveness 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 . There is frequent network problem and long wait in queue especially at the end of the month were viewed by respondents as customer relationship marketing practice weakness.so, based on the finding the researcher has recommended that the bank should provide consistence minimizing frequent network problems and should regularly visit customers