PRACTICE OF CUSTOMER RELATIONSHIP MANAGEMENT AND ITS EFFECT ON CUSTOMER LOYALTY: THE CASE OF DASHEN BANK SC

Abstract

In a competitive market such as the banking industry customer loyalty is gem stone to be dreamed of, and it’s no wonder organizations want to acquire this valuable asset. One of the effective ways to acquire customer loyalty is through properly implemented CRM and in this study the researcher has set out to investigate the practice of CRM and its effect on loyalty on the customers of Dashen bank. The researcher accomplished this by collecting data from customers of Dashen Bank via questionnaire to quantitatively analyze the data using a descriptive research design, the questionnaire was adapted from previous studies and was used to quantify the perception of the respondents towards the practice of CRM while the researcher carried out correlation and regression analysis on the collected data to determine the effects of CRM on customer loyalty. The results found the practice of CRM at Dashen bank to be less than satisfactory especially with technology based CRM, which has the least evaluated score and showed that all four dimensions of CRM having a strong positive correlation with customer loyalty, and technology based, the least performing dimension, having the strongest of the four. Moreover, the regression analysis showed that more than 3/4th of the change in customer loyalty can be explained by the change in the four CRM dimensions and again the analysis indicated that technology based CRM had the greater effect. Consequently the bank should strive hard to improve its CRM practices especially technology based CRM which should lead to increase in the level of its customer’ loyalty, it in turn being a instrumental competitive advantage.