THE EFFECT OF RELATIONSHIP MARKETING ON CUSTOMER LOYALTY IN BANKING INDUSTRY IN THE CASE OF DASHEN BANK

Abstract

The survival of any organization depends on its customers. Customers are the source of profits to be earned by a profit making organization. Due to the more and more aggressive competition in today’s business, many companies are required to build long-term profitable relationship with customers and to achieve customer loyalty. Thus , is research designed to explore the effect of relationship marketing on customer loyalty within the Dashen Bank using the five constructs dimensions of relation marketing such as Trust, switching cost, perceived service quality, perceived value and satisfaction. A cross sectional design mainly quantitative approach was used to the research question. In order to undertake this research, sample size of 111 out of 33 Branch in Addis Ababa which represents 30% of the total Dashin banks, is drawn with a total sample size of 400 Primary type of data was collected with the help of pretested questionnaires. The collected data was analyzed using SPSS. Binary logistic regression analysis is carried out to see the association between each independent variable with outcome variable and then variables that showed significant associations is included in a single model and multiple linier regressions is performed to identify the most significant predictors.95% CI and P-value (0.05) was used to assess the degree of statistically significance. The findings showed that relationship marketing dimensions have effect on customer loyalty. All the independent variables are significantly association with customer loyalty particularly in Dashen bank and in general in banking industry. And also they are expected to invest more on attracting new customers and retaining the existed ones with regard to relationship marketing to increase customer loyalty.