APPLICATION OF CUSTOMER RELATIONSHIP MANAGEMENT AND ITS EFFECT ON LOYALTY (CASE OF AWASH BANK)

Abstract

CRM in banking industry entirely different from other sectors, because banking industry purely related to financial services, which needs to create the trust among the people. So applying CRM is mandatory for the bank to have loyal customers. This research aimed at assess the extent to which Awash Bank applied CRM practices across four dimensions (Key customer focus, Knowledge Management, CRM Organization & Technology based CRM) and its effect on customer loyalty. The researcher collects data from Awash Bank customers by distributing questionnaires which measured their agreement and disagreement on CRM activities of the bank and their level of loyalty to the bank by using five point Likert scale. The researcher uses both descriptive and explanatory research type for his purpose. For this research 385 questionnaires were distributed and 332 (86%) were returned back for analysis. The collected data was analyzed by using statistical package for social science (SPSS) version 20.0 software using tables and other descriptive statistics (mean ,standard deviation) and inferential statistics (correlation and regression)as appropriate. The analysis shows that the four CRM dimension has a significant effect on Customer loyalty and From the analysis the researcher recommend Awash Bank should give priority for the application of key Customer Focus dimension than other dimensions because this dimension has high effect on customer loyalty with a Beta value (B=0.492).