The Application of Customer Relationship Management And it’s Effect on Loyalty: The Case of Dashen Bank

Abstract

CRM in banking industry is entirely different from other sectors, because banking industry is purely related to financial services, which needs to create trust among the people. So applying CRM is mandatory for the bank to have loyal customers. This research aimed to assess the extent to which DB applied CRM practices across four dimensions (Key customer focus, Knowledge Management, CRM Organization& Technology based CRM)and its effect on customer loyalty. To determine the extent of the application of CRM dimensions (Key customer focus, knowledge management, CRM organization and technology based CRM) in Dashen Bank. The target population of study comprises of all customers of Dashen Bank operating in Addis Ababa. All personal and/or commercial customers who use Dashen Bank included in the study. Total number of the customers of Dashen Bank is about (1,527,099) and the total number of Addis Ababa branch customer is about 803,528 For this research 385 questionnaires were distributed the selection of the sample has through non-probabilistic sampling technique of convenience sampling because all the population of the bank cannot be available and 370 (90%) were returned back for analysis. Data were collected from DB 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 Liker scale. The collected data was presented and analyzed by using statistical package for social science (SPSS)version20.0 software using graphs, tables and other descriptive statistics (mean ,standard deviation)and inferential statistics (correlation and regression)as appropriate. Since there is little understanding about the extent of customer loyalty in this particular bank higher officials, that the researcher discuss with From the analysis the researcher recommend DB should give priority for the application of technology based CRM dimension than other dimensions because this dimension has high effect on customer loyalty.