THE IMPACT OF RELATIONSHIP MARKETING ON CUSTOMER LOYALTY THE CASE OF COMMERCIAL BANK OF ETHIOPIA

Abstract

Today,in the new competitive environment,the developmentofclose,long-lasting relationshipswithselectedtargetcustomerhasbeenoftenadvocatedintheinternational literatureasamajorstrategictooltolimitcompetitioninmarketsandtodefendbank profitabilityinthelongrun.Recentlymorethaneverbefore,strongcompetitionand increasingcustomerawarenessandcomplexityarethebigchallengestothebankingsector. Accordingtomarketingscholars,relationshipmarketingisthebeststrategyforthispurpose. Thisresearchseekstoempiricallyevaluatetheimpactoftheunderpinningsofrelationship marketingoncustomerloyaltyinCommercialBankofEthiopia.Theresearchinvolved respondentsof400customersandeightbranchmanagersofcommercialbankofEthiopia. Thetoolsusedfordatagatheringwerequestionnaireandinterviewforcustomersandbranch managersrespectively.ThedatawereanalyzedusingStatisticalPackageforSocialScientists 20.0version.Descriptivestatistics,Correlation,independentsampleT-Test,Analysisof Variance(ANOVA),multipleRegressionanalysiswereusedtoanalyzethedatafrom the customersurvey.Theresultsobtainedbyanalyzingthedataindicatethatthereisapositive relation between relationship marketing factorsand customers’loyalty.Commitment, empathy,trustandconflicthandlingfactorsholdthefirsttofourthprioritiesinrelationtothe customers’loyalty.Thefindingsshowtherecognitionoftherelationshipmarketingandits extensionofthedimensionsareessentialfactorstoretaincustomersandimprovingloyalty.It isalsorecommendedthatthebanktoworkonrelationshipmarketingaggressively.