THE EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM) ON CUSTOMER’S LOYALTY: EVIDENCE FROM FOUR STAR HOTELS IN ADDIS ABABA

Abstract

This study examined the effect of customer relationship management on customer loyalty in star hotels in Addis Ababa. The data collected from 219 from hotel guests in Addis Ababa were entered into SPSS for analysis. Frequency count and percentage and correlation and regression analysis were used using a five -point liker scale questionnaires and proportional stratified sampling method. Accordingly, design, the study revealed that there is a weak usage of adopted automation systems on CRM like computerized, digitized operations. These hotels have well incorporated CRM based on value-creating marketing strategies that help to deliver customer value. Using explanatory research design, this study found that there is a significant effect between automation procedure, business process, online communication channels, accounting program, marketing program and customer loyalty. Thus, the study concluded that automation procedure, business process, online communication channels, accounting program and marketing program help to standardizes CRM to enhance consumer loyalty. As result, the study suggests that hotels may enhance their ability of CRM through secured information exchanges, minimize transaction and system costs and maximize the relationship’s benefits in order to repeat the exchange processes in the future.