The Effect of Relationship Marketing Practices on Customer Loyalty: The Case of Lion International Bank S.C., Addis Ababa

Abstract

Relationship marketing (RM) is one of the most important tools that companies use to build a long lasting relationship with their customers as it is a source of competitive advantage and retain them to develop their performances. The aim of this research is to examine the effect of relationship marketing practices on customer loyalty of Lion International Bank. To study the effect of relationship marketing practices six dimensions of RM practices were used as independent variables and tests the respondents understanding perspectives on the effect of relationship marketing practices on customer loyalty. In order to achieve this objective, a sample of 106 customers has taken using probability sampling particularly stratified sampling technique and a questionnaire was used as a research tool for the collection of data. And the collected data was analyzed through SPSS version 25 by running descriptive statistics, correlation and regression Moreover, the study has employed a key-informants interview, Focus Group Discussion for consolidating the information obtained by the questioner. And it has also utilized different secondary sources including books, Articles and journals. Based on this, it is found that some selected variables of relationship marketing practices (Customer Trust, Commitment, Communication, Empathy, Conflict Handling and Customer satisfaction practices) strongly, significantly and positively affected Customer Loyalty of the company. To achieve strong competitive advantage in terms of increasing profitability, market share, customer retention and attracting new and potential customers over other banks they must establish a strong relationship with their customers making them happy with their services and product they offer.