| Abstract: | Customer Relationship Management (CRM) emerges as a promising approach for banks to
differentiate themselves from the competition. This study aims to examine the effect of CRM
practices on customer loyalty within the context of Abay Bank SC, in Addis Ababa, Ethiopia.
The research methodology involved a quantitative approach, with a structured questionnaire
designed to collect data on CRM practices and customer loyalty levels. The sample population
consisted of customers of Abay Bank SC in level 2 and above branches in Addis Ababa, a total
of 341 questioners was collected from nine branches of the bank and for data analysis
descriptive analysis, correlation analysis, and regression analysis were employed to draw
meaningful conclusions about the observed data, the results revealed that behavioral
dimensions of CRM; key customer focus, knowledge management, CRM organization, and
Technology-based CRM (the independent variables in the study), had a positive and
significant effect on customer loyalty (the dependent variable of the study), indicating a
significant correlation. The implications of this research suggest that a strategic focus on
CRM can significantly influence customer loyalty and retention rates in the banking sector.
Recommendations for Abay Bank SC and other financial institutions include investing in CRM
technologies, training staff on customer-centric approaches, and continuously monitoring and
adapting CRM strategies to meet evolving customer expectations. |
