THE EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT (CRM) ON CUSTOMER’S LOYALTY: EVIDENCE FROM DASHEN BANK

Abstract

The goal of this paper is to investigate how customer relationship management affects customer loyalty at Dashen Bank S.C. Addis Ababa. The research design employed a quantitative research methodology and was both descriptive and explanatory. A structured format was used for the survey. Using a quantitative research approach, the hypothesis was tested on a sample of 399 with a valid response rate of 100%. The questionnaire was analysed using the Statistical Package for Social Sciences (SPSS) Version 20, which also computed Cronbach Alpha, descriptive statistics, correlation, and regression. The correlation matrix revealed that every independent variable with a positive coefficient of correlation strongly correlated with the dependent variable when the relationships between the variables were examined using correlation analysis. Additional regression analysis was performed, and the results showed that the Customer Involvement, Customer understanding, Customer commitment, and Customer responsiveness are the four independent variables that contribute to a statistically significant level at (p-value = 0.001). The researcher can accept the hypothesis and all of the Customer Relationship Management service dimensions because the p-value for Customer Involvement, Customer understanding, Customer commitment and Customer responsiveness is less than 0.05 based on hypothesis testing. Finally, this study suggests that in order to improve the success of the bank, there should be a high level of focus on customer relationship management. Last but not least, it can be said that without strong customer relationship management, it is impossible to succeed in maintaining customer loyalty because it is a means by which banks ultimately succeed in maintaining the business of their existing customers.