Abstract:
This study investigated the effect of customer relationship management (CRM) practices on
customer retention within the North Shoa Zone branches of the Commercial Bank of Ethiopia.
Both descriptive research design and explanatory research design were used in the study.
Questionnaires were used to collect data. Descriptive statistics (mean, standard deviation) and
inferential statistics (correlation, regression) were used to analyze the data. Customer
perceptions revealed variations in the effectiveness of the bank's CRM practices. While customer
focus strategies received moderate to high scores, indicating a generally positive view of the
bank's approach to key customers, other areas like customer retention efforts and CRM
organization scored lower. Technology-based CRM practices received a moderate score,
suggesting potential for improvement, particularly in online banking services. The multiple
linear regression analysis revealed a positive influence of all four CRM practices on customer
retention, with knowledge management emerging as the most impactful factor, followed by
organizing around CRM principles, incorporating CRM technology, and lastly, focusing on key
customers. These findings suggest that the Commercial Bank of Ethiopia should prioritize a
comprehensive approach to CRM that strengthens all dimensions. While focusing on key
customers remains important, the most significant improvements in customer retention are likely
to be achieved by bolstering knowledge management practices, implementing a well-organized
CRM structure, and investing in advanced CRM technology.
