THE PROBLEMS OF CUSTOMER RELATIONSHIP

MANAGEMENT AND ITS IMPACT ON CUSTOMER

LOYALTY IN COMMERCIAL BANK OF ETHIOPIA (THE
CASE OF YIRGALEM BRANCH)

SENIORS ESSAY SUBMITTED TO DEPARTMENT OF MANAGEMENT FOR PARTIAL

FULFILLMENT OF REQUIREMENT OF BACHELOR ART DEGREE IN
MANAGEMNT

BY:- ABDILFETA DELIL ID 0968/07

Advisor. MENGISTU A.(MBA)

HAWASSA ETHIOPIA

May 2017
 CERTIFICATION

This is to verify that this thesis entitled “Problems of CRM and its impact on customer

loyalty” submitted in partial fulfillment of the requirements for the award of the Bachelor of Arts

Degree in management to the college of business and economics, Hawassa University.

Though the department of management, done by ABDILFETA DELIL ID 0968/07 is an

authentic work carried out by his under my guidance . The matter embodied in this thesis has not
been submitted earlier for award of any degree or diploma to the best of my knowledge and
belief.

Advisor Signature

MENGISTU .A (MBA) ______________

Date ____________

Hawassa University

College of business and economics

Department of management

II
 ACKNOWLEDGMENT

First of all thanks to my family next to almighty of ALLAH the source of every knowledge and
wisdom next I would like to express my deep gratitude to my Adviser MENGISTU ANSSA(MBA) For
his genuine advise, critical comment and closer super vision.

I am also indebted to my Dear brother Abdurezak Delil who played significant role by providing
his fruitful advice.

My heart full gratitude also goes to the top manager, employees, and customer of commercial
bank of Ethiopia Yirgalem branch who have provided me with the necessary data.

Finally yet important I am highly grateful to all people who have cooperated me in the
development and success of completion of this research.

III
 ABSTRACT

The study was to be conducted on the problem of customer relationship management and its
impact on customer loyalty in case of commercial bank of Ethiopia Yirgaiem’s branch. The
major objective of this study is to assess the problems of customer relationship management and
its impact on customer loyalty and to identify the importance of customer relationship
management in Commercial Bank of Ethiopia Yirgalem branch, to keep (retain) its customers
loyal. The respondents to the study were both employees’ and customers of commercial bank of
Ethiopia Yirgalem’s. All the necessary data for the accomplishment of the study were collected
through primary source of data. The primary data were collected through distributing
questionnaire, direct observation and structured interview. The sampling method that had been
used in this study was simple random for employees and convenience sampling technique for the
customers. The results of data were organized and analyze by using descriptive method through
cross tabulation: finally the better supposed conclusion and recommendation had been given on
each problem identified. From the enquiry the research has found that even through majority of
the clients of the bank are satisfied by the service rendered by the bank, they are not loyal
customer of the bank.

IV
 ACRONYM

CRM: customer relationship management

CBA: commercial bank of Ethiopia

V
Table of content
Acknowledgment----------------------------------------------------------------------------------------------I

Abstract--------------------------------------------------------------------------------------------------------II

Agronomy-----------------------------------------------------------------------------------------------------III

Table of content----------------------------------------------------------------------------------------------IV

Chapter one-----------------------------------------------------------------------------------------------------
1

1. Introduction-------------------------------------------------------------------------------------------1
1.1 background of the study----------------------------------------------------------------------------------
1
1.2 background of the organization-------------------------------------------------------------------------2
1.3 statement of the problem--------------------------------------------------------------------------------3
1.4 objective of the study------------------------------------------------------------------------------------4
1.4.1 general objective------------------------------------------------------------------------------------4
1.4.2 specific objective-----------------------------------------------------------------------------------4
1.5 scope of the study----------------------------------------------------------------------------------------4
1.6 significance of the study--------------------------------------------------------------------------------4
1.7 limitation of the study-----------------------------------------------------------------------------------5
1.8 organization of the paper--------------------------------------------------------------------------------5

Chapter two----------------------------------------------------------------------------------------------------6

2. literature review--------------------------------------------------------------------------------------6
2.1 definition of customer relationship management-------------------------------------------------6
2.1.1Customer relationship management evolution----------------------------------------------- --6
2.2 Why do organizations need and undertake customer relationship management? ---------------7

2.2.1 Benefits of customer relationship management--------------------------------------------------7

2.3 Achieving good CRM------------------------------------------------------------------------------8

2.4 Customer loyalty------------------------------------------------------------------------------------------8

VI
2.4.1 Behavior loyalty-------------------------------------------------------------------------------------8
2.4.2 Attitudinal loyalty------------------------------------------------------------------------------------8
2.5 Categories of customer loyalty-----------------------------------------------------------------9
2.5.1 Benefits of customer loyalty------------------------------------------------------------------------9
2.5.2 Relationship quality----------------------------------------------------------------------------- 10
2.6 Antecedents factor of customer loyality -----------------------------------------------------------10
2.6.1 Customer satisfaction -------------------------------------------------------------------------10
2.6.2 Customer relationships management (CRM) --------------------------------------------------11
2.7 CRM in banking industry------------------------------------------------------------------------11
2.8 Challenges of CRM in bank---------------------------------------------------------------------11
2.9 Empirical review of the study------------------------------------------------------------------12

CHAPTER THREE

3 RESEARCH METHODOLOGY AND DESIGN-------------------------------------------------------------- 15

3.1 study design----------------------------------------------------------------------------------------15

3.2 study area, target population----------------------------------------------------------------------15

3.2.1 Study area ---------------------------------------------------------------------------------------15

3.2.2 Study population -------------------------------------------------------------------------------15

3.3 Sample size determination ------------------------------------------------------------------------15

3.4 Sampling technique --------------------------------------------------------------------------------16

3.5 Source of data--------------------------------------------------------------------------------------16

3.6 Method of data collection--------------------------------------------------------------------------17

3.7 Data collection procedure--------------------------------------------------------------------------17

3.8Method of data analysis-----------------------------------------------------------------------------17

4 CHAPTER FOUR

4.1 DATA ANALYSIS, INTERPRETATION AND PRESENTASION---------------------------------------18

CHAPTER FIVE

5 SUMMARY CONCLUSION AND RECOMMENDATION--------------------------------------------------

29

5.1Summary of major finding----------------------------------------------------------------------------------------29

5.2Conclusion-----------------------------------------------------------------------------------------------------------30

VII
5.3 Recommendation--------------------------------------------------------------------------------------------------31

Reference--------------------------------------------------------------------------------------------------

Appendix--------------------------------------------------------------------------------------------------

LIST OF TABLE
Table 4.1 sex and age distribution of the respondants-----------------------------------------------------------18

Table 4.2 education and marital states-------------------------------------------------------------------------------19

Table 4.3 show weather the customer usual or not ----------------------------------------------------------------20

Table 4.4 How often you use the bank service---------------------------------------------------------------------20

Table 4.5 Customer use to provide complain (comment) to the bank---------------------------------------21

Table 4.6 method of clients use to provides comment or suggestion to the bank-------------------------21

Table 4.7 customer satisfaction --------------------------------------------------------------------------------------22

Table 4.8 customer loyalty ------------------------------------------------------------------------------------------22

Table 4.9 handling customer complaints --------------------------------------------------------------------------23

Table 4.10 sex distribution of the respondents---------------------------------------------------------------------24

Table 4.11 age distribution of the respondents---------------------------------------------------------------------24

Table 4.12 work experience of the employees in the bank-------------------------------------------------------25

Table 4.13 satisfaction of the employees in their duties ----------------------------------------------------------25

Table 4.14 customer complain in the bank -------------------------------------------------------------------------26

Table 4.15 customer retention----------------------------------------------------------------------------------------27

Table 4.16 weakness in the bank providing service -------------------------------------------------------------28

Table 4.17 customer handling --------------------------------------------------------------------------------------28

VIII
 CHAPTER ONE
1 Introduction
1.1 Back ground of the study

Today's marketer must be good at creating customer value and managing customer relationship
management. The key to build lasing customer relationship is to create superior customer value
and satisfaction in their view of( Kilter and Armstrong,2008). Satisfied customer are more likely
to be loyal customer and to give the company larger share of their business targeting acquiring
and retain the right customer is at core of many successful business firms ones has won customer
it sees as desirable the challenge shift to building relationship and turning them in to loyal
customer who will generate growing revenue for the firm in the future. Customer relationship
management concerned with customer data management that is managing detail information
about individual customer and carefully managing customer touch point in order to maximize
customer loyalty by delivering superior customer value and satisfaction (Kittler and Armstrong,
2006).

An important concept in CRM is customer touch points every interaction with customer is touch
point (Best, 2005).

CRM is one of the several antecedents of loyalty. Because CRM the seed out of which loyalty
develops enhancing customer relationship is an important means for achieving loyally failure to
meet customer need and expectation and frailer in maintain effective customer relationship
management technique is assumed to result in dissatisfaction (Butte and Burton, 2001).

Loyalty is likely to lead to positive attitude and behavior such as patronage purchase and positive
recommendation which may influence other actual or potential customer. Loyal customer base
can be valuable asset for any organization. It reduced the need to seek new customer and positive
feedback that the organization product and services are meeting the need of particular group of
people (Kittler and Armstrong, 2006).

1
 1.2 Background of the organization

The commercial bank of Ethiopia has been one of the movers of Ethiopia economy for the past
65 years no strong bank in the country When CBE was officially launched in 1942.The bank has
a very clear shared vision and mission to play its role in supporting the growth of the national
economy thus CBE Yirgalem’s branch is doing its best to follow the national policy and
strategies of the bank.

Vision

To be a world class of commercial bank

Mission

Our mission is the profitability play a major financial service cost effective for all sector of the
economy of the nation.

Yirgalem’s Branch is one of branches of CBE which established in 23/11/ 1970 E.C

2
 1.3 Statement of the problem

Currently, in Ethiopia banking sector is considered as main beneficiary in recent economic

upturn, hence, better formation of strategies in banking sector is the most needed one especially
in the recent information technology era.

According to Gebeyehu (2014), as world has become a global village, more than ever before,
strong competition, fragmentation of market, short life cycle of products and increasing customer
awareness and complexity are the biggest challenges to the banking sectors. In such situation,
currently, banks have been using CRM strategy to create, maintain and enhance strong
relationship with their customers to secure their customer loyalty. However, according to sheath
(2002), there are problems to real implementation and resourceful practice of CRM in business
industries.

Banking sectors that successfully implement CRM will reap the rewards in customer loyalty and
long- run profitability. But many banks have not successful implementation due to they do not
understand that CRM requires company wide, cross functional and customer focused business
processer - engineering (InjzzJ.,2003).

Managing a successful CRM practice requires an integrated and balanced approach to

technology, process and people. However, many banks have been viewed CRM as technology
only and not practiced it in case of customer satisfaction in proper manner. Managing CRM
effectively and efficiently boosts customer satisfaction and retention rate ( Reichheld, 1996). m

Without proper practice of CRM, the customer satisfaction, continuous relationship of customers
and truth customer loyalty will not faced.

As we have gotten primary information form CBE at yirgalem branch 2009 E.C there is
challenges to practice CRM, and it’s in turn reduced truth loyalty of customer.

In other words, there is a gap between the literature view of CRM and its real practice in CBE,
especially at in Yirgalem branch 2017. Hence, this study targeted on investigates the major
problem of CRM and its impact on customer loyalty in CBE at Yigalem branch.

3
1.4. Research Questions

The purpose of the study is to assess problems of CRM and its impact on customer loyalty in
CBE at Yirgalem branch. For this purpose the basic research questions that this research required
to answer were:-

1 what measure does the bank use to make customer loyal?

2 How the banks handle its customers complaints?

3 What are the strength and weakness of the bank regarding customer relationship
management?

1.4 Objective of the study

1.4.1 General objective
The general objective of the study is to assess problems of customer relationship management
and its impact on customer loyalty in case of commercial bank of Ethiopia Yirgalem branch

1.4.2 Specific objectives

1. To identify the different measure that the bank use make customer loyal.

2. To find out how the company (bank) handle its customer complaints to measure the
satisfaction of its customer.

3. To identify strength and weakness of the bank regarding its customer relationship management
practice.

1.5 Scope of the study

Even though commercial bank of Ethiopia have many branches due to some constraints like time
and budget these study would be limited itself on commercial bank of Ethiopia Yirgalem branch
on customer relationship management practice and its impact on customer loyalty.

1.6. Significance of the study

The outcome that drawn from this study were help the bank in order to identify the main
customer oriented areas or touch point that should be carefully addressed to improve with
customer needs and also to identify the strength and weakness of the bank in dealing with its
customers. Then to take corrective action on the system that the study were find as a barrier. The
study would also use as a reference for other researcher who is interested in this subject matter

4
and it also help the students in partial fulfillment of the requirement of bachelor degree (BA
Degree).

1.7 Limitations of the study

Although there might have limitation on this study the following are some of the prominent once
it is only based on one organization and due to the absence of reference method in the area of
commercial bank of Ethiopia Yirgalems’s branch. The researcher enforced to see few reference
materials lack of experience the researcher see other researcher material by this they give invalid
conclusion.

1.8 Organization of the paper

The first chapter deals with the introduction that include back ground of the study statement of
the problem objectives of the study scope of the study back ground of the organization limitation
and significance of the study . The second chapter deals with literature review and the third
chapter would contain research meted logy which includes data type ‘ sources of data sampling
designed sampling technique methods of data collection and method. The fifth chapter deal
with Summary, conclusion and recommedation

5
 CHAPTER TWO

2. LITERATURE REVIEW

2.1. Definition of Customer Relationship Management

Different authors define customer relationship management indifferent time some of these are
listed as follows. Customer relationship management is the process of building and maintaining
profitable customer relationship management by delivery superior customer value and
satisfaction and involves carefully managing customer touch point to maximize customer loyalty
or its strategy, process and enabling technologies that allow organization to acquire and retain its
best customer (Philip customer Kittler 12th edition , 2006).

Customer relationship management concerns the relationship between the organization and it is
customer. Customers are the life blood of any organization be it global corporation with
thousands of employee and multibillion turn over or sole trade with a hand full of regular
customer (Ellen Gifford, 2002).

Customer relationship is a corporate wide approach to understanding customer behavior

influencing it through continuous relevant communication and developing long term
relationships to enhance customer loyalty acquisition , retention and profitability (Sharp,2003).

2.1.1. CRM Evolution

CRM itself not a new concept but is now practical due to recent advances in enterprise soft ware
technology. By using sales force automation (SFA), CRM practiced one to one marketing for
the purposes of selling but not administrative task. CRM has been shifting from transaction
based marketing to relationship marketing for the purpose of improving long run profitability
with gibing high emphasis to winning new customers, customer retention through effective
CRM. (Christopher etal,1991).

6
2.2 Why do Organizations need and Undertake Customer Relationship Management?

As Ellen Gifford stated the ultimate purpose of customer relationship management, like any
organization initiative, is to increase profit. In the case of customer relationship management this
is achieved mainly by providing a better service to your customer than your competitor .
Customer through a good customer relationship management capability will also reduce cost
wastage and complaints effective CRM also reduce staff stress because, a major cause for stress
as service and relationship improve.

2.2.1 Benefit of Customer Relationship Management

Gifford, (2002), states that there are significant business benefit derivable forms an integrated
customer relationship management approach. These include:

 Reduced costs, because the right things are being done

 Increase Customer satisfaction because they are getting exactly what they want
(:.e. exceeding expectations).
 Growth in number of customers
_Maximization of opportunities (;.e. increased service, referral etc)
 Long term profitability and sustainability
 Highlighting poor operational process
 Offering a bight advantage of competition to the enterprises
 Reduction in procedure cost
 Improvement of customer loyalty increase to the enterprises
 Reduction in procedure cost
 Improvement of customer loyalty increase to race of scat loyalty.

Benefits to customers, an off (1990:26) as quoted by Onus (2008) includes:

 Risk and stress reduction

 High quality service since the service provider becomes knowledgeable
about customer requirement.
 Social and status benefit from continuity relationship with supplier
since repeated contract may develop relationship resembling personnel
friendship which can feed ones status.
 Avoiding switching cost because maintaining a relationship with
suppliers avoids the cost associated with switching to a new provider.

7
 2.3. Achieving Good CRM

Achieving good CRM required many organizations to adopt new perspective (Ellen Gifford )
clarity as follows. Consider the following

 Traditional customer is something you’d to’ the customer.

 Modern CRM is ‘done with’ the customers.

The second statement is emphasized the big difference between conventional traditional service,
and the modern progressive CRM approach, your relationship with customer

Should be on going cooperative and built for long term organizations that have much transitory
relation with customer the cost of keeping existing customer is a tiny fraction of cost of acquiring
new customers (Ellen Gifford, 2002).

2.4. Customer Loyalty

There is still no universal agreement on the definition of loyalty. However, researchers have
agreed that customer loyalty les two dimensions :( Scotland and Sigma, 2004).

2.4.1 Behavioral Loyalty

Behavioral loyalty is a customer‘s overt behavior toward a specific product/ service in terms of
repeat purchasing pattern a repeat purchasing pattern. It can be determined as actual purchase
frequency, the portion of occasions in which a specific brand is purchased as compared to the
total number of purchased brand. According to Kumar and Shah (2004), behavioral loyalty is
observed form purchase behavior if a business can successfully achieve repurchase behavior,
then it is on the way to generating customer loyalty (Gee et al, 2008).

2.4.2 Attitudinal Loyalty

Researcher widely agrees that the mere measurement of repeat purchase does not capture the
whole meaning of loyalty. Some scholars argue that behavioral loyalty (repeat purchase) alone is
too simplistic and does not capture the multidimensionality of loyalty (Kumar and Shah2004).
Altitudinal loyalty represent a high order, or long term, commitment of customer to the
organization that cannot be inferred by merely observing customer repeat purchase behavior.
This as often results as an outcome of a long fruitful relationship between the organization and
the customer over the time (Kumar and Shah, 2004).

Van Loony et al. ( 2003 ) putting in to consideration both behavioral and attitudinal aspects Pf
loyalty, defined customer loyalty as “customer behavior characterized by a positive buying
pattern during an extended period (means of repeat

Purchases, frequency of purchases) and driven by positive towards the company and its products
or services” The consideration of attitude in addition to behavioral representation makes loyalty

8
not just richer conceptually (loyalty is a process, not just an act) but also more useful for
practical purpose.(Dick and Basu,1994)

2.5 Categories of Customer Loyalty

is categories as the following:-

A. No loyalty: - there is on absence of loyalty where the customers relative attitude is low and
there is no evidence to purchase behavior. They have law relative attitude, low repeat
behavior and does not use the company.
B. Spurious loyalty: - they have law relative attitude but high repeat behavior. They used the
company, but does not have a high relative attitude. This may be as a result of other factors
including location, convenience lack of alternatives.
C. Latent loyal: - The have high relative attitude and low repeat behavior. In this case, the
customer wishes to use the organization, but perhaps is notable to do so store location may
be in continent, favorite brands not stocked etc.
D. Truth loyalty: - There is high relative attitude, high repeat behavior, the individuals enjoy a
high relative attitude together with high repeat patronage behavior. Loyalty must be
continually reinforced, and the value offered must remain acceptable. When the true loyalty
exists the customers regularly buys and do because of strong preferences or high relative
attitudes.

2.5.1 Benefit of customer loyalty

Customer loyalty generates numerous benefits. According to Rowley (2005), a stable customer
base is a core business asset that enables improved organizational profitability. Chaudhuri and
customers are Holbrook (2001) suggest that a high customer loyalty implies a higher market
share and an ability to demand relatively a higher price compared to those competitors.
Loyal cheaper to serve; less price sensitive, foster positive word of mouth promotion.

9
2.5.2 Relationship Quality
In any commercial relationship between Customer loyalty creates a stable pool of customers for
firms products or services Loyal customers demand less time and attention from the
organizations they patronize and behave favorably towards the company in a variety ways (e.g.
forgiving product (service) because they are emotionally committed (Crosby 2002); As result,
they are a major source of sustained growth (Anderson and Mittal,2000). two parties interaction
is the key concept. The perception of relationship quality occurs in ongoing interaction.

To develop a long – term relationship, it is important for the sales person to first understand the
customers need and then selling techniques to those needs.

The relationship has to be sustained through attention to service, such as promptly returning
calls, making especial deliveries quickly and personality, seeking out answers to technical
questions and working, with the customers to design the next generation service. After building
of continuous relationship with quality, managing loyalty is very crucial. (Marketing
Management A Relationship Approach Seven Hollensen)

2.6 Antecedent factors of customer Loyalty

Maintaining customer is increasingly difficult in many industries consequently; companies need

to consider the antecedents of customer loyalty and their relative importance (Lewis and Surely,
2006). It is important to gain insight to the two antecedent factors of customer loyalty customer
satisfaction and customer relationship management (CRM).

2.6.1 Customer Satisfaction

Satisfaction is one of the several antecedents of loyalty (Bottle & Burton, 2001). Customer
satisfaction is the ability to bridge the gap between customer expectations and product/ service
delivery” (Daftly, 2011 p.44), It is achieved when the customer Expectations about the
performance of service or product being consumed are met or exceed (Anton et al ... 2007). The
strong focus on customer satisfaction is based on the implicit assumption and loyalty (Homburg
and Giering, 2001 Failure to meet customer needs and expectations is considered as a major
cause of customers exit from organization because it is assumed to result in dissatisfaction
(Zenithal and Bither, 2003) .Therefore organizations must be customer focused/driven to gain
intrinsic knowledge of the customer’s needs and expectations. Moreover, an organization’s
capacity to satisfy customers need prevent both customer withdrawal and the arrival of new
competitors (Gomez et al, 2004).

10
 2.6.2 Customer Relationship Management (CRM)

“All business is based on relationship. The firm only has to make them visible and meaningful
for its customer provided that the customer wants them” (Gunrooms, 2007).

Customer relationships Management is the overall process of building and maintaining profitable
customer relations by delivering superior or value and satisfaction (Kilter and Armstrong 2006).
CRM is an attempt to modify customer behavior over time and strengthen the bond between
customer and the company’s ability to achieve the ultimate goal of retaining customers and so
gain strategic advantage over it competitors (Nguyen et al… 2007). CRM allows organizations to
distinguish between customers that are profitable, nearly profitable, and unprofitable and have
the potential to be profitable (Bull, 2003).

The customer awareness of organization customer relationships could raise their loyalty toward
the corporation, which would in turn increase company in come, enhance market share, and
achieve other corporate objectives (Kilter and Armstrong, 2005).

2.7 Customer Relationship Management in Banking Industry

Today, many businesses such as banks. Insurance companies and other service provider Realizes
the importance of CRM and its potential to help them acquire new customers, Retain the existing
ones and their life time vault et al (2007) argues that CRM is a business strategy of identifying
the banks most profitable customer $prospects, and devotes time and attention to expanding
account relationships with those customer through individualized marketing and customized
service all delivered through the various sales channels that the bank uses.
The banking industry is facing an ever increasing level of completion around the world as
the dynamics of the business change bank have understood the need to capitalize on the
new technologies to gain advantage in the competition by exploiting their customer base,
brand value and costly infrastructure investment in order to increase profits as there is a
direct link between the customer satisfaction and profitability. However the banks faced
challenges in implementing CRM it include
 Lack skilled people
 quality of customer data
 using customer data more intelligently
 using right technologies

2.8 Challenges of CRM in the Bank

As (Antony Lawrence, 2010) stated that CRM is not easy to understand but when it come

Up to implementation it becomes very difficult for the bank. Generally it is observed that the
bank do not fail to select right tools but they fail to implement it improper way. Banks are
finding it difficult track and pitch profitable customers across the various contact channel such as

11
ATM, email, voice recognition and wireless. Bank should train customer to serve themselves
and connect customer focused marketing campaign the various service and products.

The challenge for the bank is to retain and depend on the profitability of existing customer
relationship. In attempt to be more profitable the banks have been come

Competitive and more customer o rented. The CRM is one of such tools which help in meeting
the customer expectation according to their changing needs. Banks have started acknowledging
the importance of the customer in developing their business. They have recognized that is
essential to protect must deliver superior quality service. The CRM approach adopts by the bank
focused on maximizing the value of customers and the bank. There are key derivers to customer
loyalty such as: positive staff attitude, honesty, integrity, productive advice and delivery
promised so on (Antony Lawrence, 2010, 2ndt edition,).

2.9 Empirical Review of the study

Different literature conducted different research on CRM in different time at different business
organizations. Some of researchers conducted their study on the impact of CRM on customer
loyalty, market performance employee's commitment, customer satisfaction etc at CBE

According to Krishn Moorthyand Dr. Srinivason (2003). The study was conducted on the title of
"impact of customer relation management on customer loyalty in India banking sector ". The
purpose of the research was to determine the impact of customer relationship management On
Customer Loyalty. The data was collected from private and public banking sector through
questionnaire have statistical tools (multiple regression factor analysis) were used for data
analysis. The finding of the study should that there is an impact on CRM and customer loyalty.
The study also noticed that banks words and promises are reliable, bank fulfills its obligation to
customer, offering advice on how to convert are the predominant variable which has impact on
customer loyalty.

According to Gebeyehu (2014), the funding of the study on CRM to confirm that the
independent variables such as key customer focused, customer knowledge management, CRM
organization and technology based CRM have a big positive and significance relationship with
market performance. More over the study explore that there is a positive and a significance
influence of CRM on market performance besides it was found that customer knowledge
management underpinning of CRM has the high influence on market performance in the most

12
bank. Therefore the study recommendation idea is that the most banks have to implement CRM
appropriately and continuously, as an indispensable tool for gaining competitive advantage and
building long- term and profitable relationship with its customer in order to achieve their market
performance.

According to Jens B. (2010), CRM is crimed at basiding strong long term relationships that keep
customers coming back repeatedly. It aims to help organizations building individual customer
relationship in such a way that both the firm and the customer get the most to of exchange,
providing both parties with long term benefits.

The title of his research was conducted on "providing a better understanding of customer
relationship management in BEB firms in seweden. The main purpose of the study was to
provide a better understanding of the usages of CRM in B2B firms. To achieve this goal the
three main concerned areas were considered. Objective, statemet and measurement of CRM were
mainly focused in this study. Using the collected theory about this questioner a frame of
reference is chosen and used to collect information from two large firms operation from Sweden.

The researcher was used case analysis and compared the company's each other. The data were
collected form primarily attained respondents through structured interview.

The finding of the study indicated that much of the exported theory regarding CRM is true for
the B2B sector. However, few of the most crucial issues such as loyalty and satisfaction of
customer are diverged from the theory. It also found that there was a lack of research conducting
in the area of CRM actual implementation evaluation.

Furthermore, finding of the study indicated that CRM in B2B focused on the organizational
aspects of CRM, and strong goal for business is to unlock the information that employees have
and store it in a place the business can own. Here, the researcher recommended that to
understand and implement CRM in proper manner, the firm should be focused on customer
satisfaction and loyalty before give high consideration of its profit. And it must conduct
additional researches to solve the problems of customer’s intern to provide different mechanisms
how to implement the successful CRM.

13
According to international Tourna of contemporary research in Business (2013), CRM is a
business strategy which attracts, retains and elevates the customers. The proper implementation
of this strategy will enable the organization to perform with long term profit. The title of the
study was "Studding the factors affecting the customer relationship management (CRM) in
Morun petro chemical company".

The purpose of the study was to identify factors influencing CRM. To achieve this goal and
considering the research model, five hypotheses were formulated. These were Business process
Reengineering (BPR), organizational learning, Relationship quality, organizational performance
and proper use of new technology were formulated as hypotheses. The finding of the study
indicated that except organizational learning, all other hypotheses issues were the major factors
of CRM actual implementation.

The Gap of the Study

From the empirical review of the study, the researcher conducts their study about CRM impacts
on customer loyalty, and market performance in both private and public banks. They mainly
focused on the impact of CRM on market performance as well as customer loyalty, but they did
not deal the problems that hinder CRM in detail. Before managing CRM implementation and
customer loyality directly, identifying the major problems that hinders CRM real practice is very
crucially. Hence; this study was conducted to assess the main problems that hinder CRM and its
impact on customer loyalty in CBE, particular Yirgalem branch.

In other words, the study showed that how much the literature view (theoretical idea) of CRM
has real practiced and if not, what problems hinder it and how much impacted on actual loyalty
in CBE at selected branch.

14
 CHAPTER THREE

3. RESEARCH METHODOLOGY AND DESIGN

3.1 Research Design

The research was undertaken on the title “problem of customer relationship a nod its impact on
customer loyality in case of CBE Yirgalem branch” This was carried out by using Descriptive
method. Because to describe the existing situation

3.2 Study Area and target population

3.2.1 Study area

The study was conducted in Yigalem Sidama Ethiopia on Commercial Bank of Ethiopia at
Yergalem branch. The state of southern nation nationality and people has many cities and towns.
From those Yirgalem is one of the earliest town and it was emerged during the reign of Minilik
second.Yirgalem found 317kms and 47kms far from Adis and Hawassa respectivetly.The total
population of Yirgalem and around is aproximatly 46000.

3.2.2 Target population

Target populations for the research were employees and customers of Commercial Bank of
Ethiopia Yirgalem's branch.

3.3 Sample size determination

Target populations for the research were employees and customers of Commercial Bank of
Ethiopia Yirgalem branch.

3.3 Sample size determination

N=Z2(q)N/e 2 (N-1)+(z)2(q)(a) n= sample size

Z= Confidence level

P= probability of success (90%)

N= population

e = error term (10%)

BY using the above formula the researcher has identified 24 samples among the employees of
commercial bank of Ethiopia, Yirgalem branch.

n=(1.28)2(0.5) (0.5)/(59)/(0.1) (59-1)+(1.28)2 0.5x0..5=26.22=26

15
In addition to this from the customer of the bank 41 customer are believed to be representative
for the study by the researcher after calculating by using the following formula:-

N=z 2p (q)/e2 where z =Confidence level (0%)

(Kothari, 2004 r) p= probability of success

n=sample size

q= probability of filer

e= error term (10%)

n= (1.28)2 (0.5) (0.5)/ (0.1)2

=41

3.4 Sampling technique

The researcher had used both probability and non-probability sampling technique from the
various categories of probability sampling technique the researcher specifically employed simple
random sampling technique this is because first ,all the employees are considered equally
important for the study. Second, the researcher has an access to get the list of all employees and
the last but not the least reason is in order to avoid bias simple random sampling technique was
the first choice of the researcher. On the other hand, among the different types of non- probablity
sampling technique, convenience sampling technique had been selected. This is for the
reasonthat it is difficult to get all the customers of the bank. Due to time and budget constraint of
the respondents among the entire customers of the bank were used.

3.5 Source of Data

In the study to assess the problems of customer relationship management and impact on
customer loyalty primary source of data were used the primary data for this study were the
response of employees, customer, and manger of the bank. In addition the different documents
and related literature related literature regarding CRM and customer loyalty where used.

16
3.6 Methods of data collection.

In order to collect the primary data the researcher would use interview; questioner and direct
observation. In questioners both open and closed ended questioner would be used in case of
interview structured interview selected and the researcher would try to observe the real practice
of CRM and customer loyalty in the bank.

3.7 Data Collection Procedure

Before gathering data required data required for the study, the required sample size was
identified. Then after, the necessary tools for collecting information have also been prepared as
much as possible. The next step would be collecting the required information using tools for
collecting information. The data had been collected based on inductive approach. As the data
collected, the process of analysis follows.

3.8 Method of Data Analysis

As it has been disclosed in the data collection procedure, the data analysis was carried out after
the data has been collected. Since the major data collection instrument was questionnaire, it is a
must that collecting all the necessary data prior to analyzing it. When analyzing data, tabulation
and percentage was used. The explanation and description had been given in following chapter

17
 CH APTER FOUR

4 DATA ANALYSIS, INTERPRETATION AND PRESENTATION

This part deals with the major finding of the study. All necessary data and hence the basic issues
are given appropriate treatments. In his chapter from the questioners that were distributed to
selected 26 employees of the organization, 22 were collected and analyze. And also from the
customers of bank 41 distributed questionnaires all are returned and analyzed.

Part-This section describes the data which is gathered from customers

Table 4.1 Sex and age distribution of the respondents

Respondents
Items
(No of
respondents) Percentage (%)
frequency

1. Sex
A. Male 22 53.7%
B. Female 19 46.3%
Total 41 100%
2 AGE
A Less than 25 15 36.5%
B between 25-30 16 39.02%
C between 32-40 7 17.08%
D above 41 3 7.4%

Total 41 100%

Source; questionaries’ 2017

As shown in table 4.1 out of the total respondents 22 (53.37%) of them are male whereas
19(46.3%) are female. This result show that majority of the respondents are males.

Age also other demographic variable that indicate the proportion of people by dividing in to
different section as youth adult old as it is indicated on the above table out of the total
respondents 15 (36.5%) of respondents lies the age of less than 25, 16 (39.02%) of them lies
between 25-30, (17.08%) of the respondents were between 31-40, whereas the remaining 3
(7.4%) were above 41 years of age. These indicate that majority of the respondents lie between
25-30 years of age who are adult.

18
Table 4.2 Education and marital status of respondents

Respondents
Items
( No of respondents) Percentage
frequency

3 Education level
A. Below grade 12 10 24.39
B. Certification 5 12.19
C. Diploma 9 21.95
D. Degree 16 39
E. masters 1 2.43

Total 41 100
4 marital
A married 10 24
B un married 24 59
C Divorced 3 7
D widow 4 10

Total 41 100%

Source; questionnaires, 2017

As shown in table 4.2 out of the total respondents 10 (24.39%) are below grade 12 and
5(12.19%) of the respondents holds certificate 9 (21.95%) of the respondents holds diploma
9(21.95%) and the reaming 16(39); 1(2.43) of respondents holds degree and masters
respectively. Based on this fact it is undoubtedly to conclude that majority of the percentage of
the respondents were degree holders.

The researcher also identified the marital status of the respondents the above table indicate out of
the respondent 10(24%) were married out of the respondents 24(59%) were unmarried and out
the respondents 3(7%) and the reaming 4(10%) are widow this show that the majority of the
respondents are unmarried.

19
 4.3 Shows whether the customers are usual or not.

Items Respondents
(no of respondents) Percentage
frequency
Are you customer of the
bank?
a. Yes 35 85.36
b. No 6 14.64
Total 41 100%

Source; questionnaires, 2017

Table 4.3 indicates that out of the total respondent 35(85.36%) responded yes and are usual
customer of the bank. The rest 6(14.64%) replied no. this result shows that majority of the
respondent responded yes. So, this means majority of the respondents are usual customer of the
bank.

Table 4.4 how often you use the bank service

Items Respondents
(no of respondents) Percentage
frequency
How often do you use the
bank service?
a. Always 21 51.22
b. Sometimes 4 9.76
c. Irregularly 10 24.39
d. Often 6 14
Total 41 100%
Source; questionnaires, 2017

As indicated in the above table 21(51.22%) use the bank service always (regularly). 4(9.76%) of
the respondent use the bank service sometimes and the rest 10(24.39%), 6(14%) use the service
given by the bank irregularly and often, respectively. So this manifests that most of the
respondents i.e. customers of the bank use the service provided by the bank regularly.

20
Table 4.5 customer use to provide complain (comment) to the bank

Items Respondents
(no of respondents) Percentage
frequency
a. Does the bank
provide you a
means to complain?
b. Yes
c. No 31 75.61
10 24.39
Total 41 100%
Source; questionnaires 2017
As table 4.5 shows 31(75.61%) of the total respondents agreed that the bank provides a means of
complain while 10(24.39%) of respondents doesn’t have any information regarding, the bank
whether provide a means to complain but it should announce these to all customer of the bank
because 10(24.39%) of the bank user have no any information in this regard.

Table 4.6 method of clients use to provide comment or suggestion to the bank.

Items Respondents
(no of respondents) Percentage
frequency
Which method do you use
to provide comment
complain to the bank?
a. Suggestion box 13 31.8
b. Telephone 5 12.11
c. Email - -
d. Direct contact with 23 56.09
the representative

41 100%
Source; questionnaires, 2017
According to table 4.6, out of the total respondent 13(31.8%) of respondent use suggestion box.
5(12.11%) respondent were use telephone, 23(56.09%) of respondents used direct contact with
the representative to provide comment and no respondents use email to provide comment.
Therefore, the researcher can understand that direct representative is the most widely used
method which is used by the majority of clients of the bank.

21
 Table 4.7 customer satisfaction

Items Respondents
(no of respondents) Percentage
frequency
Are you satisfied with the
performance of the bank
service provided?
a. Yes 34 82.93
b. No 7 17.07
Total 41 100%
Source; questionnaires, 2017
Table 4.7 indicates that whether the clients are satisfied by the service which is delivered by the
bank accordingly 34(82.93%) of the respondents were satisfied by the service provided by the
bank and the rest 7(17.07%) of the respondents are not satisfied by the service which is provided
by the bank. The 7 clients which responded "no" in question number "9" specified there reason in
question number “10” of these 4(54%) because of delay in delivering service 3(43%) because of
workers are not willing to help their clients the researcher concluded that here the majority of the
respondents i.e. customer of the bank were satisfied with the service delivered by the bank it is
good for the bank so it should improve its strategy in order to serve the unsatisfied customer
otherwise, in this competitive world which is full of strong competitions and the bank may be
snatched its clients by those strong competitors.

Table 4.8 Customer loyalty

Items Respondents

Do you think that you are the loyal (No of respondents ) percentag
customer of the bank? frequency e
A yes
B NO 16 39
25 61
Total 41 100%

Source questionnaire 2017

Loyalty measure the client willingness to stay with a specific vendor for the long period of the
Table 4.8 shows the loyalty of the clients to the bank. According 16 (39%) of the respondent
responded yes that means they are loyal customer of the bank and the rest 25 (61%) of the clients
are not loyal customer of the bank. Therefore the bank should do a lot in customer relationship
management and also it should device a new strategy that can help the bank so as to retain its

22
customer. In addition regarding the loyalty of customers the bank manager asked that what
measure the bank uses to make customers loyal. And he replied that the bank use several
measures to make customer satisfied with the service and to make them loyal such as the bank
providing coupons for those customer who save money more than 1000, the bank providing free
service for those who are interested to open saving account in the bank and also the bank
delivered service during lunch time.” from this the researcher conclude that the customer of the
bank did not recognized the effort of the bank. Therefore the bank should try to differentiate its
competitive advantage from the competent bank. And also the bank should modify or devise new
strategies that can help the bank to retain its customers.

Table 4.9 handling customer complaints

Items Respondents
(no of respondents) Percentage
frequency
Does the bank employee
handle customer complaints
properly?
a. Yes 18 43.9
b. No 23 56.1
Total 41 100%
Source; questionnaires, 2017
The above table, table 4.9 revealed that 18(43.9%) of the total respondent responded “yes” that
means the bank employees handle customers complaints properly the rest 23(56.1%) were
respond “no” that means the bank employees do not properly handle the complaints of
customers. The researcher concluded that the bank employees are not good in handling the
customers. The researcher concluded that the bank employees are not good in handling the
customer complaints. So, the bank management should train the worker (employees) of the bank.
Unless the unsatisfied clients might shift to other private bank and may also communicate bad
word of mouth to other customer. These will harm the bank in retain its customers.
Regarding this the manager of the bank asked “how the bank handles its customer complaints?”.
He replied that “the bank provides several mechanisms that the clients of the bank can give their
complaint like; suggestion box, telephone, e-mail etc. and the bank handles these complaints
properly as soon as it is collected.”
The researcher understood from the responses of customers and manager of the bank that the
bank did well in providing a means complain but from the responses of customer the bank
doesn’t properly handle the complaints timely.
The question which is raised in question no 13 what is the strength of the bank regarding
customer point of view? Most of the respondents respond that the bank have strength like the
bank give service to the customer properly, give on line service, the employ give service their

23
customers even at lunch time, the bank receive the complain of the customer from this the
researcher understand that the bank in good position.
For question raised from no 14 what is the weakness of the bank regarding service providing?
Majority of the respondent’s responded respond that the bank have weakness like network or
connection problem, lack of comfortable space or lack of sufficient space to sit customer., the
researcher understand that the bank should work hard to avoid their weakness.

Part II. This part of data analysis show the responses of employee for the
questionnaires
Table 4.10 sex distribution of the respondents

Items Respondents
(no of respondents) Percentage
frequency
1 sex
A male 16 73
B female 6 27
Total 22 100%
Source; questionnaires, 2017
This table 4.10 show that out of the total respondents 16(73%) were as 6(27%) were female so
that the researcher concluded that majority of the employees are male.

Table 4.11 Age of the employees in the bank

Items Respondents
(no of respondents) Percentage
frequency
Age
A less than 24 years 6 27.72
B between 24-32 years 10 45.45
C between 32-40 years 4 18.18
D above 40 years 2 9.09
Total 22 100%
Source; questionnaires, 2017
According to table 4.11 shows that 6(27.72%) were the age bellow 24 years,10(45.45%)
between 24-32 ,4(18.18%) were between32-40 and the remaining 2(9.09%) were above
40 years .So the majority the employee in the bank were age between 24-32 year

24
 Table 4.12 experience of employees in the bank

Items Respondents
(no of respondents) Percentage
frequency
How long have you been
working in the bank?
A less than one year 4 18.2
B between 1-2 year 7 31.8
C between 3-5 years 6 27.3
D above 5 years 5 22.7
Total 22 100%
Source; questionnaires, 2017
As indicated in table 4.11 out of the total respondents 4(18.2%) of the respondents have been
worked for less than one year, 7(31.8%) of the respondents are worked for the between 1-2
years, and out of the respondents 6(27.3%) of the respondents have been given service between
3-5 years. The remains 5(22.7) were respondents have been give service above 5 years. The
above data implies that majority of the employees of the bank had been given service between 1-
2 years. Beside the respondents i.e. employees of the bank are well experienced in giving service
for the clients.

For the question raised in question number ‘3’ that is what your duties is you are accountable?
Out of the total respondents 10(45.5) are cash receiver, 4(18.1%) were auditor 2(9.9%) were
customer service officer 2(9.9%) were loan process and the rest of the respondents did not
respond for the question. From this we can conclude that majority of the respondents (employees
of the bank) have high contact with the customers of the bank.

25
Table 4.13 satisfaction of employees on their duties

Items Respondents
(no of respondents) Percentage
frequency
Are you satisfied with the
duties that you are assigned
by the bank?
A yes 17 77.27
B no 5 22.73
Total 22 100%
Source; questionnaires, 2017
As indicated on the above table, table 4.13 17(77.27%) of respondent were satisfied with their
duties they are assigned by the bank and the remaining 5(22.73%) were not satisfied with their
duties. Thus the researcher understood that majority of employees are satisfied with their duties.
Thus the researcher understood that majority of employees are satisfied with their duties but
there are also employees who are unsatisfied with the duties assigned by the bank.

These employees may have a negative effect on the service which is delivered by the bank. So
the bank should use different mechanism to make them satisfied.

For the question raised n question number ‘4’ the respondent’s i.e. unsatisfied employees
specified so many reasons. Among these majority of employees specified the task that were
assigned by the bank is repetitive so, it is boring and also the number of customer that they treat
per a day were many in number it is very tiresome for the employees.

Table 4.14 customer complain in the bank

Items Respondents
(no of respondents) Percentage
frequency
Have you ever seen
customer complain in your
bank on the service
provided?
a. Yes 20 86.36
b. No 2 13.64
Total 22 100%
Source; questionnaires, 2017
As indicated in table 4.14 out of the total respondents 20(86.36%) of respondents answer ‘yes’
that means they saw customer complain in the bank and the remaining 2(13.64%) of employees

26
responded ‘no’ that means they never say any customer complain in the bank service. Based on
this fact it’s undoubtedly to conclude that the bank have problem I providing service its client.
Most of the time the cause of complains in the bank which is raised by the customer of the bank
are: delays in giving service to customer because of large size of customer per a day, short
service delivery duration are the major causes of complaints in the bank.

As much as possible the bank should improve the complaint which is provided by clients,
otherwise the bank may loose its customer to its strong competitors.

Table 4.15 customer retention

Items Respondents
(no of respondents) Percentage
frequency
Does the bank management
formulate suitable CRM for
retaining the existing
customers?
Yes
No 8 36.4
14 63.6
Total 22 100%
Source; questionnaires, 2017
As shown in table 4.15 8(36.4%) of respondent responded yes that means the bank had formulate
suitable CRM for retaining the existing customer whereas the remaining 14(63.6%) answered
that the bank didn’t formulate suitable CRM. Therefore the researcher concluded that the bank
has a problem in formulating suitable CRM so, the bank should improve or change the previous
CRM strategy so as to retain the existing customer and to make them loyal.

From the responses of employees the researcher understood that the bank did not formulate
suitable CRM. But the bank manager responded for the question ‘does the bank management
formulate suitable CRM for attracting and retaining customers? That the bank had devises
suitable CRM that can help the bank management didn’t take any input from employees and
customers of the bank while formulating CRM.

27
Table 4.16 weakness in the bank in providing service

Items Respondents
(no of respondents) Percentage
frequency
Do you have seen any
weakness in the bank in
providing service to its
clients?
A yes 16 72.7
B no 6 27.3
Total 22 100%
Source; questionnaires, 2017

According to the table 4.16, 16 (17.7%) of the respondents agreed that the bank had weakness
(problem) in providing service whereas, 6(27.3%) of the respondent responded ‘no’ that means
the bank had no any weakness in providing service to its customer. This result shows that
majority of respondent have seen weakness in the bank service providing system.

4.17 customers handling

Items Respondents
(no of respondents) Percentage
frequency
Is the bank is effective in
handling its customer?
a. Yes 13 59
b. No 9 41
Total 22 100%
Source; questionnaires, 2017
As indicate on table 4.17 out of the total respondents 13(59%) of them responded ;yes’ that
means the bank is effective in handling its customer and the rest 9(14%) of respondent responded
that the bank is not effective in handling its customer. Therefore the researcher concluded that
majority of the respondents agreed that the bank is effective in handling its customer. Even
though the bank is good in handling its customer, the bank should improve its culture of handling
customer and by this if can make its customer loyal.

For question which is raised I question number 9 among the determinant factor that enables the
bank to retain its existing customer most of the respondents responded that service quality, use of
modern technology, visionary management, fast service provision mechanism, as much as
possible long duration of service provision time good customer treatment, skilled men power and
giving appropriate answer for customer complaints are the major tools that the bank should to
retain its customer and to make them one.

28
 CHAPTER FIVE

5. SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 summary of major finding

This research was conducted to investigate customer relationship management and its impact on
customer loyalty in current business, practices of commercial bank of Ethiopia Yirgalem’s
branch. To successfully meet the objective of the study, questionnaires were distributed and
collected and interview with the manager of the bank was held. The researcher have tried to see
the impact of customer relationship on customer loyalty in the perspective of customers,
employees and manager based on their comparative exposure to the case under the study. The
major findings of the study are summarized as follows:-

 From the total respondents majority of the respondents i.e. 35(85.36%) were usual
customer of the bank.
 21(51.22%) of the customers of the bank use the bank service regularly.
 Among the total respondents 31(75.61%) of respondent agreed that the bank provide a
means of complain and only the remaining 10(24.39%) of the respondents didn’t have
any information regarding complain collection mechanisms of the bank.
 Regarding the satisfaction of customer on the performance of the bank in providing
service majority of the respondent i.e. 34(82.43%) were satisfied.
 From the total respondent 25(61%) of the respondents were not loyal customer of the
bank.
 23(56.1%) of the total respondents responded that the bank didn’t handle customer
complain properly.
 Regarding the work experience of employees majority of the respondent 7(3.81%) had
between 1-2 year experience
 Regarding the satisfaction of employees on their duties which were assigned for
17(77.27%) were satisfied on their duties.
 20(86.36%) of the total respondent responded that they saw and collect customer
complains in the service which is provided by the bank.
 From the total respondents majority of employees i.e. 14(63.6%) responded that the bank
didn’t formulate suitable CRM technique to retain the existing customers
 13(59%) of respondents responded that the bank is effective in handling its customers.

29
 5.2 conclusions
 Majority of the respondent’s i.e. the customer of bank are usual customer of the
service which is provided by the bank. And also most of the respondent of the bank
use the services regularly.

 The bank did well in providing a means of complain.

 Majority of the respondent use direct representative for providing complain,
comment, suggestion in the service which is provided by the bank.

 Majority of the respondent are satisfied on the performance of the bank service
providing system.
 Regarding the loyalty of customer majority of customers are not loyal customers of
the bank.
 Majority of the respondent responded that the bank employees did not properly
handle the complaints of customer
.
 Majority of the respondents i.e. employees of the bank are satisfied with their duties
that they are assigned for
 Majority of the employees saws customer complaint on the service which is provided
by the bank.

 Most of employees of the bank responded that the bank did not formulate suitable
customer relationship management technique for attracting and retaining customers

 Majority of the respondents have seen weakness in the bank service providing system
 Most of the employees of the bank believe that the bank is effective in handling its
customer.

30
5.3 RECOMMENDATION

Based on the conclusion of the study the following recommendations are forwarded.

 The bank should keep customer satisfaction by providing better service with good
performance. In order to make them loyal the bank always needs to improve its service
providing mechanism with the daily requirement of its customer.
 In fact, majority of the respondents i.e. customer of the bank are satisfied with the
performance of the bank service providing system. But the bank should know the fact
that all satisfied customers are not necessarily loyal customers of the bank. Therefore the
bank should renew itself by showing the existing competitors otherwise; the customers of
the bank may shift to other competitors.
 Now a day’s many private banks use the duration of service giving time as a competitive
advantage. Therefore, the bank should length (increase) its service giving time
 The bank should increase the number of windows which provide service to reduce
service delays.
 Even though, majority of the respondents are satisfied with the duties which were
assigned by the bank but still there are few employees who are not satisfied with their
duties therefore the bank should use job rotation since the job is repetitive it is so boring.
 The bank is better to use modern technologies to fasten money transfer and service
delivery.
 The bank should give training for employees to improve their skill and knowledge in
providing quality service specifically how they can handle customer complain properly.
 The bank should increase switching cost, by differentiating its service from other
competitors this enable the bank to retain customer and to make them loyal.
 The bank didn’t have a good culture regarding customer compliant handling mechanism
so; the bank should properly collect customer suggestion, complains and also give
appropriate response in the right time.
 Even through direct to representation is the most widely used method to provide different
comments or suggestion for the bank. The bank should do a lot in email and free
telephone service which are fast complain collection mechanism from customer
 As we can recognize from customers and response of the manager. The bank should
differentiate its service from other competitors and it should also communicate and make
visible and meaning full to customer since the customer of the bank didn’t recognized the
efforts of the bank that the bank use to retain its customers.

31
  Majority of the respondents agreed that the bank management didn’t formulate suitable
CRM. This is because of the bank manager didn’t participate take input) from employs,
customers, of the bank therefore the bank should revise its technique by using some input
from customers, employs etc.
 The bank management should establish suitable customer relationship technique that can
retain existing customer of the bank and to make them loyal customer of the bank.
REFERENCE
 Antony Lawrence (2010), customer relation management, 2nd edition, himaly publishing
house, new Delhi.
 Best Rober J (2005), marketing based management, 4th edition, prints hall of India
 Bull. C (2003), strategic issues in customer relationship management implementations,
business management Journal.
 Buttle, F & Burton. J (2001), Journal of consumer behavior.
 Chauduuri, A & Hole brook. M (2001), the chain effects from brand trust and brand
effect to brand effect to brand performance journal marketing retrieved from http;//on
line, segepus.com.
 Dick, A & shall D. (2004), building & sustain profitable customer loyalty for the 21th c,
journal of retaing.
 Ellen Gifford (20020, customer relationship management principles, strategy & ideas
for effective customer relationship management. http://www. Business ball.com
 Esther A. Demly(2009), the impact of building customer loyalty as a means of sustaining
continuous organization growth in highly competitive retail market.
 Gee, R, Coates, G & Nicholoson, M (2008), understanding and profitability managing
customer loyalty. Marketing intelligence & planning.
 Gronroos. C(2007), service management and marketing: customer management on
service competition (3rd ed), England: Wiley Higher education.
 Kotler and Gary Armstrong (2005) (2006) (2008), principle of marketing, 11 th edition,
prentice hall of India pvt Ltd, New Delhi.
 Kothari (2004), research methodology, methods and techniques, 2nd edition New Delhi,
India.
 Kumer, V& shah. D (2004), building & sustaining profitable customer loyalty for the
21thc, Journal of retailing.
 Lewis, B& soureli, M. (2006). The Antecedents of customer loyalty in retail banking.
Journal of customer Behavior,
 Van Looy B. Gemines P & van Dierdonck, R. (2003), service management an integrated
approach (2nd ed ). Harlow, England prentice Hall.

32
 APPENDIX I

HAWASSA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF
MANAGEMENT

QUESTIONNAIRE FOR CUSTOMER

I am student of Hawassa university I am doing research paper to identify the problems of
customer relationship management and its impact on customer loyalty in case of commercial
bank of Ethiopia Yirgalem branch.

Objective of the research

The objective of this study is to identity the main customer oriented area that should be
addressed to improve the organizational performance with the need and requirement of
customers. And also, to identity the strength and weakness of the bank regarding, customer
relationship management.

Dear respondents; please fill in the listed questions with the help of the data collector as
genuinely possible. Your cooperation in this regard is very beneficial and complete responses
will be highly appreciated.

Instructions

1. No need to write your name as

2. Please put ’’X’’ in the box for closed-ended question
3. Please write your opinion freely for open-ended question
1. Sex
A. male B. female s
2. Age
3. Educational level
A. less than 12 B. certificate C. diploma
D. degree E. masters
4. Marital status

33
 A. married B. unmarried C. divorced
D. widow
5. Are you usual customer of commercial bank of Ethiopia Yirgalem
branch
A. yes B. no

6. How often do you use the bank?

A. always B. sometimes C. irregularly D. often
7. Does bank provides you a means to complain?
A. yes B. no
8. Which method you use to provide comment for the bank?
A. suggestion book
B. E-mail
C. telephone
D. directly to representative
9. Are you satisfied with the performance of the bank service provided?
A. yes B. no
10.If your answer for no 9 is ‘no’ please write the
reason.--------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------
11.Do you think you are loyal customer of the bank?
A. yes B. no
12.Does the bank employee handle customer complaints properly?
A. yes B. no
13.What is the strength of the bank regarding customers point of
view?---------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
-----------------------------------------------------------------
14.What is the weakness of the bank in providing
service?-------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
34
 ----------------------------------------------------------------------------------------
--------------------------------------------------------------

APPENDIX II
HAWASSA UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF
MANAGEMENT

QUESTIONNAIRE FOR EMPLOYEE

I am student of Hawassa university I am doing research paper to identify the problems of
customer relationship management and its impact on customer loyalty in case of commercial
bank of Ethiopia Yirgalem branch.

Objective of the research

The objective of this study is to identity the main employee oriented area that should be
addressed to improve the organizational performance with the need and requirement of
customers. And also, to identity the strength and weakness of the bank regarding, customer
relationship management.

Dear respondents; please fill in the listed questions with the help of the data collector as
genuinely possible. Your cooperation in this regard is very beneficial and complete responses
will be highly appreciated.

Instructions

1. No need to write your name as

2. Please put ”X” in the box for closed-ended question
3. Please write your opinion freely for open-ended question

1. sex. Male. Female.

2. Age

Less than 24 years Between32-40years

Between 24- 32 years Above 40 years

35
3. How long have been working in the bank?

Less than one year Between 3-5 years

Between 1-3 years Above 5 years

4. Are you satisfy with the duties that you are assigned by the bank?

Yes No

5. Have you ever seen customer complain in your bank or service provided?

Yes No

6. Does the bank management formulate suitable CRM for retaining the existing customers

Yes No

7. Do you have seen any weakness in the bank in providing service to its client ?

Yes No

8. Is the bank is effective in handling its customer?

Yes No

9. What are the determinant factors that enable the bank to retain its existing customers?

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36
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