Abstract:
The existence of any organization depends on its customers. Customers are the source of profits
to be earned by a profit making organization. Due to the more and more fierce competition in
today’s business, many companies are required to build long-term profitable relationship with
customers and to achieve customer loyalty. Therefore, relationship marketing has become more
and more important since last decade of 20th century, especially in service industry. There are
many different relationship marketing dimensions implemented for retaining customers’.
Therefore, this study is aimed to explore the impact of relationship marketing (trust, commitment,
conflict handling, and empathy) on customer loyalty, by focusing on the Dashen Bank Jimma
District. Theoretical framework was used as a guideline to test the relationships between
relationship marketing dimensions and customer loyalty. A quantitative method which is crosssectional study with deductive approach and qualitative approach also chosen in this research to
used. In order to collect primary data, a self-completed questionnaire was designed and was
randomly given to the customers of the district. In addition to questionnaire, semi- structured
interview questions were prepared to get information from the organization which is analyzed
qualitatively. The SPSS version 16.00 for windows was used to process the primary data were
collected through questionnaire. The findings show that relationship marketing dimensions have
impact on customer loyalty. All the independent variables are positively and directly related to
customer loyalty particularly in Dashen Bank Jimma District and in general in banking industry.
The relationship between relationship marketing and customer loyalty is significant. Therefore,
the bank branches should make the whole system work with customers, not in opposite of
customers. And also they are expected to invest more on attracting new customers and retaining
the existed ones with regard to relationship marketing to increase customer loyalty.
