The Effect of Relationship Marketing on Customer Loyalty In The Case of Selected Private Banks in Ethiopia

Abstract

This research was conducted to investigate the effect of customer relationship marketing on customer loyalty in case of selected private banks. The data was collected through the five type likert scales using questionnaires. The questionnaire were physically distributed to 228 Wogagen, Dashen and Awash Banks’ customers and interview questions were distributed to managers and supervisors of selected branches from the three banks. Descriptive statistics analysis tools such as percentages, mean and standard deviation and the inferential statistics methods like correlation analysis and linear regression model were used to present and explore the overall characteristics of the data and to extract important information from the data. The linear regression model result showed that the factors like trust, communication, commitment and conflict handling were statistically significant at 5% of level of significance and all of them had positive effect on customer’ loyalty and correlation of all the pillars with customer loyalty were significant and strong positive. Communication and trust were the most crucial factors as compared to the other two, so the banks must check and upgrade the communication skill and work hard to upgrade its trust too in order to increase the profitability of banks to the optimum. The concerned bodies must give due attention towards the determinant factors in order to upscale the marketing relationship of the three private banks at study area. Further research on relationship marketing should be done by adding more pillars of relationship marketing.