Ejigayehu Tadesse Library

THE EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT ON
ORGANIZATIONAL PERFORMANCE OF SELECTED PRIVATE AND

COMMERCIAL BANKS IN GONDAR TOWN
UNIVERSITY OF GONDAR
COLLEGE OF BUSINESS AND ECONOMICS
SCHOOL OF MANAGEMENT AND PUBLIC ADMINISTRATION
DEPARTMENT OF BUSINESS MANAGEMENT
ATHESIS SUBMITED TO UNIVERSITY OF GONDAR, COLLEGE OF BUSSINESS

AND ECONOMICS, DEPARTEMENT OF MANAGEMENT FOR THE PARTIAL
FULFILLMENT OFTHE REQUIREMENTS OF THE DEGREE OF MASTER IN
BUSINESS ADMINISTRATION (MBA PROGRAM)
BY:
EJIGAYEHU TADESSE
IDNO: 06122/13
ADVISOR: ASMAMAW ARGETA (PHD)
AUGUST, 2022
GONDAR, ETHIOPIA
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DECLARATION
I,Ejigayehu Tadesse , declared that this research thesis entitled “the Effect of Customer
Relationship Management on Organizational performance of Selected Private and Commercial
Banks in Gondar Town” submitted to the school of post graduate studies is my original work and
has not been presented for a degree in any other university. All sources of materials used in
undertaking this thesis have been duly acknowledged.
I understand that non-adherence to the principle of academic honesty and integrity,
misrepresentation/fabrication of any idea or source will constitute sufficient ground for disciplinary
action by the university and can also revoke penal action from the source which have not been
properly cited or acknowledged.
(Researcher‟s Name) Signature Date
Ejigayehu Tadesse __________________ _________________
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STATEMENT OF CERTIFICATION
This is to certify that this thesis prepared by Ejigayehu Tadesse (Name of researcher)
“Comparative Study on the Effect of Customer Relationship Management on Organizational
performance of Selected Private and Commercial Banks in Gondar Town”, has been submitted to
faculty of business and economics, school of graduate studies for examination with my approval
as the college advisor.
(Advisor‟s Name) Signature Date

Asmamaw Argeta (PhD.)
__________________ _____________
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APPROVAL SHEET
We the examiners board approve that this thesis has passed through the defense and review
process
Comparative Study on the Effect of Customer Relationship Management on Organizational

performance of Selected Private and Commercial Banks in Gondar Town.
By
Ejigayehu Tadesse (name of researcher)
Approved By Board of Examiners
___________________________ __________________________
Advisor Signature
___________________________ __________________________
Internal Examiner Signature
___________________________ ___________________________
External Examiner Signature
__________________________ __________________________
Chair Person Signature
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ACKNOWLEDGEMENTS
First and foremost, I would like to thank God for giving me health, peace and an
opportunity to pursue a post-graduate program.
I would like to extend my special gratitude to my Advisor, Asmamaw Argeta (PhD.) for
his patience, guidance, critical comments and understanding me throughout the work of
this study. I really appreciate him for his politeness, punctuality, unreserved help and
being a role model as well.
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Table of Contents
Contents Page
ACKNOWLEDGEMENTS ........................................................................................................... iv
Table of Contents ............................................................................................................................ vi
List of table ..................................................................................................................................... 1
List of figure ................................................................................................................................... 3
ABBREVIATION/ACRONYMS ................................................................................................... 4
ABSTRACT .................................................................................................................................... 5
CHAPTER ONE ............................................................................................................................. 6
INTRODUCTION .......................................................................................................................... 6
1.1. Background of the Study ..................................................................................................... 6
1.2. Statement of the Problem ..................................................................................................... 9
1.3. Research Question ............................................................................................................. 11
1.4. Objectives of the study....................................................................................................... 11
1.4.1. General objective ........................................................................................................ 11
1.4.2 Specific objectives ....................................................................................................... 11
1.5. Significance of the Study ................................................................................................... 12
1.6. Scope of the Study ............................................................................................................. 12
1.7. Organization of the study ................................................................................................... 12
CHAPTER TWO .......................................................................................................................... 13
LITERATURE REVIEW ............................................................................................................. 13
2.1. Theoretical Review ............................................................................................................ 13
2.1.1. Definition of Customer Relationship Management .................................................... 14
2.1.2. Customer Relationship Management in Banking Sector ................................................ 15
2.1.3. Components of CRM ...................................................................................................... 16
2.1.3.1. Key customer focus...................................................................................................... 17
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2.1.3.2. CRM based organization.............................................................................................. 17
2.1.3.3. Knowledge management .............................................................................................. 18
2.1.4.4. CRM based on technology ........................................................................................... 19
2.1 .Empirical Review .......................................................................................................... 20
2.2 .Conceptual Framework ................................................................................................. 21
2.3 . Research hypothesis ..................................................................................................... 23
CHAPTER THREE ...................................................................................................................... 24
3. RESEARCH METHODOLOGY.............................................................................................. 24
3.1. INTRODUCTION ............................................................................................................. 24
3.2. Research Design................................................................................................................. 24
3.3. Population of the Study...................................................................................................... 25
3.4. Sampling Technique .......................................................................................................... 25
3.5. Method of Data Collection................................................................................................. 26
3.6. Data Analysis Method........................................................................................................ 26
3.7. Test of Validity and Reliability.......................................................................................... 27
CHAPTER FOUR ......................................................................................................................... 28
4. DATA PRESENTATION, ANALYSIS, AND INTERPRETATION ..................................... 28
4.1 Characteristics of the respondents .................................................................................. 28
4.1.1 Name of the organization ............................................................................................. 28
4.1.2 Gender of the respondents ........................................................................................... 28
4.1.3 Age of respondents ...................................................................................................... 29
4.2. Descriptive Analysis and Interpretation............................................................................. 31
4.2.1 Role of CRM at bank ................................................................................................. 32
4.2.1 The level of understanding or Knowledge about bank customers .............................. 33
4.2.2 The Means of using customer needs in decision making ............................................ 34
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4.2.3 The importance of customer opinion (suggestions) on service ................................... 34
4.2.4 Bank resolving complaints raised by customer ........................................................... 35
4.2.5 The Staff Relationship with customers of the bank ..................................................... 36
4.2.6 Identifying customer needs in the bank ....................................................................... 36
4.2.7 a customer lost due to failure on CRM strategies that hold account for longer period of
time ....................................................................................................................................... 39
4.2.8 the challenges on applying CRM strategies and rank from the highest to lowest ....... 39
4.2.9 Alternate marketing approaches of bank to attract customer and improve their service . 41
4.2.10. CRM service that attract new customers .................................................................. 42
4.2.11 CRM benefits bank performance and productivity .................................................... 42
4.2.12role of customer care in enterprise development ........................................................ 43
4.2.13Customer Care services in the organization................................................................ 44
4.2.14 Process of delivering customer service ...................................................................... 44
4.2.15 Mechanisms of the bank management ....................................................................... 45
4.3 correlation analysis ............................................................................................................. 46
4.4. Multiple regression analysis .............................................................................................. 47
4.4.1. Assumptions of Multiple linear regression ..................................................................... 47
4.4.2 Model fitness .................................................................................................................... 50
4.4.3 Goodness of ANOVA TEST ........................................................................................... 51
4.4.4. Regression Coefficients .............................................................................................. 52
CHAPTER FIVE........................................................................................................................... 55
5. SUMMARY, CONCLUSION AND RECOMMENDATION ................................................. 55
5.1 Summary ............................................................................................................................. 55
5.2 Conclusion...................................................................................................................... 55
5.3 Recommendations ............................................................................................................... 56
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REFERENCE ................................................................................................................................... i
Appendix I ...................................................................................................................................... 5
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List of table
3. 1sample distribution for each bank ………………………........................................25
3. 2 Cronbach Alpha value results……………………………………………………..27
4. 1 Name of the organization ……………………………………………………….28
4. 2 Gender of the respondents ……………………………………………………….28
4. 3Age of respondents ……………………………………………………………….29
4. 4 experience of the respondents ……………………………………………….29
4. 5Continue serving in bank the next 5 years ………………………………………..30
4. 6 Education level of the respondents…………………………………………… 30
4. 7 position of the respondents at the bank ………………………………………31
4. 8 Role of CRM at the Bank ………………………………………………………32
4. 9 The current Customer Relationship Management practice in the bank………….. 32
4. 10 the level of understanding or Knowledge about bank customers ………………33
4. 11 the Means of using customer needs in decision making…………………. 34
4. 12 the importance of customer opinion (suggestions) on service……………. 34
4. 13 Bank resolving complaints raised by customer………………………. ………35
4. 14 the Staff Relationship with customers of the bank ………………………………36
4. 15 identifying customer needs in the bank………………………………. ……….36
4. 16 the highest Numbers of years holding account by the customer with the bank…...37
4. 17 the lowest Numbers of years holding account by the customer with the bank
……………………………………………………………………………….38
4. 18 a customer lost due to failure on CRM strategies that holds account for longer period
of time………………………………………………………………………….. 39
4. 19 the challenges on applying CRM strategies and Rank from the highest to lowest
………………………………………………………………………………39
4. 20 the Alternate marketing approaches of bank to attract customer and improve their
service ……………………………………………………………………………….41
4. 21 CRM service that attract new customers ……………………………………….42
4. 22 CRM benefits bank performance and productivity ………………………42
4. 23 role of customer care in enterprise development ………....................................43
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4. 24 Customer Care services in the organization ………………………..44
4. 25 Process of delivering customer service………………………………… 44
4. 26 Mechanisms of the bank management ………………………………45
4. 27 correlations…………………………………………………….. ………46
4. 28 Collinearity Statistics…………………………………………………. 49
4. 29 : Durbin-Watson Autocorrelation statistics test………………………. 50
4. 30 Model summary………………………………………………………. 50
4. 31: ANOVA TEST………………………………………………………. 51
4. 32. Regression Coefficients……………………………………… ……….52
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List of figure
2. 1 Conceptual framework developed by the author……………….. 22

4. 1 normality assumption test ……………………………………….48
4.2 Linearity assumption test……………………………………………44
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ABBREVIATION/ACRONYMS
ATM Automatic Teller Machine

CBE Commercial Bank of Ethiopia
DB Dashen Bank S.C.
BB Birhan Bank
UB United Bank
AB Abay Bank
BIB Buna International Bank
CRM Customer Relationship Management
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ABSTRACT
This thesis conducted on the title “effect of customer relationship management on

organizational performance” in government and private selected banks. The major
objective of the study was to assess the relationship between effective customer
relationship management practice and organizational performance. The researcher
selected six banks as s t u d y area and employees and managers as defined target
population the total sum of the respondents were 91. After selecting defined target
population the researcher used stratified sampling method to gather all necessary
information to see the relationship between predictors and dependent variables. The
study utilized a descriptive research design to describe the overall customer
relationship management practice and banking customer relationship management
performance situation. The researcher used primary and secondary data as data
source whereas, table and percentage to show the distribution and frequency of
variables. Tables and charts were used to present the fact. To differentiate the
relationship the degree of their relationship among and between variables the
research used different parametric analysis tools like correlation and regression as
data analysis tools by using statistical package for social science version 20.0. This
research finding show there was strong positive correlation between banking
performance and effective CRM practice, compared with attracting new customers
banks are given less attention to retain current valuable customers, process and
strategy has statistically significant unique contribution in explaining variance of
banking performance. Based on the findings it can be concluded that to increase its
performance banks should focus on retaining current valuable customers than
attracting new customers because it enable to minimize organizational costs.
Therefore, the researcher was recommended to the organization banks should give
attention for both technology infrastructure and architecture and the like as CRM
process implementation tools.
Keywords: Customer Relationship Management, Bank performance, private bank,

government bank
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CHAPTER ONE
INTRODUCTION
This chapter presents a general background of the study, Objectives of the study as well as
statement of the problem. The chapter further describes the scope of the study, significance of
the study and organization of the study.
1.1. Background of the Study
The banking sector occupies one of the most important positions in the modern economic world
and essential for trade and industry. Thus, it is one of the major trading agencies. Although the
bank has been in one form or another for a very long time, the modern bank is of modern origin.
This is one of the consequences of the Industrial Revolution and the child of economic necessity.
Its presence is very useful for the economic activity and industrial progress of the country
(Limbad & Patel, 2019).
The global banking environment has also undergone a major transformation caused by the
changes in regulatory reforms and technological advancement that has escalated the level of
competition (Roy & Shekar, 2010). The advancements in technology have resulted in increased
customer awareness and demand for high quality banking services and value for their money.
The Kenyan banking sector is not exempted from this changing financial environment as it
experiences unprecedented challenges. The sector is highly competitive with the customer base
saturated with offers from all financial service providers (CBK, 2015).
Banks are service giving industries which give high emphasis to their service quality. The very
nature of service is a vital part of service giving organizations which service providers directly
contact with their customers through frontline staffs as service is one of the competitive
advantages of banks currently. In relation to this, the satisfaction of these employees plays great
role in rendering the quality of service to external customers. The importance of internal
marketing lies in motivating employees and encouraging them to offer super services to
customers who will improve the customer satisfaction of the company‟s services (Lings &
Greenly, 2005).
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Customer service holds great potential as a means for managing the internal work environment.
Focusing on people rather than on jobs can be a difficult transition, but it may be critical for the
survival and success of the organization (Cardy, 2001).
According to Coltman et al., (2011), CRM is increasingly important to firms as they seek to
improve their profits through long-term relationships with customers.
Reinartz et al., (2011) defined CRM as “a systematic process to manage customer relationship
initiation, maintenance, and Termination across all customer contact points in order to maximize
the value of the relationship portfolio.” He then further described it as CRM as “the building of
a customer-oriented culture by which a strategy is created for acquiring, enhancing the
profitability of, and retaining customers, that is enabled by an IT application, for achieving
mutual benefits for both the organization and the customers”. CRM processes include all the
activities that take place inside a company, which influence the customer relationship quality and
duration.
In today‟s competitive business environment, CRM and competitive advantage are considered
critical tools needed to compete efficiently and effectively (Thongrawd, et al., 2020). The main
objective of CRM is to maximize the longstanding development and profitability of the firm via
a good understanding of the customers‟ behavior (Alqershi et al., 2020).
A successful CRM system deployment requires from organizations not only to base their
processes on customers‟ expectations but also to adjust their attitude towards changes in inner
working, roles and responsibilities and more generally their structure (Sin et al., 2005).
Since 1991, Ethiopia has been taking various liberalization measures that are intended to enhance
the performance of banks in the industry. Some of the measures include lifting of the lending rate
cap, allowing private owners to invest in banks, introducing new financial instruments like
introducing treasury bills, inter-bank foreign exchange market and others. The financial sector of
Ethiopia is closed to foreigners though it has been opened for private Ethiopian investors. The
new policy has fundamentally changed the structure and functioning of the financial sector. Due
to this fundamental policy shift, different private financial institutions were emerging to the
market which contributed a lot for the economic growth registered in the recent past periods
(Boru, 2014).
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Privatization of state-owned banks, free entry of foreign banks, free market to interest rate and
Exchange rate, and improved regulatory and supervisory ability of the National Bank of Ethiopia
have remained as debatable issues by the concerned international organizations and professionals
of the sector. Hence, the structure of the banking sector still remains the main agenda of
discussion. Despite the major changes made by the government. The government of Ethiopia
has a firm stand on the matters stated, since the policy of the government is rigid toward the full
liberalization of the sector (Yirga, 2017).
A bank can differentiate itself from competitors by providing high quality customer service
(Naeem et al., 2009).Employee Relationship is defined as a relationship between employer or the
representative manager and employees, aimed towards maintaining commitment morale and trust
so as to create productive and secure workplace environment (Bajaj et al., 2013).
Dohnal (2002) further defines CRM as a method of searching for customers; creating, sustaining,
and nourishing long-term relationship with them; and when the need arises, terminating
economic relationship with customers for mutual benefits of customers and also the organization.
Therefore, CRM is a method of continuously collecting customer‟s information to enable a
company knows their requirements and purchasing habits, and utilizes them for mutual profits.
It is important to understand the term performance to properly explain the meaning of bank
performance. Performance is here conceived as the process of carrying into execution or
achievement; or accomplishment of specific activities as per targets (Mundi, 2019). „Bank
performance‟ may be defined as the reflection of the way in which the resources of a bank are
used in a form that enables it to achieve its objectives (Mundi, 2019).
The financial system of Ethiopia is underdeveloped. There is no stock exchange and of the 19
banks that exist, three state owned banks dominate the sector (Brook, 2015). The National Bank
of Ethiopia is the country‟s central bank. The state‐owned Commercial Bank of Ethiopia is the
largest bank in Ethiopia and controls 2/3 of the assets of the entire banking system. The Central
Bank has a monopoly on all foreign exchange transactions and supervises all foreign exchange
payments and remittances (UNDP, 2015).
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1.2. Statement of the Problem
In today‟s market Banks must strive to establish strong relationship with customers in order to
continue to compete (Hellen, 2016). The competitive advantage of customer relationship
management lies in learning to win, retain and grow customers better and more organized than
their competitors. Customers should be seen as an integral part of the business, and their needs
must be met specifically to achieve significant customers, customer satisfaction and customer
retention. This indicates that customer relationship management helps to establish, build and
maintain customer relationships, increase customer satisfaction and improve the level of
customer retention. Effective CRM practices leads to better organizational performance by
maximizing marketing effectiveness (Chege, 2013).
Banks had problems maintain existing customers and gaining new customers. Ugarahhahuman et
al., (2011) found that most banks use customer relationship management tools to gain more
customers and maintain relationships with existing customers. Banks, on the other hand, realize
that the magic formula for success in such a competitive environment is to focus on maintaining
relationships with customers. As researcher observed, the banks focus on new customers rather
than keeping existing customers, but in fact there is a clear possibility of losing existing
customers.
Secondly, banks are facing high competition in the banking sector, liberalization has led to the
growth of new banks being created, which will further increase competition .And increases in the
number of new entrants and customer requirements have intensified competition among
commercial banks in Ethiopia (NBE Banking Amendment Number, 1159/2019). As we are in an
in interconnected world, competition between companies has become tougher and tougher and
creating an environment of sustainable change, gaining and capturing customers has become
crucial to the success of any organization. This encouraged commercial banks to differentiate
their services using customer relationship management.
Many banks are still following the traditional ways of marketing and only few banks are making
attempts to adapt CRM. The role of CRM is quite different and distinguishable to traditional type
of Marketing CRM participate not only in Marketing but also in implementing the business as a
strategy to acquire, grow and retain profitable customers with a goal of creating a sustainable
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competitive advantage. Particularly in banking sector, the role of CRM is very vital in leading
the banks towards high level and volume of profits. However, there is a huge gap in supporting
customer relationship management with technology due to lack of skilled human resources.
Today, due to modern and sophisticated means of service such as the Internet, mobile banking
and card banking customer around the world are increasingly aware and prioritizing various
products and services. They now realize the value of their customers and this need motivates
banks to seek solutions through technology. This has led to the need for banks to differentiate
their through CRM that more profitable clients are attracted and retained (Thuo et al., 2011).
CBE has given due attention and high priority to credit management processes.
Subsequently, customer relationship managers were assigned to the credit management process
only to meet the demands of credit customers. The work of the Customer Relationship Manager
for credit management processes has almost reduced the concept of CRM at the corporate level.
In other words, the scope of customer relationship management is arbitrarily defined only in the
sense that it can meet the demand of credit customers. Focusing on no other areas of customer
service, such as banking business operations has led to a gap in CRM practices CBE credit
procedure, (CBE, 2016)
Other challenges poor customer relationship management practices includes knowledge gap,
technology gap and lack of responsible employee for customer relationship management
practices and delivering service not based on understanding customer need impact on
organization performance Xie,(2011).Studies on CRM and banking done in Ethiopia have not
focused on CRM and its effect on Organizational performance. As, researcher tried to refer
different published paper such as the impact of relationship marketing on loyalty Addis Ababa
University (Shifera, 2011). He was confirmed that relationship marketing has effect on loyalty
and positively related to customer loyalty in Bank of Abyssinia.
Esubalew (2018) investigated the effect CRM on marketing performance in four star hotels. He
was investigated effect of CRM practices namely key customer focus, Knowledge management,
CRM based organization and CRM based technology on four hotels in Addis Ababa and found
that CRM practices explained marketing performances. According to his Finding CRM practice
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resulting low hotel marketing performance. This shows CRM has been faced with challenges.
Therefore, there was a scarcity of research conducted on this topic independently and in detail
before to indicate the effect of CRM on organizational performance in Ethiopia, and no
identified challenges associated with CRM Practices. Therefore there is need to study on the
effect of customer relationship management on organizational performance of selected
commercial and private banks in Gondar town.
1.3. Research Question

1. What is the Effect of effect of key customer focus on organizational performance
in selected private and commercial banks in Gondar town?
2. To determine the effect of CRM organization on organizational performance in
selected private and commercial banks in Gondar town?
3. What is the effect of technology based CRM on organizational performance in
4. What is the effect Knowledge Management on organizational performance in
1.4. Objectives of the study
1.4.1. General objective
The general objective of this study was examined effect of customer relationship management on
performance of commercial banks and private banks of Ethiopia operating in Gondar town.
1.4.2 Specific objectives
Based on the general objective of the study, the following specific objectives were developed:
1. To Assess the effect of key customer focus on organizational performance in selected
private and commercial banks in Gondar town
2. To determine the effect of CRM organization on organizational performance in selected
private and commercial banks in Gondar town
3. To investigate the effect of technology based CRM on organizational performance in
selected private and commercial banks in Gondar town
4. To determine the effect of Knowledge Management on organizational performance in
selected private and commercial banks in Gondar town
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1.5. Significance of the Study
This study will help banks in study area as well as at country level to enhance customer
loyalty and satisfaction, which can contribute to improving the foundation for growth of
the banking sector and narrow the gap. The finding of this thesis research will provide
information to the management of commercial banks to better satisfy their customers,
respond to their needs on timely manners ,show how they can increase the relationship
between customer and service offering organization and thereby increase their market
share More specifically, the result of this study will provide valuable inputs and directions
for the banks to consolidate their marketing strategy, organizational productivity, and
customer knowledge management in order to increase their market performance by
pinpointing the needs of customers with respect to advanced technologies.
The study will also provide directions about the types of technology based service in light
of its opponents and address to existing gape in the banking sector in different categories.
1.6. Scope of the Study

The study focused on the Comparative Study on the Effect of Customer Relationship
Management on Organizational performance of Selected Private and Commercial Banks in
Gondar Town with purpose of providing information on how well banks are using Customer
relation management strategies to engage with their customers and the willingness of the client to
follow along in this engagement. The following six major bank branches such as Commercial
Bank of Ethiopia (government owned), Abbay bank, Unity bank, Buna bank, Dashen Bank and
Birhan Banks will be used for this study . The study is limited Gondar Town Amhara regional
state due to the following constraining factor such as time, content, financial constraint, and
limited resource.
1.7. Organization of the study
The first chapter was introductory of the study which discuss background information, the main
statement of the problem, objectives of the study, significance of the study, scope of the study,
and limitation of the study and research hypothesis, Chapter two covers Related literatures,
chapter three deals with the methodology part and Chapter four data analysis and presentation
and lastly Chapter five deals conclusion ,recommendation and suggestions.
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CHAPTER TWO
LITERATURE REVIEW
2.1. Theoretical Review
The IDIC model (Identifying, differentiating, interaction and customizing) is one of the
most common CRM-related models. The IDIC model was developed by Peppers and
Rogers (2004). According to the IDIC model, companies must take four steps to build a
closer face with customers. Identifying the company's customers and build a deeper
understanding of them. Identifying their customers to see which of them are more
important now and which contributes the most to the future. Differentiating may allow
companies to develop and implement customer-oriented strategies designed to meet the
unique needs of individual customers.
Clients represent different levels of value in a company and their needs are very different
from the business. He also said that the job differentiating customers will involve the
business in separating its customers by their importance to the company and what their
needs are. Interaction with customers to ensure that companies understand customer
expectations and their relationships with other suppliers or products. Therefore,
companies need to improve the performance of their relationship with customers. Each
subsequent customer contact must take place in the context of all previous relationship
with that customer.
Customizing should take the place of the latter. Effective customer interaction provides a
better understanding of customer needs. Customize delivery and communication to ensure
customer expectations are met. Indeed, a company needs to change a certain aspect of its
behavior toward its customers, depending on the needs of the individual and his or her
value. To involve the customer in a relationship, the company needs adjust its behavior to
meet the expressed needs of the customer. This may include “customizing the product in
bulk part of its service.
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2.1.1. Definition of Customer Relationship Management
There is no standard definition for customer relationship management. Many definitions

have been given to define customer relationship management (CRM).
Suifder, (2001) defined CRM is an organization's approach to understanding customer behavior
to attract customers. Christopher, (2003) noted “CRM is information that helps companies
understand customer needs and evaluate their behavior when compared to operating procedures”.
(Payne, 2004) defined “CRM is the whole process of retaining profitable customers”.
However, Baduri (2005) argues the misconceptions about CRM that in some banks: CRM is not
understood as a popular marketing strategy, expensive software product, and a new way of data
collection. CRM is not one of these; it is a simple practice that puts customers at the heart of
business processes, operations, and culture to improve customer satisfaction with the service and,
in turn, enhances the commercial performance of banks. She also suggests that an effective CRM
strategy aims to understand customer needs and integrate them with people, technology, and
business processes.
Therefore, the definition of CRM is best suited for this research in the context of the bank; CRM
is a practice and supports a business strategy to build long-term, profitable relationships with
customers Ling and Yen, (2001).The main purpose of CRM is to retain existing customers and
improve customer value by better understanding the needs and preferences of each customer,
providing customized services using well-organized resources. CRM enables banks gain
competitive advantage by the knowledge of customer behaviors through creating continuous
customer communication and using information and insights gained from all customer contact
points (Payne, 2004). Banks uses CRM strategies to be competitive advantages and to overcome
faced challenges in all aspects, especially market competition, technological innovation and
diverse customer needs. Today, introducing the best performance on marketing is of paramount
importance management and they strive to achieve high performance by exploiting the various
practices most widely used by CRM.
It is considered to be one of the most innovative ways to help build customer base to meet the
needs of market competition (Mylonakis, 2009). Banks and other small financial services
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providers therefore understand the importance of Customer Relationship Management (CRM)
and its ability to help them find new customers, retain existing ones, and increase their value for
life. Banks also understand that CRM is a solution to help them maintain long-term relationships
with their customers.
According to Xu, et al. (2002) CRM has enhanced banks' ability to understand the current needs
of their customers more accurately and to help them understand how their customers behave, as
they did in the past, and what they plan to do in the future. Doing so has enabled banks to
develop practices based on individual customer preferences to meet the needs of their customers.
Customer information is important to banks and the prudent use of that information can create
long-term customer relationships with Crosby (2002). Such relationships can bring several
benefits to banks because long-term customers are less expensive to use and more efficient
relationships do not require resources
2.1.2. Customer Relationship Management in Banking Sector

Over the last few decades, technical evolution has highly affected the banking industry. For more
than 200 years, banks were using branch based operations. Since the 1980s, things have been
really changing with the advent of multiple technologies and applications. Different
organizations got affected from this revolution; the banking industry is one of it (Sherif, 2002).
In this technology revolution, technology based remote access delivery channels and payment
systems surfaced. ATM displaced cashier tellers, telephone represented by call centers replaced
the bank branch, internet replaced the mail, credit cards and electronic cash replaced traditional
cash transactions, and interactive television will replace face-to-face transactions (Sherif, 2002).
In recent years, banks have moved towards marketing orientation and the adoption of
relationship banking principles. The key motivators for embracing marketing principles were the
competitive pressure that arose from the deregulation of the financial services market particularly
in India. This essentially exposed clearing banks and the retail banking market to increased
competition and led to a blurring of boundaries in many traditional product markets (Durkin,
2004).
The bank would need a complete view of its customers across the various systems that contain
their data. If the bank could track customer behavior, executives can have a better understanding,
15
a predicative future behavior and customer preferences. The data and applications can help the
bank to manage its customer relationship to continue to grow and evolve (Dyche, 2001).
Kotler and Armstrong 2007 defined CRM as the process to establish and maintaining a
profitable long-term relationship with customers through satisfaction valuable service providers.
So it can be said that CRM is a company business strategy to maintain long-term relationships
with consumers, so it will provide added value for both parties.
Khodakarami and Chan (2014) point out that technologies used in CRM seek to automate
processes in diverse areas such as management and analysis, customer support, marketing, and
sales.
Iriqat and Abu Daqar (2017) investigate the impact of CRM on Long-term Customers‟ Loyalty
in the Palestinian Banking Industry, they found that there is a positive relationship between long-
term customers‟ loyalty and CRM System Integration and Employee‟s Behavior clarified 48.2%
of the variance in long-term customers‟ loyalty.
Padmavathy et al., (2012), in turn, examined the effectiveness of customer relationship
management in the banking sector, as well as the relationship of CRM and technology-
orientation, reliability, process-driven approach, customer experience, and organizational
commitment.
Customers‟ satisfaction plays various important roles in the sustainability and success of
business organizations. For example, customer satisfaction provides organizations with a leading
measure of customer loyalty; repurchase intentions, and advocacy for the product or organization
(Jacka and Keller, 2013).
2.1.3. Components of CRM

According to Sin et al., (2005) CRM practice contains a number of important elements in
organization. Each element has a significant effect on the organizational performance of
the bank. Based on related literature, CRM was highly regarded as a multidisciplinary
case structure consisting of four broad components: Key customer focus, CRM-based
organization, information management, and CRM-based technologies
16
2.1.3.1. Key customer focus
The key customer focus is a subset of CRM, which manages critical customers or
important customers of the business (Homburg et al., 2002). the growing emphasis on key
account management is one of the most fundamental changes in the marketing of
companies today.
The best customers do not get their fair share and some companies oversee marginal
customers (Renzart et al., 2004). Key customer activities include: special pricing, product
customization, providing specialized services, providing better customers, and adding key
customers through customized offers. Hence the key elements of this dimension are
personal attention, spatial care, and value added service.
2.1.3.2. CRM based organization
Organization organizing the whole around Customer relationship management practices.

Changes in the way organization organize themselves as organization change from
product based to customer centric culture and business process conduced .Organizations
need to consider the organizational challenges inherent in any CRM approach (Agarwal et
al., 2004). The key consideration organization around CRM is as follows: organizational
structure, organization-wide commitment to resources, and human resource management
(Sadek et al., 2011).
Organizational Structure: CRM requires overall organizational functions to build and

enhance strong customer relationships. Additionally customer relationship includes the
formation of process teams, customer-centric teams, and cross-functional teams. All
structural designs require strong inter-functional coordination and integration. The
organizational structure should be flexible and, if necessary, restructured to improve the
coordination of customer-centric values and customer-centric, cross-functional teams.
Organization wide resources commitments are follow the design of the resource
organization structure and the proper integration of those components. Furthermore,
marketing resources and resource promoting service excellence should be in place.
17
Customer acquisition, development, retention and reactivation make the organization‟s
commitment successful through customer requirements (Nycomp, 200).
In addition, there must be an organizational commitment of resources, consistent

endeavors and comprehensive efforts in all organizational functions to provide a flow of
customer results (Ahmed etal. 1990). human resource management is considered to be the
main factor ticking the organization, without human resource management nothing can be
done in the organization and goal of every organization is to attract and retain the best
ones (Alkalha et al., 2012).
When employees leave the company, it not only reduces the number of employees, but
also loses the knowledge and experience they have accumulated over the years (Obidat et
al., 2017). The key to CRM are integration people the technology as well processes but
employees who are building the blocks for customer relations.
2.1.3.3. Knowledge management

From CRM's point of view, knowledge can be defined as the information used from
customer. It includes the collection and analysis of customer transactions,
communications, service experience and purchasing behaviors to important customer
information that is later used to predict future customer usage patterns (Sin et al, .2005).
And knowledge management is developed within the organization to manage customer

relationships profitable. Managing customer knowledge can be a competitive tool for
firms. Good knowledge management plays an important role for CRM in this regard:
information is important in understanding customer needs, product development, and new
service delivery, providing a single and integrated customer perspective, calculating
customer life time, customizing transactions and establishing and maintaining
relationships. Pepered et al., (2000) note that to deliver customized service and
customized products, banks should use customer information.
18
CRM strategies require organizations to adopt for the use of information and sharing. To
make a profit, customer information must be collected by contacting or contacting points
in all functional areas of the firm and converted into customer information (Chege, 2013).
Knowledge management therefore empowers organizations to come up with new ideas
for creating and developing new products and customer information services developed
from CRM and its related programs.
2.1.4.4. CRM based on technology

CRM based technology plays an important role in CRM in adding to firm intelligence. In
fact, advances in information technology have the potential to collect, analyze, and share
customer information. CRM seeks information technology strategies that use computer
technology to build relationships (Harding et al., 2004) such as data warehouses, and data
mining that enable firms to provide greater customization with better quality at lower cost.
In addition, it helps employees in all areas of communication to serve customers in a
better way. Oconnor and Galvin described many aspects of IT CRM deployment
including data bases and repositories. It empowers organizations to build strong personal
relationships with their customers and to understand their needs. This was confirmed by
Shaw who believes that the amount of information held by customers today is alarming
but goes on to say that the use of the impact of the information available on banking
marketing performances. Liu, (2007), argues that a proper CRM system requires banks to
invest in IT infrastructure and specialized software and IT hardware. Software used in
communication channels to help bank employees communicate easily with their
customers, record, track, and analyze Customer communication. Similarly, software are
used to share information between employees, with the help of IT hardware and software,
banks can easily store and retrieve valuable customer information, which continues to
help them evaluate each customer value. The IT management component in banks is
particularly important when using different management strategies. Kotler and Keller
(2009) incorporating banking information technology services are defined as an integrated
collection of information and strategies through supporting hardware and software in
which an organization collects and translates relevant information from business and
environment and transforms it into a marketing action. Talvinen (2005) IT is built on three
19
main components namely Database, Hardware, and Software Systems. Hardware a device
used as a decision-making tool, including computer hardware, communications, ATMs
and other computer hardware (Ali 2009). Software applications are available to the end
user, the main categories of software and application software.
2.1 .Empirical Review
Reinartz et al (2004) Conducted study on Customer relationship management practices

includes methods used by firms to enhance and strengthen existing customer
relationships. The company‟s main goal is to retain existing customers; up sell and cross
sell their products or services with new customized and personalized offerings and referral
management.
Pepered, etal. (2000) study on customer relationship management in financial services noted that
in order to deliver customized and customized products, banks must use customer information.
The information in this study takes two forms: the information the customer has about issues
related to the product or services they are interested in buying, and the information the company
should have that can be used to help the customer make a purchase decision.
(Crosby & Johnson, 2005) state that clients approach knowledge management with the aim of
learning from customers and understanding their needs. To create enhances customer
relationships firms need to develop knowledge management that are about desirability of
prospects, customer defection intentions, needs and customer preferences, which may benefit
existing customers.
CRM Based organization assists banks in differentiating resources allocation different to types of
customers. CRM's strategic vision emphasizes the fact that resources designed for relationship
building and management efforts, should be allocated according to the value of customer life in
the factory. Ryals, (2003) found that greater profits can only be achieved if the resources
available are invested in customer relationships that provide the desired profit. Firms must
continue to ensure the quality of life of their customers and invest in the creation and acquisition
of a combination of resources that enable them to change the behavior of individual customers or
customer groups on an ongoing basis.
20
Focus on Key Customers the Research agrees that it is not all customers, who are of equal value
to the firm. Therefore, it is important for firms to identify their right customers so as to ensure
profitable allocation of resources (Kotler et al., 2009). Key customer focus involves offering
more personalized products and services to the more profitable customers in order to cultivate
long-term relationships (Kotheri & Armstrong, (2002).
Mohammad et al. (2011) research aimed to empirically investigate the impact of relationship
marketing underpinnings (namely trust, commitment, communication, conflict handling,
bonding, shared values, empathy, and reciprocity) on customer loyalty in the banking industry. A
survey was conducted, collecting data through a questionnaire containing 34 items that was
completed by 384 randomly selected bank customers and multiple regression analysis was used
for data analysis. The results revealed that the all underpinnings of relationship marketing were
directly associated with customer loyalty and they had a significant effect on it. Therefore it is
reasonable to conclude that customer loyalty can be created, reinforced and retained by
marketing plans aimed at building trust, demonstrating commitment to service, communicating
with customers in a timely, reliable and proactive fashion, handling conflict efficiently, paying
attention to shared values, improving the empathetic and reciprocal abilities of the salespeople,
and developing strong bonds between buyers and sellers.
2.2 .Conceptual Framework

According to Das (2009), any discussion on RM would be incomplete without referring to CRM.
Therefore, this shows that CRM and RM have a strong similarity. Sin et al., 2005 cited by Das
(2009) support the above argument as CRM and RM are focused on individual buyer-seller
relationships, accept that these relationships are longitudinal in nature, and that both parties
benefit in the process. Business firms realize that marketing is a core element of management
philosophy and key to its success lies in focusing more and more on the customers. It is the
customer who decides where the firm is hedging. Customer satisfaction is an evaluation by the
customer, after buying their goods and services. The most popular view of customer satisfaction
in academia is that customer satisfaction is the judgment born out of the comparison of
repurchase expectations with post purchase evaluation of the product or service experience
21
(Kotler et al., 2012).CRM is a strategic business and process issue; not merely a technology
solution, as most often conceived in practice. The CRM process is a continuous learning process,
where information about an individual customer is transformed into a customer relationship
(Osarenkhoe and Bennani, 2007).The five key dimensions to measure CRM effectiveness
includes, “…organizational commitment, customer experience, a process-driven approach,
reliability and technology orientation”. CRM has become the core business strategy of these
organizations to enhance business performance (Padmavathy, Balaji, and Sivakumar, 2012).
The CRM determinants of customer engagement, customer interaction and competitor activities
directly influence retention of the organization. Social networks have become an essential tool
for communication in the current online business environment. Effective social networks will
support such organizations to communicate with the customers effectively and, as a result, it
ensures high level of customer retention. The Internet has become a widely used promotional
tool by every organization to portray corporate image, as well as assisting in communication
with existing and prospective customers. Implementing CRM thorough social networks is the
way forward for these organizations to gather and share information (Behravan and
sabbirrahman, 2012).
Key customer
Focus
CRM organization
Organizational Performance
Technology based
CRM
Knowledge
Management
2. 1 Conceptual framework developed by the author
22
2.3 . Research hypothesis
H1: Key Customer Focus has a positive and significant effect on bank performance.
H2: CRM organization has a positive and significant effect on bank performance.
H3: Technology-based CRM has a positive and significant effect on bank performance .
H4: Knowledge Management has a positive and significant effect on bank performance.
23
CHAPTER THREE
3. RESEARCH METHODOLOGY
3.1. INTRODUCTION
This chapter discuss about the methodology that are going to be used to conduct this study. The
general purpose of the study was to examine effect of customer relationship management on
organizational performance in selected private and commercial banks in Gondar town.
3.2. Research Design
The study employed descriptive and explanatory research design. Descriptive design
describes the existing practice in relation with customer‟s relation management with the
performance of the organization and in order to define the real problem and describe
factors, causes and challenges of performance of the organization of commercial banks
and private banks of Ethiopia operating in Gondar town. And Explanatory design was
used to examine and explain that relationship between variables in order explain problems
or events to estimate effect of CRM on of organizational performance.
24
3.3. Population of the Study
The definition of population was an identifiable total set of elements of interest being
investigated by a researcher. The populations of the study were staff working in the banks, eg.
Bank managers, relationship managers and front-line serving staff. Therefore based on the
sample size determination formula below the sample size were the 196 standardized, which are
Commercial Bank of Ethiopia (government owned), Dashen Bank , Buna international Bank,
Birhan Bank, Abbaye bank and unity bank. The questionnaires were distributed among
respondents.
N= = = 91 total number of respondent
Where n is the sample size, N is the population size, and e is the level of precision. By using this
formula at 95% confidence level and 5% level of precision.
Proportionate sample distribution for each bank

3. 1sample distribution for each bank
No Lists of banks Total population of each Sample size

bank
1 CBE(Guzara branch) 65 30
2 Abay bank 20 9
3 Unity bank 30 14
4 Buna international bank 15 7
5 Dashen Bank 43 20
6 Birhan Bank 24 11
Total 197 91
Source: survey result, 2022
3.4. Sampling Technique
The technique selected for this study was stratified sampling. Stratified sampling is appropriate
when the population is classified into different group/strata. In this study, public and private
commercial banks can be taken as strata.
25
3.5. Method of Data Collection
The data will be collected using both primary and secondary data to get sufficient
information. Source of the primary data were collected from respondents through
questionnaires and interviews and the secondary data will be collected from
company profile, other documents reference books related with the subject matter
studies and library publications.
The study will also adopt structured questionnaires and interviews to administer to collect
primary data from customer service managers The questionnaires were mainly both open
ended close ended questions that were coded and given to respondents. Secondary data
were collected from empirical evidences to supplement the finding of primary data.
3.6. Data Analysis Method
In order to analyze the examiner effect of customer relationship management on performance of

commercial banks and private banks the collected data were processed and interpreted using
SPSS version 26 and the Information analyzed were tabulated and analyzed were presented in
figure table and charts. Based on the conceptual model of the study expressed on above figure
mathematically the relationship between CRM dimensions and Bank performance is expressed
in the multiple regression equation below as:
Y = X0 +X1 (KCF) +X2 (CRMO) +X3 (CKM) +X4 (CRMBT) +Ei

Where: Y= Bank performance.
KCF = Key Customer Focus.
CRMO = CRM Organization.
KM = Knowledge management.
CRMBT = CRM Based Technology
X0= the constant parameter.
X1= Coefficient of Key Customer Focus.
X2= Coefficient of CRM Organization.
X3= Coefficient of Knowledge management.
X4= Coefficient of CRM based Technology
E= error term
26
3.7. Test of Validity and Reliability
Kothari (2004) defines validity as the most critical, which indicates the degree to which a study
measures what it is supposed to measure. In other words, is the study measuring what it is meant
to measure? The questionnaires were formulated to address specific questions that would provide
valid data rather than general questions.
Following the above reference, the questioners for the study were carefully designed and pre
tested secure consistent of questioners.
3. 2Cronbach Alpha value results
No Field Number of items Cronbach’s Alpha
1 CRM 5 0.931
organization
2 Technology. 5 0.895
3 Knowledge 5 0.888
Management
4 employee 4 0.933
performance
Total 19 0.932
Source: Survey (2022)
Based on the idea proposed by Hair, Black, Babin and Anderson, (2010) the higher the
Cronbach‟s Alpha value, the higher the internal consistency and based on their suggestion
proposed if the Cronbach‟s Alpha value is higher than 0.70, then it shows that the
reliability of measurement is high. All items applied to measure constructs were adopted
from validated sources which have an acceptable internal consistency. The above table
shows that the value of the Cronbach‟s Alpha of the study to measure constructs ranges
from 0.888 to 0.932. This indicates that the items used in the scale of this study are good
and have acceptable internal consistency.
Furthermore, the result of Cronbach‟s Alpha value for the overall variables used in this
study is 0.932 which is greater than the recommended cut-off level of 0.70 and considered
as good and acceptable consistency.
27
CHAPTER FOUR
4. DATA PRESENTATION, ANALYSIS, AND INTERPRETATION
The major purpose of this chapter is to present, analyze, and interpret the raw data which
collected from the respondents. The researcher collected raw facts from the respondent to
investigate the effect of customer relationship management practice for banking performance. To
organize the collected data the researcher used tables, graphs and different statistical tools mainly
the researcher focused in descriptive analysis of the data and relationship analysis (correlation) to
convert this data in to information. After grouping of the response the researcher also tried to
show the implication of the data to the user in the interpretation part next to each table.
4.1 Characteristics of the respondents
4.1.1 Name of the organization
4. 1Name of the organization
Name of the bank you are working Frequency Percent

Valid Commercial bank of Ethiopia (CBE) 30 33.0
Abay bank(AB) 9 9.9
United bank(UB) 14 15.4
Buna international bank(BIB) 7 7.7
Dashen bank(DB) 20 22.0
Birhan bank (BB) 11 12.1
Total 91 100.0
4.1.2 Gender of the respondents
4. 2Gender of the respondents
CBE Dashen(DB) United(UB) Birhan(BB) Abay (AB) Buna(BIB)

Fr % Fr % Fr % Fr % Fr % Fr %
Male 20 66.67 13 65 8 57.14 6 54.55 6 66.67 4 57.14
Female 10 33.33 7 35 6 42.86 5 45.45 3 33.33 3 42.86
Total 30 100.0 20 100 14 100 11 100 9 100 7 100
The above table shows us that the demographic characteristics of respondents for
CBE,DB,UB,BB,AB and BIB.91 questionnaires distributed to respondents, all of 91
questionnaires were properly filled and collected, of which 66.67%, 65%, 57.14%,
28
54.55%, 66.67%, 57.14% were males and 33.33%, 35%, 42.86%, 45.45%, 33.33%,
42.86% females respectively.
4.1.3 Age of respondents
4. 3Age of respondents
Age
United(UB Birhan(BB) Abay (AB) Buna(BIB)
CBE Dashen(DB) )
Vali 18-30 12 40 3 15 2 14.29 1 9.09 3 33.33 2 28.6
d 31-40 8 26.67 7 35 9 64.28 5 45.45 4 44.44 3 42.8
41-50 6 20 8 40 2 14.29 4 36.37 1 11.11 1 14.3
Above 50 4 13.33 2 10 1 7.14 1 9.09 1 11.11 1 14.3
Total 30 100 20 100 14 100 11 100 9 100 7 100
From the above table that the Respondents with age group age group 18-30(40%), (15%),
(14.29%), (9.09%), (33.33%), (28.6%), Respondents with age group between 31-40
(26.67%), (35%), (64.28%), (45.45%), (44.44), (42.8%) Respondents with age group
between 41-50 (20%), (40%), (14.29%), (36.37%), (11.11%), (14.3) and Respondents with
age above50 years (13.33), (10%), (7.14%), (9.09%), (11.11%) were CBE, DB, UB, BB,
AB and BIB respectively. among this table the majority of the respondent were found in
age group between 31-40. this indicates that the banks have young and productive
employees.
4. 4 experience of the respondents
Experience of the respondents

CBE Dashen United Birhan Abay Buna
Valid less than one year 5 16.67 1 5 1 7.14 1 9.1 1 11.1 1 14.29
1
1-4 10 33.33 6 30 3 21.43 2 18.18 2 22.2 2 28.57
2
5-9 12 40 12 60 6 42.86 3 27.27 2 22.2 2 28.57
2
above 10 years 3 10 1 5 4 28.58 5 45.45 4 44.4 2 28.57
4
29
Total 30 100 20 100 1 100 11 100 9
100 7 100
4
As far as work experience of the respondents is concerned in table 4.3%,
16.67%,5%,7.14%,9.1%,11.11%,14.29 percent of the respondents have less than 6 month
,33.33%,30%,21.43%,18.18%,22.22%,28.57 percent of the respondents 1 to 4 years of
working experience, 40%,60%,42.86%,27.27%,22.22%,28.57 percent of the respondents have
5 to 9 years of working experience. While 10%,5%,28.58%,45.45%,44.44%28.57Percent
respondents have above 10 years working experience in CBE,DB,UB,BB,AB and BIB.
4. 5Continue serving in bank the next 5 years
do you intended to continue serving in bank the next 5 years

Valid Yes 8 26.67 18 90 12 85.7 9 81.8 8 88.89 6 85.71
1
No 22 73.33 2 10 2 14.2 2 18.2 1 11.11 1 14.29
9
Total 30 100 20 100 14 100 11 100 9 100 7 100
Among the above table the employees continue serving in bank next 5 years were
26.67%,90%,85.71%,81.8%,88.89%,85.71% raised yes and 73.33%, 10%, 14.29%, 18.2%,
11.11%, 14.26% said no about the statement in CBE,DB,UB,BB,AB and BIB respectively.This
implies that the major employees in private bank they can continue their service in the next 5
years than the employees of government banks.
4. 6 Education level of the respondents
Education level of the respondents

Va Diploma 5 16.67 3 15 2 14.29 3 27.27 2 22.22 2 28.57
lid Degree 18 60 13 65 9 64.29 6 54.55 6 66.67 4 57.14
Masters and above 7 23.33 4 20 3 21.42 2 18.18 1 11.11 1 14.29
Total 30 100.0 20 100 14 100 11 100 9 100 7 100
As the data in table indicates 5 (16.67%) ,3(15%),2(14.29%),3(27.27%),2(22.22%) 2(28.57%)of the
respondent were diploma holders, 18(60%),13(65%),9(64.29%),6(54.55%),6(66.67%),4(57.14%) of
30
the respondents were first degree holders 7(23.33%), 4(20%), 3(21.42%), 2(18.18%), 1(11.11%),
1(14.29) of the respondents were master‟s degree and above holders in CBE,DB,UB,BB,AB, and
BIB respectively. the majority of the respondents were degree holders in the selected government and
private banks.
4. 7 position of the respondents at the bank
What is the Position hold at Bank?

Frontline staff/Teller 10 33.3 5 25 3 21.43 2 18.18 2 22.22 1 14.29
Operations/Back office staff 8 26.7 7 35 6 42.86 4 36.36 4 44.44 3 42.86
operation manager 5 16.7 6 30 3 21.43 3 27.27 1 11.11 1 14.29
branch manager 4 13.3 1 5 1 7.14 1 9.09 1 11.11 1 14.29
senior management 3 10 1 5 1 7.14 1 9.09 1 11.11 1 14.29
Total 30 100 20 100 14 100 11 100 9 100 7 100
As shown in the above table, 10 (33.3%),5(25%),3(21.43%),2(18.18%),2(22.22%),1(14.29%) of

the respondents are working in Frontline staff/Teller, 8(26.7%), 7(35%), 6(42.86%), 4(36.36%),
4(44.44%), 3(42.86%) of the respondents are working in Operations/Back office staff ,
5(16.7%), 6(30%), 3(21.43%), 3(27.27%), 1(11.11%), 1(14.29%) of the respondents are
operation managers, 4(13.3%), 1(5%), 1(7.14%), 1(9.09%), 1(11.11%), 1(14.29%) of the
respondents are branch managers and 3(10%),1(5%),1(7.14%),1(9.09%),1(11.11%),1(14.29%)
of the respondents are senior management staffs in CBE, DB, UB, BB, AB and BIB
respectively.
4.2. Descriptive Analysis and Interpretation
This portion of the research provides the overall insight of Customer relationship management
practice, the banks overall performance in implementing the strategy and general description of
the organization. The researcher used table and percentage to describe the situation.
31
4.2.1 Role of CRM at bank.
4. 8 Role of CRM at the Bank
Q1. What is Role of CRM at your bank? Rank

Valid Very crucial 5 16.7 20 100.0 14 100.0 10 90.9 8 88.9 6 85.7
Important 20 66.7 0 0.00 0 0.0 1 9.1 1 11.1 1 14.3
Not Important 5 16.7 0 0.00 0 0.0 0 0.0 0 0.0 0 0.0
Total 30 100. 20 100.0 14 100.0 11 100 9 100.0 7 100.
0 0
As the above table indicates that Role of CRM at the Bank very crucial was
16.7%,100%,100%,90.9%,88.9 ,85.7% ,important 66.67%,0.0%,0.0%9.1%,11.1%,14.3% and
not important 16.7% and the other private Banks 0.0% were CBE,DB,UB,BB,AB, and BIB
respectively .So the majority of the private bank respondents said very crucial the role of
customer in the bank bout the statement. This indicates that private banks more works in CRM
than government bank in Gonder city
4.2.2The current Customer Relationship Management practice in the bank
4. 9 The current Customer Relationship Management practice in the bank
Q2. Can you describe the current Customer Relationship Management practice in your bank?
Valid very good 5 16.7 16 80.0 10 71.4 9 81.8 7 77.8 5 71.4
Good 3 10.0 3 15.0 2 14.3 2 18.2 2 22.2 2 28.6
Satisfactory 22 73.3 1 5.0 2 14.3 0 0.0 0 0.0 0 0.0
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100. 7 100.0
As the above table indicates that the current Customer Relationship Management practice in the
bank very good was 16.7%,80%,71%,81.8%,77.8% ,71.4% ,good 10%,15 %, 14.3%,
18.2%,22.2%,28.6% and Satisfactory 73.3%,5%,14.3%,0%,0%,0% were CBE,DB,UB,BB,AB,
and BIB respectively .So the majority of the private bank respondents said very good the current
Customer Relationship Management practice in the bank about the statement. This indicates
32
that private banks current Customer Relationship Management were more practiced than
government bank in Gonder city
4.2.1 The level of understanding or Knowledge about bank customers
4. 10 the level of understanding or Knowledge about bank customers
Q3.What is your level of understanding or Knowledge about bank customers?

Val very well 3 10.0 5 25.0 5 35.7 1 9.1 5 55.6 4 57.1
id Moderate 4 13.3 11 55.0 4 28.6 3 27.3 2 22.2 2 28.6
Transactional based 12 40.0 3 15.0 5 35.7 6 54.5 2 22.2 1 14.3
Unfamiliar with 11 36.7 1 5.0 0 0.0 1 9.1 0 0.0 0 0.0
customer information
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.
0
As the above table indicates that the level of understanding or Knowledge about bank customers
very well was 10%,25%,35.7%,9.1%,55.6% ,57.1% ,moderate 13.3%,55 %, 28.6%,
27.3%,22.2%,28.6%, Transactional based was 40%, 15%, 35.7%, 54.5%, 22.2%, 14.3% and
Unfamiliar with customer information were 36.7%,5%,0%,9.1%,0%,0% were
CBE,DB,UB,BB,AB, and BIB respectively .So the majority of the private bank respondents said
very well the level of understanding or Knowledge about bank customers about the statement.
This indicates that private banks level of understanding or Knowledge about bank customers
were more understanding than government bank in Gonder city
33
4.2.2 The Means of using customer needs in decision making
4. 11 the Means of using customer needs in decision making
Q4.What are the Means of using customer needs in decision making?

V By feedback from 4 13.3 15 75.0 3 21.4 4 36.4 2 22.2 1 14.3
a products/service sold
li By customer queries 5 16.7 5 25.0 9 64.3 3 27.3 4 44.4 3 42.9
d at banking hall
By telephone 8 26.7 0 0.0 2 14.3 1 9.1 2 22.2 2 28.6
interview of customers
Not sure about it 13 43.3 0 0.0 0 0.0 3 27.3 1 11.1 1 14.3
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
Source: survey, 2022
As the above table indicates that the Means of using customer needs in decision making By
feedback from products/service sold was 13.3%,75%,21.4%,36.4%,14.3% ,22.2% , By customer
queries at banking hall was 16.7%, 25%, 64.3%, 27.3%, 44.4%, 42.9%, By telephone interview
of customers were 26.7%,0.0%,14.3%,9.1%,22.2%,28.6% and Not sure about it was
43.3%,0.0%,0.0%,27.3%,11.1%,14.3% CBE,DB,UB,BB,AB and BIB respectively .So the
majority of the private bank respondents said , By customer queries at banking hall Means of
using customer needs in decision making about the statement. This indicates that private banks
Means of using customer needs in decision making were more decided than government bank in
Gonder city
4.2.3 The importance of customer opinion (suggestions) on service
4. 12 the importance of customer opinion (suggestions) on service
Q5.What is your view on importance of customer opinion (suggestions) on service?

Most Definitely 7 23.3 10 50.0 4 28.6 6 54.5 4 44.4 3 42.9
Definitely 23 76.7 8 40.0 10 71.4 3 27.3 5 55.6 4 57.1
Not necessarily 0 0.0 2 10.0 0 0.0 2 18.2 0 0.0 0 0.0
34
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0

The importance of customer opinion (suggestions) on service. In this regard, 23.3%, 50%,
28.6%, 54.5%, 44.4%, 42.9% of the respondents said, Most definitely; 76.7%, 40%,
71.4%, 27.3%, 55.6%, 57.1% of the respondents definitely, 0.0%, 10%, 0.0%, 18.2%,
0.0%, 0.0% CBE, DB, UB, BB, AB and BIB respectively. However, definitely the
importance of customer opinion (suggestions) on service varies from customer opinion on
service. Among CBE, UB, BIB,AB, DB and BB, respectively.
4.2.4 Bank resolving complaints raised by customer
4. 13 Bank resolving complaints raised by customer
Q6. How did your bank resolving complaints raised by customer?

V Less than 12 hrs 0 0.0 10 50.0 5 35.7 2 18.2 3 33.3 2 28.6
al In 12hr 0 0.0 8 40.0 8 57.1 4 36.4 4 44.4 3 42.9
id Between12to24 hours 0 0.0 2 10.0 1 7.1 3 27.3 2 22.2 2 28.6
After 48 hrs 5 16.7
5 0 0.0 0 0.0 1 9.1 0 0.0 0 0.0
After 72 hours 10 33.3 0 0.0 0 0.0 1 9.1 0 0.0 0 0.0
Depends on complain type 15 50.0 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0
Total 30 100.05 20 100 14 100.0 11 100. 9 100 7 100.0
As the above table indicates that the bank resolving complaints raised by customer Less than 12
hrs was 0.0%,50%,35.7%,18.2%,33.3% ,28.6% ,In 12hr was 0.0%, 40%, 57.1%, 36.4%, 44.4%,
42.9%, Between12to24 hours were 0.0%,10%,7.1%,27.3%,22.2%,28.6%, After 48 hrs was
16.7%,0.0%,0.0%,9.1%,0.0%,0.0%, After 72 hours was 33.3%,0.0%,0.0%,9.1%,0.0%,0.0%
and Depends on complain type was 50%,0.0%,0.0%,0.0%,0.0%,0.0% CBE,DB,UB,BB,AB and
BIB respectively .So the majority of the private bank respondents said , the customer complain
answered with in less than 12hrs about the statement. This indicates that private banks resolving
complaints raised by customer were more resolved than government bank in Gonder city.
35
4.2.5 The Staff Relationship with customers of the bank
4. 14 the Staff Relationship with customers of the bank
Q7.What is the Staff Relationship with customers of the bank?

Valid Transactional 10 33.3 13 65.0 8 55.1 4 36.4 4 44.4 3 42.9
Personal 7 23.3 3 15.0 5 37.7 3 27.3 3 33.3 2 28.6
Interactive 8 26.7 4 20.0 1 7.1 3 27.3 2 22.2 2 28.6
Official 5 16.7 0 0.0 0 0.0 1 9.1 0 0.0 0 0.0
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
As the above table indicates that the Staff Relationship with customers of the bank Transactional
was 23.3%, 65%, 57.1%, 36.4%, 44.4%, 42.9%, Personal was 33.3%,15%,35.7%,27.3%,33.3%
,28.6%, Interactive were 26.7%, 20%, 7.1%, 27.3%, 22.2%, 28.6% and Official was 16.7%,
0.0%, 0.0%, 9.1%, 0.0%, 0.0% CBE,DB,UB,BB,AB and BIB respectively .So the majority of
the Staff Relationship with customers of the bank respondents said , transaction about the
statement. This indicates that private banks the staff relationship with customer were more
relationship than government bank in Gonder city.
4.2.6 Identifying customer needs in the bank
4. 15 identifying customer needs in the bank
Q8.What are main Process used to identifying customer needs in your bank?
Val By complaints by 0 0.0 0 0.0 5 35.7 2 18.2 3 33.3 2 28.6
id customers at the bank
By personal queries on 0 0.0 3 15.0 3 21.4 7 63.6 6 66.7 3 42.9
customers
By failed service 20 66.7 2 10.0 6 42.9 2 18.2 0 0.0 2 28.6
products
Other 10 33.3 15 75.0 0 0.0 0 0.0 0 h0.0 0 0.0
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
36
As the above table indicates that the identifying customer needs in the bank By complaints by
customers at the bank was 0.0%, 0.0%, 35.7%, 18.2%, 33.3%, 28.6%, By personal queries on
customers was 0.0%,15%,21.4%,63.6%,66.7% ,42.9%, By failed service products were 66.7%,
10%, 42.9%, 18.2%, 0.0%, 28.6% and Other was 33.3%, 75%, 0.0%, 0.0%, 0.0%, 0.0%
CBE,DB,UB,BB,AB and BIB respectively .So the majority the private bank identifying
customer needs in the bank By complaints customers of the bank respondents said, By personal
queries on customers about the statement. This indicates that private banks the identifying
customer needs with customer were more identified than government bank in Gonder city
4.2.9 The highest Numbers of years holding account by the customer with the bank
4. 16 the highest Numbers of years holding account by the customer with the bank.
Q9. is the highest Numbers of years of holding account by the customer with your bank?
Valid Less than 1 5 16.7 1 5.0 1 7.1 2 18.2 0 0.00 0 0.0
year
1-3 Years 12 40.0 2 10.0 2 14.3 2 18.2 1 11.1 1 14.3
3-5 years 10 33.3 6 30.0 1 7.1 5 45.5 3 33.3 4 57.1
5 years and 3 10.0 11 55.0 10 71.4 2 18.2 5 55.6 2 28.6
above
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
As the above table indicates that the highest Numbers of years holding account by the customer
with the bank Less than 1 year was 16.7%, 5%, 7.1%, 18.2%, 0.0%, 0.0%, 1-3 Years was 40%,
10%, 14.3%, 18.2%, 11.1%, 14.3%,, 3-5 years were 33.3%, 30%, 7.1%, 45.5%, 33.3%, 57.1%
and 5 years and above was 10%, 55%, 71.4%, 18.2%, 55.6%, 28.6% CBE,DB,UB,BB,AB
and BIB respectively .So the majority the private bank the highest Numbers of years holding
account by the customer with the bank respondents said, 5 years and above about the statement.
This indicates that private banks the highest Numbers of years with customer were more holding
than government bank in Gonder city
37
4.2.10 the lowest Numbers of years of holding account by the customer with the bank
4. 17 the lowest Numbers of years holding account by the customer with the bank
Q10. What is the lowest Numbers of years of holding account by the customer with your bank?
Valid Less than 6 15 50. 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0
month 0
Less than 10 33. 20 100 1 7.1 1 9.1 0 0.0 0 0.0
1year 3
1-3 years 5 16. 0 0.0 1 7.1 3 27.3 2 22.2 2 28.6
7
3-10 Years 0 0.0 0 0.0 5 35.7 4 36.4 5 55.6 4 57.1
10 years and 0 0.0 0 0.0 7 50.0 3 27.3 2 22.2 1 14.3
above
Total 30 100 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
As the above table indicates that the lowest Numbers of years of holding account by the
customer with the bank Less than 6 month was 50%, 0.0%, 0.0%, 0.0%, 0.0%, 0.0%, Less than
1year was 33.3%, 100%, 4.1%, 9.1%, 0.0%, 0.0%,, 1-3 years were 16.7%, 0.0%, 7.1%, 27.3%,
22.2%, 28.6% , 3-10 years were 0.0%, 0.0%, 35.7%, 36.4%, 55.6%, 57.1% and 10 years and
above was 0.0%, 0.0%, 50%, 27.3%, 22.2%, 14.3% CBE,DB,UB,BB,AB and BIB
respectively .So the majority the private bank the lowest Numbers of years holding account by
the customer with the bank respondents said, 3-10 years about the statement. This indicates that
private banks were not the lowest Numbers of years with customer more holding than
government bank in Gonder city
38
4.2.7 a customer lost due to failure on CRM strategies that hold account for
longer period of time
4. 18 a customer lost due to failure on CRM strategies that holds account for longer period
of time
Q11.Is there a customer you lost due to failure on CRM strategies which holds account for
longer period of time?
Valid Yes 25 83.3 0 0.0 0 0.0 1 9.1 0 0.0 0 0.0
No 5 16.7 20 100.0 14 100.0 10 90.9 9 100.0 7 100.0
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
Source :surveyresult,2022
As the above table indicates that a customer lost due to failure on CRM strategies that hold account
for longer period of time yes was 83.3%, 0.0%, 0.0%, 9.1%, 0.0%, 0.0% and no was 16.7%, 20%,
100%, 100%, 90.9%, 100.0%, 100% CBE, DB,UB,BB, AB and BIB respectively .So the majority
the private bank a customer lost due to failure on CRM strategies that said no about the statement.
This indicates that private banks do not loss their customers due to lack of CRM i.e the private
banks were more hold account longer period of time than government bank in Gonder city
4.2.8 the challenges on applying CRM strategies and rank from the highest to
lowest
4. 19 the challenges on applying CRM strategies and Rank from the highest to lowest
Q12. What are the challenges on applying CRM strategies? Rank the challenges from the highest to lowest?
Absence of frequent 2 6.7 1 5.0 3 21.4 2 18.2 2 22.2 1 14.3
information updating
Inadequate fund 3 10.0 8 40.0 6 42.9 5 45.5 4 44.4 3 42.9
Absence of qualified 7 23.3 7 35.0 1 7.1 1 9.1 1 11.1 1 14.3
technical staffs
Inadequate commitment by 8 26.7 2 10.0 2 14.3 1 9.1 1 11.1 1 14.3
management
39
Absence of proper ICT 10 33.3 2 10.0 2 14.3 2 18.2 1 11.1 1 14.3
technologies
Total 30 100.0 20 100 14 100 11 100 9 100.0 7 100.0

Among the above table indicates that the major challenge to apply CRM was Absence of proper
ICT technologies (33.3%),Inadequate commitment by management(26.7%),Absence of qualified
technical staffs(23.3%)Inadequate fund(10%) and Absence of frequent information
updating(6.7%) from the highest to the lowest challenges applied in CBE respectively. This
implies that in government bank the major challenge to apply CRM was Absence of proper ICT
technologies in the bank.
From the above table indicates that Inadequate fund(40%),Absence of frequent information
updating(35%),Inadequate commitment by management(10%),Absence of proper ICT
technologies(10%) and Absence of qualified technical staffs(%) were the major challenges to
apply CRM from the highest to lowest in DB respectively . This implies that in Dashen bank the
major challenge to apply CRM was inadequate fund.
Among the above table indicates that Inadequate fund(42.9),Absence of frequent information
updating(21.4%),Absence of qualified technical staffs(14.3%),Absence of proper ICT
technologies(14.3%) and Inadequate commitment by management(7.1%) were the major
challenges to apply CRM from the highest to lowest in United Bank respectively . This implies
that in united bank the major challenge to apply CRM was inadequate fund.
Among the above table indicates that Inadequate fund(45.5%),Absence of frequent information
updating(18.2%),Absence of proper ICT technologies(18.2%),Absence of qualified technical
staffs(9.1%) and Inadequate commitment by management(9.1%) were the major challenges to
apply CRM from the highest to lowest in Birhan Bank respectively . This implies that in Birhan
bank the major challenge to apply CRM was Inadequate fund.
updating(22.2%),Absence of qualified technical staffs(11.1%),Inadequate commitment by
management(11.2%) and Absence of proper ICT technologies(11.2%) were the major challenges
to apply CRM from the highest to lowest in Abay Bank respectively . This implies that in Abay
bank the major challenge to apply CRM was inadequate fund.
40
updating(14.3%),Absence of qualified technical staffs(14.3%),Inadequate commitment by
management(14.3%)and Absence of proper ICT technologies(14.3%) were the major challenges
to apply CRM from the highest to lowest in Buna international Bank respectively . This implies
that in Buna international bank the major challenge to apply CRM was inadequate fund.
Generally from the above table the major challenge in government bank was Absence of proper
ICT technologies and in private bank the major challenge were inadequate fund to apply CRM in
the bank.
4.2.9 Alternate marketing approaches of bank to attract

customer and improve their service
4. 20 the Alternate marketing approaches of bank to attract customer and improve their
service
Q13. What are the Alternate marketing approaches of bank used to attract customer and improve
their service?
Va Use up to date technology 0 0.0 2 10 2 14.3 2 18.2 2 22.2 1 14.3
lid Providing fast service 0 0.0 9 45 6 42.9 5 45.5 4 44.4 2 28.6
Promotion different services 3 10. 4 20 3 21.4 1 9.1 1 11.1 1 14.3
provided by the bank 0
Give away rewards to new 2 6.7 2 10 1 7.1 1 9.1 1 11.1 1 14.3
customer
Increase the interest rate 8 26. 3 15 2 14.3 2 18.2 1 11.1 1 14.3
7
Other 17 56. 0 0 0 0.0 0 0.0 0 0.0 1 14.3
7
Total 30 100 20 100. 14 100. 11 100. 9 100 7 100.
.0 0 0 0 0
As the above table indicates that the Alternate marketing approaches of bank to attract customer
and improve their service Use up to date technology was 0.0%, 10%, 14.3%, 18.2%, 22.2%,
14.3%, Providing fast service was 0.0%, 45%, 42.9%, 45.5%, 44.4%, 28.6%,, Promotion
different services provided by the bank were 10%, 20%, 21.4%, 9.1%, 11.1%, 14.3% , Give
41
away rewards to new customer were 6.7%, 10%, 7.1%, 9.1%, 11.1%, 14.3% and Increase
the interest rate was 26.7%, 15%, 14.3%, 18.2%, 11.1%, 14.3% and Other
56.7%,0.0%,0.0%,0.0%,0.0%,14.3% in CBE,DB,UB,BB,AB and BIB respectively .So the
majority the private bank the attract their customers through Providing fast service about the
statement. This indicates that private banks were alternate marketing approaches of bank to
attract customer and improve their service more attract and improve than government bank in
Gonder city
4.2.10. CRM service that attract new customers
4. 21 CRM service that attract new customers
Q14. Does really CRM service helps to attract new customers?

Valid Yes 8 26.7 12 60.0 14 100.0 11 100.0 9 100.0 7 100.0
No 22 73.3 8 40.0 0 0.0 0 0.0 0 0.0 0 0.0
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
As the above table indicates that a CRM service helps to attract new customers yes was 26.7%,
60%, 100%, 100%, 100%, 100% and no was 73.3%, 40%, 0.0%, 0.0%, 0.0%, 0.0%, 0.0% in
CBE, DB,UB,BB, AB and BIB respectively .So the majority the private bank CRM service helps
to attract new customers that said yes about the statement. This indicates that private banks
CRM service helps to attract new customers. i.e. The private banks were more attract new
customers than government bank in Gondar city.
4.2.11 CRM benefits bank performance and productivity
4. 22 CRM benefits bank performance and productivity
Q15. how does CRM benefits banks performance and productivity?

Valid Firm‟s Age 4 13.3 1 5 2 14.3 1 9.1 2 22.2 2 28.6
(years)
Number of 12 40.0 10 50 4 28.6 5 45.5 3 33.3 3 42.9
Employees
Working 9 30.0 6 30 5 35.7 3 27.3 2 22.2 1 14.3
Capital
42
Value of Asset 5 16.7 3 15 3 21.4 2 18.2 2 22.2 1 14.3
Total 30 100 20 100 14 100 11 100 9 100 7 100
As the above table indicates that CRM benefits banks performance and productivity Firm‟s Age
(years) was 13.3%, 5%, 14.3%, 9.1%, 22.2%, 28.6%, Number of Employees was 40%, 50%,
28.6%, 45.5%, 33.3%, 42.9%, Working Capital were 30%, 30%, 35.7%, 27.3%, 22.2%, 14.3% ,
and Value of Asset were 16.7%, 15%, 21.4%, 18.2%, 22.2%, 14.3% in CBE,DB,UB,BB,AB
and BIB respectively .So the government and private bank the CRM benefits banks
performance and productivity said number of employees i.e both private and government banks
were CRM was the importance for bank performance and productivity in Gonder city
4.2.12role of customer care in enterprise development
4. 23 role of customer care in enterprise development
Q16. What are role of customer care in their enterprise development?

Most Definitely 6 20.0 18 90.0 14 100.0 9 81.8 8 88.9 6 85.7
Definitely 8 26.7 2 10.0 0 0.0 2 18.2 1 11.1 1 14.3
Not necessarily 16 53.3 0 0.0 0 0.0 0 0.0 0 0.0 0 0.0
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
The role of customer care in enterprise development In this regard, 20%, 90%, 100%, 81.8%,
88.9%, 85.7% of the respondents said, Most definitely; 26.7%, 10%, 0.0%, 18.2%, 11.1%,
014.3% of the respondents definitely, 53.3%, 0.0%, 0.0%, 0.0%, 0.0%, 0.0% not necessary
CBE, DB, UB, BB, AB and BIB respectively. However, most definitely the roles of customer
care in enterprise development. Among CBE, UB,BIB,AB, DB and BB, respectively.so the
private banks the role of customer care more necessary than the government bank in Gonder
town.
43
4.2.13Customer Care services in the organization
4. 24 Customer Care services in the organization
Q17.how important is to apply Customer Care services in your organization?

Very important 5 16.7 8 40.0 13 92.9 7 63.6 5 55.6 5 71.4
Important 6 20.0 6 30.0 1 7.1 3 27.3 4 44.4 2 28.6
Normal 10 33.3 4 20.0 0 0.0 1 9.1 0 0.0 0 0.0
Unimportant 9 30.0 2 10.0 0 0.0 0 0.0 0 0.0 0 0.0
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
As the above table indicates that the Customer Care services in the organization Very important
was 16.7%,40%,92.9%,63.6%,55.6% ,71.4% ,Important 20%,30 %, 7.1%, 27.3%,44.4%,28.6%,
Normal33.3%,20%,0.0%,9.1%,0.0%,0.00% and Unimportant 30%,10%,0.0%,0.0%0.,0%,0.0%
were CBE,DB,UB,BB,AB, and BIB respectively .So the majority of the private bank
respondents said very good the current Customer Relationship Management practice in the
bank about the statement. This indicates that private banks Customer Care services in the
organization were more service than government bank in Gondar city.
4.2.14 Process of delivering customer service
4. 25 Process of delivering customer service
Q18. What are the Processes in Delivering Customer Service?

Being kind and socialized 2 6.7 2 10.0 3 21.4 1 9.1 2 22.2 2 28.6
to customers
Delivering what is 2 6.7 4 20.0 3 21.4 2 18.2 4 44.4 2 28.6
promised in time
quality goods and service 3 10.0 5 25.0 2 14.3 1 9.1 1 11.1 1 14.3
value customers more 8 26.7 3 15.0 4 28.6 4 36.4 2 22.2 1 14.3
Help customers fulfilled 8 26.7 4 20.0 2 14.3 2 18.2 0 0.0 1 14.3
their needs
Service at customers‟ door 7 23.3 2 10.0 0 0.0 1 9.1 0 0.0 0 0.0
44
Total 30 100. 20 100.0 14 100.0 11 100.0 9 100.0 7 100.
0 0
Source: survey result,2022
As the above table indicates that the Process of delivering customer service Being kind and
socialized to customers was 6.7%, 10%, 21.4%, 9.1%, 22.2%, 28.6%, Delivering what is
promised in time was 6.7%, 20%, 21.4%, 18.2%, 44.4%, 28.6%, quality goods and service were
10%, 25%, 14.3%, 9.1%, 11.1%, 14.3%, value customers more26.7%,15%,28.6%,36.4%,22.2%
, 14.3%,Help customers fulfilled their needs 26.7%,20%,14.3%,18.2%,0.0%,14.3% and
Service at customers‟ door was 23.3%, 10%, 0.0%, 9.1%, 0.0%, 0.0% in CBE,DB,UB,BB,AB
and BIB respectively . This indicates that both government and private banks were vary about
the process of delivering customer service in Gonder city
4.2.15 Mechanisms of the bank management
4. 26 Mechanisms of the bank management
Q19.what is the mechanism your bank used to Management (to ensure quality customer service
delivery)
reach out to customer by 3 10.0 2 10 2 14.3 1 9.1 1 11.1 1 14.3
conducting survey
Communicating and 6 20.0 4 20 4 28.6 2 18.2 2 22.2 2 28.6
delivering service as
promised
Empowering and 1 3.3 5 25 2 14.3 2 18.2 3 33.3 1 14.3
motivating employees
Training employees to gain 7 23.3 3 15 3 21.4 4 36.4 3 33.3 1 14.3
requred skills in service
delivery
Setting service standards 8 26.7 4 20 2 14.3 1 9.1 0 0.0 1 14.3
based on
customer perception 5 16.7 2 10 1 7.1 1 9.1 0 0.0 1 14.3
Total 30 100.0 20 100.0 14 100.0 11 100.0 9 100.0 7 100.0
45
Among the above table indicates that Mechanisms of the bank management were reach out to
customer by conducting survey10%,10%,14.3%,9.1%,11.1%,14.3%, Communicating and
delivering service as promised were 20%,20%28.6%,18.2%,22.2%,28.6%, Empowering and
motivating employees were 3.3%,25%,14.3%,18.2%,33.3%,14.3%, Training employees to gain
requred skills in service delivery were23.3%,15%,21.4%,36.4%,33.3%14.3%, Setting service
standards based on were 26.7%,20%,14.3%,9.1%,0.0%,14.3% and customer perception were
16.7%,10%,7.1%,9.1%,0.0%,14.3% in CBE,DB,UB,BB,AB and BIB respectively .
The government bank use a mechanism for bank management were setting service standard and
the private banks majorly use communicating and delivering service used mechanism for bank
management.
4.3 correlation analysis
4. 27 correlations
Correlations
Key
CRM Customer Technolog Knowledge employee
organization Focus y. Management performance
**
CRM organization Pearson Correlation 1 .885 .848** .816** .678**
Sig. (2-tailed) .000 .000 .000 .000
N 91 91 91 91 91
Key Customer Pearson Correlation .885** 1 .877** .897** .760**
Focus Sig. (2-tailed) .000 .000 .000 .000
N 91 91 91 91 91
Technology. Pearson Correlation .848** .877** 1 .921** .736**
Sig. (2-tailed) .000 .000 .000 .000
N 91 91 91 91 91
** **
Knowledge Pearson Correlation .816 .897 .921** 1 .817**
Management Sig. (2-tailed) .000 .000 .000 .000
N 91 91 91 91 91
employee Pearson Correlation .678** .760** .736** .817** 1
performance Sig. (2-tailed) .000 .000 .000 .000
N 91 91 91 91 91
**. Correlation is significant at the 0.01 level (2-tailed).
46
The above Table Pearson r correlation coefficients shows between each pair of variables
listed. The researcher tried to minimize the effect of missing value by using option
exclude cases pair wise in the SPSS which enable to remove missing value from the
analysis. The sig. (2-tailed) shows the distribution as normal not determined either
positive or negative direction. To determine the relationship, significance and direction
of the variable it is better to see the value of each variable.
Based on the data given above there is no negative relationship between variables. There is
different degree of significance among variables in some variable there is strong correlation
(r=0.885, r=0.877, r=0.921, r=0.817, r=0.678) between Key Customer Focus to
CRM organization, Technology to Customer Focus , Knowledge Management to technology, employee
performance to knowledge Management, CRM organization to employee performance respectively.
This table shows the value of Pearson correlation coefficient value between all variables. The
summery of total value and its impact is presented in the following table. The correlation
between CRM organization, employee performance, Technology, Key Customer Focus and Knowledge
Management has statistically significance correlation because (P< 0.05).
4.4. Multiple regression analysis
4.4.1. Assumptions of Multiple linear regression

1. Test of Normality
Figure 2: Regression Standardized Residuals (a) and P-P plot (b) Histogram
47
(a) (b) figure 4. 1 normality assumption test
Source: SPSS output 2022
Therefore, as we can see from the above histogram and normal P-P plot of regression, we
can possibly conclude that the residuals are normally distributed.
2. Test of Linearity
To examine the linearity assumptions there must be a linear relationship between the
dependent variable and the independent variables. Accorrding to Osborn and Waters
(2002) liner relationship is a liner relation of the standardized residuals and standardized
predicted values. For this assumption scatter plot is very representative showing that the
relationship between dependent and independent variables is linear (See figure 2).
48
Figure 4.2: normality assumption test
As shown in the figure above, the relationship model between the dependent (teachers
turnover) and independent variables (technology, CRM organization, Key Customer
Focus and Knowledge Management) fit reasonably with linear pattern, that is they are
concentrated at the center line and based on the scatter plot the assumption of linearity is
not violated.
3. Test of Multicollinearity
4. 28 Collinearity Statistics
Variables Collinearity Statistics

Tolerance Tolerance
CRM organization .686 1.457
Key Customer Focus .524 1.909
Technology .557 1.797
Knowledge Management .587 1.702
Source: Survey result, 2022

According to Keith (2006) the rule of thumb for large VIF value is 10 and a small value
for tolerance is 0.1. Large VIF values and small values for tolerance show the presence of
multicollinearity. As shown in the above table all VIF values are below ten and all
tolerance values are above 0.1. Thus there is no a sign for multicollinearity problem.
49
4. Test of Autocorrelation
Autocorrelation or independence error occurs when there is a serial correlation between
residuals and their own past values and also refers to the assumption that errors are
independent of one another. In other words, if the errors are not uncorrelated with one
another, it would be stated that they are “auto correlated” or that they are serially
correlated. In this study the Durbin-Watson statistic test is used to test the assumption that
our residuals are independent (or uncorrelated). It tests for autocorrelation in the residuals
from statistical regression analysis after selecting the independent and dependent
variables. These statistics always vary from 0 to 4.A value of 1 means that there is no
autocorrelation in the sample. Values approaching towards zero indicate positive
autocorrelation and values approaching towards 4 indicate negative autocorrelation. For
this assumption to be met, the DW value must to be close to 1. DW value below 1 and
above 3 is problematic and causes for violation of autocorrelation.
4. 29 : Durbin-Watson Autocorrelation statistics test
Adjusted R Std. Error of Durbin-

Model R R Square Square the Estimate Watson
a
1 .785 .616 .598 .604 1.149
As shown in the above table, the Durbin-Watson result is 1.145 which closes to 1.
Therefore, it is easy to conclude that the figure indicates as there is no autocorrelation in
the sample.
4.4.2 Model fitness
4. 30 Model summary
Model Summary
M R Adjust Change Statistics
od Squa ed R Std. Error of R Square
el R re Square the Estimate Change F Change df1 df2 Sig. F Change
1 .822 .675 .660 .541 .675 44.703 4 86 .000
50
a. Predictors: (Constant), Technology., CRM organization , Key Customer Focus h,
Knowledge Management
b. Dependent Variable: employee performance
The above table R Square result is 0.675 shows how much of the variance in banking
performance is explained by the independent variables (Technology, CRM organization,
key customer performance and knowledge management). The value can be expressed as
a percentage 67.5% of the variance in banking performance explained by the model or
predictor. Adjusted R square used to eliminate over estimation that caused to small
sample size. The result of adjusted R square result for this study shows 0.541.
The Adjusted R square statistic „corrects‟ this value to provide a better estimate of the true
population value. In the case of this study since the researcher used census using adjusted
R square is inappropriate, so that 67.5% we can say that of variance in banking
performance is explained by the Technology, CRM organization, key customer
performance and knowledge management model.
4.4.3 Goodness of ANOVA TEST
4. 31: ANOVA TEST
ANOVAa
Sum of
Model Squares Df Mean Square F Sig.
1 Regression 50.409 4 12.602 34.499 .000b
Residual 31.415 86 .365
Total 81.824 90
a. Dependent Variable: employee performance
b. Predictors: (Constant), Knowledge Management, employee performance ,
Key Customer Focus , Knowledge Management
51
From the ANOVA test in table it shows the table Sig. value 0.05 is greater than the
calculated Sig. value 0.000. It reflects there was a statistically significant correlation
between dependent variable and independent variables at 1% significant level. This
means CRM organization, technology, Key Customer Focus , Knowledge Management
effects of employee performance. But it does not mean that all these factors have
equally significant correlation with effects of employee performance .The results of
multiple linear regression analysis signal that there is variation in the effects of
employee performance. Beside the F statistics (34.499) which is used to measure the
overall test of significance of the model was presented, since the p-value is 0.000 which
is sufficiently low, the model is well fitted at 5 percent level of significance.
4.4.4. Regression Coefficients
4. 32. Regression Coefficients
Coefficientsa
Standardize
Unstandardized d Collinearity
Coefficients Coefficients Statistics
Std.
Model B Error Beta T Sig. Tolerance VIF
(Constant) 1.313 .276 4.764 .000
CRM organization .343 .070 .395 4.901 .000 .686 1.457
Key Customer Focus .600 .077 .717 7.765 .000 .524 1.909
Technology. .195 .052 .339 3.784 .000 .557 1.797
Knowledge .548 .071 .677 7.767 .000 .587 1.702
Management
a. Dependent Variable: employee performance
***
Significant at p<0.01 and ** Significant at p<0.05
Coefficient analysis shows the relationship between dependent variable and independent
variables. According to Sig. value of technology, CRM organization , Key Customer Focus, and
Knowledge Management at 5 percent significant level. Which means; technology, Knowledge
52
Management, Key Customer Focus, and Knowledge Management were the effects of employee
performance.
All independent variables have a positive relationship with employee performance. A positive
coefficient of CRM organization positive coefficient of 0.395,Key Customer Focus positive
coefficient of 0.717,Technology positive coefficient of 0.339 and Knowledge Management
positive coefficient of 0.677. This implies that CRM organization, technology, Key Customer
Focus, and Knowledge Management were the effects of employee performance
Results of Qualitative Analysis

The analyst has made a meeting with Effect of Customer Relationship Management on
Organizational performance of Selected Private and Commercial Banks in Gondar Town
(see appendix II section ), the entirety of the interviewees concur that the bank is
confronting effects of Customer Relationship Management on organizational
performance in experienced staffs.
The bank managerial staff said the reason that to improve organization performance to the
bank through different ideas. Such as, key customer focus, CRM organization,
technology and knowledge management.
The reasons that to improve organizational performance key customer focus was the one
that better option is to hone in on the customer's needs: speedy service, simple processes,
a streamlined experience. Easy, affordable and effective. This means changing from a
"bank-focus" to a "customer-focus."
Today's retail banking environment is all about money. Banks want to save money, customers
want to save money, and lost in all that is the human element. Focusing on the consumer gives
banks the ability to change that.
At the moment, banks are concerned about retaining and growing their customer bases. As
mobile and online technology improves, customers are easily replacing many of the services
once offered at brick-and-mortar branches with their smart phones and tablets. Banks have to
adapt and grow, or else they can be left behind.
53
One way to do this is by focusing on the consumer. It doesn't just involve new technology
(though that helps) or better "Our bank works for you!" marketing. It is a holistic approach, from
the very top of the sales funnel all the way through the entire business.
The CRM determinants of customer engagement, customer interaction and competitor activities
directly influence retention of the organization. Social networks have become an essential tool
for communication in the current online business environment. Effective social networks will
support such organizations to communicate with the customers effectively and, as a result, it
ensures high level of customer retention.
Customer relationship management (CRM) is a technology for managing a company‟s

relationships and interactions with all of its customers and potential customers. The goal is
simple: Improve business relationships. A CRM system helps companies stay connected to
customers, streamline processes, and improve profitability.
When people talk about CRM, they are usually referring to a CRM system, a tool that helps with
contact management, sales management, productivity, and more.
Generally the private bank managers said about the interview they made suitable environment
to attract the customers, their employees were more experienced in banking and they can handle
customers through using speedy service, communicate with customers‟, applying technology and
listen and hear customers comment.
The government bank manager said about the interview they made relationship with customers
but the employees were busy they cannot handle customers‟, hear and listen the customers
comment through lack of time.
54
CHAPTER FIVE
5. SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Summary
The main objective of this study is to investigate the influence of customer relationship
management on bank performance with reference to CBE, DB,UB,BB,AB and BIB in
Gondar city administration. In this study both quantitative and qualitative research
approaches were implemented and a descriptive research design was used. The target
populations of the study were employees of CBE, DB, UB, BB, AB and BIB and
stratified sampling was employed. In this study both primary and secondary data
were used as source of information. Ninety one (91) employees were approached using
stratified sampling (purposive sampling technique).survey forms all (91) were returned.
5.2 Conclusion
The major objective of this chapter is to present the main point of the research and to draw
some conclusions about the practice and effort of banks in applying customer relationship
management practice based on the fact presented in previous chapter. In addition to
primary data the researcher included points from literature when necessary to
support the primary data.
Strategy is among one of independent variable used to measure the banking performance.
The major strength in applying CRM strategy in banks are setting clear objectives and
strategies for key customers and greater emphasis on retaining the valuable customer.
Whereas, banks gave less attention to retain current valuable customers compared with
attracting new customers.
Customer relationship management involves using technology to organize, automate, and
synchronize business processes. Most banks have strength in using technology like core
banking a n d ATM. On the other hand relatively most banks are weak in customer
tendency to use new technology and automated tools of business operation process.
The contribution of customer for effective customer relationship management process is
vital. Customer‟s involvement is high in establishing long term relationship with banks,
55
desire for product or service differentiation, and customer activity play a key role in
order to improve the system by giving a feedback.
The banking performance is dependent variable for this research. As the data shows
among the major measurement of banking performance after CRM implementation
there is employees‟ efficiency with a specified time period, increase growth rate of
retained customers, and increases number of satisfied customers after CRM
implementation.
Table 4.27 the result shows that in private and government banks the model tested is
significant (p<0.01). The adjusted R square 0. 675 indicate that 67.5 percent of variance in
bank performance attributed to the four independent variables entered into the regression.
5.3 Recommendations
In this section the researcher tried to indicate some directions in order to apply customer
relationship management successfully. Banks are relatively weak in applying strategic
variables like using CRM data as marketing intelligence tools for long term plan and for
resource allocation between customer acquisition and retention. The strategy of customer
relationship management should focus to create long term relationship with customer and
all information gathered in the process should have to storing, analyzing, interpreting, and
using this data as marketing intelligence tools in order to get competitive advantage and to
predict customer‟s future needs. Banks also should have specific budget for specific
objectives if banks not to do so there is chance to attract new customer at the cost of
existing customers. If banks have specific budget allocation to retain and attract customers
there is a chance to increase the number of loyal customers.
Banks should focus on retaining current valuable customers than attracting new customers
because it enable to minimize organizational costs as different research result shows that
retaining current valuable customer is cheaper than attracting new customers. To
attract current valuable customers‟ banks should have to select the profitable
customers and maintain long term relationship with them.
Private Banks have better strength in using more technology than government bank
therefore the government banks could to adjust the use of technology . To use technology
56
as CRM process implementation tools banks should give attention for both Technology
infrastructure and architecture. So that, banks should do additional tasks to use balanced
and integrated technology tools to bring change in effective technology utilization.
The result of this study shows that there is strong positive correlation between effective
customer relationship management parameter and banking performance
measurement. This indicates if banks revise their strategy to establish long term
relationship with customers, use integrated information technology infrastructure and
information technology architecture it enable for sustainable development.
The major tasks that need betterment are using CRM data as resource allocation between
customer acquisition and retention. And also the bank should keep up the previous effort
in attracting new customers and greater emphasis on retaining the valuable customers.
The government and private banks could be work on CRM to attract customers and to continue a
better understanding to employees in knowledge of CRM in banks.
57
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iii
4
Appendix I
QUESIONNER
University of Gondar
College of Business and Economics
Department of Management and Public Administration
Program Master of Business Administration
The purpose of this study in general and this questionnaire in particular is to study on
“Comparative Study on the Effect of Customer Relationship Management on Organizational
performance of Selected Private and Commercial Banks in Gondar Town for Master‟s degree of
Business Administration (MBA).This research is intended only for academic purpose authorized
by theGondar university College of Business and EconomicsThus, your ideas and comments are
highly honoured and kept confidential. Your frank response and valuable support in responding
to the questions raised is of paramount importance to the success of the study. Hence, I request
you to fill the questionnaire carefully and at your best knowledge in all regard. Thank you in
advance for your cooperation and prompt response!
Put tick (√) mark in the appropriate answer box
I. Background of the General information

1. Personal information
Gender: Male  Female 
Age: 18-30  31-40  40-55 Above 55

1.1. Working Experience?
Less than a year 
1-4 years 
5-9 years 
Above 10 years 
1.2. Do you intend to continue serving in bank in the next 5 years?
Yes 
No 
5
Undecided 
1.3. What is your Educational level of Staff (The highest and the lowest education level
Diploma 
First degree 
Post-Graduate 
Masters or PHD holder 
1.4. What is the Position hold at Bank?
Frontline staff/Teller 
Operations/Back office staff 
Sales/Operations Manager 
Branch Manager 
Senior Management 
II. Customer Relation Management Question

2. What is Role of CRM at your bank? Rank
Very crucial 
Important 
Not Important 
2.1. Can you describe the current Customer Relationship Management practice in your bank?
Very good 
Good 
Satisfactory 
2.2. What is your level of understanding or Knowledge about bank customers?

Very well 
Moderately well 
Transactional based 
Unfamiliar with customer information 
2.3. What are the Means of using customer needs in decision making?
6
By feedback from products/service sold 
By customer queries at banking hall 
By telephone interview of customers 
Not sure about it 
2.4. What is your view on importance of customer opinion (suggestions) on service?
Most Definitely 
Definitely 
Not necessarily 
2.5. How did your bank resolving complaints raised by customer?
Less than 12 hrs 
In 12hrs 
Between 12 to 24 hours 
After 48 hrs 
After 72 hours 
Depends on complain type 
2.6. What is the Staff Relationship with customers of the bank?
Transactional 
Personal 
Interactive 
Official 
2.7. What is main Process used to identifying customer needs in your bank?
By complaints by customers at the bank 
By personal queries on customers 
By failed service products 
Other 
2.8. What is the highest Numbers of years of holding account by the customer with your
bank?
Less than 1 year 
1-3 Years 
3-5 Years 
7
6years and above 
2.9. What is the lowest Numbers of years of holding account by the customer with your
bank?
Less than 6 month 
Less than 1year 
1-3 Years 
1-4 Years 
5-10 Years 
10 ears and above 
2.10. Is there a customer you lost due to failure on CRM strategies which holds account for
longer period of time?
Yes 
No 
2.11. What are the challenges on applying CRM strategies? Rank the challenges from the
highest to lowest?
Absence of frequent information updating 
Inadequate fund 
Absence of qualified technical staffs 
Inadequate commitment by management 
Absence of proper ICT technologies 
2.12. What are the Alternate marketing approaches of bank used to attract customer and
improve their service?
Use up to date technology 
Providing fast service 
Promotion different services provided by the bank 
Give away rewards to new customer 
Increase the interest rate 
Other 
2.13. Does really CRM service helps to attract new customers?
8
Yes 
No 
2.14. How does CRM benefits banks performance and productivity?
Firm‟s Age (years)

Number of Employees 
Working Capital 
Value of Asset 
2.15. What are role of customer care in their enterprise development?
Most Definitely 
Definitely 
Not necessarily 
2.16. How important is to apply Customer Care services in your organization?

Very important 
Important 
Normal 
Unimportant 
2.17. What is the Process in Delivering Customer Service?

Being kind and socialized to customers 
Delivering what is promised in time 
Quality goods and service 
Value customers more 
Help customers fulfilled their needs 
Service at customers‟ door 
2.18. what is the mechanism your bank used to Management (to ensure quality customer
service delivery)
Reach out to customer by conducting survey 
9
Communicating and delivering service as promised 
Empowering and motivating employees 
Training employees to gain required skills in service delivery 
Setting service standards based on 
Customer perception 
10
III. Structured Interview Questionnaire
1. What do you think the minimum service expectation of customers on the bank
service? Did you believe that they perceive what they expected?---------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------
2. Are you treated potential customers in separate window and make them
comfortable in your service? ---------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
----------------------------
3. What is your trend in your branches? Which dimensions of service quality
contributes more towards the overall customer satisfaction and loyalty in your
bank‟s context? -------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
4. Is your bank branch the only one in the area or there are other banks? If there are,
what is your responsibility to attract customer to your bank? --------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
----
5. What kind of problems exists that hinder to give quality service to customers?-----
---------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------
11
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---------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------
12

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THE EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT ON

ORGANIZATIONAL PERFORMANCE OF SELECTED PRIVATE AND

COLLEGE OF BUSINESS AND ECONOMICS

SCHOOL OF MANAGEMENT AND PUBLIC ADMINISTRATION

DEPARTMENT OF BUSINESS MANAGEMENT

ATHESIS SUBMITED TO UNIVERSITY OF GONDAR, COLLEGE OF BUSSINESS

(Researcher‟s Name) Signature Date

Ejigayehu Tadesse __________________ _________________

(Advisor‟s Name) Signature Date

Comparative Study on the Effect of Customer Relationship Management on Organizational

Approved By Board of Examiners

Internal Examiner Signature

External Examiner Signature

Chair Person Signature

Table of Contents ............................................................................................................................ vi

List of table ..................................................................................................................................... 1

List of figure ................................................................................................................................... 3

CHAPTER ONE ............................................................................................................................. 6

1.1. Background of the Study ..................................................................................................... 6

1.2. Statement of the Problem ..................................................................................................... 9

1.3. Research Question ............................................................................................................. 11

1.4. Objectives of the study....................................................................................................... 11

1.4.1. General objective ........................................................................................................ 11

1.4.2 Specific objectives ....................................................................................................... 11

1.5. Significance of the Study ................................................................................................... 12

1.6. Scope of the Study ............................................................................................................. 12

1.7. Organization of the study ................................................................................................... 12

CHAPTER TWO .......................................................................................................................... 13

LITERATURE REVIEW ............................................................................................................. 13

2.1. Theoretical Review ............................................................................................................ 13

2.1.1. Definition of Customer Relationship Management .................................................... 14

2.1.2. Customer Relationship Management in Banking Sector ................................................ 15

2.1.3. Components of CRM ...................................................................................................... 16

2.1.3.1. Key customer focus...................................................................................................... 17

2.1.3.3. Knowledge management .............................................................................................. 18

2.1.4.4. CRM based on technology ........................................................................................... 19

2.1 .Empirical Review .......................................................................................................... 20

2.2 .Conceptual Framework ................................................................................................. 21

2.3 . Research hypothesis ..................................................................................................... 23

CHAPTER THREE ...................................................................................................................... 24

3.1. INTRODUCTION ............................................................................................................. 24

3.2. Research Design................................................................................................................. 24

3.3. Population of the Study...................................................................................................... 25

3.4. Sampling Technique .......................................................................................................... 25

3.5. Method of Data Collection................................................................................................. 26

3.6. Data Analysis Method........................................................................................................ 26

3.7. Test of Validity and Reliability.......................................................................................... 27

CHAPTER FOUR ......................................................................................................................... 28

4. DATA PRESENTATION, ANALYSIS, AND INTERPRETATION ..................................... 28

4.1 Characteristics of the respondents .................................................................................. 28

4.1.1 Name of the organization ............................................................................................. 28

4.1.2 Gender of the respondents ........................................................................................... 28

4.1.3 Age of respondents ...................................................................................................... 29

4.2. Descriptive Analysis and Interpretation............................................................................. 31

4.2.1 Role of CRM at bank ................................................................................................. 32

4.2.1 The level of understanding or Knowledge about bank customers .............................. 33

4.2.2 The Means of using customer needs in decision making ............................................ 34

4.2.4 Bank resolving complaints raised by customer ........................................................... 35

4.2.5 The Staff Relationship with customers of the bank ..................................................... 36

4.2.6 Identifying customer needs in the bank ....................................................................... 36

4.2.10. CRM service that attract new customers .................................................................. 42

4.2.11 CRM benefits bank performance and productivity .................................................... 42

4.2.12role of customer care in enterprise development ........................................................ 43

Ejigayehu Tadesse __ _