6.3 Effects of Customer Relations Management on Market Performance in the Banking Sector: A Comparative Study of Selected Private Banks in Ethiopia
Abstract
Customer Relationship Management (CRM) is widely acknowledged as a powerful tool for gaining market performance in the banking sector. The purpose of this comparative study is to examine the effects of CRM on market performance with a special reference to selected private banks in Addis Ababa. For this study, CRM is evaluated using key customer focus, customer knowledge management, CRM-based technology and CRM organization. Market performances were assigned through indicators such as sales growth, market share, profitability, customer satisfaction and customer retention. This study employed descriptive surveys and explanatory research with mixed approaches. To achieve the objective of this study, primary data was collected from managers and employees of the Awash International Bank (AIB), Bank of Abyssinia (BOA) and Wegagen Bank, and was based on the grading information system from the top and medium 12 branches in Addis Ababa. For this study, systematic random sampling techniques were pursued to collect data. Structured questionnaires were distributed to a sample of 178 employees, out of which 87% of the completed responses were returned. Interviews were also conducted with management of the banks. The questionnaires were analyzed using descriptive and inferential statistical analysis methods. The findings confirmed that all the independent variables have a positive and significant relationship with CRM and market performance. Moreover, BOA displayed a better understanding of key customer focus, CRM organization and technology-based CRM. AIB performed better in terms of customer knowledge management and market performance. In general, comparing the three private banks, BOA has a better understanding of CRM and market performance. The private banks must improve technology-based CRM by maintaining the comprehensive databases of customers to improve their services, to handle online transactions, necessary hardware and software facilities, and to address the dynamic need of customers towards the advancement of banking technologies, technical personnel support for the utilization of computers, modern banking equipment and technologies to improve the capability of employees to use the technology. There are many employees and customers using banking services in the urban and semi-urban areas, but the banks should have a wider scope and cross-functional teams in rural areas in the days to come.
6.3 Effects of Customer Relations Management on Market Performance in the Banking Sector: A Comparative Study of Selected Private Banks in Ethiopia
1920 Sangren Hall
Customer Relationship Management (CRM) is widely acknowledged as a powerful tool for gaining market performance in the banking sector. The purpose of this comparative study is to examine the effects of CRM on market performance with a special reference to selected private banks in Addis Ababa. For this study, CRM is evaluated using key customer focus, customer knowledge management, CRM-based technology and CRM organization. Market performances were assigned through indicators such as sales growth, market share, profitability, customer satisfaction and customer retention. This study employed descriptive surveys and explanatory research with mixed approaches. To achieve the objective of this study, primary data was collected from managers and employees of the Awash International Bank (AIB), Bank of Abyssinia (BOA) and Wegagen Bank, and was based on the grading information system from the top and medium 12 branches in Addis Ababa. For this study, systematic random sampling techniques were pursued to collect data. Structured questionnaires were distributed to a sample of 178 employees, out of which 87% of the completed responses were returned. Interviews were also conducted with management of the banks. The questionnaires were analyzed using descriptive and inferential statistical analysis methods. The findings confirmed that all the independent variables have a positive and significant relationship with CRM and market performance. Moreover, BOA displayed a better understanding of key customer focus, CRM organization and technology-based CRM. AIB performed better in terms of customer knowledge management and market performance. In general, comparing the three private banks, BOA has a better understanding of CRM and market performance. The private banks must improve technology-based CRM by maintaining the comprehensive databases of customers to improve their services, to handle online transactions, necessary hardware and software facilities, and to address the dynamic need of customers towards the advancement of banking technologies, technical personnel support for the utilization of computers, modern banking equipment and technologies to improve the capability of employees to use the technology. There are many employees and customers using banking services in the urban and semi-urban areas, but the banks should have a wider scope and cross-functional teams in rural areas in the days to come.