EFFECTS OF CUSTOMER RELATIONSHIP MANAGEMENT ON MARKET PERFORMANCE: THE CASE OF COMMERCIAL BANK OF ETHIOPIA (CBE) IN ABI-ADI TOWN AND ITS NEIGHBORING WOREDAS, TIGRAY.

Abstract

In the evolving and competitive landscape of the banking industry, Customer Relationship Management (CRM) has emerged as a pivotal strategy for driving sustainable market performance. This study examines the effect of CRM dimensions on the market performance of the Commercial Bank of Ethiopia (CBE), focusing on its branches in Abi-Adi Town and neighboring woredas in Tigray. The research centers on four strategic CRM dimensions: Key Customer Focus (KCF), Customer Knowledge Management (CKM), CRM Organization (CRMO), and Technology-Based CRM (TCRM). Employing a quantitative, cross-sectional design, data were collected from 90 employees through structured questionnaires and analyzed using SPSS version 24. The reliability of the instrument was confirmed with high Cronbach’s Alpha values, all exceeding 0.80. Descriptive statistics, correlation analysis, and multiple regression were used to test the research hypotheses. The results reveal that all four CRM dimensions significantly and positively affect market performance. Notably, CRM Organization had the strongest influence (β = 0.416), followed by Key Customer Focus (β = 0.307), Customer Knowledge Management (β = 0.173), and Technology-Based CRM (β = 0.162). The adjusted R² value of 0.764 indicates that over 76% of the variance in market performance can be explained by these CRM factors. These findings underscore that CRM, when strategically aligned and executed, enhances customer satisfaction, retention, profitability, and overall brand reputation. The study concludes that CBE’s strength lies in its CRM organization and customer-centric strategies, although challenges remain in digital literacy and service consistency across branches. The research offers practical recommendations for bank management to deepen CRM integration through employee training, technology optimization, customer data analytics, and performance monitoring. It also highlights directions for future research, such as longitudinal studies, multi-sector analysis, and customer-focused CRM evaluations. Ultimately, this study contributes to both academic knowledge and practical banking operations by illuminating how CRM strategies can be leveraged to sustain competitive advantage in Ethiopia’s financial sector.