THE EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT PRATCTICES ON CUSTOMER SATISFACTION IN THE CASE OF COMMERCIAL BANK OF ETHIOPIA, MAICHEW, TIGRAY, ETHIOPIA

Abstract

The banking sector is highly competitive, with commercial banks striving to attract new customers and retain existing ones. Customer Relationship Management (CRM) has emerged as a key strategy for enhancing competitiveness in the financial sector. By focusing on the individual needs of customers, CRM practices contribute significantly to customer satisfaction and loyalty. This study aims to examine the effect of CRM on customer satisfaction at the Commercial Bank of Ethiopia (CBE), Maichew branch. Specifically, the study investigates the impact of CRM behavioral components—reliability, process-driven approach, customer focus, and technology orientation—on customer satisfaction. The research addresses a gap in the literature by exploring CRM effectiveness from the customer perspective within the Ethiopian banking context. A descriptive and explanatory research design is employed, using a convenient sampling method to select respondents from the CBE Maichew branch. from the total population size of 800 customers 267 samples of respondents will take from the selected branch. Data are collected through structured questionnaires and analyzed quantitatively to determine the strength and direction of relationships between CRM dimensions and customer satisfaction. The findings reveal that all four CRM dimensions positively and significantly influence customer satisfaction, with reliability and technology orientation having the strongest effects. These results provide valuable insights into CRM practices in Ethiopian banks and offer actionable recommendations for CBE to enhance customer satisfaction, strengthen its competitive position, and improve overall business performance. The bank should enhance service quality by ensuring reliability, leveraging technology, streamlining processes, personalizing customer experiences, and providing ongoing CRM training to staff.