YARDSTICK INTERNATIONAL COLLEGE

DEPARTMENT: BUSINESS ADMINISTRATION(MBA)

TITLE: THE EFFECT OF CUSTOMER RELATIONSHIP
MANAGEMENT ON BANK PERFORMANCE:
IN CASE OF SELECTED BRANCH OF COOPERATIVE
BANK OF OROMIA NORTH ADDIS ABABA DISTRICT
BY: YIBAS DEJENE
ADVISOR: DR.TASOW
April,2024
 2. Background of the study
People: are those who manage business processes, and
make connections within the whole organization and make
relation with costumers.
Process: is a set of programs, measures and structural
property that support realization of CRM strategy purposes.
Strategy: it’s a plan to build strong relationship with
existing customers and generate more leads among
prospective customers. Focuses on the way how to attract
new customers and how to retain current valuable ones.
Communication: is the exchange of information between
customers and organizational employees for giving services
for the customers to achieving organizational performance.
 Conti…
CRM Technology: the function of technology is
gathering and storing information.
• More sophisticated software enables data analysis,
providing insights to help grow customer satisfaction.
• CRM technology helps you consolidate, unify and
centralize all the important customer information and
company data in one place.
key customers focus: includes the identified ones that
provide more values for company through providing
more profits, active long-term relationships, and
powerful leadership for the company.
 Cont….
It is important in the first instance to confirm that the main
purpose behind customer-oriented behaviors is to increase
customer’s long-lasting satisfaction and create customer-
loyalty.
2.1. Need of the study
• Enhances better customer service
• Facilitate discovery of new customers
• Increase customer revenues
• Simplifies the sales and marketing process
• Increase customer satisfaction, which may lead to
increased customer loyalty for increasing bank
performance.
 3. Statement of the problem
 The COOP bank of Oromia north Addis Ababa faces many
problems from time to time regarding on CRM.
• The bank has the communication(language barrier) problem
between customers and employees.
• The COOP bank faced difficulty in applying new strategy
• the bank gives more emphasis only on attracting new
customers, instead of maintaining the existing ones or
focusing on key customers.
• The bank has the technology dimension problem for bank
automation, the bank has no fingerprint machine for
opening an account and cannot process ATM on time.
• The bank has difficulties on the process of delivering
service to the customer and delivery of the system for
handling the customer.
 Cont….
• The research findings indicate offering high quality
service increase customer satisfaction, which in turn
leads to high level of customer commitment and
retention.
• If the customers are satisfied, they will always be loyal
to the firm and the business remains forward to the
development of its power.
• If you are able to communicate with your customer
effectively, you can reap the benefit of boosted sales,
returning customers and referrals
• So, when the above all gaps are fulfilled the customers
are satisfied and when the customers are satisfied the
bank performance will be achieved.
 4. Objective of the study
4.1. General objective
• The general objective of the study is the effect of customer
relationship management mechanism on bank performance on
cooperative Bank of Oromia north Addis Ababa district
4.2. Specific objective
• To evaluate the deployed strategies.
• To evaluate the effect of technology on CRM for bank
performance.
• To evaluate the mechanism to handle long term customer relation
• To evaluate the contribution of people for organizational success.
• To identify the process that satisfies the customers.
• To assess the effect of key customer focus practices on CRM.
• To assess the effect of communication practices on CRM.
 6. Research questions
• What are the best strategies to be deployed in cooperative
bank of Oromia north Addis Ababa district to manage
customer relationship?
• What are the role of communication between employees and
customers on CRM?
• How technology utilization affect organizational
performance in CRM?
• How COOP bank motivates its employees to satisfy the
customers?
• How People aspect (top management, motivated employee
and partners) contribution is key success factor for
organizational performance?
• How process is a key for CRM on bank performance?
• What is the main function of key customer focus on CRM for
bank performance?
 7. Major theories of the study
• Building permanent customer relationships is the way to create
superior customer value and satisfaction. (Kotler and
Armstrong, 2008), in their view fulfilled customers are more
likely to be truthful customers and to provide the company a
bigger share of their business.
• Shani and Chalasani (1992), defined over a long period
relationship marketing as an integrated efforts to identify, keep
up and develop a system with individual customers and to
constantly strengthen the system for the common advantage of
both sides through intuitive, individualized and esteem included
contacts.
• CRM is the definition of (Rababah K, Mohd H, and Ibrahim H,
2010) who proposed that “Customer Relationship Management
is the working of a customer oriented culture.
 8. Conceptual framework
Independent variable Dependent variable

People

Process

Strategy
Banking performance
Communication

Technology

key customer focus

 9. Methodology
9.1. Case area
The case area of the study is on some selected branch of
Cooperative Bank of Oromia north Addis Ababa district
9.2.Research design
• The research approach applied for this study is mixed
research design approach which is qualitative and
quantitative approaches.
• In qualitative approach, information gathered will be
non-numerical and might include responses to an open-
ended survey question, dialogues from focus groups etc.
• Quantitative research focuses on numeric and
unchanging data and detailed, convergent reasoning
rather than divergent reasoning.
• Explanatory studies and descriptive survey designs
are used to allow for the gathering of information,
summarize, present and interpret it for the purpose of
clarification.
9.3. Target population
• According to the collected information from HRM of
COOP bank of Oromia north Addis Ababa district the
total target population of the district are 493.
• From district total population 39 employees were the
number of population in 6 branches of COOP bank in
north Addis Ababa district.
• The six branches are Medero, Bekelcha, Awaro,
Gelelcha, Kono and Tokuma. The key customers are
372 from 6723 total account holders.
 9.4. Sample technique
• The researcher used purposive sampling technique.
• It select the respondents who have enough awareness about
the bank’s CRM practices based on their education level for
they read and understand the questionnaires.
9.5. Data collection instrument
• The researcher used structured type of questionnaire
designed and distributed to the respondent.
• the researcher used Likert scale questionnaire design.
• It used five point with all points label verbally for
dependent and independent variable questions (strongly
agree(5), agree(4), neutral(3) , disagree(2), strongly
disagree(1) ) forms.
• The researcher used primary and secondary data sources to
 9.6.Method of Data analysis
• After collecting all the necessary data the researcher
used tables and charts to organize the raw data in a
meaningful way.
• The researcher used Mean, percentage, standard
deviation and frequency during the implementation of
CRM practice in a descriptive analysis part.
• The researcher used correlation to describe the degree of
relationship between independent and dependent
variable.
• To do all the analysis the researcher used SPSS
(statistical package for social science) version 26.
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