Nebiyon Dawit

Challenges of Adopting Customer Relationship
Management by Commercial Bank of Ethiopia
(The case of Addis Ababa Branches)
In Partial Fulfilment of the Requirement for the Award of Master of Arts

Degree in Marketing Management
By: Nebiyou Dawit
Advisor: Teklegiorgis Assefa (Asst. Professor)
Addis Ababa University
School Of Commerce
Addis Ababa, Ethiopia
May 2014
Challenges of Adopting Customer Relationship Management by Commercial Bank of
Ethiopia
A Thesis Submitted to the School of Commerce, Addis Ababa University, in partial

fulfilment of the requirement for the award of Masters degree in Marketing Management
Submitted By: Nebiyou Dawit
Approved by Board of Examiner
Name Signature Date
External Examiner: __ ____ ____________________
Internal Examiner: ________ ___
Advisor: ________ ___

Declaration
I, Nebiyou Dawit, hereby declare that the thesis entitled ' Challenges of Adopting
Customer Relationship Management by Commercial Bank of Ethiopia
is my original work. I have carried out the present study independently with the guidance
and support of the research advisor, Teklegiorgis Assefa (Assistant Professor). Any other
contributors or sources used for the study have been duly acknowledged. Moreover, this
study has not been submitted for the award of any Degree or Diploma Program in this or any
other institution.
Signature Date
Nebiyou Dawit _____________________
Advisor _____________________
Teklegiorgis Assefa
(Assistant professor)
Table of Contents
Acknowledgement...................................................................................................................................i
Acronyms ................................................................................................................................................ ii
List Of Tables .......................................................................................................................................... iii
Abstract ................................................................................................................................................... v
CHAPTER ONE ......................................................................................................................................... 1
INTRODUCTION ....................................................................................................................................... 1
1.1 Background of the study ................................................................................................................... 1
1.2 Statement of the problem ................................................................................................................ 2
1.3 Objectives of the Study ..................................................................................................................... 4
1.3.1 General Objective .......................................................................................................................... 4
1.3.2 Specific Objectives ......................................................................................................................... 4
1.4 Scope of the Study ............................................................................................................................ 5
1.5 Limitations of the study .................................................................................................................... 5
1.6 Significance of the study ................................................................................................................... 5
1.7 Key Terms.......................................................................................................................................... 6
1.8 Organization of the study ................................................................................................................. 6
CHAPTER TWO ........................................................................................................................................ 7
LITERATURE REVIEW ............................................................................................................................... 7
2.1 Chapter Overview ............................................................................................................................. 7
2.2 The Banking Industry in Ethiopia ...................................................................................................... 7
2.3 CRM DEFINITION ............................................................................................................................. 10
2.4 Types of CRM .................................................................................................................................. 13
2.4.1 Operational CRM.......................................................................................................................... 14
2.4.2 Analytical CRM ............................................................................................................................ 14
2.4.3 Collaborative CRM ....................................................................................................................... 15
2.4.4 Strategic CRM............................................................................................................................... 15
2.5 Benefits of CRM.............................................................................................................................. 15
2.6 Challenges Related to CRM ............................................................................................................ 17
2.7 Internal and External Factors Influencing CRM ............................................................................. 19
2.8 Major Factors Affecting CRM’s success ......................................................................................... 24
2.8.1 Lack of skills.................................................................................................................................. 24
2.8.2 Inadequate investment ................................................................................................................ 24
2.8.3 Poor data quality and quantity ................................................................................................... 24
2.8.4 Failure to understand the business benefits .............................................................................. 25
2.8.5 Lack of leadership and top management involvement .............................................................. 25
2.8.6 Technology Factors ..................................................................................................................... 25
2.9 Conceptual Model .......................................................................................................................... 26
CHAPTER THREE.................................................................................................................................... 26
METHODOLOGY .................................................................................................................................... 27
3.1 Chapter Overview ........................................................................................................................... 27
3.2 Research Design .............................................................................................................................. 27
3.3 Sampling Design ............................................................................................................................. 28
3.4 Data collection procedures ............................................................................................................. 30
3.5 Reliability and Validity..................................................................................................................... 31
3.6 Data Analysis ................................................................................................................................... 31
CHAPTER FOUR ..................................................................................................................................... 33
ANLYSIS AND INTERPRETATION ............................................................................................................ 33
4.2 Background of the respondents...................................................................................................... 33
4.2.1 Employee Respondents ............................................................................................................... 33
4.2.2 Customer respondents ................................................................................................................ 35
4.3 Factors that affect the adoption of CRM in CBE ............................................................................. 37
4.3.1 Factors Affecting the Adoption of CRM– Employees‘ Perception ............................................... 37
4.3.1.1 Skill Related Issues .................................................................................................................. 38
4.3.1.2 Budget Related Issues ............................................................................................................... 39
4.3.1.3 Data Related Issues ................................................................................................................... 41
4.3.1.4 Understanding Benefits of CRM ............................................................................................... 43
4.3.1.5 Management commitment towards the adoption of CRM ...................................................... 44
4.3.1.6 Technological Related Issues .................................................................................................... 46
4.3.2. Factors affecting the adoption of CRM customer’s perception ................................................. 47
4.4 Summary of the Findings ................................................................................................................ 56
CHAPTER FIVE ....................................................................................................................................... 58
CONCLUSION AND RECOMMENDATION .............................................................................................. 58
5.2 Conclusions ..................................................................................................................................... 58
5.3 Recommendations .......................................................................................................................... 60
5.4 Implications Of Theory .................................................................................................................... 61
5.5 Implications for Further Studies..................................................................................................... 61
Acknowledgement
First and for most, I would like to express my deepest respect and gratitude for almighty
GOD for his gift of wisdom that makes me pass through all these obstacles and ups and
downs, and realize my dream.
Next, my thanks will be forwarded to my family Bety, Emmy, Yemegn, Abenezer and of
course Loza for all their support in my entire life, my work, and particularly to this paper.
I would also like to express my thanks to Ato Teklegiorgis Assefa (Ass. Professor), my
advisor, for his unconditional support, expert guidance, and useful recommendations that are
crucial for the completion of this study.
My special thanks goes to Selam Zerou who helped me a lot in making this study real. Thank
you so much.
Finally, I would like to acknowledge all respondents of my questionnaires and thank to all
others without whom this paper would not have been possible.
Acronyms
CBE: Commercial Bank of Ethiopia
NBE: National Bank of Ethiopia
CRM: Customer Relationship Management
ii
List of Tables
Page
Table 3.1 customer distribution of the branches of CBE 30

Table 4.2.1 Background characteristics of the ‘Employee Questionnaire’
Respondents 33
Table 4.2.2 Background Characteristics of the 'Customer Questionnaire’
Respondents 35
Table 4.3.1 Factors that affect the adoption of CRM - Employee’s perception……….37
Table 4.3.1.1 One- Sample statistics-lack of skill 38
Table 4.3.1.2 T-test on lack of skill 39
Table 4.3.1.3 One- Sample statistics-Budget related issues of CRM 40
Table 4.3.1.4 One-Sample statistics –Budget Related Issues 40
Table 4.3.1.5 One- Sample statistics-Concerning data quality and quantity 42
Table 4.3.1.6 One-Sample statistics – Understanding the Benefits of CRM 43
Table 4.3.1.7 T-test on the Understanding the Benefits of CRM 44
Table 4.3.1.8 One-Sample statistics –commitment of top level management 44
Table 4.3.1.9 T-test on the commitment of top management 45
Table 4.3.1.10 One-Sample statistics –Technological related issues 46
Table 4.3.1.11 T-test on Technological Related Issues 47
Table 4.3.2.1 Factors Affecting the Adoption of CRM- Customer’s Perception 48
Table 4.3.2.2 T-Test on Customers’ Responses 50
Table 4.3.2.3 Having knowledge regarding CRM………………………………………51
Table 4.3.2.4 Provision of information about CRM by the bank 51
Table 4.3.2.5 Employees knowledge of CRM as perceived by customers 51
Table 4.3.2.6 Technical problems of employees observed while handling customers
CRM program 52
Table 4.3.2.7 Speed of getting service in relation to CRM………………………………52
Table 4.3.2.8 Employers serve customers with great respect.............................................52
Table 4.3.2.9 The bank identifies customers’ needs............................................................53
Table 4.3.2.10 The bank’s CRM program is based upon the customers' needs..............53
Table 4.3.2.11 There are enough skilled personnel in the CRM department..................53
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Table 4.3.2.12 The bank has been supporting me with its CRM program.....................54
Table 4.3.2.13 It is easy to communicate with top CRM managers when necessary 54
Table 4.3.2.14 The bank is doing more than relationship management to satisfy
customers 54
Table 4.3.2.15 There are simple procedures provided by the bank to accept
customers’ complaints regarding CRM 55
Table 4.3.2.16 The bank positively accepts complaints and
provides timely feedback 55
Table 4.3.2.17 I have regular internet access to deal with CRM when necessary 55
Table 4.3.2.18 I do not have the basic IT knowledge that helps me in getting CRM
service from the bank 56
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Abstract
The aim of this paper is to identify the Challenges of Adopting Customer Relationship
Management by Commercial Bank of Ethiopia. Thus, it aims to add some information and
facts with regards to the challenges of CRM in its adoption process. The study has
incorporated both primary and secondary data. Moreover, the study uses qualitative research
method as a primary source of data. Qualitative data was collected from questionnaires
distributed to 384 samples for customers of CBE that are selected by a probability sampling
techniques from five Grade IV branches of CBE. Questionnaires were also distributed to the
selected branches of employees of CBE and head office employees of CBE who are working
around CRM area. The study incorporated descriptive statistics for analyzing the collected
data from respondents. To confirm results, T-Score was used. The outcome of the analysis
are presented in tables. The outcome of this research indicated that there are Challenges in the
Adoption process of Customer Relationship Management by Commercial Bank of Ethiopia.
These challenges are identified as budget related challenges, technological related challenges,
skill related challenges, lack of adequate involvement from the top management side, lack of
quality data, and the lack of understanding the benefits of CRM by the bank's employees. Of
all, budget and technological related problems are the most serious and affecting the adoption
process significantly, compared to the other challenges. Therefore, in order to achieve better
results and maximize effectiveness of the CRM program the bank is adopting, the challenges
identified by this study should get adequate attention and needs to be solved.
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CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Effective customer relationship is a base for customer value. In order to support

relationship marketing, it is obvious that customer relationship management plays a crucial
role. Payne and Frow (2005) gave a definition as CRM is a strategic approach that is
concerned with creating improved shareholder value through development of appropriate
relationships with key customers and customer segments. CRM unites the potential of
relationship marketing strategies and IT to create profitable, long-term relationships with
customers and other key stakeholders. CRM provides enhanced opportunities to use data
and information to both understand customers and co-create value with them. Companies
are more conscious to manage customer relationships in the long term. Today, continuing
relationship is much more important than transaction marketing. The role of customer
relationship management is becoming more important today than ever before. It helps to
integrate various activities for better efficiency and effectiveness.
Understanding customers is the key to success of any organization. The aim of CRM
systems is to help improve and/or handle sales development, customer retention and
interactions with customers more efficiently (Schulze 2000, 18). The performance of a
company highly depends up on the understanding of its customers. Companies with better
information about their customers are in a better position than those that lack information
about their customers. Acquiring new customers is important. However, retaining them is
much more important to firms that engaged in a severe competition like the banking
industry. Since the competition among commercial banks in Ethiopia is getting stronger,
the adoption of customer relationship management is one of the major activities that must
be performed in order to understand the present as well as future needs of their customers.
Customer relationship management is more important to banks as they need to get detailed
information and understanding regarding their customers. This information allows them
for developing and improving their services better than their competitors as per needs and
wants of their customers. Technological advancements have made even the customer
1
relationship management activities more simple and more valuable to both firms and
customers. Banks and financial institutions are recognizing that they can no longer look at
a consumer from a specific product or snapshot perspective but must encompass the entire
customer relationship to fully understand a client„s profitability (Christoph Ako-Nai 2011)
Customer relationship management is an indispensable requirement to reach out to the

customers proactively and provide personalized services. A good Customer Relationship
Management system should always be determined by its final outcome and should result in
high customer value creation. Lack of understanding about Customer Relationship
Management (CRM) systems has the potential to contribute to the failure of the whole
initiative – especially when organizations view such systems from a purely narrowed
technological perspective or when they address Customer Relationship Management in a
fragmented manner. The systems have been available as software for the collection
analysis and evaluation of information to help the activities of marketing and to provide
better customized service to customers. “Organizations need to understand the theoretical
and practical implications of the business perspective of CRM before embarking upon a
CRM system project. [...] To be successful, CRM projects need to be viewed as more than
the implementation of IT” (Light 2001, p.1239).
There are a number of challenges that banks in Ethiopia are facing during the application
of Customer Relationship Management. Therefore, the basic aim of this research is to
identify the challenges and issues from the application of customer relationship
management in the Commercial Bank of Ethiopia.
1.2 Statement of the problem
In the financial services sector the use of Customer Relationship Management systems is
seen as promising with high potential. Sufficient customer knowledge can be accumulated
as a result of sound Customer Relationship Management in order to support customization
effectively. The information gathered through interaction with the customers offer great
potential for developing appropriate marketing strategies which help to create and maintain
strong relationship with customers. In retail banking, a large number of customer
relationships are maintained and a large number of services provided, making it possible to
reliably classify customer relationships and derive (and utilize) reference solutions. For
2
these reasons, growth in the level of investments in CRM systems in the financial services
sector is disproportionately high.
Organizations particularly banking firms need to understand the theoretical and practical
implications of the business perspective of Customer Relationship Management before
embarking up on a CRM system project. According to Robert Winter (2003), the
advantages of Customer Relationship Management from the company‟s stand point
include those with technical biases like data integration and automation of marketing or
sales process and those with a business bias like extension and consolidation of profitable
customer relationship. Customer Relationship Management enables prospective new
customers to be targeted with individualized and attractive offers, thus increasing the
effectiveness of sales development (Schulze 2000a, 52-54). Customer Relationship
Management makes profitable customer relationships even more profitable. It identifies
additional sales potentials and prevents the migration of profitable customers through the
individualization of pricing, discount, and the likes.
Banks in Ethiopia are implementing the Customer Relationship Management program in

order to achieve their objectives regarding the understanding of their customers‟ needs and
behaviours. However, the continuing struggle to adopt Customer Relationship
Management practice brings several challenges and issues which may limit the success of
the program. In order to overcome high competition in the banking industry, adopting
effective Customer Relationship Management program is an important task.
The basic aim of this research is to discover the serious challenges the Commercial Bank
of Ethiopia is facing today in its Customer Relationship Management adoption process.
The following research questions will help the researcher to achieve this research study‟s
purpose.
1. What are the challenges of the commercial Bank of Ethiopia while adopting
Customer Relationship Management (CRM) program?
2. Which challenges are most significant and prevent the bank from achieving better
results from the Customer Relationship Management (CRM) program stand point?
3. What are the necessary solutions that can tackle those challenges of Customer
Relationship Management (CRM) identified by the research?
3
1.3 Objectives of the Study
Customer Relationship Management is becoming more popular in the banking industry in

Ethiopia. This is banks plan to learn more about their customers‟ needs and behaviours. By
gathering the necessary information from their customers they further design competitive
marketing strategies to create and maintain strong and long-lasting relationship with their
customers.
Since competition among firms in the banking industry in Ethiopia is getting strong, it is
crucial to provide individual or customized service to customers that can satisfy them
according to their individual needs and behaviours than competitors. Thus, in order to
understand customers more one of the activities that should be performed by commercial
banks is Customer Relationship Management.
1.3.1 General Objective
Although Customer Relationship Management (CRM) is very important to a company that

wishes to get better understanding regarding its customers, it is not smooth all the time.
There are various challenges that should be tackled in order to get better results. Therefore,
this research aims to identify the challenges of Customer Relationship Management
(CRM) in the adoption process as well as tries to provide the necessary recommendations
to make the program more effective and achieves the Customer Relationship Management
objectives. In general, the objective of the research besides investigating those factors that
create obstacles in the adoption of Customer Relationship Management, it provides the
necessary recommendations to tackle those challenges.
1.3.2 Specific Objectives
The research, therefore, aims
 To identify the challenges of adopting Customer Relationship Management

process within the Commercial Bank of Ethiopia.
 To identify the most significant factors that hinder the organization from
achieving better result from its Customer Relationship Management program.
4
 To provide the necessary recommendations to tackle those challenges so that
better results will be registered.
1.4 Scope of the Study
Commercial Bank of Ethiopia operates in 216 branches in Addis Ababa as of December

2013. It would be a daunting task to cover all of the bank's branches in this study due to
time and financial constraints. The research is, therefore, limited to the five (5) branches of
the Commercial bank of Ethiopia in Addis Ababa. However, care was taken to ensure that
the responses collected are representative.
1.5 Limitations of the study
The research is limited to one commercial bank in Ethiopia among the many due to cost and
other constraints. The different ways of Customer Relationship Management adoption used
by other commercial banks in Ethiopia may result in different challenges of Customer
Relationship Management which may again make the findings of this research not to be
generalized. However, if commercial banks adopt Customer Relationship Management in
similar way with the Commercial Bank of Ethiopia, the findings and recommendations
provided could help them in tracing Customer Relationship Management related challenges
and make them to adopt their Customer Relationship Management programs effectively to
know their customers well so that they can develop a competitive marketing strategy.
1.6 Significance of the study
This study has significance for different parties particularly to the researcher, to the
Commercial Bank of Ethiopia, and to other commercial banks in Ethiopia. It also provides
benefit to others who will conduct a research regarding Customer Relationship Management
in the future.
To the researcher, it helps by building experience in having deep knowledge regarding CRM
and the experience of conducting a research. To the Commercial Bank of Ethiopia and other
commercial banks of the private sector it benefits them by providing the information
regarding the challenges while adopting Customer Relationship Management programs. It
provides the important recommendations for effective Customer Relationship Management
5
program adoption to these banks. As CRM becomes indispensible today, understanding the
challenges of Customer Relationship Management helps these companies well in allowing
them to design a better CRM program.
Even for other researchers who may be involved in conducting CRM related research, it
helps them by providing a reference to have deep knowledge regarding their topic.
1.7 Key Terms
Customer - operationally customer refers to organizations individuals and businesses that

patronize bank products and services.
Relationship Marketing - establishing, maintaining and enhancing relationship with

customers and other partners at a profit and that the objectives of the parties involved are
met (Coronroos, 1994)
Customer Relationship Marketing-Enterprise approach to understand and influence

customer behaviour through meaningful communications in order to improve customer
acquisition, customer retention, customer loyalty, and customer profitability (Swift, 2001).
1.8 Organization of the study
This study has 5 chapters. The first chapter outlines the introduction part. It deals with the
background of the study, statements of the problem, objectives of the study, significance of
the study, scope of the study, limitations of the study and organization of the study.
The second chapter deals with literature review. It reviews various studies conducted on
Customer Relationships Management (CRM). Chapter three outlines the research
methodology employed. It deals with the method of data collection & sources of data
employed.
Chapter four deals with the analysis of the data and the interpretation of the data collected
with a help of tools mentioned in the third chapter.
And finally, chapter five presents the key result, conclusions and recommendations for the
topic of the study.
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CHAPTER TWO
LITERATURE REVIEW
2.1 Chapter Overview
In order to find relevant information about the chosen area, the project started with a
literature review that was done primarily through the library of Addis Ababa University,
School of Commerce by the use of search engines such as PRIMO and Emerald yet some
of the information has been collected through books. Relevant literature were collected by
the use of the following keywords: customer relationship management, customer retention,
customer loyalty, CRM strategy, and Challenges of adopting CRM. These words have
been used both individually and together in different combinations. Internet, Google, has
also been used in a small extent.
2.2 The Banking Industry in Ethiopia
Banking is one of the oldest professions in human history. A broader definition of a bank
is any financial institution that receives, collects, transfers, pays, exchanges, lends, invests,
or safeguards money for its customers. This broader definition includes many other
financial institutions that are not usually thought of as banks but which nevertheless
provide one or more of these broadly defined banking services. These institutions include
finance companies, investment companies, investment banks, insurance companies,
pension funds, security brokers and dealers, mortgage companies, and real estate
investment trusts. (Encarta, 2009)
The banking industry is facing an ever-increasing level of competition around the world as
the dynamics of the business change. Technology, commoditization, deregulation and
globalization forever changed the face of banking (Joyner 2002). Banks have understood
the need to capitalize on the new technologies to gain advantage in the competition by
exploiting their customer base, brand value and costly infrastructure investments in order
to increase profits, as there is a direct link between the customer satisfaction and the
profitability. CRM is the strategy which enables the banks to analyze the customer
7
profiles, to detect their needs and potential profitability areas and establish the necessary
actions that achieve customer satisfaction, competitive advantage and thus the profitability.
Banking in Ethiopia began in 1905 with the establishment of Bank of Abyssinia, a private
company controlled by the Bank of Egypt. In 1931 it was liquidated and replaced by the
Bank of Ethiopia which was the bank of issue until the Italian invasion of 1936. During the
Italian occupation, Italian owned banks were operating in Ethiopia. To name a few Banco
di Roma, Banco di Napoli, Bancao Nazionale del lavoro and Agricultural Bank were the
prominent ones. After the Italians were forced to leave the country the Italian banks were
closed, but the branch offices of Banco di Roma, and Banco di Napoli continued their
operations in Asmara, Massawa and Addis Ababa until 1974.
Under the subsequent British occupation, Ethiopia was briefly a part of the East Africa
Currency Board. In 1943, the State Bank of Ethiopia was established, with two
departments performing the separate functions of an issuing bank and a commercial bank.
In 1963, these functions were formally separated and the National Bank of Ethiopia (the
central and issuing bank) and the Commercial Bank of Ethiopia were formed. (Lulseged,
2005) The first private Ethiopian bank, Addis Ababa Bank Share Company, was
established on Ethiopians initiative and started operation in 1964 with a capital of 2
million in association with National and Grindlay Bank of London which had 40 percent
of the total share. The Ethiopian Government Bank established after the Italian occupation
ended in 1934 E.C. This bank has the mandate from the ministry of Finance to issue paper
money and coins.
The banking system has developed well over the years in terms of its geographical
coverage, deposit mobilization and credit expansion. With regard to technology, it is
underdeveloped, yet most of the commercial banks have started ATM service in Addis
Ababa in recent years. Furthermore, these banks are currently offering fund transfer, both
domestic fund transfer all over the country and international fund transfer, rendered in
cooperation with international money transfer companies like Western Union, Money
gram and others. This shows these commercial banks have a pivotal role to the financial
sector in particular and their growing importance to the performance of the economy as a
whole.
8
Although the banking industry in Ethiopia has about hundred years of experience, it can be
said that, the sector is not yet developed and is still in its infancy or a growing stage. In
addition to that, despite a rapid increase in the number of financial institutions since the
1992 financial liberalization, the Ethiopian banking system is still underdeveloped
compared to the rest of the world. Though efforts have been made to introduce
competitiveness, the banking sector seemed to look an oligopolistic structure for many
years, with only few institutions particularly state owned banks controlling the majority
market share in the sector. The financial system is also characterized by repression factors
including negative real interest rates, inefficiency in financial intermediation and non –
existing or underdeveloped financial markets.
The Commercial Bank of Ethiopia was established in its present form by a merger of the
nationalized private banks (Addis Bank) with that of the publicly owned commercial bank
by proclamation No.184 (1980). Since 1992 Ethiopia has been gradually liberalizing its
financial sector. One of the main targets of financial institutions is mobilizing resources
specifically domestic savings and channelling investment (Alemayehu, 2006). Financial
institutions act as the most important engine of economic growth for several economies in
the world. In Ethiopia the major financial institutions operating are banks, insurance
companies and micro-finance institutions. The market structure for commercial banks in
the economy is highly concentrated especially, in the area of total assets and deposits
(Ebisa, 2012). Commercial banks should not only focus on quantitative analysis and safety
but also on effective qualitative analysis about bank risk control, internal management and
customer service levels when it does performance assessments. With the ever improving
information technology, commercial banks will inevitably change in service model, in
order to adapt to the trend of social development. Of course, that will depend on
improvement of financial security technologies, so that banks can continue to innovate
financial products, and enhance core competitiveness (Zhang & Li, 2009).
However, today Commercial Bank of Ethiopia is facing stiff competition from privately
owned commercial banks in utilizing modern technologies and they have to make efforts
to survive in a competitive market and uncertain market place to continue generating
profits. Banks increasingly realize that managing customer is a very important factor for
their success in increasing organizational performance in respect of customer attraction,
customer satisfaction and customer retention. Customer management is a strategy that can
9
help them build strong relationships with their customers and increase their profits through
the right management system and the application of customer focused profit generating
institutions. The organizational efficiency of banking sector has been one of the major
issues in the financial turmoil and dynamic financial environment of the world. Thus, the
evolution of customer management is found in relationship marketing theory which is
intended at improving long term customer relationship by changing from transaction based
marketing, with its emphasis on attracting new customers, to customer retention through
effective management of customer relationships to cope up with unstable financial crisis
(Christopher et al., 1991). Reich and Sasser (1990) stated that, those customers who have
been around long enough to get familiar with the company‟s rules, regulations, ethics and
principles, will make more valuable business partnership, will acquire more business
profits and will be less price sensitive on individual offers.
Mainly organizational performance focuses as attracting, maintaining and improving

customer management. The implementation of customer management as a tool of
competitive strategy is on the rise in different financial institutions across the world. Yet
there is no doubt that an effective and efficient practice of customer management is
important to the successes of financial institutions such as banks. Parvatiyar and
Sheth(2002), argued that most of the firms implementing customer management are highly
getting benefit out of it. However, most banking systems experience some degree of
inefficiency in the utilization of their resources and, especially with regard to managing the
quality of service to service-seekers and service provider client partnership. Previous
studies have been concluded that the service is very complex and customized in the
transaction process, the external environment is sensitive to change rather than stable, and
the marketing is uncertain when sellers are not sure what the service seekers want.
Besides, banks operating in Ethiopia are consequently put into a lot of pressure due to the
increasing modern banking technology competition from Private Banks.
2.3 CRM DEFINITION
The term CRM is not clear. There is confusion about what it stands for and how to
implement it. As a result, CRM has different meanings depending on who you ask (Payne
& Frow, 2005). There are various opinions about CRM and from which aspects one can
see it. Chen and Popovich (2003) refer to CRM as a combination of people, process and
10
technology. These three parts aim at understanding the customers and managing the
relationships with them since it focuses on customer retention and relationship
development. If one instead take into account what Crosby and Johnson (2000) believe,
CRM needs to include a business strategy, supported by technology and human resources.
The strategy also needs to align relevant processes in connection to CRM and shall be
focused on building proactive customer relationships that build profitable customer loyalty
for the organization and support the desired customer expectations (Crosby & Johnson,
2000).
Peelen (2005, p. 3) has pointed out four different major views regarding CRM, the aspects
are technology, process, strategy and real time marketing. The first aspect, technology,
helps the company to gain knowledge about their customers, for example what and when
they bought something. The company can also look at previous behaviour of a customer
and thereby make predictions about future purchases (Xu, Yen, Lin & Chou, 2002).
Followers of this technology philosophy advocate that the main element of CRM is the
possibility to establish customer contact between employees from different departments
through internet, telephone and also face-to-face (Peelen, 2005, p. 3). There are supporters
who say that the second aspect of CRM, the process, works in order to identify customers,
creating customer knowledge and building relationships (Nguyen, Sherif & Newby, 2007).
As one can see, the technology view is not mentioned in this way of looking at CRM. This
approach demand greater focus on the customer, and focus on not only one transaction, but
the whole relationship building. It strives to get the company to know the customer more
as a person than just a buyer of their goods (Peelen, 2005, p. 4). The third aspect of CRM
is that it should be seen as a business strategy and it should optimize the mixture of the
goals which are to increase revenue and profit, but also to raise customer satisfaction
(Peelen, 2005, p. 4). Osarenkhoe and Bennani (2007) have developed a model, the 5-S,
that describes the core dimensions of relationship strategy implementation. The 5-S are;
structure, staff, style, systems and schemes within the company.
As previously mentioned, CRM lacks a generally accepted definition. Instead, there are
several different definitions and the viewpoints differ considerably, and the authors‟ view
points are very different. The definition of CRM has been described in several ways, for
example as a process, strategy and a technological solution (Dimitriadis & Stevens, 2008).
A definition formulated by Kincaid (2003) refers to CRM as more than the relationships,
11
“The strategic use of information, process, technology, and people to manage the
customers’ relationship with your company across the whole customer life cycle”
(Kincaid, 2003, p. 41).
Swift (2001, p. 12) are defining CRM as an “Enterprise approach to understanding and
influencing customer behaviour through meaningful communications in order to improve
customer acquisition, customer retention, customer loyalty, and customer profitability”. In
this definition the customers are in focus, and the author does not mention any other tool to
handle the relationship other than understanding the customers by using communication
tools. Parvatiyar and Sheth (2001) have another definition of CRM; “A comprehensive
strategy and process of acquiring, retaining, and partnering with selective customers to
create superior value for the company and the customer. It involves the integration of
marketing, sales, customer service, and the supply-chain functions of the organization to
achieve greater efficiencies and effectiveness in delivering customer value”. According to
Parvatiyar and Sheth, (2001) CRM is deeper than the aforementioned, and emphasizes on
the positive exchange between customers and the company. This definition mentions,
unlike the ones mentioned above, that a company should work with customers that they
have selected in order to bring value to both the customers and also to the company. Not
all customers are willing to develop long-term relations with a firm, thus, the company
needs to select who these customers are (Peelen, 2005, p. 56).
Osarenkhoe and Bennani (2007); “CRM is a strategy used to learn more about customers
needs and behaviours in order to develop stronger relationships with them”. This
definition is short, simple, informative, and it highlights CRM with focus on the
relationships. The definition by Kincaid (2003) is wider than this one by Osarenkhoe and
Bennani as it also points out that a business needs to use technology, information and
employees in order to be able to handle the long-term relationships over the customer life
cycle that CRM should bring. This definition by Osarenkhoe and Bennani (2007) is similar
to the definition made by Swift (2001) since it aims to keep a strong communication with
customers in order to learn more about their behaviour. The definition by Parvatiyar and
Sheth (2001) stands out since it brings up the customer value as an important part of CRM,
the other definitions refers only to the relationship with the customers, customer loyalty
and customer retention and do not mention the value that a company actually delivers to
the customer.
12
What the definitions above have in common is that the customer is in focus and that it is a
concern how to establish long-term relationships with them. These definitions of CRM
points out how important it is to view CRM as a extensive set of strategies for managing
those relationships with customers that relate to the overall process of marketing, sales,
service, and support within the organization. In order to satisfy the customer, information
technology and information systems can be used to support and integrate the CRM process
(Ngai, 2005). Since there is no widely accepted definition about CRM, the best way to
achieve a picture of what CRM stands for is to read and mix different definitions and to
summarize them. Crosby and Johnson (2001) identify customer relationship management
as a business strategy that multiplies the use of technology and includes it in all processes
to create retention and loyalty over time. In general terms, the focus of the CRM concept is
to build a long-term and value-added relationship for both business and customers.
In this perspective, it will be necessary to review some definitions to clarify the term:
 “Coherent and complete set of processes and technologies for managing

relationships with current and potential customers and associates of the
company, using the marketing, sales and service departments, regardless of the
channel of communication” (Chen and Popovich, 2003);
 CRM applications can enable effective Customer Relationship Management,
provided that an enterprise has the right leadership, strategy, and culture”
(Thompson 2002);
 “To improve service and retain customers, CRM synthesizes all of a company‟s
customer touch points” (Yu,2001);
 “Good customer relationship management means presenting a single image of the
company across all the many channels a customer may use to interact with the
firm, and keep a single image of the customer that is shared across the enterprise”
(Berry and Linoff 2000, p.14).
2.4 Types of CRM
Several researchers have presented different views about which types comprise a best
CRM consideration. For instance, Reynolds (2002) in her book presented three different
types of CRM i.e. operational, analytical, and collaborative CRM. These three different
13
3types were also presented in the recent work of (Minna and Aino, 2005). Similarly,
Dyche‟ (2002, p.13), in his work emphasized more on operational and analytical CRM.
However most recently, Buttle (2009, p.4) in his book presented strategic CRM as a fourth
type of CRM. In general, these all types of CRM are important because they all have a
common objective which is to deliver CRM successfully within the organizations.
Therefore, the following section presents and discusses all the four major types of CRM.
2.4.1 Operational CRM
According to Dyche, (2002, p.13) an operational CRM is also known as front office CRM.
It involves the areas where direct customer contact occurs which is also known as touch
points. A touch point can be an inbound contact (e.g. a call to a company‟s customer
support hotline) or an outbound contact (e.g. an in-person sales call or an email promotion
to customers). In other words, the operational CRM is used to capture customers‟ data. The
operational CRM also enables and streamlines communications to and from customers, but
it does not necessarily mean optimizing service. Just because a banking customer checks
his/her balance on a mobile telephone would not conclusively establish that he/she does
not prefer to perform his/her transaction in the branch.
2.4.2 Analytical CRM
An analytical CRM is also known as a back office CRM. It involves understanding the
customers‟ activities that occurred in the front office. The analytical CRM requires
technology (to compile and process the mountains of customers‟ data to facilitate analysis)
and new business processes (to refine customer-facing practices to increase loyalty and
profitability). Under pressure from analysts and industry experts, most of today‟s CRM
vendors are either creating analytical CRM capabilities or partnership with business
intelligence (BI) vendors to incorporate analysis into their offerings (Dyche‟, 2002, p.13).
If enhanced customer loyalty is the door, then integration is the key. Similarly, Adebanjo
(2003) described that an analytical CRM is mainly used for building data warehouses,
improving relationships, and analyzing customers‟ data.
14
2.4.3 Collaborative CRM
According to the definitions from Search CRM, 2007, “collaborative CRM is an approach
to CRM in which the various departments of a company such as: sales, technical support,
and marketing etc., share any information which they collect from interactions with their
customers. For instance, customer feedback gathered from a technical support session
could inform marketing staff about products and services that might be of interest to the
customer. The purpose of this collaboration is to improve the quality of customer service
in order to increase customer satisfaction and loyalty. Minna and Aino (2005) and
Adebanjo (2003) explained that: “a collaborative CRM system is mainly used for building
online communities, developing business-to-business customer exchanges, and
personalizing services”.
2.4.4 Strategic CRM
Based on the ideas of Buttle (2009, p.4), strategic CRM is focused upon the development
of a customer-centric business culture within an organization. This culture is dedicated to
winning and keeping customers by creating and delivering value better than competitors.
The author further argues that such business culture is reflected in leadership behaviors,
the design of formal systems of the company, and the myths and stories that are created
within the firm. Also, in such culture, the resources would be allocated where they would
best enhance customer value, reward system to promote employee behaviors that enhance
customer satisfaction and retention, and customer information to be collected, shared and
applied across them business. In this way, the heroes of the business would be those who
deliver outstanding value or service to the customers.
2.5 Benefits of CRM
According to Boris Milovic, due to the highly competitive market in the banking sector, it
is very difficult for banks to differentiate themselves from the competition because the
services that they offer are very similar, which leaves the customer interaction as a way to
distinguish the bank from the competition and the same goes for insurance companies.
Customers usually choose a bank based on its location or how close it is to the customer's
home or work place. Competitive pressure and dynamic market have contributed to the
15
development of CRM in the financial sector. CRM solutions for Banking provide multi-
channel communication with customers in a consistent and efficient manner. This
distinguishes the bank from its competitors and provides the most efficient data collection,
unified view of each client, enhanced decision making, product design and sales. Together
this allows banks to know their clients and to make the most efficient use of customer
interactions across multiple channels. CRM solution also allows the increase of revenue
through customized sales and customer service interactions, which allows banks to
respond to new customers, products and markets faster and easier. CRM will improve
customer satisfaction and enable a better organization for banks with high quality services,
better analytics, segmentation and targeting. All these results will not be achieved simply
by purchasing and implementing CRM solutions.
Using a Customer Relationship Management system allows businesses to attain many

objectives:
 Streamlined sales and marketing processes

 Higher sales productivity
 Added cross-selling and up-selling opportunities
 Improved service, loyalty, and retention
 Increased call centre efficiency
 Higher close rates
 Better profiling and targeting
 Reduced expenses
 Increased market share
 Higher overall profitability
 Marginal costing
 Integration of primary business activities
 Tracking of all customer interactions
 Storage of customer data in a single database
 Support of customer life cycle.
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2.6 Challenges Related to CRM
The challenges faced by many of the banks whilst implementing CRM can be summarized
by Babin Pokharel as the followings:
 Getting management sponsorship

 Quality of customer data
 Alignment issue (Alignment of people and processes)
 Lack of skilled people
 Determining the right time for customer needs
 Using customer data more intelligently
 Incorporating customer data and customer preferences to the customer data base
 Using right technologies
 Real time data cross all customer channels
 Having 360- degree view of customers (Single view of customers)
The retail banking market is fiercely competitive (Pili 2006). The competition is forcing
banks to find new ways of satisfying customers and quick adaptation to changes. The
competition among the banks itself is also very major domestic players on the arena.
Banks are aware of this fact and exploit new trends to continue their existence in the
market. CRM is one of these trends that are highly adopted by many banks. The
satisfaction level of customers who agree that they are treated as a valued customer is the
measuring part for CRM's success in the bank. This could be attributed to the distinctive
communication capabilities, which target to establish an emotional link with the customer.
This is highly related with organizational learning philosophy and adaptive culture of the
banks. One of the major challenges when implementing CRM is to know when the timing
for the implementation is right and many companies have difficulties to develop a CRM
strategy as they lack the resources to develop CRM software (Bull, 2003). Zineldin (2006)
presents a framework (the 5Q-model) that consists of five different qualities that influence
the satisfaction and loyalty of a customer. The model consists of the quality of -object, -
processes, -infrastructure, -interaction and the quality of atmosphere. This framework can
help the managers to analyze which changes in the CRM strategy that affect the
satisfaction and loyalty of a customer. All of the different qualities can be seen as CRM
challenges since their implementation will affect the satisfaction of the company‟s
customers. The five stages can be hard to implement successfully because if the company
17
uses this model inappropriately it runs the risk of losing customers, due to low level of
satisfaction (Zineldin, 2006).
It is a challenge to find a balance between maintaining existing customers and finding new
ones. According to Zineldin (1999) it is more important to keep and satisfy the existing
customers than getting new ones, since it is less costly and more profitable. Customer
retention can also contribute to lower the customer acquisition costs, since retention helps
to build a reputation around the company that spreads a positive spirit (Xu & Walton,
2005). If the level of satisfaction exceeds the expectations of the customer, the customer
may become fond of the company. This implies that the consumer becomes more loyal to
the entire company and starts spreading positive word of mouth, which is very good for the
company's survival. But it can also result in the opposite, that a consumer gets
disappointed and start spreading negative word of mouth about the company, which can be
devastating for the future for business (Osarenkhoe & Bennani, 2007).
Many companies find it challenging to define which of their customers that are most
profitable for their business, and which ones that instead are costing a lot of money for the
company, as there is no easy way to measure this (Bull 2003). Profitability is not just
about measuring the level of expenses in the company. Some of the customers may even
cost the business a lot of money, for example, when a customer has unrealistic
expectations of the service, they can become a burden on the business service resources.
Therefore, it is important for a company to profile the customers in order to know which
ones are the most profitable and which ones may cost the company money. Thereafter, the
company may be able to allocate its resources on the most effective way in order to
maintain customer relationship(Bishop, 2009). It is a good idea for a company to invest in
staff training and development even in harsh times because the skills, talent and
capabilities of the people are what will enable customer service delivery to succeed.
Making a customer feel special is the best way to help them become even more loyal to the
business, and a satisfied customer can be the best advocates for future sales, as they spread
positive word of mouth and recommendations which may result in increased customers for
the company as consumers always seeks to gain the best value for money (Bishop, 2009).
A dissatisfied customer tells approximately 9-10 persons about the bad incident they had
with the company. This is obviously not very positive since word of mouth travels fast.
Yet, if the company handles the complaints in a good way, about 95 percent of the
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customers who are dissatisfied are likely to come back to the company at another time.
Also a happy and satisfied customer will return once again, and they are also willing to tell
other about their good experience (Zineldin, 2006). Companies often reduce their CRM
activities when budgets come under strain within a company (Bishop, 2009). According to
Bishop (2009) one of the first areas to suffer cuts are investments in staff training and
development, which can be seen as another challenge of CRM. This is because employees
are essential part of a company's CRM efforts and need to pay fulltime attention to the
implementation(Chen & Popovich 2003).
Many organizations do not make enough research and planning before implementing
CRM, which may have the result that the flexibility is not enough and that the CRM lacks
commitment and support from the top management (Nguyen, Sherif & Newby, 2007).
Further challenges of CRM are due to poor leadership. Most of CRM programs are
implemented based on a technical requirements focus, rather than on a business-needs
focus. Leaders of CRM often lack a well developed strategic CRM plan, and they are
measuring specific activities within their functions. When working on the overall
strategies, the company should be the main focus (Nguyen, Sherif & Newby, 2007).
2.7 Internal and External Factors Influencing CRM
The internal and external factors that influence a company's CRM strategy have to be
considered in order to succeed. The internal factors include the employees of a business,
and also to avoid building CRM on negative grounds (for example if the products do not
meet customers' expectations), this may have the result that the company is not able to put
the customer‟s desires into their products and services. This can lead to a failure in
customer retention and loyalty(Dimitradis and Stevens, 2008; Peelen, 2005). Dimitradis
and Stevens explain that it does not exist any generally accepted framework for CRM
success factors. However, they summarize that the internal environment of a company can
be summarized in five factors that influence the implementation and performance of CRM.
These five factors are the strategy, which is considered as the starting point of CRM. The
key reasons to fail with the CRM strategy are if the company fails with the implementation
of the CRM strategy across the whole company and also fails to integrate it with the
marketing and corporate strategy. Next internal factor is the organizational environment;
numerous cultural and structural factors have been shown to have an impact on the success
19
of CRM. Furthermore, the organizational environment can influence a company‟s capacity
to benefit from the investments in CRM and also influence the success of the efforts in
CRM technology. The third factor, multichannel integration, consists according to Payne
and Frow (2005), of six types of both physical and virtual contact points with the
customer, such as sales force and electronic commerce (Dimitradis & Stevens, 2008). The
fourth factor, people and the management, are responsible for the daily work with the
CRM, and some of them have also contact with the customers. These employees are
supposed to implement the CRM strategy in a human level in order to success with the
implementation. It can be more difficult and complex to handle these areas with staff and
company structure than to handle technologies and customer analysis. The last of the
internal factors that affect a company is the technology which helps to support CRM
related activities and to contribute to better organizational performance.
Thus, it is important to not view CRM as only a technology since seeing it that way
strongly contributes to failure (Dimitradis & Stevens, 2008). Peelen (2005, p. 56) points
out that the external factors consists of the customers, the competition and the distributors
of the products. The company needs to identify which of its customers are willing to
develop deeper relationships with them. All customers are, of course, not interested in this;
some stays satisfied with single purchases. Since not all of the customers are about to
develop this kind of relationship, the company needs to perform a differentiated marketing
approach where the loyal customers will be better rewarded. Though, the customers need
to accept these marketing conditions if the company should be able to implement this
strategy.(Peelen, 2005) Further, the competition on the market is also important to
consider. If the company operates on a market where it has a monopoly situation, it will
take less effort to create customer retention and loyalty. If the competition on the other
hand is tough, more effort is necessary to exceed the customers‟ expectation and to create
loyal customers (Peelen, 2005, p.56). The last factor to consider in the external
environment of a company is, according to Peelen, the distribution of the products. It is
important to create a strategy that strengthens the relation to the customers, especially if
the companies use intermediaries to serve their customers. To achieve stronger
relationships with customers, the company can record customer data and keep contact with
the customers over the Internet or telephone. This leads to companies building more
confidence to the intermediaries since they are better suited to handle these kinds of data.
There might occur a channel conflict if the intermediaries begin to feel threatened by the
20
actions of the suppliers, since the supplier is powerful and can lower the intermediary‟s
compensation or start selling directly to the customers. When designing the CRM strategy
all mention above must be taken into account since it is supposed to suit all involved
(Peelen, 2005, p. 57). While Peelen (2005) take both customers and the environment into
account when describing the external factors around a company, Dimitradis and Stevens
(2008) focus on the relationship with the customers. They state that the external side of the
environment is based on the relationship from the customers‟ point of view (Dimitradis &
Stevens, 2008). Detailed studies have been performed concerning, for example,
relationship quality, satisfaction with a relationship, trust and commitment (Dimitradis &
Stevens, 2008). When customers‟ expectations and experience of a relationship are closely
matched, satisfaction will occur.
The following external factors affect a company‟s CRM success. The first factor to
consider is the relationship expectations. These expectations can, for example, be
confidence, time savings or social satisfactions. Moreover, the perception of the
relationship has to be taken into account. This includes how a customer perceives and
interprets different actions by the CRM channels, touch points of a CRM strategy and
system that he comes in contact with (Dimitradis & Stevens, 2008). This is, however, not
easy to measure, and the authors‟ opinions are different since it can be seen both as an
overall construction or an analytical component (Palmatier el al., 2006). How much effort
is needed in order to develop customer loyalty and retention depends on what kind of
market the company is operating at. If it operates at a market with high competition it will
take more effort to create deep relationships compared to if they have a monopoly situation
(Peelen, 2005, p. 56). It is important to manage the distributors in an appropriate way since
it can occur channel conflicts if the intermediaries feel threatened by the suppliers. It is
positive for the whole business if the relationship between the suppliers and the
intermediaries can be strengthened since in some cases the intermediaries handle the
customer contacts (Peelen, 2005,p. 57). Frequently, the organizational goals do not reflect
departments and employee‟s goals and metrics. In some companies, sales departments are
concerned with selling activities, since they are evaluated and rewarded only according to
sales metrics. Due to this fact, sales people usually think that maintaining a close
relationship with customers is not their responsibility. As a result, customers that complain
or make suggestions do not receive a satisfactory amount of attention.
21
Regarding practical propositions, it must be considered that, prior to adopting a CRM tool,
it is necessary to evaluate whether or not the organization is already oriented by a
philosophy of CRM, whether the company is in fact customer-centred, and whether its
culture and history show that collective efforts have been made to create and support long-
term relations with customers. Of course, there will be different levels of engagement with
CRM‟s philosophy. In some cases, a series of activities and changes will be necessary in
order to prepare the path for CRM implementation. In others, the project must be
postponed to avoid the CRM tool becoming an enemy. In the past, some companies had
the excuse of not having enough data/information in order to understand and satisfy
customers. CRM tools can supply companies with a consistent database, but if the
company is not prepared to use this information to provide a good service, the same tool
can make this organization incompetent even more evident to customers. For instance,
some companies create a Relationship Centre in the wake of a CRM tool adoption, but it is
simply useless because either managers and employees (historically and culturally) are not
concerned about customers at all, or the organizational structure is so thin and unprepared
that there are not enough qualified people to serve clients properly via the new channels
opened by CRM tools. Not to mention that resistance to CRM tools can be so intense that a
lot of money and effort can be dramatically wasted.
The impact of culture on attitudes and behaviours is particularly observable for services
with medium and high levels of customer contact, such as professional financial services
(Mattila, 1999, Patterson, Cowley and Pransongsukarm, 2006). Changes in the
organizational structure, levels of empowerment of people dealing with customers,
rewarding and evaluation of staff systems connected to CRM goals, employees‟ selection
and qualification all these issues have to be linked to a CRM strategy that also has to
support the adoption of a CRM tool. Even if the company is already customer-centred and
has a CRM philosophy, an isolated CRM tool without process revision, adaptations and
involvement of all areas and managers will not be efficient. For relationship marketing to
be truly effective, an organization must first decide what kind of customer information it is
looking for and it must decide what it intends to do with that information. For example,
many financial institutions keep track of customers' life stages in order to market
appropriate banking products like mortgages to them at the right time to fit their needs.
Next, the organization must look into all of the different ways information about customers
comes into a business, where and how this data is stored and how it is currently used. One
22
company, for instance, may interact with customers in a myriad of different ways
including mail campaigns, Websites, brick-and-mortar stores, call centres, mobile sales
force staff and marketing and advertising efforts. Solid CRM systems link up each of these
points. This collected data flows between operational systems (like sales and inventory
systems) and analytical systems that can help sort through these records for patterns.
Company analysts can then comb through the data to obtain a holistic view of each
customer and pinpoint areas where better services are needed (Eckerson and Watson,
2000). The first step in managing a loyalty-based business system is finding and acquiring
the right customers (Reicheld andTeal, 1996). Targeting, acquiring and retaining the
“right” customer are at the core of many successful services firm. Building relationship is a
challenge especially when a firm has vast number of customers who interact with the firm
in many different ways from e-mail and websites to call centres and face to face
interactions. When customer relationship management systems are implemented well, they
provide managers with the tools to understand their customers and tailor their services,
cross-selling and retention efforts, often on a one on one basis (Eckerson and Watson,
2000).
The idea of relationship marketing is that it helps businesses use technology and human
resources to gain insight into the behaviour of customers and the value of those customers.
If it works as hoped, a business can: provide better customer service, make call centres
more efficient, cross sell products more effectively, help sales staff close deals faster,
simplify marketing and sales processes, discover new customers, and increase customer
revenues. It does not happen by simply buying software and installing it. Relationship
technology leads to deep customer insight so useful in the formulation of effective
marketing strategy. Information technology helps store and manipulate extensive
information about the customer. This information about the customer is used in customer
relationship management. Through the technology of customer relationship management,
relationship marketing helps uncover customer insights. Also the technology of customer
relationship management helps give attention from the perspective of the marketer to the
perspective of the customer. Database marketing uses database to hold and analyse
customer information thereby helping in creating strategies for marketing. Database
marketing usually uses personalise communication, data mining which refers to
uncovering relationship about customers from customer data. Advanced software and
23
hardware have made it possible to extract consumer insight that might not have been
possible otherwise.
2.8 Major Factors Affecting CRM’s success
In the implementation of CRM, finding the barriers to CRM success could help a company
to develop its CRM programs. Generally, the barriers which will affect the CRM success
always involve the points as the following (Payne 2006, 336).
2.8.1 Lack of skills
To the implementation of CRM, lack of skills in establishing and utilizing the new IT-
based CRM system are the major barriers. In a large-scale CRM implementation project,
technically skilled people always are important part. In operating the CRM program
especially some new systems, though more and more enterprises realized the importance
of employee‟s skills, the most of enterprise‟s executives still relied on vendor training to
ensure the employee‟s skills. But actually the training method is not the only way and not
always powerful. So, the employee‟s CRM skills need to enhance in order to ensure the
CRM‟s success (Payne 2006, 336).
2.8.2 Inadequate investment
To operate the CRM, adequate funding is an indispensable requirement. Particularly, for

some large-scale projects, adequate investment will provide the financial basis to the
CRM‟s implementation. So, the company could make a systemic plan for CRM‟s long-
term development and prepare adequate funding to extend the CRM system (Payne 2006,
336-337).
2.8.3 Poor data quality and quantity
As the combination of the management concept and the technical system, CRM needs a
large numbers of databases. If a company cannot ensure the quality and the quantity of the
data in the process of CRM‟s implementation, CRM cannot give full scope to the
company. But in company‟s different stages of CRM development, the emphasis levels of
the data quality and the data quantity are different. For some companies which at the early
24
stage of CRM development, data quality is the key point; but for some developed
companies which plan to undertake or have undertaken the data refinement and the de-
duplicating, data quantity is more important than data quality (Payne 2006, 337).
2.8.4 Failure to understand the business benefits
Low awareness of the business benefits will also affect the CRM‟s success. Like some
senior management of a company always have a low understanding of the marketing
database which is the key issue of the CRM‟s analysis and research. But in CRM‟s
implementation, especially in the earlier stage, data warehouse cannot be neglected
because it could help the company to forecast the potential benefits and profits after the
analysis. So, for seeking the true objectives and maximizing the profits, the company
really should understand the business benefits firstly (Payne 2006, 337).
2.8.5 Lack of leadership and top management involvement
For the CRM‟s long-term success, the best leadership and top management‟s involvement
play the important roles. Actually, the roles of leadership are to keep the executive in high
level, make the decisions decisively and to ensure that the idea is innovative, but the most
important role of leadership is to grasp the overall situation and try to be the real champion
in the process of CRM‟s implementation. Therefore, if a company lacks the powerful
decision makers and the management team, the success of company‟s CRM will be
affected by these future barriers (Payne 2006, 337-338).
2.8.6 Technology Factors
The interface of the CRM technology in any company is appreciated by the employees. A
humanized user interface of technological has been made through the improvement of the
CRM system. It shows continuously interaction between technological implementation and
application users (Karakostas et al.,2005). A friendly user interface makes the
technological applications easy to use and understand, and it increases the degree of CRM
adoption. Towards salesmen who need to operate the technological application with most
of work, usefulness and practicability directly shows the importance during their work
(Avlonitis & Panagopoulos, 2005; Ozgener & Iraz, 2006). Some assistant tools in the
25
interface can help employees to operate the CRM system conveniently, like the filter and
the information memories.
2.9 Conceptual Model
Based on the works of Payne (2006), therefore, there are six major factors affecting the
adoption of CRM namely lack of skill, inadequate investment, poor quality and quantity,
failure to understand the benefits of CRM, lack of leadership and top management, and
technological related problems. Thus, this study built on the basis of the above framework.
Lack of skills
Inadequate investment
Poor data quality and quantity
Major Factors Affecting
CRM’s success Failure to understand business

benefits
Lack of leadership and top

management involvement
Technological Barriers
Source: Payne (2006)
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CHAPTER THREE
METHODOLOGY
This chapter deals with the methodology of the study where by the research design,
sampling and sampling techniques, data collection instruments, data collection procedures
and the method of data analysis are discussed.
3.2 Research Design
Research methods, such as quantitative and qualitative methods, are used to ensure new
knowledge from research processes are convinced (Sedmak & Longhurst, 2010). A
qualitative strategy is chosen in the process of this research. With the clarification of
Bryman and Bell (2007), qualitative research emphasizes more words rather than data
numbers. Also, it regards the research outcomes as an examination from the interactions
between individuals (ibid). The suitability of qualitative research emerges from in-depth
studies and specific knowledge in a particular subject. CRM has been used publicly in
many companies. Previous literature has mentioned various critical factors to CRM.
However, in the Commercial Bank of Ethiopia context, whether these factors affect CRM
in the same way should be pointed out. As Edmonson and Mcmanus (2007) argue,
qualitative research brings out fruitful outcomes in the research field in which little
previous knowledge has been explored. Therefore, a qualitative research method is used in
our research process.
Case studies are often used for the study of a single organization (Bryman & Bell, 2007). It
is rather useful and helpful to research on a detailed and intensive examination on an
organization (ibid). Eisenhardt (1989) point out one of the most important realities of case
studies: large amounts of data. Being intimate with the empirical evidences often let
researchers produce creative theories (ibid). Meanwhile, Sedmak and Longhurst (2010)
indicate that case studies are used to undertake research in a specific context for a studied
phenomenon, as this research based on the Commercial Bank of Ethiopia. Hence, the
researcher chose a suitable company for a case study. The company occupies a large
27
proportion of the banking market in Ethiopia. Also, CRM plays a very important role in
managing customers well in large customers with different needs.
This research is descriptive in nature in that it collects data from one or more target groups
and analyzes it in order to describe the present condition. More specifically a survey data
on the six dimensions of the factors that affect the adoption of CRM in the Commercial
Bank of Ethiopia was collected from customers, customer relation officers and customer
service managers from the branches, and customer relation managers from the head office.
This is to identify the factors that affect the adoption of CRM in the Commercial Bank of
Ethiopia.
3.3 Sampling Design
The population of the study encompasses all customers, customer relation officers and
customer service managers of the bank‟s branches, and the customer relation managers of
the bank from the head office in Addis Ababa. As it is impractical to assess all branches of
Commercial Bank of Ethiopia located in Addis Ababa, a purposeful sampling is found to
be the most appropriate for this case study approach, because information- rich cases can
be selected so as to learn much about the issues that are important to the study (patton, M,
Q.1990).
To do so, the branches in Addis Ababa were categorized in to sub-groups as per the bank‟s
branch grading system. This grading system categorizes branches from Grade I to Grade
IV based on volume of transaction, variety of services provided, site location, amenities
and staff strength, cash holding limits and other similar considerations.
After the identification of the specific number of branches in each group the sample is
drawn only from the higher grade branches (Grade IV) which constitutes 16 branches of
the bank as of November, 2014. Focusing in Grade IV branches is believed to provide the
necessary data for the study since the overall structural platform across branches in the
Commercial Bank of Ethiopia is uniform as it is dictated by the procedural manuals
designed for the processing units. Moreover, the use of higher grade branches is presumed
to enable access to multiple portfolios of customers, employees and managers of the bank
as the branch rating criteria enables the identification of branches where it provides
diversified services that involve huge volume of transactions.
28
Accordingly, among the grade IV branches only five of them namely Arat kilo branch,
Arada Giorgis, Finfine branch, Sillasie branch and Aba koran branch were included in this
study so as to enable undertaking a focused inquiry within the scheduled time. In addition
to this, as the credit processing team of the bank for branches in Addis Ababa is located
solely in the head office, the credit customers and the respective customer relationship
officers were also included in the sample.
Overall, 73 employees that work in the CRM areas of the five branches and in the head
office and 384 customers of CBE having a business relationship with the five branches
were included in the sample. The number of customers in each branch was derived from
the Management Information System (MIS) of the bank as depicited in table 3.1 below.
According to Miaoulis and Michener, (1976) in addition to the purpose of the study and
population size three criteria usually will need to be specified to determine the appropriate
sample size: the level of precision, the level of confidence or risk, and the degree of
variability in the attributes being measured. The level of precision, sometimes called
sampling errors is the range in which the true value of the population is estimated to be.
This range is often expressed in percentage points (e.g., + 5 percent). The key idea
encompassed in level of confidence is that when a population is repeatedly sampled the
average value of the attribute obtained by those samples is equal to the true population
value and the degree of variability in the attributes being measured shows the distribution
of attributes in the population. Based on this premises, the writer has devised strategies to
determine sample size for different number of population.
According to Krejcie and Morgan (1970), a sample size of 384 is appropriate for a given
population size of 100,000 and above at the confidence level of 95% and a margin of error
of 5%. Using the same analogy, in this study 384 questionnaires were distributed to meet
up to the required level of number of responses from customers of CBE. In addition,
employee questionnaires were distributed to all of the customer relationship area
performers of the five branches and head office as well.
29
Name of Current Saving Time Credit Total
Branch Account Account Deposit service
customers customers customers customers
Art Killo 1,705 106,002 2 517 91,717
Arada 2,260 80,068 - 81 41,320
Gorgis
Finfine 3,117 51,064 6 391 36,187
Sillasie 1,363 82,434 6 65 25,528
Aba koran 4,205 42,612 1 580 47,398
Grand total 12,650 362,180 15 1,634 242,150
Table 3.1 customer distribution of the branches of CBE
The structured questionnaires were used to solicit primary data from employees and
customers to get the necessary information. Questionnaires distributed to customers will be
labeled as „Customer Questionnaire' and those distributed to employees will be labeled as
„Employee Questionnaire‟ (sadek et al 2011) to avoid mix ups of responded questionnaires
during data collection.
The secondary data were collected from annual reports of both National Bank and
Commercial Bank of Ethiopia. At tertiary level published journals, articles, publications,
books, websites and others were used to solidify the premises of the study.
3.4 Data collection procedures
Data was collected mainly from survey through questionnaires. The 'Employee
Questionnaire‟ were given to the concerned branch customer relationship officers and
customer service managers through branch managers accompanied by the inter-
departmental memo requesting cooperation. Consequently, the branch managers also
distribute the 'Customer questionnaire' to the employees under their domain through
customer relationship officers. Since the customer relationship officers and customer
service managers are the one with which customers are frequently engaged, the „customer
Questionnaires‟ will be given to them who further distribute it to the customers and receive
the responses thereby.
Accordingly, 73 employee questionnaires and 384 customer questionnaires were given to

the respective branch managers of the bank. This yields 82.5% response rate for employee
questionnaire and 90% response rate for customer questionnaire.
30
3.5 Reliability and Validity
Reliability can be defined as the degree to which measurements are free from errors and,
therefore, yield consistent results. Operationally, reliability is defined as the internal
consistency of a scale, which assesses the degree to which the items are homogeneous.
Validity, on the other hand, is concerned with whether the findings are really about what
they appear to be about. Validity is defined as the extent to which data collection methods
accurately measure what they were intended to measure (Saunders and Thornhill, 2003)
To ensure the validity and reality of this research, the researcher utilized the criterion
argued by Bryman and Bell (2007) to test the process of the research. First of all, the
internal validity would be fulfilled by the consistency between the research data collection
and the theoretical framework. On the other hand, the external validity, which is also met
by this formal theory generated, represents that the findings would be used in more general
area. Secondly, the researcher makes an adequate agreement in the process of the research,
and the extent of the agreement determines the internal reality. Meanwhile, this research
will try to a direction for further research on the construction of implementation of CRM
strategies. Hence, the external reality would be met.
Reliability was computed using cronbach‟s coefficient alpha for the entire set of factors
affecting the adoption of CRM and found to be 0.82 which is much higher than the
threshold value of 0.65. Therefore, the scale is considered to be reliable (Nunnaly, 1978).
3.6 Data Analysis
Eisenhardt (1989) highlights data analysis is the heart of building a new theory from case
studies. Also, the difficulties and challenges caused by mixed and disordered data are also
pointed out (ibid). Therefore, the researcher chose grounded theory which has become by
far a most widely used method for analyzing qualitative data, according to Bryman and
Bell (2007). The research, therefore, follows the processes in the grounded theory
illustrated by them. After the first turn of data collection, the research started from coding -
the basic step in the grounded theory for refining concepts and categories. The researcher,
then, collected the necessary data. Recollecting and reanalyzing new data are useful for
qualitative research (Edmonson & Mcmanus, 2007).
31
The survey is designed to solicit for the identification of the factors affecting the adoption
of Customer Relationship Management in the Commercial Bank of Ethiopia. The data was
analyzed using the Statistical Package for Social Science (SPSS) version 21.0 software
using tables and other descriptive statistics. This software has been widely used by
researchers as a data analysis technique (Zikmund, 2003).
The analysis to address the research question is done by first calculating the mean score for
each dimension in the respective respondent groups and consequently confirms the result
using T-test statistics. Based on the results of this score, factors that affect the adoption of
CRM in each dimension is ranked for the respective employee and customer respondent
groups. Later, the overall mean score of challenges as perceived by employees is compared
with that of customers‟ perception mean score using Z-score. Finally, those dimensions
that score below the simple average of the scale points i.e. 3.00 are considered to show the
major challenges of the bank in adopting CRM while those scores above this point shows
less significant factors affecting the adoption of CRM in the Commercial Bank of
Ethiopia.
32
CHAPTER FOUR
ANLYSIS AND INTERPRETATION
In this chapter the collected data from the employees and customers of the five branches of
Commercial Bank of Ethiopia are summarized and analyzed in order to realize the ultimate
objective of the study. Accordingly, the demographic profile of the two respondent groups
and the major challenges affecting the adoption of CRM in the Commercial Bank of
Ethiopia as perceived by the bank's employees and customers are discussed. Finally,
summary of the findings are presented.
4.2 Background of the respondents
4.2.1 Employee Respondents

Table 4.2.1 Background characteristics of the ‘Employee Questionnaire’ respondents
Frequency Percent Valid Cumulative
Percent percent
Gender Male 57 85.1 85.1 85.1
Female 10 14.9 14.9 100.0
Total 67 100.0 100.0
Educational First degree 60 89.6 89.6 89.6
Level Second degree 7 10.4 10.4 100.0
Total 67 100.0 100.0
Job Title Branch Manager 5 7.5 7.5 7.5
Customer 28 41.8 41.8 49.3
Relationship Manager
Customer Service 12 17.9 17.9 67.2
Manager
Customer relationship 22 32.8 32.8 100.0
Officer
Total 67 100.0 100.0
Job 1-3 years 10 14.9 14.9 14.9
Experience 4-10 years 22 32.8 32.8 47.8
11-20 years 28 41.8 41.8 89.6
More than 20 years 7 10.4 10.4 100.0
Total 67 100.0 100.0
Source: own survey, 2014
33
Table 4.2.1 presents the summarized characteristics of respondents of the 'Employee
Questionnaire' who are mainly involved in the CRM activities of Commercial Bank of
Ethiopia. The male respondents constitute the largest share of the gender composition
representing 85.1% of the respondents while 14.9% were female employees.
In terms of educational level, 89.6% of the respondents were first degree holders while the
remaining 10.4% were second degree holders. Among the employees of the bank who are
involved in this study, 32.8% were customer relationship officers, 17.9% were customer
service managers, and the remaining 7.5% were branch managers all of them working in
the branches of the banks, whereas the remaining 41.8% were Customer Relationship
Managers based at the head office.
Finally, the respondent distribution shows that nearly 10.4% of the respondents were
highly experienced in the banking sector being in the industry for more than 20 years.
Accordingly, the employees with job experience of less than 20 years but greater than 11
years take the lion share of the respondents, i.e. 41.8%, those with experience of between 4
and 10 years are 32.8%, while those who are less experienced in the banking business
constitute 14.9% of the respondents.
34
4.2.2 Customer respondents
The summarized profile of customer respondents is shown in table 4.2.2 below.
Table 4.2.2 Background Characteristics of the 'Customer Questionnaire’ Respondents

Frequency Percent Valid Cumulative
Percent percent
Branch Abakoran Branch 52 16.4 16.4 16.4
Name 81 25.6 25.6 42.0
Arat kilo Branch
Arada Giorgis Branch 61 19.2 19.2 61.2
Finfine Branch 55 17.4 17.4 78.5
Sillasie Branch 68 21.5 21.5 100.0
Total 317 100.0 100.0
Gender Male 259 81.7 81.7 81.7
Female 58 18.3 18.3 100.0
Total 317 100.0 100.0
Age Below 30 27 8.5 8.5 8.5
31-39 70 22.1 22.1 30.6
40-49 131 41.3 41.3 71.9
50 and above 89 28.1 28.1 100.0
Total 317 100.0 100.0
Purpose Personal 71 22.4 22.4 22.4
of using Business 75 23.7 23.7 46.1
the bank
Both 171 53.9 53.9 100.0
Total 317 100.0 100.0
The kind Saving account 123 38.8 38.8 38.8

of service Current account 93 29.3 29.3 68.1
used
Credit account 67 21.1 21.1 89.3
Money transfer 28 8.8 8.8 98.1
Credit card service 6 1.9 1.9 100.0

Total 317 100.0 100.0
How long 1-3 years 21 6.6 6.6 6.6
have you 4-10 years 104 32.8 32.8 39.4
been
more than 10 years 192 60.6 60.6 100.0
customer
of the 317 100.0 100.0
Total
bank
35
As clearly seen from table 4.2.2, 16.4% of the respondents are customers of Abakoran
branch, 25.6% are Arat Kilo Branch customers, 19.2% are from Arada Giorgis Branch,
17.4% are from Finfine Branch and the remaining 21.5% are customers of the Sillasie
Branch of CBE.
As observed from the table, the gender composition of the respondents is dominated by
male respondents, which constituted 81.7% of the respondents while the rest 18.3% are
female respondents
Concerning the purpose for which the customers use the service rendered by Commercial
Bank of Ethiopia, majority of the respondents (53.9%) was found to be using the service
for both personal and business purpose. This shows that the respondent profile is pervasive
enough to explore the factors that affect the adoption of CRM as customers' perception
represent assessment made from both angles. Moreover, customers that use Commercial
Bank of Ethiopia's services for personal purposes constituting 22.4% and those that use it
only for business purposes representing 23.7% of the respondents were also included in the
study.
As to the services that are used in Commercial Bank of Ethiopia, saving account users take
the lion‟s share(38.8%) followed by current account (checking account) users(29.3%), and
21.1% of them use credit service of the bank as well. Thus, it is of a significant
contribution to the study since credit service customers are found to be major contributors
for the bank's profitability. Other service users constitute 8.8% and 1.9% of the
respondents profile for money transfer and credit card service, respectively.
For the inquiry regarding the length of relationship with the bank either for personal
consumption or business purpose, most of the respondents (60.6%) were found to be using
CBE‟S services for more than 10 years and those who have the relationship with the bank
for years between 4 and 10 are 32.8%, but those with the least number of years of
relationship with the bank represent only 6.6% of the respondents. Hence, this is believed
to substantiate the outcome of the study in revealing the perception of those customers that
are in position to compare and contrast CBE's service endeavors since they have
experience in CBE both before and after the adoption of the CRM practices.
36
4.3 Factors that affect the adoption of CRM in CBE
The main objective of this study is to determine the factors that affect the adoption of
CRM in terms of the six dimensions namely skill, budget, data, benefit of CRM,
management commitment, and technology related issues. To do so, both employees and
customers of CBE were asked to rate the factors that affect the adoption of CRM process
on a Likert scale of 1 through 5 where the highest being strongly agree and the lowest
representing strongly disagree. The questionnaires were distinguished based on the
heading given for each of them either „Employee questionnaire‟ or „Customer
Questionnaire” .
In the following section the data collected is analyzed in two sections, devoted for each
group of respondents, so as to explore their perception, as the factors affecting the
adoption of CRM by deploying the six dimensions.
4.3.1 Factors Affecting the Adoption of CRM– Employees‘ Perception
The data was collected to solicit the perception of employees that work under the title of
branch manager, customer relationship manager, customer service manager, and customer
relationship officer of CRM in CBE measured using the six dimensions therein.
Accordingly, the resultant output is shown in table 4.3.1 where the factors that affect the
adoption of CRM in CBE is demonstrated by the mean score achieved by each dimension
under consideration.
Table 4.3.1 Factors that affect the adoption of CRM - Employee’s perception
Dimensions N Mean Std. Deviation
Employees' Skill in handling CRM 67 1.4254 .31985
Budget allocation 67 1.3761 .35080
Quality and quantity of data 67 1.6866 .30084
Understanding the Benefits of CRM 67 1.7711 .37699
Management commitment 67 1.4701 .25570
Technological related issues 67 1.3881 .32097
37
As clearly seen from table 4.3.1, the budget related issues dimension has got the least
mean score as compared to the other five dimensions .It stands first followed by the
technological related issue dimension. On the contrary, understanding the benefits of CRM
dimension achieved the highest mean score, which evidently puts it in the six order rank
among the group. Hence, employees perceive budget related challenges as the most serious
problems that affect the adoption of CRM as compared to the other dimensions.
4.3.1.1 Skill Related Issues
The guidance for customer-contact employees is to increase customer satisfaction in the

communication, especially in dealing with customer complaints. The employees' skill
ensures the quality of services and raises the efficiency of employees in their work.
Furthermore, employee responsibility will be recorded through the “first person
responsibility”. CRM embodies a continuous process to understand customer (Kim, Kim
& Park, 2010). The work of customer-contact employees might influence how the bank is
serving its customers in its CRM program.
The collected data is used to assess the extent to which the employees working in customer
relationship management areas perceive lack of skill as the factor that affect the adoption
of CRM in CBE. A one-sample statistics that shows the mean and standard deviation for
the response given in a five point Likert scale was calculated using SPSS. The least mean
figure represents the least level of agreement with the item under consideration while the
highest signifies high level of agreement with the scale item.
Table 4.3.1.1 One- Sample statistics-lack of skill

Challenges concerning skill N Mean Std.
Deviation
I have the basic knowledge regarding the concept of CRM 67 1.67 .587
The company has provided me with continuous supplementary 67 1.24 .464
training about CRM
I have no technical problems to implement CRM well 67 1.36 .569
I am committed to serve customers beyond my respective 67 1.43 .609
responsibility
Overall 1.43 0.32
38
The manifestation of lack of skill dimension is included in the items that are used to
identify the factors affecting the adoption of CRM. Among these, lack of providing
regular training about CRM by the bank and technical problems in handling CRM by the
employees are the major ones. However, having the basic knowledge regarding the
concept of CRM scored the highest mean representing less significant compared to the
other items with in the dimension above. In general, however, one can observe from the
overall mean representing the six dimensions that the employees' skill gap in the adoption
process of CBE is one of the most significant challenges.
In the mean time, to confirm the results of the sample statistics a t-test was also conducted
using the same software showing a totally conformity with the one-sample statistics
output. Accordingly, the above t-test results confirm the sample statistics results whereby
the least mean score 1.239 registered for the provision of continuous supplementary
training about CRM is matched with the least t- score of (19.270) and the same is
applicable for all of the other items under consideration.
Table 4.3.1.2 T-test on lack of skill

Test Value = 0
t df Sig. Mean 95% Confidence
Difference Interval of the
(2-tailed) Difference
Lower Upper
I have the basic knowledge regarding the 23.292 66 .000 1.672 1.53 1.81
concept of CRM
The company has provided me with 19.270 66 .000 1.239 1.13 1.35
continuous supplementary training about
CRM
I have no technical problems to implement 19.523 66 .000 1.358 1.22 1.50
CRM well
I am committed to serve customers beyond 21.877 66 .000 1.433 1.28 1.58
my respective responsibility
Source: SPSS data analysis output, 2014
4.3.1.2 Budget Related Issues

This dimension appraises the extent to which budget related problems affect the adoption
of CRM in CBE. The dimension is comprised of five items responded on a five point
Likert scale where the highest being strongly agree and the lowest representing strongly
39
disagree. Accordingly, the sample statistics for each item is calculated & presented in table
4.3.1.3 below.
Table 4.3.1.3 One- Sample statistics-Budget related issues of CRM
Challenges concerning budget allocation N Mean Std.
Deviation
The bank allocates adequate investment to implement the CRM program 67 1.24 .495
well
The bank allocates the budget promptly (on time) 67 1.34 .509
The bank's budget allocation is based up on the tasks to be performed and the 67 1.36 .542
objectives to be achieved
The bank has a mechanism to check whether the budget is spent on the 67 1.54 .611
intended CRM activity
The bank has a mechanism to evaluate the outcome of the budget allocated 67 1.40 .579
for CRM program
Overall 1.38 0.35
The table shows that having mechanism to check whether the budget is spent on the
intended CRM activity and the allocation of adequate budget for CRM represent the
highest and the lowest mean figures, respectively as compared to the other items tested
using the sample statistics. Of the five items 60% of them have a mean score that is less
than the overall mean showing significant challenges in this particular dimension. Thus, it
is secure to say that budget related problems are the most serious factors that affect the
adoption of CRM in CBE, as perceived by employees of the bank.
Table 4.3.1.4 T-test on Budget Related Issues

Items Test Value = 0
Lower Upper
The bank allocates adequate investment to 19.837 66 .000 1.239 1.12 1.36
implement the CRM program well
The bank allocates the budget promptly (on 20.480 66 .000 1.343 1.22 1.47
time)
The bank's budget allocation is based up on the 20.504 66 .000 1.358 1.23 1.49
tasks to be performed and the objectives to be
achieved
The bank has a mechanism to check whether 21.598 66 .000 1.537 1.39 1.69
the budget is spent on the intended CRM
activity
The bank has a mechanism to evaluate the 20.588 66 .000 1.403 1.26 1.54
outcome of the budget allocated for CRM
program
40
A t-test that confirms the above sample statistics was also conducted where the highest
mean score for the bank to check whether the budget is spent on the intended CRM
activity (1.537) is confirmed by the highest t-test score of 21.598 and also the lowest t-test
score confirms the lowest mean figure of 1.239 for the bank allocating adequate
investment to implement the CRM program well.. Thus, it is confident to say that the
above sample statistics result is the true representation of the budget related factors
affecting the adoption of CRM in CBE as perceived by its employees working in the
domain.
4.3.1.3 Data Related Issues
For the CRM to be truly effective, the organization must first decide what kind of
customer information they want to collect, and what to do with that information. Bank
managers have realized that customers have different economic value for them, and they
adapt their offer and communication strategy accordingly. Successfully implemented,
CRM system brings many benefits to the bank such as quick and easy customer
information collection and storage, analyzing profitability, assisting in marketing efforts,
acquisition of new customers, relationship management, client retention rate increase,
cross selling, etc. CRM solution needs to ensure that the marketing campaigns of banks are
appropriately personalized and targeted towards the most appropriate segments of potential
clients. This optimizes marketing efforts and results in a higher level of acquisition of new
clients. The solution provides a comprehensive preview of the clients, enabling access to
all points of interaction that a client has with the bank. CRM solution also automates
business processes and business activities, and therefore eliminates manual tasks resulting
in reduction of error possibilities and process time. In order to go a step further in
enhancing the sales and services, banks are focusing on the development, implementation
and integration of their channels quickly and efficiently. However, failing to perform this
may pose a problem in the effective running of CRM.
This dimension is concerned with identifying factors challenging the adaptation of

customer data into intelligence in order to understand customers‟ needs and trying to meet
their needs accordingly .To assess employees' perception regarding the data related issues
that may pose problems in adopting CRM, five items were used which were responded on
five point Likert scale that goes from strongly disagree to strongly agree points.
41
Low data quality brings out many problems to companies, especially to customer-contact
employees. They have to accept customer complaints caused by wrong data, and do extra
work to modify the data. Actually, it does not only troubles employees, but also customer
satisfaction will be decreased if the phenomenon of low data quality is common.
Based on the responded questionnaires, therefore, a sample statistics is calculated resulting

in a mean and standard deviation score where the highest mean indicates a high level of
agreement and the lowest signifying high level of disagreement. Table 4.3.1.5 shows the
output of the sample statistics
Table 4.3.1.5 One- Sample statistics-Concerning data quality and quantity

Challenges concerning data quality and quantity N Mean Std.
Devia
tion
It is easy to collect enough data regarding customer profile from 67 1.72 .517
customers and other sources
The bank collects quality data that are helpful to achieve CRM 67 1.82 .520
objectives
There are no problems regarding the collection of customer profile 67 1.52 .587
data
The bank uses modern technology to provide better service to 67 1.84 .642
customers
The way data is managed can help the bank to identify customers 67 1.91 .596
leaving the bank and helps to know why
Overall 1.69 0.30

As one can observe from table 4.3.1.5, problems regarding the collection of customer
profile data secured the least mean figure while data management ways in identifying
those customers leaving the bank for various reasons resulted in the maximum mean score
among the tested items. Thus, one can conclude from the statistics result above that data
related issues, according to the bank‟s employees, are considered as the major factors
affecting the bank‟s CRM adoption process, among others.
To confirm the above sample statistics a t-test was also conducted for this dimension. As a
result, the t-test has confirmed the sample statistics result by providing the highest t-test
score of 41.886 for the highest mean score and the lowest t-test score of 16.20 for the
42
corresponding item that has the least mean score. Thus, we can say that the mean scores
achieved for each item tested represent the data related issues are factors affecting CRM
adoption process of CBE.
4.3.1.4 Understanding Benefits of CRM
Under this dimension, understanding of employees towards benefits of CRM is assessed.

In soliciting the employees perception of their understanding about the benefits of CRM,
four items are used to be responded on a five point Likert scale where the highest point
represent strongly agree and the lowest representing strongly disagree.
Table 4.3.1.6 One-Sample statistics – Understanding the Benefits of CRM

Challenges concerning lack of knowledge about the benefits of N Mean Std.
CRM Deviation
The bank continuously provides me with the information involving 67 1.43 .609
the benefits of CRM
I personally understand the benefits of CRM 67 2.04 .323
I usually explain the benefits of CRM to my customers 67 1.84 .480
Overall 1.78 0.38

Accordingly, a one –sample statistic is calculated where 'The bank continuously provides me
with the information involving the benefits of CRM' scored the least mean whereas the item 'I
personally understand the benefits of CRM' scored the highest mean among the three items with
in the dimension. Moreover, the item the bank continuously provides me with the information
involving the benefits of CRM scored a mean that is even below the total mean indicating
failure to do so. However, one can observe from the overall mean among the six
dimensions that lack of understanding about the benefits of CRM by the employees of
CBE is the least influential factor affecting the adoption of CRM, compared to the other
major constraints. To confirm the above sample statistics result a t-test was also conducted
as shown in table 4.2.1.9 below. As a result, the t-test has confirmed the sample statistics
result by providing the lowest t-test score of 19.270 for the lowest mean score and the
highest t-test score of 51.890 for the corresponding item that has the highest mean score.
Clearly, the t-test confirms the above results where it is confident to appraise the
understanding of employees of CBE about the benefits of CRM.
43
Table 4.3.1.7 T-test on the Understanding the Benefits of CRM
Items Test Value = 0
Lower Upper
The bank continuously provides me 19.270 66 .000 1.433 1.28 1.58
with the information involving the
benefits of CRM
I personally understand the benefits of 51.894 66 .000 2.045 1.97 2.12
CRM
I usually explain the benefits of CRM 31.319 66 .000 1.836 1.72 1.95
to my customers
4.3.1.5 Management commitment towards the adoption of CRM
This dimension is concerned with identifying the extent to which top level managers are
involving constructively to support the adoption process of CRM within the company. In
this regard, to assess employees' perception five items were used which were responded on
five point Likert scale that goes from strongly disagree to strongly agree points. Based on
the responded questionnaires a sample statistics is calculated resulting in a mean and
standard deviation score where the highest mean indicates a high level of agreement and
the lowest signifying high level of disagreement. Table 4.3.1.8 shows the output of the
sample statistics
Table 4.3.1.8 One-Sample statistics –commitment of top level management

Challenges concerning lack of management commitment N Mean Std.
Deviation
Top managers are cooperative and collaborative in relation to 67 1.33 .613
practicing CRM
Top managers accept and provide leadership for building and 67 1.28 .454
maintaining customer relationship as a major goal of the bank
CRM responsibilities of employees are clearly defined, assigned and 67 1.87 .457
understood
The bank takes customers feedback seriously and reply 67 1.40 .605
Overall 1.45 0.26
The manifestation of lack of commitment of top level management dimension is included

in the items that are used to identify the factors affecting the adoption of CRM. Among
44
these, top managers accept and provide leadership for building and maintaining customer
relationship as a major goal of the bank resulted in the least mean signifying that the bank
has to take measure in improving the situation. The highest mean 1.87 is for the definition
and assignment of responsibilities to CRM department employees, which implies that it is
the least determinant compared to the other items included in the dimension, according to
employees of the bank.
In the mean time, to confirm the results of the sample statistics a t-test was also conducted
using the same software showing a total conformity with the one-sample statistics output.
The highest mean score for 'CRM responsibilities of employees are clearly defined, assigned and
understood' (1.866) is confirmed by the highest t-test score of 33.468 and also the lowest t-
test score (17.746) of top managers accept and provide leadership for building and maintaining
customer relationship as a major goal of the bank confirms the lowest mean figure of 1.284.
Thus, it is possible to say that the above sample statistics result truly represents how the
inadequate involvement of the top management in CBE creates challenge to the adoption
process of CRM, as perceived by the employees working in the domain.
Table 4.3.1.9 T-test on the commitment of top management

Test Value = 0
t df Sig. Mean 95%
Items Difference Confidence
(2-tailed) Interval of the
Difference
Lower Upper
Top managers are cooperative and 18.997 66 .000 1.328 1.18 1.48
collaborative in relation to practicing
CRM
Top managers accept and provide 17.746 66 .000 1.284 1.17 1.39
leadership for building and
maintaining customer relationship as a
major goal of the bank
CRM responsibilities of employees are 33.408 66 .000 1.866 1.75 1.98
clearly defined, assigned and
understood
The bank takes customers feedback 23.135 66 .000 1.403 1.26 1.55
seriously and reply
45
4.3.1.6 Technological Related Issues
The customer is in focus and that it is a concern how to establish long-term relationships
with them. CRM points out how important it is to view CRM as an extensive set of
strategies for managing those relationships with customers that relate to the overall process
of marketing, sales, service, and support within the organization. In order to satisfy the
customer, information technology and information systems can be used to support and
integrate the CRM process (Ngai, 2005).
The collected data is used to assess the extent to which technological related issues the
employees working in customer relationship management areas perceive technological
related issues as the factor that affect the adoption of CRM in CBE.
A one-sample statistics that shows the mean and standard deviation for the response given
in a five point Liket scale was calculated using SPSS. The least mean figure represents the
least level of agreement with the item under consideration while the highest signifies high
level of disagreement with the scale item.
Table 4.3.1.10 One-Sample statistics –Technological related issues

Challenges concerning Technology N Mean Std.
Deviation
There has been provision of logistics or resources (computers, 67 1.30 .523
stable internet connectivity, cars, people, etc) for use in the right
quantities, place and time.
Regular training has been provided to employees of the bank to 67 1.19 .468
introduce cutting edge IT software to enable the bank's CRM
process.
The bank regularly takes measure to improve the existing level of 67 1.67 .561
CRM related technology.
Overall 1.39 0.32
The table shows that provision of regular training by the bank to CRM employees to
enable them to match their skill with the changing technology results in the least men score
of 1.19 whereas the highest mean score is for the measures taken by the bank to improve
its CRM related technology, which is a mean score of 1.6 7 as compared to the other items
tested using the sample statistics. Thus, one can conclude from the above statistics result
that the bank has the limitations in making technology as one opportunity to use in the
46
banking industry where the competition is getting tough. The overall mean scores of the
six dimensions even reveal that technological related challenges are posing the most
serious problems in the adoption of CRM in CBE, next to budget related problems.
To confirm the above sample statistics result a t-test was also conducted as shown in table
4.3.1.11 below. As a result, the t-test has confirmed the sample statistics result by
providing the lowest t-test score of 20.336 for the lowest mean score of 1.194 and the
highest t-test score of 24.388 for the corresponding item that has the highest mean score of
1.672. Clearly, the t-test confirms the above results where it is possible to appraise the
understanding of employees of CBE about the challenges of technological related
problems in the CRM adoption process.
Table 4.3.1.11 T-test on Technological Related Issues

Test Value = 0
Items t df Sig. Mean 95%
(2-tailed) Difference Confidence
Interval of the
Difference
Lower Upper
There has been provision of 20.868 66 .000 1.299 1.17 1.43
logistics or resources (computers,
stable internet connectivity, cars,
people, etc) for use in the right
quantities, place and time.
Regular training has been provided 20.336 66 .000 1.194 1.08 1.31
to employees of the bank to
introduce cutting edge IT software
to enable the bank's CRM process.
The bank regularly takes measure 24.388 66 .000 1.672 1.53 1.81
to improve the existing level of
CRM related technology.
4.3.2. Factors affecting the adoption of CRM customer’s perception
Data was analyzed to assess the factors affecting the adoption of CRM in CBE using
descriptive measures that were used in most of the CRM researches that deals with the
deployment of CRM in the service industry, like those undertaken by Saeed et al. (2011)
and Das et al (2009).
47
A one- sample test was conducted on the sixteen items which were responded on a five
item scale with the highest being strongly agree and the lowest strongly disagree. The
result of the sample statistics depicits what are the factors affecting the adoption of CRM
in CBE, according to the customers' perception. The highest mean figure shows high level
of agreement with the scale item while the lowest indicates high level of disagreement
with the particular item being tested.
Accordingly, table 4.3.2.1 shows the summary of the data collected from customers of the
surveyed branches.
Table 4.3.2.1 Factors Affecting the Adoption of CRM- Customer’s Perception

Items N Mean Std.
Deviation
I have the basic knowledge about CRM and its benefits. 317 1.71 .527
The company has been providing me with the information 317 1.73 .563
regarding CRM
Employees of the bank have the basic knowledge regarding 317 1.33 .670
the concept of CRM
Employees do not have any technical problems while handling 317 1.24 .626
CRM
Speed of the service delivery is good while applying CRM 317 1.62 .647
with customers.
Employees serve customers with great respect 317 1.65 .661
The bank identifies customers‟ needs 317 1.54 .669
The bank‟s CRM program is based upon the customers' needs 317 1.43 .611
There are enough skilled personnel in the CRM department 317 1.53 .773
The bank has been supporting me with its CRM program 317 1.77 .720
It is easy to communicate with top CRM managers when 317 2.12 .839
necessary
The bank is doing more than relationship management to 317 1.40 .840
satisfy customers
There are simple procedures provided by the bank to accept 317 1.39 .842
customers‟ complaints regarding CRM
The bank positively accepts complaints and provides timely 317 1.31 .577
feedback.
I have regular internet access to deal with CRM when 317 1.55 .652
necessary.
I do not have the basic IT knowledge that helps me in getting 317 1.94 .973
CRM service from the bank
Overall
48
This assessment is done to appraise what are the factors affecting the adoption of CRM in
CBE while to meet the needs of its most valuable customers by providing customized
products that are in agreement with their prevailing requirements.
As it can be seen from the table above, the output of the sample statistics reveal that the
highest mean was recorded in 'easiness of communicating top level managers when the
need arises resulting in a mean score of 2.12 followed by 'I do not have the basic IT
knowledge that helps me in getting CRM service from the bank with mean score of 1.94.
However, lack of technical skill in handling CRM has been found to be with the least mean
score of 1.24 followed by lack of accepting customers' complaints and providing timely
feedback to the complaints with a mean score of 1.31.
To confirm the above test result a t-test was conducted. Likewise, the item lack of
technical skill in handling CRM has been found to be with the least mean score of 1.24
with the least t-score value of 33.716 followed by lack of accepting customers' complaints
and providing timely feedback to the complaints with a mean score of 1.31 which
corresponds a t- score value of 34.131. The highest t- value (67.966) was recorded for the
easiness to communicate with top CRM managers when necessary, which shows a mean
score of 2.12, has been perceived by customers as least significant factor affecting the
adoption of CRM program in CBE.
49
Table 4.3.2.2 T-Test on Customers’ Responses
Items t df Sig. Mean 95% Confidence

(2-tailed) Difference Interval of the
Difference
Lower Upper
I have the basic knowledge about 50.005 316 .000 2.205 1.71 2.26
CRM and its benefits.
The company has been providing me 51.522 316 .000 2.230 1.73 2.29
with the information regarding CRM
Employees of the bank have the basic 34.395 316 .000 2.309 1.33 2.38
knowledge regarding the concept of
CRM
Employees do not have any technical 33.716 316 .000 2.240 1.24 2.31
problems while handling CRM
Speed of the service delivery is good 49.699 316 .000 1.625 1.62 1.70
while applying CRM with customers.
Employees serve customers with great 49.929 316 .000 1.650 1.65 1.72
respect
The bank identifies customers‟ needs 47.595 316 .000 1.637 1.54 1.71
The bank‟s CRM program is based 42.411 316 .000 1.628 1.43 1.70
upon the customers' needs
There are enough skilled personnel in 46.144 316 .000 1.830 1.53 1.92
the CRM department
The bank has been supporting me 51.863 316 .000 1.773 1.77 1.85
with its CRM program
It is easy to communicate with top 67.966 316 .000 1.931 2.12 2.02
CRM managers when necessary
The bank is doing more than 40.322 316 .000 1.997 1.40 2.09
relationship management to satisfy
customers
There are simple procedures provided 36.869 316 .000 1.792 1.39 1.88
by the bank to accept customers‟
complaints regarding CRM
The bank positively accepts 34.131 316 .000 1.495 1.31 1.56
complaints and provides timely
feedback.
I have regular internet access to deal 48.271 316 .000 1.549 1.55 1.62
with CRM when necessary.
I do not have the basic IT knowledge 53.569 316 .000 1.943 1.94 2.05
that helps me in getting CRM service
from the bank
50
The tables below show the level of agreement & disagreement for each item in detail .The
tables are headed by the shortened name for the respective items included in the dimension
and they indicate the frequency & percentage of responses along with the valid percent and
cumulative percent.
Table 4.3.2.3 –Having knowledge regarding CRM

Frequency Percent Valid Percent Cumulative
Percent
Disagree 264 83.3 83.3 83.9
Neutral 35 11.0 11.0 95.0
Agree 16 5.0 5.0 100.0
Total 317 100.0 100.0
As one can observe from table 4.3.2.3 that, 83.3% responded they have lack of knowledge
regarding CRM whereas only 5% responded they have the knowledge of CRM.
Table 4.3.2.4-Provision of information about CRM by the bank

Frequency Percent Valid Percent Cumulative Percent
Strongly disagree 2 .6 .6 .6
Disagree 259 81.7 81.7 82.3
Neutral 38 12.0 12.0 94.3
Valid
Agree 17 5.4 5.4 99.7
Strongly agree 1 .3 .3 100.0
Total 317 100.0 100.0
Table 4.3.2.4 shows that majority (81.7%) of the respondents disclosed the bank does not
provide the necessary information regarding CRM.
Table 4.3.2.5-Employees knowledge of CRM as perceived by customers

Strongly disagree 3 .9 .9 .9
Disagree 245 77.3 77.3 78.2
Neutral 39 12.3 12.3 90.5
Valid
Agree 28 8.8 8.8 99.4
Total 317 100.0 100.0
51
From table 4.3.2.5 we can observe that 77.3% of the respondents perceive as the bank's
employees have little knowledge about CRM.
Table 4.3.2.6 Technical problems of employees observed while handling customers

Strongly disagree 8 2.5 2.5 2.5
Disagree 249 78.5 78.5 81.1
Neutral 37 11.7 11.7 92.7
Valid
Agree 22 6.9 6.9 99.7
Total 317 100.0 100.0
From table 4.3.2.6 we can observe that 78.5% of the respondents perceive employees of
the bank have technical problems while handling their customers.
Table 4.3.2.7 Speed of getting service in relation to CRM

Disagree 140 44.2 44.2 90.9
Valid
Neutral 29 9.1 9.1 100.0
Total 317 100.0 100.0
Table 4.3.2.7 reveals that 46.7% strongly disagree and 44.2% disagree in getting fast
services in relation to CRM from CBE.
Table 4.3.2.8 Employers serve customers with great respect

Disagree 140 44.2 44.2 89.6
Valid
Neutral 33 10.4 10.4 100.0
Total 317 100.0 100.0
One can see from table 4.3.2.8 that 45.4% strongly disagree and 44.2% disagree with the
item 'Employers serve customers with great respect'.
52
Table 4.3.2.9 The bank identifies customers’ needs
Disagree 134 42.3 42.3 89.3
Valid
Neutral 34 10.7 10.7 100.0
Total 317 100.0 100.0
According to table 4.3.2.9 47.0% strongly disagree that the bank identifies customers'
needs.
Table 4.3.2.10 The bank’s CRM program is based upon the customers' needs
Disagree 155 48.9 48.9 93.1
Valid
Neutral 22 6.9 6.9 100.0
Total 317 100.0 100.0
As table 4.3.2.10 clearly indicates 44.2% strongly disagree that the bank‟s CRM program
is based upon the customers' needs.
Table 4.3.2.11 There are enough skilled personnel in the CRM department
Disagree 130 41.0 41.0 79.5
Neutral 63 19.9 19.9 99.4
Valid
Agree 1 .3 .3 99.7
Total 317 100.0 100.0
According to table 4.3.2.11 majority of the respondents perceive there is lack of skilled
personnel in the CRM department of the bank.
53
Table 4.3.2.12 The bank has been supporting me with its CRM program
Disagree 161 50.8 50.8 88.0
Valid Neutral 30 9.5 9.5 97.5
Agree 8 2.5 2.5 100.0
Total 317 100.0 100.0

Table 4.3.2.12 reveals that only 2.5% of the respondents feel the bank has been supporting
them with its CRM program.
Table 4.3.2.13 It is easy to communicate with top CRM managers when necessary
Disagree 153 48.3 48.3 80.8
Valid Neutral 41 12.9 12.9 93.7
Agree 20 6.3 6.3 100.0
Total 317 100.0 100.0
One can observe from table 4.3.2.13 that 32.5% strongly disagree and 48.3% disagree with
the easiness of communicating with top CRM managers when necessary.
Table 4.3.2.14 The bank is doing more than relationship management to satisfy
customers
Disagree 154 48.6 48.6 77.6
Valid Neutral 51 16.1 16.1 93.7
Agree 20 6.3 6.3 100.0
Total 317 100.0 100.0
We can see from table 4.3.2.14 that only 6.3% of the respondents feel the bank is doing
more than relationship management to satisfy customers.
54
Table 4.3.2.15 There are simple procedures provided by the bank to accept
customers’ complaints regarding CRM
Disagree 142 44.8 44.8 85.5
Neutral 35 11.0 11.0 96.5
Valid
Agree 5 1.6 1.6 98.1
Strongly agree 6 1.9 1.9 100.0
Total 317 100.0 100.0
According to table 4.3.2.15 more than 85% of the respondents do not agree that there are
simple procedures provided by the bank to accept customers‟ complaints regarding CRM.
Table 4.3.2.16 The bank positively accepts complaints and provides timely feedback.

Disagree 131 41.3 41.3 95.9
Neutral 13 4.1 4.1 100.0
Valid
Total 317 100.0 100.0
Table 4.3.2.16 shows that more than 96% of the respondents feel not only the bank fails
accepting complaints positively but also lacks providing timely feedback.
Table 4.3.2.17 I have regular internet access to deal with CRM when necessary.
Strongly 170 53.6 53.6 53.6
disagree
Disagree 121 38.2 38.2 91.8
Valid
Neutral 25 7.9 7.9 99.7
Agree 1 .3 .3 100.0
Total 317 100.0 100.0
From table 4.3.2.17 we can observe that lack of getting regular internet access is perceived
as a challenge in adopting CRM by over 91% of the respondents.
55
Table 4.3.2.18 I do not have the basic IT knowledge that helps me in getting CRM
service from the bank
Disagree 134 42.3 42.3 79.5
Neutral 36 11.4 11.4 90.9
Valid
Agree 23 7.3 7.3 98.1
Strongly agree 6 1.9 1.9 100.0
Total 317 100.0 100.0
Table 4.3.2.18 shows that having the basic IT knowledge that helps customers in getting
CRM service from the bank is a challenge in adopting CRM, as perceived by more than
79% of the respondents.
4.4 Summary of the Findings
The previous two sections presented in detail the factors affecting the adoption of CRM in
CBE as perceived by the employees of the bank and customers of the sampled branches. In
this section, the finding from the two groups of respondents is presented in a summarized
and informative manner.
Both respondent groups were asked to assess the factors affecting the adoption of CRM in
a five point Likert scale where the factors are seen in congruent with the six dimensions
therein. Accordingly, as it is depicted in the previous section the resultant sample for both
groups of respondent shows that there are factors affecting the adoption of CRM in CBE.
Through the overall mean score for both groups of respondents, understanding of the
bank's employees about the benefits of CRM and accessing quality data are less significant
factors in affecting the adoption of CRM in CBE. Whereas, those dimensions that are
budget related issues, technology related issues, and lack of skill in handling CRM by the
employees of the bank are found to be serious factors affecting the smooth running of
CRM in CBE. The lack of positive and constructive involvement of management in the
CRM adoption process is also another challenge that has been putting a constraint in the
CRM execution process in the bank.
56
As the major goal of CRM is identifying the individual needs of customers and meet these
needs accordingly, the findings of this study show that customers have not simple and
clear procedures to forward their comments and to complain about issues what they think
should be treated by the bank immediately, as perceived by customers.
The simple comparison between the two mean scores of the group reveals that employees
perceive that the bank does not allocate adequate budget for running CRM program.
Moreover, the technology that the bank has been using for years made CRM very difficult
to run in a smooth and efficient manner. Not only there are weaknesses by the bank in
providing the necessary logistics but also it is not providing regular training to its
employees so that they can understand the dynamics of the technological environment and
serve their customers well.
On the contrary, the overall mean score of the customers response shows that, customers
perceive as having no means for their complaints to make including no sign from the bank
regarding feedbacks to their complaints even if their complaints are accepted. It is very
difficult to implement CRM without considering customers together with their opinions
and complaints.
Finally, this study reveals that the major factors affecting the proper adoption process of
CRM mentioned by Payne (2005) and many other professionals and even this study
builds as a framework, the challenges are hampering the effectiveness of CRM program in
the CBE. The extent to which the factors are affecting the CRM adoption process varies as
tried to mention above. Both employees and customers believe that skill related problems
prevailing followed by the commitment of top management in paying special attention to
CRM program and act accordingly. Though not confirmed by a larger degree, challenges
related to customer data handling and understanding the benefits of CRM are still factors
affecting the adoption process to some extent. However, budget allocation of the bank for
the running of CRM program both in terms of adequacy and timing is the most serious
factor affecting CRM adoption process of the bank followed by technological related
issues like provision of regular training to employees, provision of the necessary logistics,
and taking timely measures to update the existing technology.
57
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
Based on the findings presented in the previous chapter, this chapter provides the
conclusions reached as to the major factors affecting the adoption of CRM in the
Commercials Bank of Ethiopia and forward possible measures that are aimed at
moderating the prevailing deficiencies and further enhance the smooth running of CRM
program within the bank.
5.2 Conclusions
According to literatures, CRM involves cross-functional integration i.e. .the integration of

marketing, sales, customer service, IT and supply chain functions of the organization to
achieve greater efficiencies and effectiveness in delivering customer value. However, there
are a number of factors that may hinder organizations from achieving CRM objectives .In
this regard ,taking care of providing the necessary knowledge about CRM and its benefits
to both customers and employees, making employees skilful in handling CRM, allocating
the necessary budget in time with adequate follow-ups for executions, using timely
technology & getting important data, and the involvement of top management from
planning phase until evaluation of performance are essential and imperative.
Based on these premises, the factors that affect the adoption of CRM in the Commercial
Bank of Ethiopia has been identified from six dimensions where both employees and
customers of the selected sample grade IV branches are included.
As per the foregoing findings, the following conclusions are drawn;
 .CRM has been implemented relatively well in the head office of Commercial Bank
of Ethiopia than its branches. Very few customer relationship officers are assigned
to each branch of CBE all over Addis Ababa to handle very few activities in
relation to CRM. Thus, it can be concluded that the adoption process of CRM is in
its infant stage in the Commercial Bank of Ethiopia.
58
 A separate department is organized with relatively more number of skilled
personnel in the head office with distinct CRM responsibilities. This might tell
someone that the bank is on its way to expand the program and trying to get a
competitive advantage since competition in the sector is getting strong every time
and CRM is one means to differentiate services.
 In the adoption process of CRM, the employees of Commercial Bank of Ethiopia
have no significant difficulties in understanding what CRM is about, its benefits
and also serving their customers in relation to the guidelines .This study identified
that knowledge of employees about CRM and its benefits together with having the
necessary customer profile management system to execute CRM strategies are
found to be the least factors affecting the adoption of CRM in the Commercial
Bank of Ethiopia.
 Concerning the six dimensions the study followed the problem of budget allocation
to the program; technology related problems and the important skill required from
employees while handling CRM are found as major problems of commercial Bank
of Ethiopia that may result in under achievement of the Bank‟s CRM objectives.
 Among the factors identified, according to this study, the less involvement of top
management from planning phase of the CRM process to the controlling and
evaluation phase is also the most serious challenge the bank has been facing next to
the factors mentioned immediately above.
 However, budget related issues are the most serious challenges of all Commercial
Bank of Ethiopia has been struggling in adopting CRM. Besides allocating
inadequate budget, the bank has no serious mechanism to evaluate whether the
budget has been used as per the objectives to be achieved and the tasks to be
performed in the department of CRM, as the study reveals.
 Technological related problems such as shortage of latest CRM technologies,
repeated lack of internet access from Ethio-Telecom, lack of providing up-to-date
machines to customers at various convenient locations, etc are among the major
challenges Commercial Bank of Ethiopia has been encountering.
 The quality and quantity of data collected in the CRM department is crucial to
achieve CRM objectives effectively. However, the deficiency in performing this
has been creating an obstacle in CBE due to lack of quality & quantity of data that
59
should be collected by the CRM department, as perceived by the bank‟s
employees.
 Hence, it is possible to conclude that by putting solutions to the challenges
mentioned above, CBE can perform CRM better and achieve greater result since
the banking industry in Ethiopia has been getting more competitive
5.3 Recommendations
Based on the findings of the study, the following measures are recommended to CBE
in order to exploit the benefits sought in adopting CRM and tackling the challenges
prevailing during the adoption process.
 It is a good idea for a company to invest in staff training and development

even in harsh times because the skills, talent and capabilities of the people are
what will enable customer service delivery to succeed. Making a customer
feel special is the best way to help them become even more loyal to the
business, and a satisfied customer can be the best advocates for future sales,
as they spread positive word of mouth and recommendations which may
result in increased customers for the company as consumers always seek to
gain the best value for money. Good CRM program helps a lot in this regard.
 The data obtained from respondents agreed with literature that budget related
problem is a major factor affecting the adoption process largely. Thus, it is
imperative to the bank that it should allocate the necessary budget to run the
program effectively. Not only allocating the required budget but also should
follow whether the budget allocated to the program is in its best way to fetch
what was intended as CRM objective.
 Greenberg (2004) argued that the implementation of CRM strategy has the
ability to increase the true economic worth of a business. The CRM initiative
of the bank is pivotal in winning CBE the Ethiopian banking sector. But it is
only when management involves in the program constructively by accepting
CRM as a strategy by itself, not something supplementary which can be
handled by extra time and resource alone.
 Management has to make significant decisions in respect of regular and
systematic training of staff in order to improve staff knowledge in customer
60
service as customers should be rewarded with the superior service from
employees. Provision of timely, regular and up-to-date training is
indispensible to employees in particular and the bank in general in achieving
the best result from CRM program. Since top management's commitment is
decisive for proper implementation of CRM, it has to show its perseverance
by designing sound CRM strategies, and stipulating clear policies for a
smooth customer relationship.
 There has to be an improvement in the introduction of cutting-edge IT
software to enable the bank„s CRM processes. There should also be provision
of logistics or resources (computers, stable internet connectivity, cars and
people) for use in the right quantities, place and time.
 Understanding the dynamics of CRM and performing a cost-benefit analysis
of its adoption is critical for competition in the CBE. Therefore, there must be
occasions and programs provided by the bank to its employees to improve
their understanding about the benefits of CRM and enhance their capabilities
in executing the program.
5.4 Implications of Theory
The purpose of this study was to gain a better understanding of what the challenges of
CRM in its adoption process in CBE. The thesis has tried to explore this area by applying
existing theories in connection to a company within the industry. The most noted of this
investigation is that firms with great competition needs to identify those challenges of
CRM in its adoption process. As CRM today is a means to identify the needs and
behaviours of their customers and enable them in designing proper marketing strategy,
identifying the challenges and providing solutions to these challenges help these firms in
getting the desired output from their CRM programs.
5.5 Implications for Further Studies
This study has tried to provide a better understanding of what the challenges of adopting
CRM program in CBE. There are many areas in this field that can be used to further
research.
61
The list below suggests some suitable areas that need further research:
 Studies of what the challenges of adopting CRM in the commercial banks of
Ethiopia, other than CBE.
 Comparing how the challenges affect industries other than the banking sector.
 Although CRM is widely used, there are still some other challenges such as
usability, complexity, fragmentation and so on. These factors also should be
concerned in further research.
62
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66
APPENDICES
67
Appendix 1
Addis Ababa University - School of Commerce
The Department of Marketing Management
(Questionnaire to the Employees of Commercial Bank of Ethiopia)
Dear respondent, this questionnaire is designed to seek information on the factors that affect the
adoption of CRM: The case of Commercial Bank of Ethiopia, in partial fulfilment for the award of
master of art in marketing management.
The overall objective of this questionnaire is to gather first hand information on the
aforementioned issue. I would like to assure you that the information you are going to provide will
be exclusively used for academic purpose and will kept confidential. Your contribution to this
research is very greatly appreciated.
Thank you in advance for your cooperation
Part I. Demographic Information
Please complete the section by ticking  in the box provided.
1. Gender: Male  Female 
2. Age: below 30  31-39  40-49  50 and above 
3. Educational background: Diploma  First Degree  Second degree and above
4. Job Title:
Branch Manager  Customer Service Manager 
Customer Relationship Officer  Customer Relationship Manager 
5. How long have you been employee of the bank?

1-3 year  4-10 years  11-20 years  above 20 years 
68
Part II. Factors that affect the adoption of CRM
Please indicate the extent to which you agree with the following put by this a  mark in the box to choose the
number from 1 to 5 that best represent your level of agreement with the statement.
5. Strongly agree 4. Agree 3. Neutral
2. Disagree 1. Strongly disagree
Elements Level of agreement
Strongly Agree Neutral Disagree Strongly

agree disagree
Regarding skill
I have the basic knowledge regarding the
concept of CRM
The company has provided me with
continuous supplementary training about
CRM
I have no technical problems to
implement CRM well
I understand customers deserve the
necessary respect and I am committed to
do so.
I am committed to serve customers
beyond my respective responsibility
Regarding Investment
The bank allocates adequate investment
to implement the CRM program well
The bank allocates the budget promptly
(on time)
The bank's budget allocation is based up
on the tasks to be performed and the
objectives to be achieved
The bank has a mechanism to check
whether the budget is spent on the
intended CRM activity
The bank has a mechanism to evaluate
the outcome of the budget allocated for
CRM program
69

agree disagree
Regarding data quality and quantity

It is easy to collect enough data regarding
customer profile from customers and
other sources
The bank collects quality data that are
helpful to achieve CRM objectives
There are no problems regarding the
collection of customer profile data
The bank uses modern technology to
provide better service to customers
The way data is managed can help the
bank to identify customers leaving the
bank and helps to know why
Understanding Business Benefits
The bank continuously provides me with
the information involving the benefits of
CRM
I personally understand the benefits of
CRM
I believe CRM is very important to the
bank as well as to customers
I usually explain the benefits of CRM to
my customers
Leadership and management
involvement
Top managers are cooperative and
collaborative
Top managers accept and provide
leadership for building and maintaining
customer relationship as a major goal of
the bank
CRM responsibilities of employees are
70

agree disagree
clearly defined, assigned and understood

The bank takes customers feedback
seriously and reply
The bank has effective customer recovery
strategies
Technology
There has been provision of logistics or
resources (computers, stable internet
connectivity, cars, people, etc) for use in
the right quantities, place and time.
Regular training has been provided to
employees of the bank to introduce
cutting edge IT software to enable the
bank's CRM process.
The bank regularly takes measure to
improve the existing level of CRM related
technology.
1. In your opinion, what are the challenges Commercial Bank of Ethiopia has been facing while
implementing CRM?
2. Which of the challenges do you think is/are most serious?
If you have any other comment
Thanks
71
Appendix 2
አዱስ አበባ ዮኒቨርስቲ - የንግድ ስራ ት/ቤት - የገበያ ስራ አመራር ት/ክፍሌ
በኢትዮጵያ ንግድ ባንክ የዯንበኛ ግንኙነት ሰራተኞች የሚሞሊ መጠይቅ
ክቡር ሰራተኛ ፤ ይህ መጠይቅ የተዘጋጀው በገበያ ስራ አመራር የድህረ ምረቃ ተማሪ

ሲሆንአሊማውም ‘Factors that affect the adoption of CRM: the case of
Commercial Bank of Ethiopia’ ማሇትም ባንኩ የዯንበኛ ግንኙነትን በመተግበር ረገድ
የሚስተዋለ ችግሮች በሚሌ ርዕስ ሇሚያዘጋጀው የመመረቂያ ጽሁፍ ነው፡፡
በመጠይቁ የሚገኘው መረጃ ሇጥናቱ እና ሇትምህርታዊ አሊማ ብቻ የሚውሌ ሲሆን

የመረጃው ምስጢራዊነት በከፍተኛ ጥንቃቄ የሚያዝ መሆኑና በእርሶ ፈቃዯኝነት ብቻ
የሚሞሊ መሆኑን በአክብሮት እገሌጻሇሁ፡፡ የእርስዎን ማንነት (ስሞን) መግሇጽ አስፈሊጊ
አይዯሇም፡፡
ወርቃማ ጊዜዎን ሰውተው መጠይቁን ሇመሙሊት ፈቃዯኛ በመሆንዎ በቅድሚያ

አመሰግናሇሁ፡፡
ክፍሌ አንድ - አጠቃሊይ መረጃ
በጥያቄዎቹ ፊት ሇፊት በተቀመጡት ሳጥኖች ፊትምሌክት ያድርጉ
1. ጾታ ወንድ  ሴት 
2. የትምህርት ዯረጃ ዱፕልማ  የመጀመሪያ ዱግሪ 
ሁሇተኛ ዱግሪ እና ከዛ በሊይ 
3. የስራ ኃሊፊነት የቅርንጫፍ ስራ አስኪያጅ  የዯንበኛ ግንኙነት ስራ አስኪያጅ


የዯንበኛ አገሌግልት ስራ አስኪያጅ  የዯንበኛ አገሌግልት ተጠሪ


4. የስራ ሌምድ 1-3 አመት  4-10 አመት  11-20 አመት  ከ20 አመት በሊይ

72
ክፍሌ ሁሇት፤ የዯንበኛ ግኑኝነት በመተግበር ረገድ የሚያጋጥሙ ችግሮችን በተመሇከተ
እያንዲንደ ጥያቄ አምስት ምርጫዎች ያለት ሲሆን አማራጮቹም፤5- በጣም

እስማማሇሁ 4- እስማማሇሁ 3- አስተያየት የሇኝም 2- አሌስማማም 1- በጣም
አሌስማማም የሚሇውን ሀሳቦች ይወክሊለ ፡፡ ከአምስቱ ምርጮዎች እርሶ
የሚስማሙበትን ምሌክት ያድርጉ
ተ. ዝርዝር ጥያቄዎች አማራጮች

ቁ በጣም አስተያየ በጣም
አስማማ እስማማ ት አሌስማ አሌስማ
ሇሁ ሇሁ የሇኝም ማም ማም
ክህልትን በተመሇከተ
1 የዯንበኛ ግንኙነትን(CRM) በተመሇከተ
በቂ ዕውቀት አሇኝ
2 ባንኩ የዯንበኛ ግንኙነትን (CRM)
በተመሇከተ ተከታታይ ስሌጠናዎችን
ይሰጠኛሌ
3 የዯንበኛ ግንኙነትን (CRM) ሇመተግበር
የቴክኒክ ክፍተቶች የለብኝም
4 ዯንበኞች በቂ እንክብካቤና ክብር
አንዯሚገባቸው እገነዘባሇሁ፤
እተገብራሇሁም
5 ባንኩ ከሰጠኝ ሃሊፊነት በተጨማሪ በግሌ
ተነሳሽነት ዯንበኛን ሇማገሌገሌ ጥረት
አዯርጋሇሁ
በጀትን በተመሇከተ
ሇመተግበር በቂ በጀት ይመድባሌ
ሇመተግበር አስፈሊጊውን በጀት በወቅቱና
አስፈሊጊ በሆነ ሰዓት ይመድባሌ
3 የባንኩ የበጀት አመዲዯብ ሉሰሩ የታቀደ
ስራዎችን መሰረት ያዯረገ ነው
4 ባንኩ የዯንበኞች ግንኙነትን ሇመተግበር
የተመዯበውን በጀት በአግባቡ በስራ ሊይ
መዋለን የሚከታተሌበት አሰራር አሇው
5 ባንኩ የዯንበኞቹን ግንኙነትን ሇመተግበር
የተመዯበውን በጀት ያመጣውን ውጤት
ይገመግማሌ
የመረጃ ብዛትና ጥራትን በተመሇከተ
1 የዯንበኞችን መረጃዎች በቀሊለ ከዯንበኞች
እና ከላልች ምንጮች ማግኘት ይቻሊሌ
73
2 ባንኩ የዯንበኛ ግንኙነትን (CRM) ዓሊማ
ሉያሳኩ የሚችለ ጥራት ያሊችውን
መረጃዎች በየወቅቱ ይሰበሰባሌ
3 የዯንበኞችን መረጃ በማሰባሰብ ረገድ
የሚስተዋለ ችግሮች የለም
4 የባንኩ በዘመናዊ ቴክኖልጂ የታገዘ
አገሌግልት ይሰጣሌ
በጣም አስተያየ በጣም

አስማማ እስማማ ት አሌስማ አሌስማ
ሇሁ ሇሁ የሇኝም ማም ማም
የአመራር ትኩረትን በተመሇከተ
1 የበሊይ አመራሮች ከዯንበኛ
ግንኙነትሰራተኛ
ጋር ትብብር እና ቀረቤታ አሊቸው
2 የባንኩ አመራር ከዯንበኞች ጋር መሌካም
ግንኙነት መገንባት በጣም
አስፈሊጊእንዯሆነ
ያምናሌ፤ሇተግባራዊነቱም ይሰራሌ
3 የዯንበኞች ግንኙነት ክፍሌ
ሰራተኞችተግባር
እና ሃሊፊነት በግሌጽ
ተቀምጧሌ፤ሰራተኞቹም
ተገንዝበውታሌ
4 ባንኩ የዯንበኞቹን አስተያየት በሚገባ
ያዯምጣሌ፤ተገቢውንም ምሊሽ ይሰጣሌ
5 ባንኩ ውጤታማ የሆነ የዯንበኞች
ግኑኝነት
እስትራቴጂ አሇው
ቴክኖልጂን በተመሇከተ
1 ባንኩ መሰረታዊ የቴክኖልጂ ግብአቶችን
ማሇትምእንዯኮምፒውተር፤መኪናወ.ዘ.ተየ
መሳሰለትን
በተገቢው መጠን እና ሰዓት ያቀርባሌ
2 ባንኩ ተከታታይ እና ወቅቱን የጠበቁ
የቴክኖልጂ ስሌጠናዎችን ይሰጠናሌ
3 ባንኩ በቴክኖልጂ ራሱን ሇማገዝ
ተከታታይ
የማሻሺያ እርምጃዎችን በየወቅቱ
ይወስዲሌ
74
በድጋሚ አመሰግናሇሁ፡፡
Appendix 3
Addis Ababa University - School of Commerce
The Department of Marketing Management
(Questionnaire to the customers of Commercial Bank of Ethiopia)
Dear respondent, this questionnaire is designed to seek information on the factors that
affect the adoption of CRM: The case of Commercial Bank of Ethiopia, in partial
fulfilment for the award of master of art in marketing management.
The overall objective of this questionnaire is to gather first hand information on the
aforementioned issue. I would like to assure you that the information you are going to
provide will be exclusively used for academic purpose and will kept confidential. Your
contribution to this research is very greatly appreciated.
Thank you in advance for your cooperation
75
Part I. Demographic Information
Please complete the section by ticking  in the box provided.
1. Brach name: Abakoran  Arat Killo  Arada giorgis 

Finfine  Sillasie
2. Gender: Male  Female 
3. Age: below 30  30-39  40-49  50 and above 
4. Purpose of using the bank‟s service: Personal  Business  Both 
5. The service used:

Saving account  Current account  Credit service  ATM
Money transfer  Credit card service 
6. How long have you been customer of the bank

1-3 year  4-10 years  More than 10 years
Part II. Factors that affect the adoption of CRM

Please indicate the extent to which you agree with the following put by this a  mark
in the box to choose the option that best represents your level of agreement with the
statement.
5. Strongly agree 4. Agree 3. Neutral
2. Disagree 1. Strongly disagree

agree disagree
I have the basic knowledge about CRM and its benefits.
The company has been providing me with the information

regarding CRM
Employees of the bank have the basic knowledge
regarding the concept of CRM
Employees do not have any technical problems while

handling CRM
76

agree disagree
Speed of the service delivery is good while applying CRM
with customers.
Employees serve customers with great respect
The bank identifies customers’ needs
The bank’s CRM program is based upon the customers'

needs
There are enough skilled personnel in the CRM

department
The bank has been supporting me with its CRM program.
It is easy to communicate with top CRM managers when

necessary.
The bank is doing more than relationship management to

satisfy customers.
There are simple procedures provided by the bank to

accept customers’ complaints regarding CRM
The bank positively accepts complaints and provides timely
feedback.
I have regular internet access to deal with CRM when

necessary.
I do not have the basic IT knowledge that helps me in
getting CRM service from the bank.
Thanks
Appendix 4
አዱስ አበባ ዮኒቨርስቲ - የንግድ ስራ ት/ቤት - የገበያ ስራ አመራር ት/ክፍሌ
በኢትዮጵያ ንግድ ባንክ ዯንበኞች የሚሞሊ መጠይቅ
ክቡር ዯንበኛ፤ ይህ መጠይቅ የተዘጋጀው በገበያ ስራ አመራር የድህረ ምረቃ ተማሪ ሲሆን አሊማውም
‘Factors that affect the adoption of CRM: the case of Commercial Bank of Ethiopia’
ማሇትም ባንኩ የዯንበኛ ግንኙነትን በመተግበር ረገድ የሚስተዋለ ችግሮች በሚሌ ርዕስ ሇሚያዘጋጀው
የመመረቂያ ጽሁፍ ነው፡፡
በመጠይቁ የሚገኘው መረጃ ሇጥናቱ እና ሇትምህርታዊ አሊማ ብቻ የሚውሌ ሲሆን የመረጃው

ምስጢራዊነት በከፍተኛ ጥንቃቄ የሚያዝ መሆኑና በእርሶ ፈቃዯኝነት ብቻ የሚሞሊ መሆኑን በአክብሮት
እገሌጻሇሁ፡፡ የእርስዎን ማንነት (ስምዎን) መግሇጽ አስፈሊጊ አይዯሇም፡፡
ወርቃማ ጊዜዎን ሰውተው መጠይቁን ሇመሙሊት ፈቃዯኛ በመሆንዎ በቅድሚያ አመሰግናሇሁ፡፡
77
ክፍሌ አንድ - አጠቃሊይ መረጃ
በጥያቄዎቹ ፊት ሇፊት በተቀመጡት ሳጥኖች ፊትምሌክት ያድርጉ
1. የሚጠቀሙት የባንኩ ቅርንጫፍ ስም አባኮራን  አራት ኪል 
አራዲ ጊዮርጊ  ፊንፊኔ  ስሊሴ 
2. ጾታ ወንድ  ሴት 
3. እድሜ ከ30 ዓመት በታች  ከ30-39 ዓመት 
ከ40-49 ዓመት 50 ዓመት ና ከዚያ በሊይ 
4. የባንኩን አገሌግልት የሚጠቀሙት ሇግሌ ጉዲይ  ሇንግድ  ሇሁሇቱም 
5. የሚጠቀሙት የባንክ አገሌግልት ዓይነት የቁጠባ አገሌግልት  የቼክ አገሌግልት 
የብድር አገሌግልት  የገንዘብ ማዘዋወር አገሌግልት 
የክሬዱት ካርድ አገሌግልት  የኤቲኤም አገሌግልት 
6. የባንኩ ዯንበኛ በመሆን የቆዩት ከ1-3 ዓመት  ከ4-10 ዓመት  ከ10 ዓመት በሊይ 
ክፍሌ ሁሇት፤ የዯንበኛ ግንኙነትን በመተግበር ረገድ የሚያጋጥሙ ችግሮችን በተመሇከተ
እያንዲንደ ጥያቄ አምስት ምርጫዎች ያለት ሲሆን አማራጮቹም፤5- በጣም

እስማማሇሁ 4- እስማማሇሁ 3- አስተያየት የሇኝም 2- አሌስማማም 1- በጣም
አሌስማማም የሚሇውን ሀሳቦች ይወክሊለ ፡፡ ከአምስቱ ምርጮዎች እርሶ
የሚስማሙበትን ምሌክት ያድርጉ
ተ.ቁ ዝርዝር ጥያቄዎች አማራጮች

በጣም አስተያየት በጣም
አስማማሇሁ እስማማሇሁ የሇኝም አሌስማማም አሌስማማም
1 ስሇ የዯንበኛ አገሌግልት ግንኙነት
(CRM) ጠቀሜታዎች በቂ ግንዛቤ አሇኝ
78
በተመሇከተ መረጃዎች ይሰጠኛሌ
3 የባንኩ ሰራተኞች ስሇየዯንበኛ ግንኙነት
(CRM) መሰረታዊ ዕውቀት በበቂ ሁኔታ
አሊቸው
4 የባንኩ ሰራተኞች የዯንበኛ አገሌግልትን
በመተግበር ረገድ የሚስተዋሌባቸው
ችግሮች የለም
5 የባንኩ ሰራተኞች የዯንበኛ አገሌግልትን
በመተግበር ረገድ ፈጣንና ቀሌጣፎች
ናቸው፡፡
6 የባንኩ ሰራተኞች ዯንበኞችን በሚገባ
ያስተናግዲለ፤ያከብራለም፡፡
7 ባንኩ የዯንበኞችን ፋሊጎት በሚገባ
ይረዲሌ
8 የባንኩ የዯንበኛ አገሌግልት ፕሮግራም
የዯንበኞችን ፋሊጎት ማዕከሌ ያዯረገ ነው
9 በባንኩ ውስጥ በቂ የሆኑ የሰሇጠኑ
የዯንበኛ አገሌግልት ሰራተኞች አለ፡፡
10 የባንኩ የዯንበኛ አገሌግልት ፕሮግራም
በግላ ጠቅሞኛሌ
11 የባንኩ የዯንበኛ አገሌግልት ኃሊፊዎችን
ባስፈሇገኝ ወቅት በቀሊለ ማግኘትና
ማወያየት እችሊሇሁ፡፡
12 ባንኩ ዯንበኛን በማክበር የራስ አድርጎ
ሇማቆየት ከበቂ በሊይ ስራዎችን
እንዯሚሰራ ታዝቤያሇሁ
13 ባንኩ የዯንበኞችን ቅሬታን የማቅረቢያ
ቀሊሌ አሰራር ዘርግቷሌ ፡፡
14 ባንኩ የዯንበኞችን ቅሬታ
ይቀበሊሌ፤ፈጣን ምሊሽም ይሰጣሌ
ከባንኩ
15 የዯንበኛ አገሌግልት መጠቀም ጋር
በተያያዘ የኢንተርኔት ችግሮች
አያጋጥሙኝም፡፡
16 በግላ የኢንፎርሜሽን ቴክኖልጂ (IT)
ማሇትም ኮምፒውተሮችን፤የባንኩ
የቴክኖልጂ ማሽኖችን፤ወዘተ የመጠቀም
የዕውቀት እና የክህልት ችግሮች
የለብኝም፡፡
በድጋሚ አመሰግናሇሁ፡፡
79

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Challenges of Adopting Customer Relationship

Management by Commercial Bank of Ethiopia

(The case of Addis Ababa Branches)

In Partial Fulfilment of the Requirement for the Award of Master of Arts

By: Nebiyou Dawit

Advisor: Teklegiorgis Assefa (Asst. Professor)

Addis Ababa University

Addis Ababa, Ethiopia

(The case of Addis Ababa Branches)

A Thesis Submitted to the School of Commerce, Addis Ababa University, in partial

Submitted By: Nebiyou Dawit

Approved by Board of Examiner

Name Signature Date

External Examiner: __ ____ ____________________

Internal Examiner: ________ ___

Advisor: ________ ___

(The case of Addis Ababa Branches)

Nebiyou Dawit _____________________

CBE: Commercial Bank of Ethiopia

NBE: National Bank of Ethiopia

CRM: Customer Relationship Management

Table 3.1 customer distribution of the branches of CBE 30

1.1 Background of the study

Effective customer relationship is a base for customer value. In order to support

Customer relationship management is an indispensable requirement to reach out to the

1.2 Statement of the problem

Banks in Ethiopia are implementing the Customer Relationship Management program in

Customer Relationship Management is becoming more popular in the banking industry in

1.3.1 General Objective

Although Customer Relationship Management (CRM) is very important to a company that

1.3.2 Specific Objectives

The research, therefore, aims

 To identify the challenges of adopting Customer Relationship Management

1.4 Scope of the Study

Commercial Bank of Ethiopia operates in 216 branches in Addis Ababa as of December

1.5 Limitations of the study

1.6 Significance of the study

1.7 Key Terms

Customer - operationally customer refers to organizations individuals and businesses that

Relationship Marketing - establishing, maintaining and enhancing relationship with

Customer Relationship Marketing-Enterprise approach to understand and influence

1.8 Organization of the study

2.1 Chapter Overview

2.2 The Banking Industry in Ethiopia

Mainly organizational performance focuses as attracting, maintaining and improving

2.3 CRM DEFINITION

 “Coherent and complete set of processes and technologies for managing

2.4 Types of CRM

2.4.1 Operational CRM

2.4.2 Analytical CRM

2.4.4 Strategic CRM

2.5 Benefits of CRM

Using a Customer Relationship Management system allows businesses to attain many

 Streamlined sales and marketing processes

 Getting management sponsorship

2.7 Internal and External Factors Influencing CRM

2.8 Major Factors Affecting CRM’s success

2.8.1 Lack of skills

2.8.2 Inadequate investment

To operate the CRM, adequate funding is an indispensable requirement. Particularly, for

External Examiner: __________________

Internal Examiner: ______ _

Advisor: ______ _