The Effect of Relationship Marketing on Customer Loyalty: The Case of Cooperative Bank of Oromia in Nekemte Town

Gudata Abara Chali

doi:10.56741/IISTR.jgi.002033

Authors

Gudata Abara Chali
gudataa@gmail.com
Wallaga University https://orcid.org/0000-0001-8761-7545

DOI:

https://doi.org/10.56741/IISTR.jgi.002033

Keywords:

Cooperative Bank of Oromia, Customer Loyalty, CRM, Relationship Marketing

Abstract

This study investigates the impact of relationship marketing—specifically Customer Relationship Management (CRM) practices—on customer loyalty at the Cooperative Bank of Oromia (CBO) in Nekemte town. Despite the rapid growth of the Ethiopian banking sector, competition for customer retention remains intense. Utilizing a descriptive and explanatory research design, the study collected primary data from 180 respondents using structured Likert-scale questionnaires. Data analysis was performed employing descriptive statistics, Pearson correlation, and multiple regression analysis. The findings reveal significant positive correlations between all six studied dimensions—Key Customer Focus, Interaction Management, CRM Organization, Knowledge Management, Technology-based CRM, and IT Integration—with customer loyalty. Regression results (R2=0.755) indicate that CRM practices explain 75.5% of the variance in customer loyalty. Notably, Technology (β=0.337) and ICT Integration (β=0.320) emerged as the most potent predictors. The study concludes that while CBO performs moderately in relationship marketing, a technology-driven, customer-centric approach is essential for long-term loyalty. Recommendations include upgrading digital banking infrastructures and enhancing personalized communication frameworks.

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Author Biography

Gudata Abara Chali, Wallaga University

is a researcher and assistant professor affiliated with the Department of Management at Wallaga University in Nekemte, Oromia, Ethiopia. He focuses his work on management topics with a particular emphasis on leadership styles and their impact on employee performance within Ethiopia’s public sector. Based in Nekemte, he communicates research findings and collaborates with colleagues to advance understanding of how transformational leadership influences organizational outcomes in public institutions. (email: gudataa@gmail.com).

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