The effect of Customers Relationship Management on Service Quality and Customers Retention among Bank Customers

Abstract

This study examines the effects of Customer Relationship Management (CRM) on service quality and customer retention among bank customers. In an increasingly competitive banking environment, maintaining strong relationships with customers has become essential for improving service delivery and sustaining long-term patronage. The study adopts a quantitative research design, utilizing structured questionnaires to collect data from bank customers. Key CRM dimensions such as customer engagement, communication, personalization, and responsiveness are analyzed to determine their influence on perceived service quality and customer retention. Data are analyzed using descriptive and inferential statistical techniques, including correlation and regression analysis, to test the relationships among the variables. The result shows that customer relationship management has a significant positive effect on customer retention (β = .93, SE = .540, CR = 2.268, p =.023). When customer relationship management goes up by 1 standard deviation, customer retention goes up by .93 standard deviations. The regression weight estimate, .93, has a standard error of about .540. The probability of getting a critical ratio as large as 2.268 in absolute value is less than .05. In other words, the regression weight for customer relationship management in the prediction of customer retention is significantly different from zero at the 0.05 level (two-tailed). The study concludes that banks that invest in robust CRM systems and strategies are more likely to deliver superior service quality and retain their customers over time. It is recommended that bank management should strengthen CRM initiatives by leveraging technology, training staff, and adopting customer-focused policies to enhance service delivery and loyalty.