Effects of Customer Relationship Management Strategy on Selected Commercial Private Banks’ Performance in Addis Ababa Ethiopia: The Mediating Role of Brand Equity
Keywords:
Customer Relationship Management, Brand Equity, Banks’ performance, Addis AbabaAbstract
Both customer relationship management and brand equity are important factors that influence a company's overall performance. A mixed-methods strategy was used in gathering data by using structured questionnaires from 312 workers of six private banks with head offices in Addis Ababa. Result shows CRM enhances BE, which subsequently improves customer trust, loyalty, and engagement, ultimately boosting bank performance. The findings demonstrate that CRM significantly and positively impacts banks' performance and brand equity (BE), with strong direct effects (β = 0.48, p<0.001 and β = 0.73, p<0.001 respectively). Furthermore, Brand equity has a substantial effect on Bank Performance (β=0.351, p<0.001), suggesting that a strong brand influences banks operational and financial success. Additionally, CRM has an indirect effect on bank performance through brand equity (β=0.384, p<0.001), signifying that a partial mediating factor in the link between CRM and performance is brand equity. Therefore, banks should include regular brand equity assessments, leveraging data-driven CRM tools, and harmonizing CRM practices with BE initiatives. Banks should deploy robust CRM systems capable of capturing detailed customer insights through personalization of services, efficient resolution of customer concerns, and proactive customer engagement to improve customer satisfaction and loyalty; leading to enhanced performance.
Downloads
References
Abamid, M. R., Sami, W., & Mohmad Sidek, M. H. (2017). Discriminant Validity Assessment: Use of Fornell & Larcker criterion versus HTMT Criterion. Journal of Physics: Conference Series, 890(1). https://doi.org/10.1088/1742-6596/890/1/012163
Ailawadi, K. L., Lehmann, D. R., & Neslin, S. A. (2003). Revenue Premium as an Outcome Measure of Brand Equity. Journal of Marketing, 67(4), 1–17. https://doi.org/10.1509/jmkg.67.4.1.18688
Akdogan, C. B., Uray, N., Ulengin, B., & Kiygi-Calli, M. (2024). A holistic empirical approach to marketing activities and performance interaction in banking industry: the mediating role of customer-based brand equity. Business Process Management Journal. https://doi.org/10.1108/BPMJ-02-2024-0072
Al-Kharabsheh, A. (2024). The effect of customer relationship management on customer satisfaction performance in the hotel industry in Jordan. Innovative Marketing, 20(4), 134–145. https://doi.org/10.21511/im.20(4).2024.12
Al-Weshah, G. A., Al-Manasrah, E., & Al-Qatawneh, M. (2019). Customer relationship management systems and organizational performance: Quantitative evidence from the Jordanian telecommunication industry. Journal of Marketing Communications, 25(8), 799–819. https://doi.org/10.1080/13527266.2018.1449007
Alfons, A., Ateş, N. Y., & Groenen, P. J. F. (2022). A Robust Bootstrap Test for Mediation Analysis. Organizational Research Methods, 25(3), 591–617. https://doi.org/10.1177/1094428121999096
Alqershi, N., Mokhtar, S. S. M., & Abas, Z. Bin. (2020). Innovative CRM and performance of SMEs: The moderating role of relational capital. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 1–18. https://doi.org/10.3390/joitmc6040155
AlTabbaa, O., & Ankrah, S. (2016). University of Huddersfield Repository. Technological Forecasting & Social Change, 104, 1–15.
Amegavie, L. O., Mensah, N. M. D., & Jephthah Kwame, A. (2019). Consumer Relationship Management and Its Effect On Organizational Performance Within the Telecommunication Industry of Ghana. European Journal of Business and Management Research, 4(6), 1–10. https://doi.org/10.24018/ejbmr.2019.4.6.166
Amoako, G. K. (2019). Relationship Marketing, Orientation, Brand Equity and Firm Value: The Mediating Role of Customer Value—An Emerging Market Perspective. Journal of Relationship Marketing, 18(4), 280–308. https://doi.org/10.1080/15332667.2019.1639589
Ardestani, A. S., Amirzadeh, Y., & Amrollahi, M. H. (2012). A Study of the Relationship between Brand Value and the Performance of Private Banks in Terms of E-Cards Sales. European Journal of Experimental Biology, 2(5), 1833–1838.
Attia, A. (2023). Effect of Sustainable Supply Chain Management and Customer Relationship Management on Organizational Performance in the Context of the Egyptian Textile Industry. Sustainability (Switzerland), 15(5). https://doi.org/10.3390/su15054072
Aydin, G. (2015). Effect of Brand Equity on Firms Financial Performance in Consumer Goods Industries. Pressacademia, 4(3), 331–331. https://doi.org/10.17261/pressacademia.2015313056
Bagozzi, R. P., Fornell, C., & Larceer, D. P. (1981). Canonical correlation analysis as a special case of a structural relations model. Multivariate Behavioral Research, 16(4), 437–454. https://doi.org/10.1207/s15327906mbr1604_2
Barasa, L., & Ahmad, A. (2024). Determinants of Mobile Customer Relationship Management Adoption and Its Impact on Firm Performance in Kenya. Journal of African Business, 00(00), 1–21. https://doi.org/10.1080/15228916.2024.2368315
Barney, J. (1991). Firm Reources ad Sustained Competitive Advantege. In Journal of Management (Vol. 17, Issue 1, pp. 99–120).
Bierstedt, R., & Blau, P. M. (1965). Exchange and Power in Social Life. American Sociological Review, 30(5), 789. https://doi.org/10.2307/2091154
Buzdar, M. F., Janjua, S. Y., & Khurshid, M. A. (2016). Customer-based brand equity and firms’ performance in the telecom industry. International Journal of Services and Operations Management, 25(3), 334–346. https://doi.org/10.1504/IJSOM.2016.079516
Cheng, B., & Hou, S. (2024). Brand equity and financial performance: an institutional view. Marketing Intelligence and Planning, 42(8), 1433–1463. https://doi.org/10.1108/MIP-01-2024-0049
Chepkwony, D., Langat, L., Rop, W., & Naibei, I. (2018). Influence of Brand Equity on Financial Performance of Mobile Telecommunication Firms in Nairobi, Kenya. International Journal of Economics, Commerce and Management, 6(9), 487–531.
Chetioui, Y., & Abbar, H. (2017). Customer Relationship Management (CRM) in service firms: A model proposal to measure the impact of the implementation of CRM dimensions on Hotel Performance. International Journal of Scientific and Engineering Research, 8(5), 289–307.
Creedon, P. S., & Hayes, A. F. (2015). Small Sample Mediation Analysis: How Far Can We Push the Bootstrap? Annual Conference of the Association for Psychological Science.
Deb, S. K., Jain, R., Manohar, S., & Marwah, S. (2023). A study on mediation effect of relationship quality outcome between customer relationship management and mutual fund decision. Global Knowledge, Memory and Communication. https://doi.org/10.1108/GKMC-09-2022-0212
Gonu, E., Okeniyi, J., & Agyapong, G. K. Q. (2024). Customer relationship management practices and organisational performance of commercial banks in Ghana: a mediation analysis. Journal of Financial Services Marketing, 29(2), 607–624. https://doi.org/10.1057/s41264-023-00226-8
González-Mansilla, O. L., Serra-Cantallops, A., & Berenguer-Contrí, G. (2023). Effect of value co-creation on customer satisfaction: the mediating role of brand equity. Journal of Hospitality Marketing and Management, 32(2), 242–263. https://doi.org/10.1080/19368623.2023.2164394
Grace Ufuoma, J. (2024). Customer Relationship Management (CRM) and Organizational Performance in Nigeria. British Journal of Management and Marketing Studies, 7(1), 151–157. https://doi.org/10.52589/bjmms-bax83ndn
Guerola-Navarro, V., Gil-Gomez, H., Oltra-Badenes, R., & Soto-Acosta, P. (2024). Customer relationship management and its impact on entrepreneurial marketing: a literature review. In International Entrepreneurship and Management Journal (Vol. 20, Issue 2). Springer US. https://doi.org/10.1007/s11365-022-00800-x
Guerola-Navarro, V., Oltra-Badenes, R., Gil-Gomez, H., & Iturricha Fernández, A. (2021). Customer relationship management (CRM) and Innovation: A qualitative comparative analysis (QCA) in the search for improvements on the firm performance in winery sector. Technological Forecasting and Social Change, 169. https://doi.org/10.1016/j.techfore.2021.120838
Haghshenas, M., & Mir Ahmadi, S. M. R. (2015). The effects of customer relationship management dimensions on organizational performance ( Case study : shipping organization of Iran ). WALIA Journal, 31, 134–141.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2019). Multivariate Data Analysis (8th ed.). Cengage Learning. (2019). 2019.
Hair, J. F. (2016). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research This, 18(1), 39–50.
Hair, J. F., Risher, J. J., Sarstedt, M., & Ringle, C. M. (2019). When to use and how to report the results of PLS-SEM. European Business Review, 31(1), 2–24. https://doi.org/10.1108/EBR-11-2018-0203
Hajiyan, H., Aminbeidokhti, A. A., & Hemmatian, H. (2015). The effect of customer relationship management on customer loyalty: Evidence from banking industry. Management Science Letters, 14(5), 993–998. https://doi.org/10.5267/j.msl.2015.9.001
Hanaysha, J. R., & Mehmood, K. K. (2022). An Exploration of the Effect of Customer Relationship Management on Organizational Performance in the Banking Sector. International Journal of Customer Relationship Marketing and Management, 13(1), 1–16. https://doi.org/10.4018/IJCRMM.2022010101
Hassan, N., Assistant, E., Mohammedelhassan, M., & Alaraki, H. (2020). " The effect of Customer Relationship Management Dimensions on the Organizational Performance in Telecommunication Sectors in Sudan " Researchers : - Nuha Hassan Elmubasher Assistant Professor in Mashreq University - Maan MohammedElhassan Hamid Alaraki As. 63–76.
Hassanpour, B., & Rostamian, H. (2019). Investigate the Impact of Customer Relationship Management and Organizational Learning Capabilities on the Financial Performance of Producers of Herbal Products. Saudi Journal of Business and Management Studies, 04(09), 736–745. https://doi.org/10.36348/sjbms.2019.v04i09.007
Herman, L. E., Sulhaini, S., & Farida, N. (2021). Electronic Customer Relationship Management and Company Performance: Exploring the Product Innovativeness Development. Journal of Relationship Marketing, 20(1), 1–19. https://doi.org/10.1080/15332667.2019.1688600
Hillier, G., Garderen, K. J. Van, & Hillier, G. (2024). Improved tests for mediation. 2022, 1–58.
Ishaq, I. (2012). Perceived value, service quality, corporate image and customer loyalty: Empirical assessment from Pakistan. Serbian Journal of Management, 7(1), 25–36. https://doi.org/10.5937/sjm1201025i
Jashari-Mani, F. (2024). Impact of Customer Relationship Management Dimensions on Customer Retention through Customer Satisfaction: A Customer Perspective of Balkan Transition Economies. Proceedings of The International Conference on Opportunities and Challenges in Management, Economics and Accounting, 1(1), 1–14. https://doi.org/10.33422/omeaconf.v1i1.198
Junior Oti-Frimpong, Samuel Gyedu, & Francis Ntori. (2022). The Impact of Customer Relationship Management on Business Performance : The Mediating Effect of Innovation Capability. International Journal of Scientific Research in Computer Science, Engineering and Information Technology, 3307, 183–199. https://doi.org/10.32628/cseit228231
Karim, R. Al, Hoque, I. F., Islam, M. W., & Shamsun, F. (2024). Modeling brand experience and brand equity association in the banking industry: mediating role of brand identification, attachment and engagement. Journal of Modelling in Management. https://doi.org/10.1108/JM2-07-2024-0231
Keller, K. L. (1993). Conceptualizing, measuring, managing. Journal of Marketing, 57, 1–22.
Keller, K. L. (2001). Building Customer-Based Brand Equity : A Blueprint for Creating Strong Brands Building Customer-Based Brand Equity : A Blueprint for Creating Strong Brands. Journal of Marketing Communications, 15(2–3), 139–155. https://doi.org/10.1080/13527260902757530
Khan, R. U., Salamzadeh, Y., Iqbal, Q., & Yang, S. (2022). The Impact of Customer Relationship Management and Company Reputation on Customer Loyalty: The Mediating Role of Customer Satisfaction. Journal of Relationship Marketing, 21(1), 1–26. https://doi.org/10.1080/15332667.2020.1840904
Khan, S. A. (2018). Relationship between Customer Relationship Management and Marketing Performance. World Vision Research Journal, 12(1), 29–41.
Kim, H. B., Kim, W. G., & An, J. A. (2003). The effect of consumer-based brand equity on firms’ financial performance. Journal of Consumer Marketing, 20(4–5), 335–351. https://doi.org/10.1108/07363760310483694
Koopman, J., Howe, M., Hollenbeck, J. R., & Sin, H. P. (2015). Small sample mediation testing: Misplaced confidence in bootstrapped confidence Intervals. Journal of Applied Psychology, 100(1), 194–202. https://doi.org/10.1037/a0036635
Lebdaoui, H., & Chetioui, Y. (2020). CRM, service quality and organizational performance in the banking industry: a comparative study of conventional and Islamic banks. International Journal of Bank Marketing, 38(5), 1081–1106. https://doi.org/10.1108/IJBM-09-2019-0344
Mahmoud Al-azzam, A. F. (2016). The impact of customer relationship management on hotels performance in head of department marketing. International Journal of Business and Social Science, 7(4), 200–210.
Moke, K. K. F., Chang, C. K. W., Prihadi, K., & Goh, C. L. (2018). Mediation Effect of Resilience on The Relationship Between Self-Efficacy and Competitiveness Among University Students. International Journal of Evaluation and Research in Education (IJERE), 7(4), 279. https://doi.org/10.11591/ijere.v7i4.15725
Morgan, R. M., & Hunt, S. D. (1994). The Commitment-Trust Theory of. Journal of Marketing, 58(July), 20–38. https://journals.sagepub.com/doi/full/10.1177/002224299405800302
Morris, E. (20145). Sampling from Small Populations. University of Regina Sociology Department, 1–4. http://uregina.ca/~morrisev/Sociology/Sampling from small populations.htm
Narteh, B. (2018). Brand equity and financial performance: The moderating role of brand likeability. Marketing Intelligence and Planning, 36(3), 381–395. https://doi.org/10.1108/MIP-05-2017-0098
Nedeljković, I., Zlatanović, D., & Marinković, V. (2022). Effects of Customer Relationship Management on Organizational Performance. Economic Themes, 60(2), 237–258. https://doi.org/10.2478/ethemes-2022-0014
Nethanani, R., Matlombe, L. W., Vuko, S. N., & Thango, B. A. (2024). Customer Relationship Management (CRM) Systems and their Impact on SMEs Performance: A Systematic Review. 0–52. https://doi.org/10.20944/preprints202410.1538.v1
Ngo, V. M., & Vu, H. M. (2021). Can customer relationship management create customer agility and superior firms’ performance? International Journal of Business and Society, 22(1), 175–193. https://doi.org/10.33736/IJBS.3169.2021
Ohlendorff, J. S., Munch, A., Sørensen, K. K., & Gerds, T. A. (2025). Cheap Subsampling bootstrap confidence intervals for fast and robust inference in biostatistics. 1–13. http://arxiv.org/abs/2501.10289
Pașcalău, S. V., Popescu, F. A., Bîrlădeanu, G. L., & Gigauri, I. (2024). The Effects of a Digital Marketing Orientation on Business Performance. Sustainability (Switzerland), 16(15). https://doi.org/10.3390/su16156685
Payne, A., & Frow, P. (2005). A strategic framework for customer relationship management. Journal of Marketing, 69(4), 167–176. https://doi.org/10.1509/jmkg.2005.69.4.167
Quzwen, M. H., Hurriyati, R., & Sultan, M. A. (2021). Customer Relationship Management in Business-to-Business Marketing: The Impact on Corporate Performance. Proceedings of the 5th Global Conference on Business, Management and Entrepreneurship (GCBME 2020), 187(Gcbme 2020), 517–523. https://doi.org/10.2991/aebmr.k.210831.101
Rahman, H., Hurriyati, R., & Hendrayati, H. (2024). The Effect of Customer Relationship Management on Customer Engagement. October, 538–543. https://doi.org/10.2991/978-94-6463-443-3_70
Rahman, M. M., Hussain, M. T., Moon, S. P., Tisha, M. M., & Lima, M. T. (2021). Impact of Customer Relationship Management (CRM) on Organizational Performance: A Study from the Perspective of Bangladesh. American Journal of Trade and Policy, 8(3), 225–230. https://doi.org/10.18034/ajtp.v8i3.609
Rîpa, A. I., & Nicolescu, L. (2023). Customer Relationship Management. Websites Analysis of the Top Ten Consumer Goods Companies. Management Dynamics in the Knowledge Economy, 11(4), 352–371. https://doi.org/10.2478/mdke-2023-0022
Sanasam, L., Pradhan, B. B., & Mohanty, S. (2022). Empirical Evidence From Hotel Industry on the Dimension of Customer Relationship Management & Their Influence on Organisation Performance. Geojournal of Tourism and Geosites , 41(2), 408–414. https://doi.org/10.30892/gtg.41210-844
Shalaby, S., Sayed Kamel, T., & Mohamed Afify, G. (2024). The Impact of Customer Relationship Management on Customer Loyalty.15(1), 517–539. https://doi.org/10.21608/jces.2024.352820
Shriedeh, F. B., & Ghani, N. H. A. (2016). Impact of Innovation on the Relationship between Customer Relationship Management and Brand Equity in the Medical Tourism of Jordan. Journal of Research in Business, Economics, and Management, 7(4), 1150–1158.
Sofi, M. R., Bashir, I., Parry, M. A., & Dar, A. (2020). The effect of customer relationship management (CRM) dimensions on hotel customer’s satisfaction in Kashmir. International Journal of Tourism Cities, 6(3), 601–620. https://doi.org/10.1108/IJTC-06-2019-0075
Soleman, A.-B., & Tiffanie Victoria, J. (2021). Statistical Mediation Analysis Using the Sobel Test and Hayes Spss Process Macro. International Journal of Quantitative and Qualitative Research Methods, 9(1), 42–61. https://ssrn.com/abstract=3799204
Soltani, Z., Zareie, B., Milani, F. S., & Navimipour, N. J. (2018). The impact of the customer relationship management on the organization performance. Journal of High Technology Management Research, 29(2), 237–246. https://doi.org/10.1016/j.hitech.2018.10.001
South-east, B., Eboh, O. S., Akam, G. U., & Dike, G. N. (2024). Customer Relationship Management and the Performance of Deposit Money Customer Relationship Management and the Performance of Deposit Money Banks in South-East , Nigeria. May, 29–55. https://doi.org/10.5281/zenodo.12077768
Swathi, T. (2022). Customer Relationship Management ( CRM ) Implications on Customer Satisfaction and Loyalty. March.
T.B., R., G., S., & D., M. (2022). Examining the Influence of Customer Relationship Management and Innovation Capability on the Performance of Small and Medium Scale Enterprises: Content Analysis and Partial Least Square Approach. British Journal of Management and Marketing Studies, 5(2), 64–96. https://doi.org/10.52589/bjmms-mqlvfoo2
Zhang, H., & Li, X. (2023). A framework for mediation analysis with massive data. Statistics and Computing, 33(4), 1–16. https://doi.org/10.1007/s11222-023-10255-x
