The Role of Customer Relationship Marketing on Customer Retention: A case of Ethiopian Insurance Corporation in Mekelle Branch

Abstract

The success of any organization depends on its customers and many organizations attempt to establish strong relationship with their customers to achieve customer retention. The overall objective of the study was to assess the role of customer relationship marketing on customer retention focusing on Ethiopian Insurance Corporation (Mekelle Branch). Therefore the study tries to examine the level of customer retention in EIC. The study employed cross sectional survey design. Both qualitative and quantitative type of data was used for the purpose of the study. In order to collect the primary data, structured questionnaire was designed and collected through convenient sampling technique from customers of EIC. Structured questionnaires were distributed to 188 customers, only 162 (86%) complete responses were returned from the customers. Moreover, semi structured interview with marketing manager was conducted to supplement data collected using questionnaire. The SPSS version 16.00 was used to process the primary data which is collected through questionnaire. The finding indicates that relationship marketing dimensions (the independent variables) such empathy, trust, commitment, communication and responsiveness are positively and significantly correlated with customer retention and satisfaction. Generally all the independent variables are positively and directly related to customer retention and satisfaction in Ethiopian Insurance Corporation Mekelle branch. The result of the study indicated that the insurance doesn’t provide clear and detailed information about all conditions of the service to its customers. Finally, to enhance the flow of information, the corporation should work cooperatively and make the whole system on work with customers, in order to improve customer retention.