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BAHIR DAR UNIVERSITY COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT PROGRAM THE EFFECT OF CUSTOMER
RELATIONSHIP MANAGEMENT ON THE OPERATIONAL PERFORMANCE IN CASE
O....

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 BAHIR DAR UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT PROGRAM

THE EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT

ON THE OPERATIONAL PERFORMANCE IN CASE OF
ETHIOPIAN ELECTRIC UTILITY, BAHIR DAR DISTRICT

BY

Fetih Kefyalew

A THESIS SUBMITTED TO THE GRADUATE SCHOOL OF BAHIR DAR

UNIVERSITY IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR

THE DEGREE OF MASTERS OF BUSINESS AND ADMINISTRATION (MBA).

ADVISOR: - ALAZAR AMARE (Ph.D.)

August, 2022
BAHIR DAR, ETHIOPIA

0
 BAHIR DAR UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT MBA PROGRAM

THE EFFECT OF CUSTOMER RELATIONSHIP MANAGEMENT

ON THE OPERATIONAL PERFORMANCE IN CASE OF
ETHIOPIAN ELECTRIC UTILITY, BAHIR DAR DISTRICT
by
Fetih Kefyalew

A Thesis Submitted to Bahir Dar University, College of Business and Economics,

Department of Management in Partial Fulfillment of the Requirements for the
Award of the Degree of Master of Business Administration

Advisor

Alazar Amare (Ph. D)

August 2022
BAHIR DAR, ETHIOPIA

i
 DECLARATION
I, the undersigned, confirmed that this study entitled “The Effect of Customer Relationship
Management on the Operational Performance in Case of Ethiopian Electric Utility, Bahir
Dar District”. This work is submitted by me for the grant of the Degree of Masters of Business
Administration in Bahir Dar University at Bahir Dar, is my work and has not offered for a
degree in any other university, and that all sources of materials used for the study have duly
acknowledged.

Fetih Kefyalew ____________ ____________

Candidate Name: Signature Date

ii
 CERTIFICATION
This is to certify that the thesis prepared by Fetih Kefyalew entitled, “The Effect of
Customer Relationship Management on the Operational Performance in Case of Ethiopian
Electric Utility, Bahir Dar District” and submitted for the partial fulfillment of Masters of
Business Administration (MBA) at Bahir Dar University, College of Business and
Economics with the regulations of the university and meets the accepted standards with
respect to originality and quality.

Alazar Amare (Ph. D) _____________ _________

Advisor Name: Signature Date

iii
 BAHIR DAR UNIVERSITY
COLLEGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF MANAGEMENT
APPROVAL OF THESIS FOR DEFENSE RESULT

This thesis work is to certify that prepared by Fetih Kefyalew, entitled: “The Effect of
Customer Relationship Management on the Operational Performance in Case of Ethiopian
Electric Utility, Bahir Dar District” submitted for partial fulfillment of the requirements
for the degree of Master of Business Administration with respect to the regulation of the
University and meet an accepted standard with respect to originality and quality.

Board of Examiners

External Examiner Signature Date

Internal Examiner Signature Date

Chair person’s name Signature Date

iv
 ACKNOWLEDGMENT

First and foremost, I would like to thank God. I believe that without the help of God
completion this thesis work would have been impossible. Second, I would like to express
my sincere appreciation to my advisor, Alazar Amare (Ph.D.) for his continuous support,
guidance, and assistance, critical comment for each part of the thesis. I am always grateful
for his technical assistance and encouragement which helped me with my thesis work.

Finally, I would also like to extend my sincere gratitude to Electric Utility, Bahir Dar
District which gave the opportunity and assisted me in conducting my research by
providing me all relevant information and by taking part in responding to the questionnaire.

v
Table of Contents
DECLARATION........................................................................................................................... ii

CERTIFICATION ....................................................................................................................... iii

ACKNOWLEDGMENT .............................................................................................................. v

List of Table ................................................................................................................................... ix

List of Figure.................................................................................................................................. ix

List of Abbreviation ........................................................................................................................ x

Abstract .......................................................................................................................................... xi

CHAPTER ONE ............................................................................................................................. 1

INTRODUCTON ............................................................................................................................ 1

1.1. Background of the Study ..................................................................................................... 1

1.2. Overview of the Study Area ................................................................................................ 3

1.3. Statement of the Problem ..................................................................................................... 3

1.4. Basic Research Questions .................................................................................................... 6

1.5. Hypothesis............................................................................................................................ 6

1.6 Research Objectives .............................................................................................................. 7

1.6.1. General objective .......................................................................................................... 7

1.6.2. Specific objectives ........................................................................................................ 7

1.7. Significance of the Study ..................................................................................................... 7

1.8. Scope of the Study ............................................................................................................... 7

1.9. Definition of Terms.............................................................................................................. 8

1.10. Organization of the Study .................................................................................................. 8

CHAPTER TWO ............................................................................................................................ 9

REVIEW OF RELATED LITERATURE ...................................................................................... 9

2.1. Theoretical Literature Review ............................................................................................. 9

vi
 2.1.1. Concept of Customer Relationship Management ......................................................... 9

2.1.2. Types of Customer Relationship Management ........................................................... 11

2.1.3. Dimension of Customer Relationship Management ................................................... 12

2.1.4. Performance Measurement of Customer Relationship Management ......................... 15

2.2. Empirical Literature Review .............................................................................................. 17

2.3. Conceptual Framework of the Study ................................................................................. 23

CHAPTER THREE ...................................................................................................................... 25

RESEARCH DESIGN AND METHODOLOGY ........................................................................ 25

3.1. Research Approach ............................................................................................................ 25

3.2. Research Design................................................................................................................. 25

3.3. Source of Data.................................................................................................................... 25

3.4. Data Collection Tool .......................................................................................................... 25

3.5. Data gathering Procedure ................................................................................................... 26

3.6. Population and Sampling Design ....................................................................................... 27

3.6.1. Population ................................................................................................................... 27

3.6.2. Sampling Design ......................................................................................................... 27

3.7. Measurement of Variables ................................................................................................. 29

3.7.1. Measurement of Independent Variables ..................................................................... 30

3.7.2. Dependent Variable Measures .................................................................................... 31

3.8. Research Procedures .......................................................................................................... 31

3.9. Data Analysis Methods ...................................................................................................... 32

3.10. Research Design Quality.................................................................................................. 32

3.10.1. Validity ..................................................................................................................... 32

3.10.2. Reliability.................................................................................................................. 32

3.11. Ethical Consideration ....................................................................................................... 33

vii
CHAPTER FOUR ......................................................................................................................... 34

DATA PERESENTATION, ANALYSIS AND INTERPRETATION ........................................ 34

4.1. Response rate on Questionnaire ......................................................................................... 34

4.2. Demographic Characteristics of the Respondent ............................................................... 35

4.3. Descriptive Statistics Analysis of CRM Dimensions ........................................................ 36

4.3.1. Perceptions of respondents towards the effects of CRM on operational performance 36

4.3.2. Customer focus ........................................................................................................... 37

4.3.3. Organized Customer relationship management .......................................................... 38

4.3.4. Customer knowledge management ............................................................................. 40

4.3.5. Customer relationship management-based Technology ............................................. 41

4.3.6. Operational performance ........................................................................................ 43

4.4. Results and Discussion of Inferential Statistics ............................................................. 44

4.4.1. Discussion of the Correlation Results ..................................................................... 45

4.5. Regression Analysis and Hypothesis Testing Results ....................................................... 48

CHAPTER FIVE .......................................................................................................................... 52

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS................................................. 52

5.1. Summary of Major Findings .......................................................................................... 52

5.2. Conclusion...................................................................................................................... 53

5.3. Recommendations .............................................................................................................. 54

Reference ...................................................................................................................................... 55

Appendix A ................................................................................................................................... 60

PART A: Demographic Information ....................................................................................... 61

PART B: level of opinion ......................................................................................................... 62

Part C: Operational Performance .............................................................................................. 64

APPENDIX-B ............................................................................................................................... 65

viii
 List of Table

Table 3.2. Total population of the study ....................................................................................... 27

Table 3.1 Classification of Population and Sample Size .............................................................. 29
Table 4.1. Number of distributed, Number of collected and Response rate ................................. 34
Table 4.2. Frequency and %age of Respondents’ Demographic Characteristics ......................... 35
Table 4.3. Mean Score Range for Five-Scale Likert’s Response ................................................. 36
Table 4.4. Mean and Standard Deviation Results of Customer Focuses ...................................... 37
Table 4.5. Mean and Standard Deviation Results of CRM organization Dimension ................... 39
Table 4.6. Mean & Standard Deviation Results of Customer knowledge management Dimension
....................................................................................................................................................... 40
Table 4.7. Mean and Standard Deviation Results of CRM based technology .............................. 41
Table 4.8. Mean and Standard Deviation Results of operational performance ............................ 43
Table 4.9. Correlations between customer relationship management and operations Performance
....................................................................................................................................................... 44
Table 4.10. Summary of hypothesis testing of correlation ........................................................... 46
Table 4.11. Multi co-linearity Test table ...................................................................................... 47
Table 4.12. Multiple Regression analysis result of CRM and operations performance ............... 48
Table 4.13. Beta Weights of Predictor Variables in the Test........................................................ 49
Table 4.14.. Summary of hypothesis testing .................................................................................. 51

List of Figure

Figure 2.1. Conceptual Framework of the Study .......................................................................... 24

ix
 List of Abbreviation

CRM Customer Relationship Management

EEU Ethiopia Electric Utility
ROI Return on Investment
SPSS Statics Package for Social Science

x
 Abstract

The general objective of the study was to investigate the effect of customer relationship
management on the operational performance in case of Ethiopian Electric utility, Bahir Dar
district. In order to achieve the objective, the study used descriptive research designs. The
descriptive research design was used to assess the current/ existing situation of CRM and
operational performance. The study is used purposive and stratified proportional sampling
techniques. Data was gathered via structured questionnaire and interview from 241 sample
respondents. The study is used both descriptive and inferential data analysis to analyze data that
collect from data collection tools. The results of this study revealed that customer relationship
management implementation influences operations performance. Hence, it can be concluded that
operations performance in the sampled district was reduced due to low practice of customer
relationship management.

Key words: Effect, CRM, operational performance

xi
 CHAPTER ONE

INTRODUCTON

1.1. Background of the Study

Currently, business environment dramatically changed due to the reason that organizations are
realizing the importance of understanding customers’ behaviors, needs and wants Temiz, Gökmen,
and Abubakar (2015). Through the effective use of communication, technology and information
organizations are offering quality customer’s products with reasonable prices and services to
satisfy the needs of customers. In addition, the current advance of information technology, new
system adopted to enhance the power of organization toward reduction of internal costs, better
relationship with the environment, enhance their employees, efficiently and effectively use
resources which may consequently lead to economic profit in the long run. It indicated that
different organization across in various parts of the world understood the importance of becoming
customer centric and developed their business strategy for their organizational, marketing and
operational performance Osmonbekov, Bello, Gilliland, and Marketing (2002).

The most important strategies of private and public enterprises at the present time how can they
use their technology resources in their operational activities because it enables organizations to
make the right decision based on the right information that collected from their suppliers, efficient
and effective labor force and customers (Ghalandari, 2018). It indicated that organizations had
decided the right way to build the long term relation with customer through different tools and
techniques. Indeed, the present globalized worlds mainly emphasize on differentiated service
rather than differentiated products. The adoption of Customer Relationship Management (CRM)
is widely seen as way to achieve competition strategies in the service rendering companies.
Companies that implement CRM can make better relationships with their customers, improve
customers’ loyalty, increased revenue and reduced cost (Blery & Michalakopoulos, 2006).

CRM is increasingly important to firms as they seek to improve their profits through longer term
relationships with customers. In recent years, many have invested heavily in information
technology (IT) assets to better manage their interactions with customers before, during and after
purchase (Bohling et al., 2006). It refers that in the current time, customers are prime asset for an

1
organization and managing customer relation is equally becoming critical for operational and
organizational performance.

According to (Dowling, 2002) CRM is premised on the belief that developing a relationship with
customers by providing quality products/ services and plays vital role in the overall goal of the
organization and win new clients, nurture and retain those the company by reduce the costs and
deliver quality products at right time marketing and client service. Whereas, (Payne & Frow, 2005)
defined CRM as it is means to create and maintain a specified relationship with profitable
customers through using appropriate information and communication technology. They state that
CRM provides enhanced opportunities to use data and information to both understand customers
and create value with them. This requires a cross-functional integration of processes, people,
operations, and marketing capabilities that is enabled through information, technology, and
applications.

The above definition proven fact that CRM is the multi- dimension’s concept and relatively new.
Due to the newness of the concept, there was scanty of research made on the CRM dimensions of
some service sectors such as in public enterprises. Thus, the range of information on this concept
is quite limited (Akroush, Dahiyat, Gharaibeh, & Abu-Lail). Although the concept is new, there
are also evident facts about the effect of CRM on operational performance of firm. For instance,
CRM showed significant positive impact on marketing and operational outcomes; customers’
satisfaction, quality service with low cost, and eventually on the company profitability (Akroush
et al.; Coltman, 2007). Due to this, many organizations have invested heavily in information
technology (IT) assets to better manage their interactions with customers before, during and after
purchase (Bohling et al., 2006).

Cognizant of the above, CRM is an extensively accepted instrument that supports customer
oriented organizations’ decisions (Kebede, Tegegne, & Management, 2018). More specifically,
CRM is regarded to be among the best strategies and practices for companies in order to develop
their financial, marketing and operation al performance and thus to make sure that their long- term
objectives (Rashid, Tahir, & Technology, 2013). Measuring CRM performance is a challenge
because it is difficult to define causal connections between CRM activities and the company’s
performance results. These difficulties result from the manifold relationships between functional
areas such as financial, marketing, sales and operating. In addition, many CRM benefits are of a

2
qualitative nature and it is therefore difficult to prove their influence on financial results (AlSafad
& Management, 2016).

Operational performance refers to the performance of human resources, companies, and ethics in
connection with measurement and indicators of effectively, efficiency, and accountability. This
performance can be measured at the unit work, play process, also at the organizational level (J
Harris, Kacmar, & Psychology, 2005). Based on (Alawiyah & Humairoh, 2017), operational
performance indicating low cost, quality products, just on time, supplier performance and customer
satisfaction. The semetrics are used in measure operational performances that truly capture the
essence of CRM function to operational performance.

1.2. Overview of the Study Area

Ethiopian Electric Utility(EEU) plays a big role to country economic development by giving
electric access on urban and rural areas, for foreign and local investors, households, public service
sectors, commercial, factories, originations and industries. Therefore, EEU set its vision and
mission to realize rendering quality service to local and abroad, the updated availability of
inventory materials, well organized purchasing system, and systematically to deliver quality
services and customer satisfaction. In relation to this, CRM is viewed as one strategy for them to
monitor and maintain good relationship with customer and how it was impacted the organizational
performance. Besides that, CRM will use as management practice and help top management to
give the best service to customer and operational performance of the firm. Hence, this study
assesses the effect Customer Relationship Management on the operational performance in case of
Ethiopian Electric Utility Bahir Dar district.

1.3. Statement of the Problem

In today’s competitive business environment, giving quality services to customers is a very critical
exercise. Meeting customer expectation by giving quality services is very important to customers.
The emergence of new channels and technologies is significantly altering how companies interface
with their customers. In recent years, several factors have contributed to the rapid development of
CRM. CRM consists of a historical view and analysis of all the acquired or to be acquired customer
in the firm for a long time. If the customers are satisfied, they will play vital role in increasing the
profitability of the firm and the business remains forward to the development of its power (Benn,
Edwards, & Williams, 2014).

3
There are various studies conducted on customer relationship management and its effect on
operational performance of firm across in different parts of the world. The study conducted by
(Alawiyah & Humairoh, 2017) revealed a study research that CRM affected the financial
performance in significant. In detail, the research shows that in the mature stage, CRM
implementation will influence number of ROI. That indicated CRM as a long term investment
which will helps company increasing financial performance. The finding of (Alawiyah &
Humairoh, 2017) said that the implementation of business intelligence in investing in managing
relationships with customers, in this case CRM can reduce the cost of marketing, but still maintain
good relations with customers, so that the cost incurred can be more efficient.

Another research done by (Alawiyah & Humairoh, 2017) revealed that an organization can
develop time of product modification for a customer compared to competition and increase a
number of newly introduced products compared to the competition. She also expressed CRM cause
increase sales volume of individual customers and also sales revenue with individual customers.
Customer satisfaction and loyalty is as consequences of CRM process too. A result from their
study by conducted by (Alawiyah & Humairoh, 2017) revealed that execution of customer support
and marketing support in CRM strategies in banks and financial institutions have positive and
meaning impact on relationship marketing and then leads to increase the effect on business
performance.

According to (Santouridis, Tsachtani, & Finance, 2015), CRM has a strong effect on the
profitability of an organization. If implemented properly it produces positive results on the other
side improper management of CRM solutions results in downfall of an organization. Management
of individual customer relations results in enhanced customer loyalty, customer satisfaction, thus
increasing the profitability of an organization. Customer satisfaction has a positive impact on firm's
profitability due to a number of reasons. First, customer satisfaction enhances customer loyalty
and influences customers‟ future repurchases intentions and behaviors.

(Opara, Opara, & Invention, 2016) identified strong positive relationship between customer
satisfaction, market share and profitability. The study opined that management strategies designed
to increase customer satisfaction are likely to lead to quantifiable returns in the long run. Identified
customer satisfaction was found to be an antecedent to customer loyalty, retention, behavioral

4
intention, market share and profitability; while customers are expected to be more likely to form
future purchase intention, engage in positive word of mouth advertising.

Most of this previous literature regarding with CRM focused from developed countries context
little has been made in developing countries context, including Ethiopia. It indicated that the
subject matter of customer relationship management needs further attention. Indeed, the previous
literatures revealed that there is inconsistency of finding results (Dereje, Earsido, Temam, &
Abebe, 2020).

There is few scanty studies conducted In Ethiopia context; (Gebeyehu, 2014) analyzed the effect
of CRM on profit and market performance by considering branches of Commercial bank of
Ethiopia, Awash International bank and Wegagen bank located in Mekele city. The finding of the
study showed that the existence of a positive and significant relationship between CRM
dimensions and profit performance. The study conducted by (TEKLIYE, 2017) revealed that there
is strong, positive and significant relationship between customer relationship management
dimensions (key customer focus, CRM organization, customer knowledge management and CRM
based technology) and profit performance. The study conducted by (EWNETU, 2015) revealed
that CRM has strong relationship effect on market share of Commercial bank of Ethiopia. Most
of previous studies which conducted in Ethiopia have been restricted to banks sector by not giving
attention for public enterprise.

Cognizant of the above facts, we can understand that absence of clear-cut direction on the variables
of customer relationship management and its effect on operational performance. Most of previous
studies of CRM not focused on operational performance of the firm rather focus on marketing or
organizational performance. We can have understood there is a lack of empirical research that
investigates the relationship of CRM and operational performance. Indeed, studies conducted in
Ethiopia focus area Banks by ignoring public enterprise like Ethiopian Electric utility. Therefore,
we can have understood that there is an empirical gap on the subject matter on the effect of
customer relationship management and its effect on operational performance in public enterprise,
particularly Ethiopian Electric Utility. Therefore, this study assesses the effect of customer
relationship management on the operational performance; in case of Ethiopian Electric utility,
Bahir Dar district.

5
1.4. Basic Research Questions
This study tried to answer the following research questions:

 To what extent key customer focus of customer relationship management affect the
operational performance of Ethiopian Electric utility, Bahir Dar district?
 To what extent knowledge management of customer relationship management affect the
operational performance of Ethiopian Electric utility, Bahir Dar district?
 To what extent technological based customer relationship management affect the
operational performance of Ethiopian Electric utility, Bahir Dar district?
 To what extent organized customer relationship management affect the operational
performance of Ethiopian Electric utility, Bahir Dar district?

1.5. Hypothesis
Based on the review of the theoretical and empirical literature with regard to the effect of customer
relationship management on the operational performance (see chapter two.), the following
hypotheses are developed to guide the empirical work of the present study:

 Hypothesis 1: Key customer focus has positive and significant influence on operations
performance in the Ethiopian Electric utility, Bahir Dar district.
 Hypothesis 2: CRM organization has positive and significant influence on operations
performance in the Ethiopian Electric utility, Bahir Dar district.
 Hypothesis 3: Customer knowledge management has positive and significant influence
on operations performance in the Ethiopian Electric utility, Bahir Dar district.
 Hypothesis 4: Technology based CRM has positive and significant influence on
operations Performance in the Ethiopian Electric utility, Bahir Dar district.

6
1.6 Research Objectives
1.6.1. General objective
The general objective of the study is to examine the effect of customer relationship management
on the operational performance in case of Ethiopian Electric utility, Bahir Dar district.

1.6.2. Specific objectives

 To evaluate the effect of key customer focus Customer Relationship management on the
operational performance of Ethiopian Electric utility, Bahir Dar district.
 To assess the effect of knowledge management on the operational performance of
Ethiopian Electric utility, Bahir Dar district.
 To assess the effect of technological based customer relationship management on the
operational performance of Ethiopian Electric utility, Bahir Dar district
 To assess the effect of organized customer relationship management on the operational
performance of Ethiopian Electric utility, Bahir Dar district.

1.7. Significance of the Study

This study provides desirable information about the effect of CRM on operational performance
with regards to public state enterprises specifically Ethiopian Electric utility, Bahir Dar district.
Other significances of the study are the following; the finding result of this study gives insight for
management of EEU, particularly EEU, Bahir Dar district how efficiently and effectively
resources at right time provide quality service and manage their customers. The findings of this
study provide valuable inputs and directions to concerned parties of EEU and concerned bodies in
applying different marketing strategies to improve their marketing and overall performance,
specifically operational performance. This study can help EEU and other public enterprises to
identify their customers’ need in order to apply well managed customer services. Additionally, it
can be used as a reference for other researchers who want to make further investigation in the area.

1.8. Scope of the Study

The study delimits in to geographical, conceptual, sampling frame and time scope. Geographically,
the study considers Ethiopian Electric Utility, Bahir Dar district. Conceptually, the study was
conducted to assess the effect of Customer relationship on the operational performance by mainly
focus on key customer focus, knowledge management, technological based CRM and organized

7
around CRM. Regarding sampling the study was focus on operational department, financial and
management staff members which found in Bahir Dar District.

1.9. Definition of Terms

 Customer- operationally customer refers to organizations individuals and businesses that
patronize Ethiopian Electric Utility products and services.
 Customer Relation Management (CRM); can be defined as the establishment and
maintenance of long-term relationships between an organization and its customers (Torres
& Kline, 2006).
 Performance: the result that obtain from CRM activities and it include on the three
functional areas such as financial, marketing, sales and operating (Chen, Hsu, & Tzeng,
2011).
 Operational Performance: it refers to the performance of human resources, companies, and
ethics in connection with measurement and indicators of effectively, efficiency, and
accountability. This performance can be measured at the unit work, play process, also at
the organizational level (Hervani, Helms, & Sarkis, 2005).

1.10. Organization of the Study

The study consists five chapters. The first chapter deals with introductory part which including
background of the study, background of the organization, statement of the problem, objectives of
the study, significance of the study and scope of the study. The second chapter deals with review
of related literature, empirical findings, and conceptual model; the third chapter deals with research
design and methodology. The fourth chapter presents the analysis and interpretation of the effect
of customer relationship management on the operational performance. Finally, summary of major
findings, conclusions, recommendation, and future research direction will have forwarded.

8
 CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1. Theoretical Literature Review

2.1.1. Concept of Customer Relationship Management
Different definitions of customer relationship management are provided by the researchers. Some
consider it as strategy, some consider as technology, some other consider it as information system.
(Sin, Alan, & Yim, 2005) have defined CRM as a comprehensive strategy and process that enables
an organization to identify, acquire, retain and nurture profitable customers by building and
maintaining long-term relationships with them. According to (Deneke, 2017) Customer
relationship management (CRM) is a philosophy and a strategy to manage a company’s
interactions with customers, clients, and sales prospects which can achieve financial institutions
goal such as customer satisfaction, customer loyalty and profit. It involves using technology to
organize, automate, and synchronize business processes.

(Resom, 2020) stated that the goal of CRM is to manage all aspects of customer interactions in a
manner that enables the organization to maximize profitability from every customer. CRM is not
a concept that is really new but rather due to current development and advances in information and
enterprise software technology, it has assumed practical importance. (Ramaseshan, Bejou, Jain,
Mason, & Pancras, 2006) stated that Customer relationship management (CRM) has been called
an inevitable relentless movement because it represents the way customers want to be served and
offers a more effective and efficient way of conducting business. (Shani & Chalasani, 1992) have
defined relationship marketing as an integrated effort to identify, maintain and build a strong
network with individual customers and continuous strengthening of relationship for mutual
benefits of both sides. CRM is an enterprise wide approach to understanding and influencing
customer behavior through meaningful communication to improve customer acquisition, customer
retention, customer loyalty, and customer profitability. CRM plays a critical role for customers
being loyal to their service provider. (Uppal & Finance, 2010) has analyzed that when good service
is provided to a customer, then a loyal customer will work as an ambassador and help in the
organization’s growth.

9
Lambert and Marketing (2010) defined Customer Relationship Management as one of the
strategies to manage customers as it focuses on understanding customers as individuals instead of
as part of a group. (Dyche & O'Brien, 2002) defines CRM as the infrastructure that enables the
delineation of an increase in customer value, and the correct means by which to motivate valuable
customers to remain loyal indeed, to buy again.(Yesha Tomar, Dangwal, & Sharma) defined CRM
for banks as a sound business strategy to identify the bank’s most profitable customers and
prospects, and devotes time and attention to expanding account relationships with those customers
through individualized marketing, reprising, discretionary decision making, and customized
service-all delivered through the various sales channels that the bank uses. CRM involves using
technology to organize, automate, and synchronize business processes. The objectives of CRM are
to enhance profitability, income, and customer satisfaction. To attain CRM, many organizations
use set of tools, technologies, and procedures to support the relationship with the customer to
enhance sales.

According to (Agustina et al.) CRM system consists of the following three aspects which are
described as Customer, Relationship, and Management.

• Customer. The customer is the only source of the company’s present profit and future growth.
However, a good customer, who provides more profit with less resource, is always scarce because
customers are knowledgeable and the competition is fierce. Sometimes it is difficult to distinguish
who is the real customer because the buying decision is frequently a collaborative activity among
participants of the decision making process, information technologies can provide the abilities to
distinguish and manage customers. CRM can be thought of as a marketing approach that is based
on customer information.

• Relationship. The relationship between a company and its customers involves continuous
bidirectional communication and interaction; the relationship can be short-term or long-term,
continuous or discrete, and repeating or one-time. Relationship can be attitudinal or behavioral.
Even though customers have a positive attitude towards the company and its products, their buying
behavior is highly situational. For example, the buying pattern for airline tickets depends on
whether a person buys the ticket for their family vacation or a business trip. CRM involves
managing this relationship so it is profitable and mutually beneficial. Customer lifetime value
(CLV), is a tool for measuring this relationship.

10
• Management. CRM is not an activity only within a marketing department. Rather it involves
continuous corporate change in culture and processes. The customer information collected is
transformed into corporate knowledge that leads to activities that take advantage of the information
and of market opportunities. CRM required a comprehensive change in the organization and
people.

According to (Alawiyah & Humairoh, 2017), explained that in ideal, CRM will help companies to
understand their customers deeper, then apply this information and knowledge to decide a better
business strategy. A right utilization of CRM could help companies scale up their business.
Elucidated that CRM is more than just a marketing or customer services, but includes
methodologies, software abilities, also internet capabilities which help a the company to manage
relationship with its customers with a directed and structured way (Alawiyah & Humairoh, 2017).

CRM as the practice of analyzing and utilizing marketing databases and leveraging communication
technologies to determine corporate practices and methods will maximize the lifetime value of
each individual customer. Conventional communication processes are often time delayed, e-CRM
allows organizations to always operate in real-time and more than that interaction with customers
are transparent so that organizations are able to draw conclusions on customer behavior and
measure the success of activities. CRM helps to accelerate the revenue and profit growth of firms.
Many owners and/or managers have stabilized or grown their firms by viewing their investment
in CRM as a main priority. Firms realize that in order to remain competitive, they need to build
relationships with their clients

2.1.2. Types of Customer Relationship Management

Adoption of CRM concept in the banking sector requires jointly effort on three areas: operational,
analytical and organizational (Payne & Frow, 2006):

1. Operational CRM: Operational CRM provides a unique source of information about Customers.
It deals with creation of information and supports sales, marketing and customer service.

2. Analytical CRM: Analytical CRM is carried out through collection, processing and
systematization of data in order to obtain information relevant to Customer Relationship
Management.

11
3. Organizational/Collaborative CRM: Organizational/Collaborative CRM requires co-operation
between marketing functions and infrastructure in order to optimize activities aimed at customers,
to create value for the bank and the customer through usage of multiple channels of
Communication. This CRM is responsible for establishing customer interaction through
appropriate channel of communication.

2.1.3. Dimension of Customer Relationship Management

Different researchers reviewed that there is no one universal definition of CRM. However,
occasionally, people define it based on the context within which it is being considered for specific
study. Hence, some researchers described CRM dimensions from customer’s attitudinal aspects
like trust, commitment, conflict handling and empathy. But on this study behavioral aspect of
customers is chosen to describe the CRM dimensions. (Nesaratnam et al., 2020) posited that CRM
means the desire and ability of the institution to custom its behavior towards every customers on
the basis of information the customer tells and what the institution knows about that customers.

(Sin et al., 2005) suggest that the concept of CRM is a multidimensional construct consisting of
four broad behavioral components. These behavioral components are: Key Customer Focus, CRM
organization, Knowledge Management and Technology-based CRM. It is strongly emphasized
that all behavioral components or dimensions must be integrated in order to achieve Customer
Loyalty and company profitability. Other studies like those of (Abdullateef, Mohd Mokhtar,
Yusoff, & Security, 2010) and also find customer orientation as part of behavioral components.

2.1.3.1 Key Customer Focus

Key customers are customers who are more important for organization strategically and who have
a greater profitability (Ryals & Knox, 2001).It can be said that organizations that apply CRM are
customer- driven in a sense that all their decisions must take into consideration customers’ interest
and welfare. In doing so, the companies should promise superior value to their customers and try
to deliver the desired satisfaction more effectively and efficiently than their competitors. This
involves an attempt to design its offer in a personalized way to its key customers. Key elements of
this dimension consist of customer-centric marketing, key customer lifetime value identification,
personalization and interactive co-creation marketing. Customer orientation refers to the
employee’s predisposition to meet the customers’ needs. It has a positive impact on employees’
performance and customers’ satisfaction. Moreover, customer-oriented behaviors can maintain a

12
good relationship between the service provider and the customers; leading to improvement in the
organization’s performance (Diefendorff, Brown, Kamin, & Lord, 2002). The essence of customer
orientation is to increase long-term satisfaction and to create customer loyalty (Jain & Singh, 2002;
Weber & Schmid, 1998).

2.1.3.2 Knowledge Management

Recent studies on CRM, suggest that customer knowledge has been considered as a valuable
organizational resource such that any technique which is geared towards transmitting knowledge
regarding customers are core resources that serves a sustainable competitive advantage for firms
and allows a company to strengthen its link with the customers (Croteau & Li, 2003; Kaoud &
Technology, 2017). Therefore, customers’ knowledge plays a vital role in CRM. Organizations
can use it to build and develop their relationship with customers (Zahay & Griffin, 2004), and it
enables organizations to gain a competitive advantage in the market (Sin et al., 2005). In the words
of information on customer knowledge needs to be shared and disseminated throughout the
organization because the potential of knowledge occurs when it is shared within various functions
of the organization in order to meet current customers and their anticipated needs. Knowledge
management helps an organization to succeed by building better customer relationships and it has
a positive impact on an organization’s performance (Sin et al., 2005).

2.1.3.3. Customer Relationship Management Organization

For a better CRM implementation and total quality assurance of those strategies, there is a need to
employ total participation from all levels of the organization. The organizational structure is
supposed to be redesigned to include proper and effective lines of communication (Liu, Rao, Li,
& Zhang, 2007). (Mechinda & Patterson, 2011) and (Dutu & Halmajan, 2011) stated that for
service employees to display customer-oriented behavior, organizations must develop a climate
for service in the work which includes providing staff with modern tools and technology, customer
satisfaction tracking and complaint management systems, inspiring service leadership, and an
appropriate reward system. In implementing CRM many changes are required in the way that firms
are organized (Ryals & Knox, 2001), business processes are conducted (Hoffman & Kashmeri,
2000) and the qualified employees that are involved in delivering value to the target customers.
The researchers also argue that CRM cannot be successful even if the organizations enjoy the most
advanced technology and adapt a customer- oriented approach, unless the project is completely

13
integrated by them (Sin et al., 2005). The key considerations in order to successfully organize the
whole company around CRM are as follows: organizational structure, organization-wide
commitment of resources, and human resources management. Therefore, we can say that CRM
organization has to be an essential means through which firms effect fundamental changes in the
way they organize their actual business processes for employees and customers (Sin et al., 2005).

2.1.3.4 Technology-based Customer Relationship Management

With advances in information communication technology (ICT), a modern system can be used to
improve the power of organizations to reduce internal costs, better interact with the environment,
and increase economic profit in the long term (alem Mohammad, bin Rashid, bin Tahir, &
Technology, 2013). CRM involves gathering a lot of data about the customer. The data is, then,
used to facilitate customer service and transactions in order to meet customers’ needs. This results
in more satisfied customers, a more profitable business and more resources available to the support
staff.

Technology based CRM enables organizations to plan and implement successful marketing actions
for retaining customers long-last and making them more profitable, because of the customer
database and other information-storing systems (Mohammed, bin Rashid, & Marketing, 2012).
Additionally, Chang, Park, and Chaiy (2010) confirm that CRM technology improves marketing
capabilities by providing valuable information about customers, which, in turn, will help both
managers and employees to achieve specific marketing goals much more effectively.

2.1.3.5 Customer Loyalty

Loyalty is a prejudice to behavioral response over time in which the person prefers a particular
brand than other brands and made decisions as a mental commitment (Amir, Yousof, & Asma,
2014). Loyalty is one of the key concepts in the field of marketing management that plays an
important role in creating long-term benefits for the organization because loyal customers do not
require extensive promotion efforts. Loyal customers help the organization in determining the
expected increase in sales and profit. In addition, customers who are familiar with the brand are
likely to recommend it to their friends and relatives and affect the feedback and evaluation cycle
of the product and these issues are critical in today's business environment (Bagheria, Rahimniab,
Kazemic, & Paper, 2014). Beerli, Martin, and Quintana (2004) defined Loyalty as a strong
commitment to repurchase a product or service in the future, so that the same brand or product is

14
purchased despite the marketing efforts and potential competitors. (Uncles, Dowling, &
Hammond, 2003) defined loyalty as customer’s commitment to do business with a particular
corporation, buying their products and services frequently and recommending the corporation’s
offerings to friends and associates. Behavioral loyalty attempts to define brand loyalty in terms of
the actual purchases observed over a time period, whereas attitudinal loyalty measures are based
on stated preferences, commitment or purchase intentions (Rundle‐Thiele, Bennett, &
Management, 2001). Another definition of loyalty from point of view of the concept of
commitment is provided by (Khan, Humayun, Sajjad, & management, 2015) that customer Loyalty
is a deep commitment to purchase a product or service again in the future that means buying one
brand again despite environmental influences and marketing efforts of competitors to change
behavior.

2.1.4. Performance Measurement of Customer Relationship Management

Customers are the basic source of business, so the foundation of CRM is customer value
management. If the CRM program has been carefully planned and successfully implemented, it
promises many benefits for the customer and the business/ company itself (Low, Chen, Wu, &
systems, 2011).

Measuring CRM performance is a challenge because it is difficult to define causal connections

between CRM activities and the company’s performance results. These difficulties result from the
manifold relationships between functional areas such as financial, marketing, sales and operating.
In addition, many CRM benefits are of a qualitative nature and it is therefore difficult to prove
their influence on financial results. Performance measurement in CRM can either focus on
calculating the monetary benefit of CRM investments or measuring and managing the success of
CRM activities. In this study, we will concern for both. According to (Alipour, Arabani, Asadi,
& Zareii), measuring monetary and successful of CRM activities approach indicates that CRM has
impact on company performance in three segments.

2.1.4.1. Financial Performance

According to (Saputra, MANURUNG, & Banking, 2014); financial performance, in general, are
compiled by four indicators that are operating cost, cash flow, operating revenue, and profit.
Financial performance will be shown at financial performance report which is should completed
with revenue, profit or loss from operational activities, financial cost, profit or loss from equity

15
activities, and stocks that show the performance of company in making money by selling products/
services.

According to (Pranowo, Achsani, Manurung, & Nuryartono, 2010), financial performance, in

general, are compiled by four indicators that are operating cost, cash flow, operating revenue, and
profit. Financial performance will be shown at financial performance report which is should
completed with revenue, profit or loss from operational activities, financial cost, profit or loss from
equity activities, and stocks that show the performance of company in making money by selling
products/ services (Hershman & Mazero, 2008) and (Ndoen, Bunga, Neno, & Anabuni, 2022).

2.1.4.2. Marketing Performance

Based on (Kennerley, Neely, & management, 2002) assessment began with the marketing
productivity paradigm and move on to illustrate which expanded conceptions of marketing outputs
and inputs, particularly in the distinction between marketing activities and assets. This expansion
will be useful to measures of the marketing health in the company, such as market orientation,
customer satisfaction, customer loyalty, and brand equity. The conclusion of that contribution
examines current challenges to the accurate measurement and understanding of marketing
performance.

In essence, the blueprint of marketing performance is a story about the convergence of marketing
talents, technologies, strategies, and opportunities to build performance-based organizations. In
this case, a commitment to grow as a marketer and a business is really needed if it is to succeed.
Consumers are increasingly confiscating traditional marketing-based interruptions. Marketers
must create a more personal and engaging experience to attract, convert, and satisfy customers.
Use these performance laws to spur change. The optimization of marketing performance within an
organization is useful in exceeding ROI expectations and outperforming the competition. Some
ways that can be pursued for marketing performance is to align expectations and potential, commit
to core strengths, and manage by all means, etc. (Roetzer, 2014).

2.1.4.3. Operating Performance

Operational performance refers to the performance of human resources, companies, and ethics in
connection with measurement and indicators of effectively, efficiency, and accountability. This
performance can be measured at the unit work, play process, also at the organizational level (Yao,
Haris, & Tariq, 2018). Based on (Yunus, Hashim, Embi, Lubis, & Sciences, 2010), operational

16
performance has some benchmark, such as GPM, NPM, OPM, pretax profit margin, corporate tax
to turn over ratio, dividend payout ratio. Operational performance and growth of firm is essential
for the existence of the firm. As stated by (Blackhurst, Scheibe, Johnson, & management, 2008)
operational management protects the firm the attainment of loses due to low quality products,
customers who are disappointed and loss of good social responsibility. The principle determinant
of efficient production is quality of raw materials right from procurement to the time of processing.

(Bengtsson, Lakemond, Laursen, & Tell, 2016),views that the most effective measurement
systems assess performance in the entire length of the firm’s procurement function, from suppliers
through internal processes to customers. The operational performance of the firm are divided in
five major categories which include cost measures, quality measures, time measures, supplier
performance measures and customer satisfaction measures. The metrics that are used in
performance measurement should be those that truly capture the essence of the procurement
function performance.

Metrics assignments to the most right full places should be through a measurement system.
Measurement goals should amount to the goals of the function and metrics chosen should strike a
balance between financial and non-financial measures that can aid indecision making for effective
performance measurement. The performance of the procurement function encompasses the
financial performance and market performance. Business profitability is a justification of its good
performance and loss is a justification of poor performance. Profits are an indication of good
operational performance. In (Mozaheb, Alamolhodaei, Ardakani, & Sciences, 2015) research we
could read a condition that different sectors which is optimum by implementing CRM, operating
performance of company also advance after applied the right system of CRM.

2.2. Empirical Literature Review

The study conducted by (Ang & Management, 2011) showed an increasing of financial
performance in company that applied CRM software with a varieties satisfaction scale. From their
sample companies, Service Company is a dominant sector which gets the benefit from CRM
implementation rather than others. Even though, there are no significant gaps of satisfaction of
CRM implementation effect on ROI between service and non-service companies, both got
advantageous from it. The study also found that company with an intelligent application of CRM
software can yield improvements in business performance.

17
In a detail, this study found that almost 40% companies in Australia already implemented CRM
software to support their business, but not exactly the same for three purposes, namely acquisition,
retention and development of customers. This research also found that as one of CRM proxies,
customer retention is significantly better in increasing firm value and company performance than
the results from alternative strategies, including improvement in margin, reduction in customer
acquisition cost, also adjustments to the discount rate or cost of capital. Next, the result shows that
by using CRM software correctly, company could increase ROI as a representative from financial
performance. CRM could affect financial performance in significant. The study of Journal (Acker,
Gröne, Blockus, Bange, & Management, 2011) also revealed a study research that CRM could
affect the financial performance in significant. In detail, the research shows that in the mature
stage, CRM implementation will influence number of ROI. That indicated CRM as a long term
investment which will helps company increasing financial performance.

Based on (Mozaheb et al., 2015) had done a research about CRM effect on SMEs performance.
According to their observation industries, moreover SMEs are not really in touch with their
customer, although in new business era nowadays, it is important to detail information about
customer behavior and transaction pattern. By this study, CRM proved can helps Company to
understand customer deeper, improve their service, and make a better innovation because they
maximize technology in maintain relationship with the customers. Implementation of CRM
software industries have significant role in the data gathering and analysis. As a result, if using
CRM does not lead to added value for customers and competitive advantage for industries, there
is no result except wasting resources. For detail result, this study shows that customer support has
direct significant effect on the SMEs performance in exporting companies, market support has
positive effect on the performance of SMEs, and CRM technology has effect on the SMEs
performance in exporting companies. In short, this study shows a significant effect of CRM on
company performance, moreover in financial and operational performance. For financial, this
study shows explicitly the effect of the CRM variables on the variables that proximate the finances.

Based on (Gujrati, 2016) said that the implementation of business intelligence in investing in
managing relationships with customers, in this case CRM can reduce the cost of marketing, but
still maintain good relations with customers, so that the cost incurred can be more efficient. Money

18
invested in CRM implementation will also return and improve ROI. The results also pointed out
that the proper application of CRM can significantly affect financial performance.

According to (Santouridis et al., 2015), CRM has a strong effect on the profitability of an
organization. If implemented properly it produces positive results in the other side improper
management of CRM solutions results in downfall of an organization. Management of individual
customer relations results in enhanced customer loyalty, customer satisfaction, thus increasing the
profitability of an organization. Customer satisfaction has a positive impact on firm's profitability
due to a number of reasons. First, customer satisfaction enhances customer loyalty and influences
customers‟ future repurchases intentions and behaviors. When this happens, the profitability of a
firm would increase. Second, highly satisfied customers are willing to pay premium prices and less
price sensitive. This implies customers tend to pay for the benefits they receive and be tolerant of
increases in price, ultimately increasing the economic performance of the firm.

Journal by (Krishnan, Groza, Groza, Peterson, & Fredericks, 2014), explained that an essential
goal of CRM technology is to enable salespeople and marketers to improve client facing efficiency
and effectiveness, which leads to improving performance as evidenced in this study. The study
shows that by pursuing a customer relationship initiation process, along with a relationship
maintenance process it has positive effects on sales performance. The key is to have management
convince the sales team of the importance that CRM technology plays in this course of action
resulting in sales performance. Moreover, CRM technology effectiveness should be viewed as a
tool to drive a customer centric culture within the selling firm and it starts with the prospect
initiation and is carried through the relationship maintenance process.

Sales force automation tools, such as CRM, have been shown to help sales professionals improve
closing rates and generate revenue faster. By taking advantage of CRM capabilities, salespeople
can expand their knowledge, improve their targeting skills, enhance their presentation skills and
culminate in a more effective sales process. CRM is the core business strategy that integrates
internal processes and functions and external networks to create and deliver value to targeted
customers and finally, increases profits. Research (Woodcock, Green, Starkey, & Management,
2011), identified how does social CRM work in the real world. CRM can deliver financial benefits
to companies in every sector. The benefits are centered on ‘customer’ and are not peripheral but
fundamental to driving business performance. Financial benefits apply across the customer

19
lifecycle, in acquisition, retention, value development and managing cost to serve. In addition,
CRM can deliver insight that will help drive real customer centric innovation. The knowledge built
on customer behavior, attitudes and mood will help drive benefits throughout the value chain,
impacting on suppliers (for example, forecasting demand) and intermediaries (for example,
shaping in-store promotions). CRM technology also help sales reduce sales cycle time and “make
them more successful in targeting the appropriate prospects and converting them into customers”.
CRM technology is designed to support customer relationships at customer touch points where the
buyer and sales firms interact. For sales organizations that implement CRM technology, potential
benefits include improved efficiency in sales processes; increased productivity in sales, marketing,
and customer support and the ability to record and understand customer needs.

As has been shown in the explanation of the CRM effect on finance from research (Mozaheb et
al., 2015), the results of this study also show a significant effect of CRM on marketing performance
by using customer approach as a proxy. Customer information gathering steps for a sharper and
more precise business plan also support the results of a significant CRM effect on the marketing
performance.

Journal (Namjoyan, Esfahani, Haery, & sciences, 2013), indicated that CRM successfully
influences marketing performance significantly. In CRM implementation, data collecting for
customer categorizing is important to understand sales potentials and maintain relationship with
costumers, moreover make them loyal. This model takes into consideration customer needs data
and wants to provide more desirable services for customers. Organizations that follow this model
will be able to adjust to the needs and desires of customers in the shortest time and also can provide
the best service for them. CRM modeling efforts to help employees understand all customer needs
and wants.

CRM practices can be leveraged to provide important customer information which can used to
improve organizational performance. Since, the traditional way of marketing in increasing
retention of customer incurred high cost, the best practicing of CRM provides firm with a
promising way to attack this critical problem. Periodic measurement of a firm’s CRM could help
managers track changes over time. In addition to the implementation of the modelin the monitoring
process, all three components in the CRM model can serve the training needs by helping human
resource managers to develop appropriate training programs. It aims to help improve staff

20
understanding of the activities involved in implementing CRM, so the top management can decide
the best business strategy. Not only that, this study also found that knowledge management
influences marketing performance significantly. As conclusion, CRM implementation proved
affects to marketing performance in significant (Mohammed et al., 2012).

Another research done by (Mohamad, Othman, Jabar, Majid, & Management, 2014) stated that in
a highly competitive era of globalization, organizations (whether SMEs, corporations, or
governments) must find appropriate measures to survive and compete. Therefore, this study
examines the implementation of good CRM to improve performance, so as to achieve
organizational success. The results show that CRM practices provide by key customer focus,
knowledge management, relationship marketing, and technical CRM resources are significantly
affected on organizational performance, one of them is marketing performance.

(Shavazi, Moshabaki, Hosseini, & Kordnaeij, 2015) believed an organization can Develop time of
product modification for a customer compared to competition and increase a number of newly
introduced products compared to the competition. She also expressed CRM cause increase sales
volume of individual customers and also sales revenue with individual customers. Customer
satisfaction and loyalty is as consequences of CRM process too.

(Gujrati, 2016) told that in the current economy condition, the most innovative companies are those
who use Business Intelligence techniques to meet the needs and wants of customers, so that they
can survive, even compete with innovation in this competitive environment. Business Intelligence
can be used correctly only when applied with care and full support from top management. With
the help of Business Intelligence, companies can identify their most profitable customers and
fundamental reasons for customer loyalty, as well as identify potential customers in the future if
not larger prospective. The most innovative companies today are those who use business
intelligence to gain a sustainable competitive advantage. In this case, customer-driven business
intellectual is CRM could affect marketing performance significantly.

A result from their study by (Mohamad et al., 2014) that in a highly competitive era of
globalization, organizations (whether SMEs, corporations, or governments) must find appropriate
measures to survive and compete. Therefore, this study examines the implementation of good
CRM to improve performance, so as to achieve organizational success. The results show that CRM
practices proxied by key customer focus, knowledge management, relationship marketing, and

21
technical CRM resources are significantly affected on organizational performance one of them is
marketing performance.

The findings of this research (Rafi, Ahmed, Shafique, & Kalyar, 2021) are CRM helped
telecommunication industry to provide a platform telecommunication organization to improve
their customer relationship management capabilities for making a long-term relationship with their
customers and make frequent and bundle sale of their products and services to the customers. It is
satisfying and makes a customer loyal to them which was take financial and non-financial

The purpose of this research (ALRasheedi & Education, 2021) is to produce some evidence of the
association between customer relationship marketing strategies and the market and economic
performance of the firm. Results indicated that execution of customer support and marketing
support in CRM strategies in banks and financial institutions have positive and meaning impact
on relationship marketing and then lead to increase the effect on business performance.

Based on hypothesis by (Kim, Wang, & Mattila, 2010) indicates that customer relationship
management influences marketing performance significantly. With CRM impact to improve the
employees' efforts for attracting reviews their job customers through increasing knowledge,
improving reviews their flexibility and speed in responding the customers, and paying attention to
reviews their needs and wants. This means that a company which focuses on the continuous
improvement of its employees work environment, technical skills, expertise and behavior during
customer contacts can excel in the implementation of its customer acquisition and retention
strategies.

Based research on (Jain & Singh, 2002), analyzed the impact of online CRM practices on
company's productivity and customer retention. And the result from this research there is the
relationship between CRM to productivity and customer retention. This research tells that CRM
as the practice of analyzing and utilizing marketing databases and leveraging communication
technologies to determine corporate practices and methods will maximize the lifetime value of
each individual customer. Conventional communication processes are often time delayed, e-CRM
allows organizations to always operate in real-time and more than that interaction with customers
are transparent so that organizations are able to draw conclusions on customer behavior and
measure the success of activities.

22
(Opara et al., 2016) identified strong positive relationship between customer satisfaction, market
share and profitability. The study opined that management strategies designed to increase customer
satisfaction are likely to lead to quantifiable returns in the long run. Identified customer satisfaction
was found to be an antecedent to customer loyalty, retention, behavioral intention, market share
and profitability; while customers are expected to be more likely to form future purchase intention,
engage in positive word of mouth advertising.

CRM strategy in the banking sector is being employed to help organizations make use of
technology and human resources to gain insight into the behavior of a customer and value of those
customers. If it works as planned, the organization can: provide better customer service, make call
centers more efficient and accessible, cross sell products more effectively, help marketing staff
close deal faster, simplify marketing and sales processes, discover new customers, and increase
customer’s revenues (Önüt, Soner, & Management, 2007).

There is few studies conducted In Ethiopia context; (Gebeyehu, 2014), analyzed the effect of CRM
on profit and market performance by considering branches of Commercial bank of Ethiopia,
Awash International bank and Wegagen bank located in Mekele city. The finding of the study
showed that the existence of a positive and significant relationship between CRM dimensions and
profit performance.The study conducted by (Dereje et al., 2020) revealed that there is strong,
positive and significant relationship between customer relationship management dimensions (key
customer focus, CRM organization, customer knowledge management and CRM based
technology) and profit performance. The study conducted by (EWNETU, 2015) revealed that
CRM has strong relationship effect on market share of Commercial bank of Ethiopia.

2.3. Conceptual Framework of the Study

This conceptual framework of the study was developed on the basis of literature and empirical
review what they stated about the customer relationship management and operational performance.
This conceptual framework was developed to show the effect of an independent variable CRM.
Under independent variable, the researcher was used the following key customer focus, knowledge
management: technology Based CRM and organized CRM and the dependent variable operational
performance. The following graph depicts the conceptual framework of the study.

23
 Key customer
Focus

Knowledge
Management
Operational performance

Efficient and effective use of resources

Technologica
l Based CRM

Organized
CRM

Independent Variable Dependent variable

Source: (adopted from (Sin et al., 2005))

Figure 2.1. Conceptual Framework of the Study

24
 CHAPTER THREE

RESEARCH DESIGN AND METHODOLOGY

3.1. Research Approach

The study was used both quantitative and qualitative research approaches. Quantitative research is
structure way of collecting and analyzing data obtained from different sources. It involves the use
of computational, statistical and mathematical tools to drive results on effect of customer
relationship management on operational performance. Because this research approaches, the
researcher was test hypothesis that was formulated in order to achieve the objective of the study.
On the other hand, the study was employed qualitative research approach. Moreover, qualitative
research approach was used due to the fact that it emphasis on interpretative study of specified
issues in which the researcher is the central to the theory that was derive from participants of the
study.

3.2. Research Design

The study was used explanatory research designs. (Saunders, Lewis, & Thornhill, 2007) suggest
an explanatory study type of research design for researches that study “a situation or a problem to
explain the relationships between variables.” Considering of this definition, the study was
assessing the effect of Customer relationship management on the operational performance of
Ethiopian Electric utility, Bahir Dar District.

3.3. Source of Data

The study was used both primary and secondary data sources. Primary sources will have used for
the sample employees of Ethiopian Electric utility working at nine districts. Here, the relevance of
the primary source in the study is to measure their perception level regarding the practice of CRM
and its effect on operational performance of the Ethiopian Electric Power Utility. Secondary data
was collect from the organization’s brochures, documents and annual report of the EEU to get the
necessary input for the study.

3.4. Data Collection Tool

According to Cohen and Manor (2011) questionnaire is a set of questions was designed to produce
the statistical information from the respondents in order to accomplish research objectives. It

25
allows the researcher to collect the relevant information necessary to address research question or
model hypothesis testing. With this understanding, questionnaire method has been used as a
method of data collection under this study. The prepare questionnaire contain statements that are
specifically designed to measure the effect of CRM on operational performance through the four
behavioral dimensions of CRM-Key Customer Focus, CRM organization, Knowledge
Management and Technology-based CRM. The prepared questionnaire has three parts; the first
part was used to collect demographic data of respondent. The second part was used to collect
respondent’s view about CRM practices in Ethiopian Electric utility, Bahir Dar district by using
Five point Likert scale and third part was seeking data on the effect of CRM on operational
performance by using Likert five scale which is useful method for measuring opinions, attitude
and behavioral tendencies was used on this study and Likert scale scoring from strongly agree=5
to strongly disagree=1 was used to measure the effect of CRM on operational performance. These
responses can easily have been quantified, and thus get equip for any mathematical analysis.

Indeed, this study was used semi- structured interview because; it is low cost, rapid method of
gathering information from individual. The flexible guide of semi structured interview was
ensuring the researcher stay to focus on the issue at hand and allow research participants to discuss
issues which they deem be relevant and it help for comparative listening to perspectives of
participants. Accordingly, interview questions were prepared for manager, HR and department
managers.

3.5. Data gathering Procedure

A self-administered, structured questionnaire was used to gather data from employees. The
researcher was formally request permission from the EEU, Bahir Dar district for the study. Then
after getting permission, the study was distributing questionnaires and interview to sample
population was made by the researcher as per the schedule. The tools that was used to collect the
data from the respondent’s response on the questionnaires. Since the district offices are
geographically dispersed therefore, both the distribution and collection of questionnaires was made
through the EEU internal network.

26
3.6. Population and Sampling Design
3.6.1. Population
The target population in this research was the employees of Ethiopia Electric Utility Bahir Dar
District who had the necessary information required for the research questions. The populations of
Ethiopia Electric Utility Bahir Dar District employers are 671. Therefore, the total population of
this study was 681 professional employees and it is depicted in table below.

Table 3.1. Total population of the study

Sample frame/ Total population

Employees
Center Male Female Total
Bahir Dar No.1 83
Bahir Dar No.2 77
Merawi 74
Durbete 75
Zege 70
Adet 79
Hamusit 60
Ambesame 73
Wereta 80
Total 671
Source: Ethiopia Electric Utility Bahir Dar District, 2022

3.6.2. Sampling Design

3.6.2.1. Sampling Frame
Sampling frame in this study consisted of a number of elements in the general population from
which the researcher selected subjects to represent the general population of Ethiopia Electric
Utility, Bahir Dar District. It’s further mentioned that for the sample frame to be accurate, the
sample frame has to be a complete list leaving some elements out and resulting to some elements
not having equal chances of selection (Blumberg, Cooper, & Schindler, 2014). A list of selected
elements from a sampling frame was selected to represent the entire population due to financial
costs involved in studying the entire population, time element involved and the desire for accuracy
in analysis.

The sample units were the different departments with the employees being the elements. Thus the
target population defined those units for which the findings of the survey are meant to generalize.
In this study, the sampling frame consisted of all professional employees who are working at

27
Ethiopia Electric Utility, Bahir Dar District. Isenhower et al. (2010) mention that the likely
problem to arise here is the systematic discrepancies between the population and sampling frame
which we had to monitor keenly to enable us to have an accurate representation of the target
population.

3.6.2.2. Sampling Technique

Sampling technique is the process of identifying multiple options to enable researchers to cut down
the capacity of data that needs to be collected by considering a sample instead of the entire group
due to the limited resources of time, money and the population size involved. The study was use
stratified proportional sampling, simple random and purposive sampling. To reply the research
questions, (Sekaran & Bougie, 2016) mention that the study made inferences from the selected
samples and for this sample to be a total representative of the population, probability sampling will
use to identify, decide, select and check the sample. To be more specific, the study was
implemented the stratified random sampling technique in sampling the populations to arrive at
clusters to represent it.

3.6.2.3. Sample Size

Bahir Dar district cover a large area, due to the vastness of the district, the researcher purposively
selected employees that are found around the main office Bahir Dar. Thus, the study was selected
sample of 250 employees. From each geographical location the proportionate number of subjects
was used to select on the basis of number size of employees in their respective geographical zone.
After that, the researcher was used stratified proportional sampling to guarantee presentation of
respondents. Based on the size of employees in the geographic the researcher was classifying
respondents on the basis of their stratum. Then after, the study was used simple random sampling
technique, this sampling technique was help to provide that employees of the district to give their
views towards the effect of CRM on operational performance by having equal chance without
biasness. The study also was used purposive sampling for operational department, marketing
department and management members to get detail information on Customer Relationship
Management and operational performance in Ethiopian Electric Utility, Bahir Dar District.

To do so the sample size determined statistically, at 95% confidence level with a 5% margin of
error was assume. Given this level of confidence and the assume margin of error.

28
To manage the data, the study was used Yemane Taro’s sample size determination formula. Per
Yemane, if the error term increases the sample size has been decrease with the range interval of
5% of error term. Considering of this it has been difficult to select more sample within the given
time interval, therefore the researcher has been select 5% of error term.

Whereas, n means sample size, N means total population, e means error term.

n=N/ [1+Ne2]
= 671 /1+671 (0.05)2
= 671/ [1+671 (0.0025)]
=250 employees will have selected as sample population.
Table 3.2 Classification of Population and Sample Size

Sample frame/ Total population Sample size

Center Employees Sample population from
each center/ total
population* sample size
Bahir Dar No.1 83 83/671*250 = 31
Bahir Dar No.2 77 77/671* 250 = 28
Merawi 74 74/671* 250 = 28
Durbete 75 75/671* 250 = 29
Zege 70 70/671* 250 = 26
Adet 79 79/671* 250 = 29
Hamusit 60 60/671* 250 = 22
Ambesame 73 73/671* 250 = 27
Wereta 80 80/671* 250= 30
Total 671 250
Source: Ethiopian Electric Utility, Bahir Dar district, 2022
3.7. Measurement of Variables
In the questionnaire provided to the employees, all variables were treated. The questionnaire
includes two parts. In Part I personal data was obtained; Part II contains scales to measure the
variables of the study. (Sin et al., 2005) suggest that the concept of CRM is a multidimensional
construct consisting of four broad behavioral components. These behavioral components are: Key
Customer Focus, CRM organization, Knowledge Management and Technology-based CRM. It is
strongly emphasized that all behavioral components or dimensions must be integrated in order to
achieve Customer Loyalty and company profitability. Other studies like those of (Abdullateef et
al., 2010) and also (kin) find customer orientation as part of behavioral components. It composed

29
of four domains, each of which has associated competencies. The questionnaire contained 30
questions related to CRM, for operation performance using the five-point Likert scale rated using
1-strongly disagree to 5- strongly agree.

3.7.1. Measurement of Independent Variables

In this study, the independent variable comprises of four dimensions of operation performance that
are developed by (Sin et al., 2005) this measure is intended to judge competencies from four
quadrants. These include:

Customer Focus; Key customers are customers who are more important for organization
strategically and who have a greater profitability (Ryals & Knox, 2001). To measure Key
Customer Focus six questions were adopted from the work of (Sin et al., 2005). The items were
measured using a five-point Likert scale ranging from ‘strongly disagree’ (1) to ‘strongly agree’
(5).

Organized Customer relationship management; For a better CRM implementation and total quality
assurance of those strategies, there is a need to employ total participation from all levels of the
organization. To measure Organized Customer relationship management seven questions were
adopted from the work of (Sin et al., 2005). The items were measured using a five-point Likert
scale ranging from ‘strongly disagree’ (1) to ‘strongly agree’ (5).

Customer knowledge management; a vital role in CRM. Organizations can use it to build and
develop their relationship with customers (Zahay & Griffin, 2004), and it enables organizations to
gain a competitive advantage in the market. To measure social-awareness ten questions were
adopted from the work of (Sin et al., 2005). The items were measured using a five-point Likert
scale ranging from ‘strongly disagree’ (1) to ‘strongly agree’ (5).

Customer relationship management-based Technology; With advances in information

communication technology (ICT), a modern system can be used to improve the power of
organizations to reduce internal costs, better interact with the environment, and increase economic
profit in the long term Mohammed et. al (2013). Therefore, to measure the relationship-
management six questions were adopted from the work of (Sin et al., 2005). The items were
measured using a five-point Likert scale ranging from ‘strongly disagree’ (1) to ‘strongly agree’
(5).

30
3.7.2. Dependent Variable Measures
The dependent variable for this study is employee performance and to measure general operation
performance the researcher was adopted (Koopmans, Michalowski, & Waibel, 2012) Individual
Work Performance Questionnaire (IWPQ). the aim of the IWPQ scales by including more items
which the scales indicated good model appropriate and dependability, and were scrutinized for a
critical measurement requirement (e.g. Category, ordering, and differential item functioning).
Finally, calculation and interpretability of scores were addressed. Consequently, it can be more
trustworthy measures for workers at all levels of ability. The scale had five questions and
respondents had to respond on 5 points Likert scale ranging from strongly disagree (1) to strongly
agree (5).

3.8. Research Procedures

Research questions will construct to formulate the questionnaire. Before this questionnaire could
be used to collect the required data from the field, a pre-test of the questionnaire will do to make
sure that respondents understood the questions and there were no issues with wording and then the
questionnaires were edited to rectify issues such as either including more questions or taking out
some and any other inadequacies basing on the feedback and reactions we get from the pre-testing
of the questionnaires.

A one-paragraph preamble introduction letter consisting of the purpose of the study and its
significance to both of the organization and employees were addressed to the respondents to gain
their permission for the researcher to accomplish the study. The researcher was ensured to take
away the fears of respondents in terms of their privacy by assuring them of the confidentiality of
the information that they were provided. It was paramount importance to the study that the
response rate was high and timely and this ensures by putting in place measures such as; 1)
carefully designing individual questions, 2) clear layout of questionnaire forms, 3) Clearly stating
the purpose of the questionnaire, 4) Pilot testing, 5) Planning and executing implementation, 6)
keeping the wording basic and simple for all respondents to understand and lastly short questions
and short length of questionnaire. Once all the above is done, the final edited questionnaire was
printed after approval for its clarity and then used as an instrument for data collection in a timely
fashion.

31
3.9. Data Analysis Methods
After the researcher collected the data from field, it has been prepared through coding and editing.
It was involved checking of data collection forms for omission, legibility and consistency as well
as discarding the incomplete responses which was missed the data. Thereafter, the researcher was
identifying potential errors in data collection was identified and discuss for their implications. Data
has been analyzed via and inferential analysis; such as; percentage, mean, standard deviation and
also inferential statistics has been used to show the relationship and effect of both independent and
dependent variables through correlation and regression with the aid of Statistical Package for
Social Science (SPSS) version 26.

3.10. Research Design Quality

3.10.1. Validity
Validity is often defined as the extent to which an instrument measures what it purports to measure.
Before development of the questionnaire the researcher was conducted extensive CRM literature
review which are done by (Sin et al., 2005) and other researchers who study about CRM behavioral
components and operational performance. Since the questionnaire has been developing after a
thorough review of CRM academic literatures and it was assumed that the construct validity was
hold.

3.10.2. Reliability
Reliability is the extent to which measurements are repeatable when different persons perform the
measurements, on different occasions, under different conditions, with supposedly alternative
instruments which measure the same thing. In sum, reliability is consistency of measurement
(Saunders et al., 2007), or stability of measurement over a variety of conditions in which basically
the same results will be obtained.

To investigate the reliability of the questionnaire, the researcher was undertaken pilot-test to ensure
the reliability using Cronbach’s coefficient on all constructs. A pilot test was conducted on 30
respondents to measure the reliability and consistency of the research instrument. Cronbach’s
alpha was used the measure the reliability and internal consistency.

32
3.11. Ethical Consideration
In this research study, issues relating to the ethical conduct of research such as was informed
consent, confidentiality, privacy and anonymity was upheld. According to (Saunders et al., 2007),
ethics is the norms or standards of behavior that guide moral choices about our behavior and our
relationships with others. The researcher was keep the participants ‘identity, confidential; replaced
actual names with fictional names. The researcher was not offer any incentives to the participants
except for honorable mention in the document. Additionally, all information has been gathered in
order to achieve the purpose of this research study.

33
 CHAPTER FOUR

DATA PERESENTATION, ANALYSIS AND INTERPRETATION

Descriptive statistics stand for the conversion of raw data into useful information, which can be
interpreted to explain a group of dimensions. They represent one of the most important early stages
of statistical data analysis. This form of statistical analysis can include a number of outputs,
including frequencies, percentages, means and standard deviation (Pallant, 2020). Inferential
statistics is a part of statistics that is concerned with the analysis, interpretation and drawing
conclusion about the source of the data (Dejene, 2011).

4.1. Response rate on Questionnaire

For this study a questionnaire with 35 close-ended items were used to collect information from
employees of the Ethiopian Electric Utility regarding the independent variables (Key Customer
Focus, CRM organization, Customer Knowledge Management and CRM based Technology) and
the dependent variable operational performance.

Table 4.1. Number of distributed, Number of collected and Response rate

Sr. No. Number of distributed Number of retrieved Response

Districts Questionnaire and sound lists Rate in (%)
1 Bahir Dar No.1 31 30 98%
2 Bahir Dar No.2 28 28 100%
3 Merawi 28 27 95%
4 Durbete 29 29 100%
5 Zege 26 26 100%
6 Adet 29 29 100%
7 Hamusit 22 20 95%
8 Ambesame 27 25 95%
9 Wereta 30 27 90%
Total 250 241 96%
Source: Own Survey (2022) n=241

34
As shown in the Table 4.1 above, a total of 250 questionnaires were distributed to employees of
the ten districts. Of the total dispatched questionnaires, 241(96%) were filled up and returned. This
clearly indicated that employees of all branches were very cooperative to fill the questionnaires.

4.2. Demographic Characteristics of the Respondent

Table 4.2. Frequency and %age of Respondents’ Demographic Characteristics

No Demographic Classification Frequency % age (%)

Factors (n = 241)
1 Sex Male 217 90
Female 24 10
2 Age 25 years or less 51 21.2
Between 26– 30Years 125 51.9
Between 31– 40Years 54 22.4
Between 41–50 Years 5 2.1
Above 51 years 6 2.5
3 Educational Certificate - -
level Diploma - -
Degree 182 75.5
Maters and above 59 24.5
4 Experience 5 years or less 133 55.2
From 6 – 10years 91 37.8
From 11 – 15 Years 11 4.6
16 & Years More 6 2.5

Source: Own Survey (2022), n=241

Table 4.2 above shows the gender of the respondents. As we can see from the table, 217 (90%) of
the respondents were male and the remaining 24 (10%) of them were females this shows gender
distribution in the sample branches was not equal. Regarding the age of the respondents, most of
the age groups 125 (51.9%) were found between 26– 30 years. The age range of 25 years or less
(21.2%) of the total respondents while 54 (22.4%), 5(2.1%) and6 (2.5%) of the respondents found

35
under the age range of 31– 40 years, 41-50 years and 51 and above, respectively. From this we can
observe that in the sampled branches employees found in their productive age.

In relation to marital status, from the total respondents 165 (68.5%) were not engaged in marriage.
Whereas 76 (31.5%) of them were engaged in marriage. As far as the educational qualification of
employees is concerned, the below Table 4.2 shows that from the total respondent’s majority, 182
(75.5%) of the respondents were BA degree holders and 59(24.5%) of the respondents were
master’s holder.

The last demographic variable was work experience. Again Table 4.2 indicates that the majority,
133(55.2%) of the respondents had been working in the organization for the last 5 or less years.
Similarly, 91 (37.8%) and 11 (4.6%) of them are working in the organization for the year between
6 - 10 and 11 to 15years, respectively. In the same situation, 6(2.5%) individuals indicated they
have been working in the organization more than 16 years. This indicates the employees of the
organization are young in the organization.

4.3. Descriptive Statistics Analysis of CRM Dimensions

4.3.1. Perceptions of respondents towards the effects of CRM on operational performance
In this section of the analysis, the employees’ responses were used to assess their perception level
towards the effect of CRM on operational performance of the districts. From the collected data,
mean scores and standard deviations were calculated for all Five-Point Likert Scale items. Then to
assess the employee’s perception towards the effect of operational performance descriptive
statistics, mean and standard deviation were considered.

According to (Al-Sayaad, Rabea, & Samrah, 2006) the calculated mean score of an item were
classified in ranges to fit the five-scaled Likert’s measure of responses (strongly disagree, disagree,
neutral, agree, and strongly agree) as shown in the Table 4.3 below. Hence, in this study the
perceptions of respondents on each item for all variables were labeled according to its calculated
mean score result and the classification presented in following table.

Table 4.3. Mean Score Range for Five-Scale Likert’s Response

Mean Response
From 1.00 to less than 1.80 Strongly Disagree

36
 From 1.80 to less than 2.60 Disagree
From 2.60 to less than 3.40 Neutral
From 3.40 to less than 4.20 Agree
From 4.20 to less than 5.00 Strongly Agree
Source: Al-Sayaad et al. (2006)

4.3.2. Customer focus

Key customers are the identified customers that provide more values for company through
providing more performances, active long-term relationships, and powerful leadership for
Ethiopian Electric Utility (Akroush et al.).

Table 4.4. Mean and Standard Deviation Results of Customer Focuses

Questionnaires’’ Items N Mean Std. Over all

Deviation Response
Ethiopian Electric Utility, Bahir Dar district 241 2.7593 1.28134 Neutral
works with customers need to customize its
offerings.
Ethiopian Electric Utility, Bahir Dar district sets 241 3.0124 1.07036 Neutral
clear objectives and strategies for key customers.
Ethiopian Electric Utility, Bahir Dar district 241 2.7303 .96495 Neutral
makes coordinated efforts to modify a service for
key customers
Ethiopian Electric Utility, Bahir Dar district is 241 2.5477 1.05614 Disagree
Continuously delivering superior and added
value for key customers
The Electric Utility, Bahir Dar district is meeting 241 2.2905 1.24443 Disagree
and ensuring key customer needs
All employees in our Ethiopian electric utility 241 2.1245 1.22179 Disagree
treat customers with special care.
Valid N (listwise) 241
Source: Own Survey (2022) n=241

As shown in Table 4.4 above, key customer focus dimension was assessed by six measurement
items. According to the mean score of the items that describes key customer focus dimension of
CRM, the highest mean score was attained by the item included to determine the level how the
Ethiopian Electric Utility, Bahir Dar district sets clear objectives and strategies for key customers
with (mean = 3.0124& standard deviation = 1.07036) and the least mean was scored by an item

37
stated to analyze the all employees in the All employees in our Ethiopian electric utility treat
customers with special care with (mean = 2.1245, standard deviation =1.22179). As the statistical
results on Table 4.4 above depicts, employees disagree with three items of key customer focus
(Continuously delivering superior and added value for key customers, meeting and ensuring key
customer needs and treating customers with special care) whereas neutral with the reaming three
items of key customer focus. This indicates that even though, key customer focus is one of the
most important dimensions of customer relationship management that involves an overall
customer-centric focus and continuously delivering superior and added value through customized
offers to the key customers, the practice of the Ethiopian Electric Utility in this regard is not well
organized to meet needs of its customers.
On the other side, information collected from interviewing team managers and directors of the
corporate levels of the Ethiopian Electric Utility has relaxed the situation related to key customers.
According to them, since issue of development is top agendas of the government, for this particular
case Ethiopian government by itself has its own strategy to let both foreign and domestic investors
to be engaged in the investment activities by setting priority areas of investment. However, their
response accepted the existence of some weakness from the Ethiopian Electric Utility side in
addressing customers request related to loan and other related facilities.

4.3.3. Organized Customer relationship management

Organizational structures that support cross functional communication and coordination, as well
as rewards and training programs designed around customers’ needs resulted in higher relationship
quality, which in turn positively influenced organizational performance (Marani, 2019). If the
organization around CRM is well structured, organizations can ensure the required customer -
oriented behaviors of their employees by providing staff with the modern tools and technology,
customer-satisfaction tracking and complaints management systems, inspirational leadership, and
appropriate rewards systems (Mechinda & Patterson, 2011).

38
 Table 4.5. Mean and Standard Deviation Results of CRM organization Dimension

Questionnaires’ Items N Mean Std. Over all

Deviation Response
The Ethiopian Electric Utility has Good 241 2.3402 .95764 Disagree
organizational structure that attract customers

The Ethiopian Electric Utility is committed to utilize 241 3.2324 .99370 Neutral
wide organizational resources
The Ethiopian Electric Utility adopted flexible 241 2.7344 .95089 Neutral
organizational structure and arrangement

There is a coordination for focused customer services 241 2.3195 .97553 Disagree
Our Ethiopian Electric Utility structure is carefully 241 2.2863 1.12035 Disagree
designed around our customers.
There is a cross-functional team organized to 241 2.9793 1.10848 Neutral
coordinate its services

The Ethiopian Electric Utility has good 241 2.2656 1.15290 Disagree
organizational image
Valid N (listwise) 241
Source: Own Survey (2022) n=241

As the statistical results on Table 4.5 above depicts, the mean results indicate employee’s
perception on CRM Organization. The employees‟ highest agreement level was attached to the
item stated as" the Ethiopian Electric Utility Committed to utilize wide organizational resources"
with (mean = 3.2324& standard deviation = .99370). The lowest agreement was revealed for the
item the Ethiopian Electric Utility has good organizational image (mean = 2.2656, standard
deviation = 1.15290). However, the level of agreement in all of the items falls under "Disagree
and neutral".

Information obtained while interviewing team managers and directors indicates that, the Ethiopian
Electric Utility started its reformation by targeting an extensive branch expansion program to
change the overall organizational setup of the Ethiopian Electric Utility.

39
4.3.4. Customer knowledge management

Regarding Knowledge management, in order to develop highly personalized offerings, business

organizations have to take into account that the success of relationship management is heavily
dependent on collecting and analyzing customers’ information.

Table 4.6. Mean & Standard Deviation Results of Customer knowledge management Dimension

Questionaries’ Items N Mean Std. Over all

Deviation Response

The Ethiopian Electric Utility enables ongoing and 241 3.4606 1.02444 Agree
two-way communication
There is good management practice that would create 241 1.8340 .96902 Disagree
customers to have good expectation
Customer-centric functions are staffed with well- 241 3.1701 .94874 Neutral
trained and motivated employees.
The Ethiopian Electric Utility manages all customer 241 2.1950 1.00381 Disagree
communications so that they are consistently superior
and relevant to the customer.
There is a successful dissemination of knowledge 241 2.8672 1.01191 Neutral
management system 241 2.0954 1.26294 Disagree
The management has the ability to transform locally
acquired new knowledge into organization-level
knowledge.
The management has the ability to trial customer 241 1.9461 .92713 Disagree
behavior
Workers in the Ethiopian Electric Utility have detail 241 3.5477 1.01592 Agree
knowledge of every procedure
The staff members of the Ethiopian Electric Utility 241 3.6183 .78761 Agree
have the ability to interact with others
Workers have the ability to handle customers and to 241 2.361 1.17543 Disagree
solve their complaints
Valid N (listwise) 241

40
 Source: Own Survey (2022) n=241

As it is shown in the Table 4.6 above, in this section of the questionnaire the mean result indicates
employee’s perception on Customer knowledge management. From the perception of employees,
the highest agreement level was related to the item stated as “The staff members of the Ethiopian
Electric Utility have the ability to interact and work well with others” with (mean = 3.6183&
standard deviation = .78761). The lowest agreement was also revealed from the item which was
stated as There is good management practice that would create customers to have good expectation
(mean = 1.8340 & standard deviation = .96902). However, the level of agreement in majority of
the items falls under "Disagree and neutral". This implies that, the practice of customer knowledge
management was found low in the Ethiopian Electric Utility.

On the other hand, information gathered through interview indicates that, recently the Ethiopian
Electric Utility has been making a considerable improvement in collecting and analyzing customer
information to evaluate competitiveness of the services that the Ethiopian Electric Utility delivers
to its customers by mentioning the currently effort that the Ethiopian Electric Utility made to
facilitate knowledge management by adopting ERP (Enterprise Resource Planning) System.

4.3.5. Customer relationship management-based Technology

In the current globalized world sophisticated technologies are simplifying the process undertaken
to establish one-to-one communications, analyze customer-value, integrate customer information
system, automate processes and customize services (Ghodeswar & Applications, 2001).

Table 4.7. Mean and Standard Deviation Results of CRM based technology

Questionnaires’ Items N Mean Std. Over all

Deviation Response
Ethiopian Electric Utility maintains a 241 2.5145 .88081 Disagree
comprehensive database of our customers.
Ethiopian Electric Utility has the right hardware 240 3.0792 1.12688 Neutral
and software to serve our customers.
Ethiopian Electric Utility has assigned the right 241 2.7884 1.30736 Neutral
technical personnel to provide technical support

41
 for the utilization of computer technology in
building customer relationships.
Ethiopian Electric Utility provides Information 241 3.5062 1.14426 Agree
Technology facilities, like computer aided
design for managing customer relationships
Ethiopian Electric Utility has employed a system 241 1.3527 .84907 Strongly
of disseminating information to customers Disagree
through e-mail to reduce customer waiting time.
Our staffs give much attention and prompt 241 1.4274 .76643 Strongly
services to our customers irrespective of their Disagree
status using online media.
Data warehousing and data mining have already 241 3.0083 .94424 Neutral
been implemented.
We communicate with our customers with 241 3.4938 1.03731 Agree
telephones to meet their urgent requests and
needs.
Valid N (listwise) 240
Source: Own Survey (2021) n=241

As it can be seen in the Table 4.7 above, for CRM based technology aspect of customer relationship
management the highest mean value from employee’s perception was attached to the item to
addressed The Ethiopian Electric Utility provides Information Technology facilities, like computer
aided design for managing customer relationships (mean = 3.5062 and standard deviation
=1.14426). An item with the least mean value was related to the question referring to the Ethiopian
Electric Utility has employed a system of disseminating information to customers through e-mail
to reduce customer waiting time (mean=1.3527 and standard deviation=.84907). But majority of
the items were falls under "Strongly Disagree, Disagree and neutral"
Similarly, information was gathered from an interview conducted with managers. Basically they
expressed their perception in this regard by pointing the strong effort that the Ethiopian Electric
Utility has made to change the old system to the current new technology that connected each
branches throughout the country like T-24 system.

42
4.3.6. Operational performance

The purpose of CRM is to efficiently and effectively increase the acquisition and retention of
effective customers by selectively initiating building and maintaining appropriate relationships
with them.

Table 4.8. Mean and Standard Deviation Results of operational performance

Questionaries’ Items N Mean Std. Over all

Deviation Response
The practice of giving customized service for its 241 2.5643 .83480 Disagree
customers contributed a lot for the Ethiopian
Electric Utility’s performance.
The Ethiopian Electric Utility 's districts and 241 2.1826 .89435 Disagree
branches are appropriately located around ideal or
convenient places for its customer to sustaining
them and improve Ethiopian Electric Utility
performance
In line with its objective, the Ethiopian Electric 241 1.7593 1.11811 Strongly
Utility is becoming highly effective in the industry Disagree

The technology which is applied in the Ethiopian 241 3.0830 .94503 Neutral
Electric Utility is appropriate so that the Ethiopian
Electric Utility is improving its operations
performance.
Valid N (listwise) 241
Source: Own Survey (2022) n=241

As the statistical results on Table 4.8 above depicts, the highest mean of items in this section was
attached to the item that the technology which is applied in the Ethiopian Electric Utility is
appropriate so that the Ethiopian Electric Utility is improving its operations performance
(mean=3.0830and standard deviation =.94503). On the other hand, the least mean was attached to
an item “In line with its objective, the Ethiopian Electric Utility is becoming highly effective in
the industry with (mean=1.7593and has a standard deviation =1.11811). On the other hand, all

43
items employees’ perception level revealed that they disagree with the Ethiopian Electric Utility's
performance. From this ground it is possible to put the situation as the Ethiopian Electric Utility's
operations performance is low. In this regard information obtained from interview showed that the
Ethiopian Electric Utility didn’t run only for effectiveness rather it follows the government policy
to complete the project categorized as priority by the government. Thus, the Ethiopian Electric
Utility’s operations performance was not an excellent one.
4.4. Results and Discussion of Inferential Statistics
In this study, to process the correlation analysis, data from the scale typed questionnaires were
entered in to the SPSS software version 24. Pearson correlation coefficient is used to specify the
strength and the direction of the relationship between the independent variable (Key Customer
Focus, CRM Organization, Customer Knowledge management and CRM based technology) and
the dependent variable i.e. operations Performance. The results of the correlation between these
variables are shown in Table 4.9 below.

Table 4.9. Correlations between customer relationship management and operations Performance

operations Performance

Degree of the Level of Significance

No. Items correlation significance
1. Key customer focus .0.730** 0.871 Significant
2. CRM organization .0.840** 0.911 Significant
3. Customer knowledge management .724** 0.892 Significant
4. CRM based Technology .803* 0.799 Significant

Correlation is significant at the 0.00 level (2-tailed)

Source: Own Survey (2022) n=241

As it is indicated in the Table 4.9 below, generally there is a positive, strong and statistically
significant correlation between CRM dimensions and operations performance at 1% level of
significance (P<0.000) which signifies the effect of CRM on the operations performance of
Ethiopian Electric utility.

44
To be specific for each dimensions, from presented correlation matrix table again we can observe
that there is a positive, strong and statistically significant correlation between CRM dimensions
(Key customer focus, CRM organization, knowledge management and CRM based technology)
and operations performance, as the correlation coefficient between each dimensions and operations
performance described as 0.730, 0.840, 0.724 and 0.803 respectively and in all cases at 1%
significance level (p < 0.000).

4.4.1. Discussion of the Correlation Results

The findings of this research supported the earlier works on this subject matter. The hypothesis
was to check for a significant relationship between all the dimensions of CRM and Ethiopian
Electric Utility’s operations performance. The correlation results presented in Table 4.9 above
indicates that all of the CRM dimensions are correlated with Ethiopian Electric Utility’s operations
performance at 1 % level of significance. The result of correlation analysis of this study was
consistent with the findings of (alem Mohammad et al., 2013; Gebeyehu, 2014; Namjoyan et al.,
2013).

By taking the strength of their relationship, the finding further indicates that the CRM organization
dimension has highest correlation with operations performance, followed by CRM technology and
Key customer focus. Comparatively the least relationship was found between Customer
knowledge management and operations performance.

The correlation coefficient between CRM organization dimension and operations performance is
placed first from all correlation results of CRM dimensions with (r=0.840; p<0.000). This means
if the Ethiopian Electric Utility improves the overall situation of its CRM organization dimension,
the Ethiopian Electric Utility’s operations performance will be improved. From this it is possible
to say that the extent of CRM organization dimension can determine the operations performance
of the Ethiopian Electric Utility.

According to (Namjoyan et al., 2013), development of every organization in information

technology area improves its capability in collecting, saving, analyzing, and sharing knowledge
about customer. This leads to increase the organization’s capability in responding the customers‟
needs and maintaining them. In line with this, Mukherjee& Singh (2009), also said that
technology-based CRM leads to information integration and sharing that influences smooth and

45
efficient firm-customer interactions, appropriate analysis of customer data and customization of
response. Having said this, the correlation coefficient (r=0.803, P< 0.000) of CRM based
technology shows that if the Ethiopian Electric Utility make an improvement in the technologies
that customers in the industry need, there would occur a significant improvement in the operations
performance of the Ethiopian Electric Utility through its effect in customer acquisition, attraction,
and retention. Therefore, the result of this finding is consistent with the finding of (Namjoyan et
al., 2013).
It is pretty clear that key customers are ones who are more importance for organization from
strategically viewpoint and are more effective (Ryals & Knox, 2001). The third dimension of CRM
which has a correlation result (r= 0.730, p<0.000) is Key customer focus. In this regard the
correlation result shows that there are strong positive relationships between key customers focus
and operations performance at 1 % level of significance. i.e. if the Ethiopian Electric Utility change
its strategies to manage its key customers, the change will bring a change in operations
performance of the Ethiopian Electric Utility.

Finally, CRM organization refers to acquiring, sharing, and developing the customer knowledge
among employees for making effective to the organization and customers. In order to improve the
organizational efficiency and effectiveness, insure from delivering desirable products and services
to the customers and acquire their satisfaction, it is necessary to manage the Customer knowledge
management. The relatively least correlation result (r=0.724, p<0.000) was realized between
Customer knowledge management and operations performance. In this case, although relatively it
is weak to the other correlation results, the result shows that there is a positive, strong and
significant relationship between Customer knowledge management and operations performance.
This is to mean that if the Ethiopian Electric Utility adopted a mechanism to handle Customer
knowledge management, it is definite that its operations performance also changes in the same
direction. The following Table 4.10 shows the hypotheses summary of the CRM dimension (Key
Customer Focus, CRM Organization, Customer Knowledge management and CRM based
technology) has a correlation with operations performance.

Table 4.10. Summary of hypothesis testing of correlation

Hypothesis Tool Outcome

46
 H1 : Key customer focus has correlation with operations Correlatio Correlate
performance n d

H 2 CRM organization has correlation with operations Correlatio Correlate

performance n d
H3: Customer knowledge management has correlation Correlatio Correlate
with operations performance n d

H4: Technology based CRM has correlation with Correlatio Correlate

operations n d

Performance
Source: Own Survey (December, 2022) n=241

4.5.2. multi co linearity test

To independent variables should not be highly correlated with each other. In multiple regression
analysis, co-linearity refers to the correlation among the independent variables (Pallant, 2020).

Therefore, to make sure that there is low co-linearity, the values of tolerance and VIF (Variance
Inflation Factor) should be checked. According to (Pallant, 2020), tolerance indicates to what
extent the independent variables do not explain much of the variability of a specified independent
variable and the value should not be small (more than 0.10) to indicate the absence of co-linearity.
In addition to that, VIF, the inverse of tolerance value, should have a value of less than 10 to avoid
any concerns of co-linearity (Pallant, 2020). Hence, the values in the Table 4.11 below indicate
low co-linearity because all Tolerance values are above 0.1 and all VIF values are less than 10.
Therefore, these tests reflect that the variables used in the study are free from multi co-linearity.

Table 4.11. Multi co-linearity Test table

Unstandardized Collinearity Statistics

Coefficients
No Model B Tolerance VIF
(Constant) -0.672

47
 1 Key Customer Focus .197 .451 2.218
2 CRM Organization .317 .249 4.014
3 Knowledge Management .216 .453 2.209
4 CRM Based Technology .437 .301 3.320
Source: Own Survey (2022) n=241

4.5. Regression Analysis and Hypothesis Testing Results

The regression analysis was conducted to know by how much the independent variable explains
the dependent variable. In this study, regression was employed to examine the effect of the
independent CRM dimensions such as key customer focus, CRM organization, Customer
Knowledge management and CRM based technology on dependent variable operations
performance.

Table 4.12. Multiple Regression analysis result of CRM and operations performance

Model R R Adjuste Std. Error Change Statistics

Squar dR of the
R F df1 df2 Sig. F
e Square Estimate
Square Change Change
Change
1 0.906 0.821 0.818 0.28015 0.821 270.741 4 236 .000

a. Predictors: (Constant), CRM TECHNOLOGY, KEY CUSTOMERFOCUS, KNOWELEDGE

MANAGEMENT, CRMORGANIZATION

Source: Own Survey (December 2022) n=241

The results of regression analysis presented in Table 4.12, indicate positive and significant
relationship between the CRM dimensions and operations performance. This means the predictive
variables (independent variables) such as key customer focus, CRM organization, Knowledge
management and CRM based technology jointly determine the dependent variable operations
performance. The adjusted R-Square (R2 = 0.818) shows the explanatory power of all variables
involved in the study. Hence key customer focus, CRM organization, Knowledge management
and CRM based technology jointly determine (explain) 81.8% of the variance in operations

48
performance. Whereas 18.2% of the operations performance of Ethiopian Electric utility was
explained by the variables which were not included in the study.

Table 4.13. Beta Weights of Predictor Variables in the Test

Model Unstandardized Standardized t Sig. 95.0%

Coefficients Coefficients Confidence

Interval for B
B Std. Beta Lower Upper
Error Bound Bound
(Constant) .-672 .107 -6.294 .000 -.883 .462
Key Customer .197 .029 .275 6.711 .000 .139 .255
Focus
CRM .317 .062 .282 5.119 .000 .195 .438
Organization
Customer .216 .046 .191 4.665 .000 .125 .307
Knowledge
Management
CRM Based .437 .072 .305 6.076 .000 .295 .578
Technology
a. Dependent Variable: operations PERFORMANCE

Source: Own Survey (December, 2022) n=241

The values of the un-standardized Beta Coefficients (β) indicate the effects of each independent
variable on dependent variable. Furthermore, the values of the un-standardized Beta Coefficients
in the Beta column of the Table 4.13 above, indicate which independent variable (CRM
dimensions) makes the strongest contribution to explain the dependent variable (operations
performance), when the variance explained by all other independent variables in the model is
controlled. The t value and the sig (p) value indicate whether the independent variable is
significantly contributing to the prediction of the dependent variable.

49
The study’s hypothesis testing was made based on β, t, and P values. Hence using those coefficient
results, the proposed hypotheses for this study were tested as follows.

Hypothesis 1: Key customer focus has positive and significant influence on operations
performance.
The results of multiple regressions, as presented in Table 4.13 above, revealed that key customer
focus had a positive and significant effect on operations performance of the Ethiopian Electric
Utility with (β = 0.197, t = 6.711 & p <0.000). Thus, the proposed hypothesis was accepted. This
statistic infers that if the Ethiopian Electric Utility increased its focus to key customers by one %,
then its operations performance would increase by 19.7%.

Hypothesis 2: CRM organization has positive and significant influence on operations

performance.

The results of multiple regressions, as presented in Table 4.13 above, revealed that CRM
organization had a positive and significant effect on customer satisfaction with values (β=0.317, t
= 5.119, p < 0 .000). Thus, the proposed hypothesis was accepted. Here also the beta coefficient
implies that if the Ethiopian Electric Utility changes its CRM organization by one %, by keeping
the other variables constant its operations performance would increase by 31.7%. Therefore, CRM
organization had a positive and significant effect on operations performance.

Hypothesis 3: Customer knowledge management has positive and significant influence on

perations performance.

The results of multiple regressions, as presented in Table 4.13 above, revealed that Knowledge
management had a positive and significant effect on market performance with values (β = 0.216,
t = 4.665, p =0.000). The results clearly indicated that the proposed hypothesis was accepted. This
implies that assuming other variables constant, a one % change in the customer knowledge
management practice of the Ethiopian Electric Utility results in an 21.6% increase in the operations
performance of the Ethiopian Electric Utility. Therefore, customer knowledge management had a
positive and significant effect on operations performance.

Hypothesis 4: Technology based CRM has positive and significant influence on operations
Performance

50
The results of multiple regressions, as presented in Table 4.13 above, revealed that CRM based
technology had a positive and significant effect on operations performance with values (β = 0.
437, t = 6.076, p <0.000). Thus, proposed hypothesis was accepted. In this case the beta coefficient
describes that keeping the other variables constant, in this model a one % change in the overall
CRM technology, the consequence would be an increase in operations performance by 43.7 %.

Generally, the results of multiple regression analysis supported the four hypotheses constructed to
test a positive and significant influence that each CRM dimensions have on operations
performance. This finding is also supported findings of by (Gebeyehu, 2014). Ehich CRM
dimensions have a positive and significant influence on operations and market performance in the
Ethiopian Electric Utility’s.

Table 4.14. Summary of hypothesis testing

Hypothesis Tool Outcome

H1: Key customer focus has positive and significant Multiple Regression Accepted
influence on operations performance
H2: CRM organization has positive and significant Multiple Regression Accepted
Influence on operations performance.
H3: Customer knowledge management has positive Multiple Regression Accepted
and
significant influence on operations performance Multiple Regression Accepted
Source: Own Survey (2022) n=241

51
 CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1.Summary of Major Findings

The main purpose of this study is to investigate the effect of customer relationship management
on operations performance in the selected districts and head office level of Ethiopian Electric
Utility. To examine the effect of CRM on operations performance, the specific objectives were :
examining the perceptions of employees towards CRM in the case Ethiopian Electric Utility;
assessing the firm's operations performance; analyzing the relationship between dimensions of
CRM (key customer focus, knowledge management, technology based CRM and CRM
organizations) and operations performance and to identifying the relative influence of CRM
dimensions (key customer focus, knowledge management, CRM based technology and CRM
organizations) on operations performance of the case Ethiopian Electric Utility.

Before going to the main analysis of the study, a reliability test was administered to check whether
the questionnaire is reliable or not. In this regard all the quaternaries were reliable and acceptable
with Cronbach's Alpha result of 0.913 values.

Regarding employee’s perception towards CRM dimensions, generally in the Ethiopian Electric
Utility the practice of customer relationship management was low. Moreover, the perception of
employees towards the Ethiopian Electric Utility's operations performance was not satisfied.

In addition, the result of correlation analysis was made. In this regard all the independent variables
(key customer focus, CRM organization, customer knowledge management and CRM based
technology) are positively and significantly correlated with the dependent variable (operations
performance) (P <0.000). The highest correlation is attached to CRM organization (r= 0.840),
followed by CRM based technology (r=0.803), key customer focus (r=0.730) and customer
knowledge management (r=0.724).

Finally, a multiple regression analysis was conducted to test the hypothesis. In this regard the result
shows that the model tested is significant (p<0.000) with the adjusted R square 0.818. This value
indicates that 81.8 % of variance in operations performance is attributed to the four independent
variables entered into the regression. The remaining 18.2 % of the variance in operations

52
performance may attribute to other factors. Regarding the hypothesis all the beta coefficients were
found significant to all hypotheses in the study are accepted. Moreover, the finding revealed that,
CRM based technology is found being the most dominant dimension in determining the variation
in operations performance of the Ethiopian Electric Utility.

5.2.Conclusion
Prior empirical work on CRM implies that in building effective relationship, customer relationship
management plays a key role. The present research seeks to investigate the effects of CRM on
operations performance of Ethiopian Electric Utility. Thus, on the base of the finding the following
conclusions were made.

The perception of employees towards CRM practice and operations performance of the Ethiopian
Electric Utility, the findings of the study practically showed that the practices of each CRM
dimensions (key customer focus, CRM organization, customer knowledge management and CRM
based technology) and the Ethiopian Electric Utility's operations performance in terms of
increasing effectiveness was perceived as low.

As the finding of correlation analyses confirmed, there is also a strong, positive and significant
relationship between customer relationship management dimensions (key customer focus, CRM
organization, customer knowledge management and CRM based technology) and operations
performance. Similarly, from multiple regression analysis result that variability in operations
performance is resulted from the variability in CRM dimensions (key customer focus, CRM
organization, customer knowledge management and CRM based Technology). Hence, from this
the study concludes that the Ethiopian Electric Utility's operations performance is determined by
the emphasis that the Ethiopian Electric Utility gives to each dimensions of customer relationship
management.

Also the relative influence of an individual component of customer relationship management on

operations performance, the result of multiple regression coefficient shows that CRM based
technology is the most dominant dimension in determining the operations performance of the
Ethiopian Electric Utility. Finally, the results of this study revealed that customer relationship
management implementation influences operations performance. Hence, it can be concluded that

53
operations performance in the sampled district was reduced due to low practice of customer
relationship management.

5.3. Recommendations
Based on the research findings the following recommendations are provided in order to upgrade
level of customer relationship management practice and improve operations performance of the
Ethiopian Electric Utility. These include:

 The Ethiopian Electric Utility need to identify, differentiate and interact customers who are
more important to the Ethiopian Electric Utility and should start providing customized service
for those identified key customers.
 The Ethiopian Electric Utility's management need to examine the existing organizational
structure, processes and methods in which service is offered and where necessary changes
should have made which can improve the service for customers and build long term
relationship.
 In order to improve the level of customer knowledge management, the management of the
Ethiopian Electric Utility needs to incorporate CRM concepts in all the Ethiopian Electric
Utility's policies and plans.
 The Ethiopian Electric Utility need to improve the level of its CRM based technologies to
continuous interaction with its customer. This may require adopting new methods and
techniques in communication such as the use of email, SMS and other communication
devises.
 In addition, to improving CRM practices, the Ethiopian Electric Utility is recommended to
update itself to dynamic changes in the demand and expectation of customers in the industry.
 As it has been mentioned earlier, it is not possible to generalize this finding for all branches
of the Ethiopian Electric Utility as the samples of this study cannot represent all. Hence,
further studies which consider all branches of the Ethiopian Electric Utility, the Ethiopian
Electric Utility, and other industries are recommended for generalizing the findings.

54
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 Appendix A

Bahir Dar University

College of Business and Economics

Post Graduate Program in Masters of Business Administration

Questionnaire to be filled by Employees

Dear Respondents: - My name is Fetih Kefyalew. I am studying Masters of

Business Administration in Bahir Dar University. Now I’m going to conduct study on the "effects
of Customer Relationship Management on operational Performance in the case of Ethiopian
Electric utility, Bahir Dar district, I would like to express my deep appreciation for your generous
time, honest and prompt responses.

Objective: -This questionnaire is designed to collect data about the “The effects of Customer
Relationship Management on operational Performance in the case of Ethiopian Electric utility,
Bahir Dar district.". The information that you offer me with this questionnaire will be used as a
primary data in my study which I am conducting as a partial fulfilment of the requirements for the
Masters of Business Administration (MBA) degree. Therefore, this research is to be evaluated in
terms of its contribution to our understanding of Customer Relationship Management (CRM) and
its effects on operational Performance.

General Instructions

• No need of writing your name.

• In all cases where answer options are available please tick (√) in the appropriate box.

Confidentiality:-I want to assure you that this research is only for academic purpose
authorized by Bahir Dar University. No other person will have to access this collected data.

Thank you for your cooperation!!

60
PART A: Demographic Information
1. Sex: Male Female

2. Age: 25 years or less between 26– 30 Years

Between 31– 40Years between 41– 50 Years

51 years and above

3. Education level: Certificate Diploma

Degree Masters and above

4. Experience:
5 years or less from 6 – 10years

From 11 – 15 Years 16 years & above

5. Marital Status: Single Married

Divorce Other

61
PART B: level of opinion
Please state your level of opinion for each given statement using the following scales:

1 = Strongly Disagree 2 = Disagree 3 = Neutral 4 = Agree 5 = Strongly Agree

Perceptions of respondents towards the effects of CRM on Agreement scale
No. operational performance
Items 1 2 3 4 5
Customer focus SD D NO A DA
1. Ethiopian Electric Utility, Bahir Dar district works with customers
1 2 3 4 5
need to customize its offerings.
2. Ethiopian Electric Utility, Bahir Dar district sets clear objectives and
1 2 3 4 5
strategies for key customers.
3. Ethiopian Electric Utility, Bahir Dar district makes coordinated efforts
1 2 3 4 5
to modify a service for key customers
4. Ethiopian Electric Utility, Bahir Dar district is continuously delivering
superior and added value for key customers 1 2 3 4 5
5. The Electric Utility, Bahir Dar district is meeting and ensuring key
1 2 3 4 5
customer needs
6. All employees in our Ethiopian electric utility treat customers with
1 2 3 4 5
special care.
Organized Customer relationship management SD D NO A DA
1. The Ethiopian electric utility has good organizational structure that
1 2 3 4 5
attract customers
2. The Ethiopian electric utility is committed to utilize wide
1 2 3 4 5
organizational resources
3. The Ethiopian electric utility adopted flexible organizational
1 2 3 4 5
structure and arrangement
4. There is a coordination for focused customer services
1 2 3 4 5
5. Our Ethiopian electric utility structure is carefully designed around
1 2 3 4 5
our customers.
6. There is a cross-functional team organized to coordinate its services

62
 1 2 3 4 5
7. The Ethiopian electric utility has good organizational image
1 2 3 4 5
Customer knowledge management SD D NO A DA
1. The Ethiopian electric utility enables ongoing and two-way
1 2 3 4 5
communication
2. There is good management practice that would create customers to
1 2 3 4 5
have good expectation
3. Customer-centric functions are staffed with well-trained and
1 2 3 4 5
motivated employees.
4. The Ethiopian electric utility manages all customer communications
so that they are consistently superior and relevant to the customer. 1 2 3 4 5
5. There is a successful dissemination of knowledge management system
1 2 3 4 5
6. The management has the ability to transform locally acquired new
1 2 3 4 5
knowledge into organization-level knowledge.
7. The management has the ability to trial customer behavior
1 2 3 4 5
8. Workers in the Ethiopian electric utility have detail knowledge of
1 2 3 4 5
every procedure as per their duties.
9. The staff members of the Ethiopian electric utility have the ability to
1 2 3 4 5
interact and work well with others
10. Workers have the ability to handle customers and to solve their
1 2 3 4 5
complaints
Customer relationship management-based Technology SD D NO A DA
1. Ethiopian electric utility maintains a comprehensive database of our
1 2 3 4 5
customers.
2. Ethiopian electric utility has the right hardware and software to serve
1 2 3 4 5
our customers.
3. The Ethiopian electric utility has assigned the right technical
1 2 3 4 5
personnel to provide technical support for the utilization of
computer technology in building customer relationships.

63
 4. The Ethiopian electric utility provides Information Technology
facilities, like computer aided design for managing customer 1 2 3 4 5
relationships
5. Our staffs give much attention and prompt services to our customers
1 2 3 4 5
irrespective of their status using online media.
6. Data warehousing and data mining have already been implemented.
1 2 3 4 5
7. We communicate with our customers with telephones to meet their
1 2 3 4 5
urgent requests and needs.

Part C: Operational Performance

Kindly indicate using the scale below on the effects of Customer Relationship management
practices on operational performance of Ethiopian electric utility.

Scale: (1 =Strongly Disagree, 2 =Disagree, 3=No Opinion, 4 =Agree, 5 = Strongly

Agree (round appropriate)

Operational performance SD D NO A DA

1 The practice of giving customized service for its 1 2 3 4 5

customers contributed a lot for the Ethiopian Electric
Utility’s performance.
2 The Ethiopian Electric Utility 's districts and branches 1 2 3 4 5
are appropriately located around ideal or convenient
places for its customer to sustaining them and improve
Ethiopian Electric Utility performance
3 In line with its objective, the Ethiopian Electric Utility is 1 2 3 4 5
becoming highly effective in the industry
4 The technology which is applied in the Ethiopian Electric 1 2 3 4 5
Utility is appropriate so that the Ethiopian Electric Utility
is improving its operations performance.
Any other? Please indicate.

64
………………………………………………………………………………………

Thank you for your participating!!

APPENDIX-B

ባህር ዳር ዪኒቨርሲቲ ቢዝነስና ኢኮኖሚክስ ኮሌጅ

የስራ አመራር ትምህርት ክፍል የድህረ ምረቃ የንግድ ስራ አስተዳደር ፕሮግራም

በሰራተኞች የሚሞላ መጠይቅ፡-

ውድ ተሳታፊዎች በመጀመሪያ ውድ ጊዜያችሁን በመስዋት እና በመጠቀም መልስ በመስጠታችሁ ከልብ

የመነጨ ምስጋናየን አቀርባለሁ፡፡

እኔ የባህርዳር ዩኒቨርሲቲ የቢዝነስና ኢኮኖሚክስ ኮሌጅ የስራ አመራር ትምህርት ክፍል የድህረምረቃ

የሁለተኛ ዲግሪ ተማሪ ስሆን ባሁኑ ጊዜ የመመረቂያ ጥናቴን የኢትዮጵያ ኤሌክትሪክ ሃይል ኮርፖሬሽን ባህር

ዳር ወረዳ ‹‹የደንበኞች ግንኙነት አስተዳደር በሥራ አፈጻጸሙ ላይ ያለው ተጽእኖ›› ነው፡፡ በመሆኑም እርሰዎ

በዚህ ጥናት በመሳተፍ የሚሰጡት መረጃ ለጥናቱ እጅግ በጣም አስፈላጊ ስለሆነ መጠይቁን በመመሪያው

መሰረት በመሙላት ትብብር እንዲደርጉልኝ ስል በአክብሮት እጠይቃለሁ፡፡ የሚሰጡት መረጃ በሚስጥር

የሚያዝ እና ለዚህ ጥናት ብቻ የሚውል ነው፡፡

የዚህ ፅሁፍ መጠይቅ ሶስት ክፍሎችን ይይዛል፡፡

 ክፍልአንድ፡- ስለ ግለሰብ አጠቃላይ መረጃ

 ክፍልሁለት፡- ስለ ደንበኞች ግንኙነት አስተዳደር

 ክፍልሶስት፡- ስለ ስራ አፈፃፀም
አጠቃላይ መረጃ

 ስም መጻፍ አያስፈልግም፡፡

 እያንዳንዱን ዓረፍተ ነገር በአግባቡ በማንበብ መልስ ይስጡ፡፡

 ለግለሰብ ጠቅላላ መረጃ መልስዎን ከባዶቦታው ላይ ‹‹√›› በመጠቀም ይሙሉ፡፡

ለክፍልሁለትእናለክፍልሶስትጥያቄዎች ከ1-5 ካሉትምርጫዎችአንዱንበማክበብመልስይስጡ፡፡

ለሚያደርጉት ትብብር ከወዲሁ ከልብ አመሰግናለሁ፡፡

65
እውነተኛ መረጃ ለትክክለኛ ውጤት ወሳኝ ነው፡፡ ሥልክ ቁጥር፡- 0934668117

ክፍል አንድ ፡- የግለሰብ ጠቅላላ መረጃ

መመሪያ፡-በተገቢው ሳጥን ወስጥ የ‹‹√››ምልክት ያድርጉ፡፡

1. ጾታ: ወንድ ሴት

2. ዕድሜ: 25 አመት እና በታች ከ 25 እስከ 30 አመት

ከ 31 እስከ 40 አመት ከ 41 እስከ 50 አመት

ከ 50 አመት በላይ

3. የትምህርት ደረጃ: ምስክር ወረቀት ዲፕሎማ

የመጀመሪያ ዲግሪ ሁለተኛ ዲግሪ እና በላይ

4. የአገልግሎት ዘመን: ከ 5 ዓመትያነሰ ከ 6-10 ዓመት

ከ 11-15 ዓመት ከ 16 ዓመትበላይ

5. የጋብቻ ሁኔታ; ያላገባ/ች ያገባ/ች

የፈታ/ች ሌላ

66
ክፍልሁለት፡- ደንበኞች ግንኙነት አስተዳደር
መመሪያ፡-

ከዚህ በታች የተዘረዘሩት ጥያቄዎች ሰራተኞች ስሜታቸውን ማወቅና መረዳት ባህርይ በትክክል ይግልፃሉ፡፡

በመሆኑም የምትሞሉትን አማራጭ ከ1-5 ካሉት አማራጮች አንዱን በማክበብ መልስ ስጡ፡፡

ከ1-5 ባሉ አማራጮች ውስጥ 1. በጣም አልስማማም 2. አልስማማም 3. መወሰን አልችልም 4. እስማማለሁ 5.

በጣም እስማማለሁ በሚል ይወከላሉ፡፡

ሀ. የደንበኛ ትኩረት

አልስማማ
አልስማም

እስማማለ

እስማማለ
አልችልም
መወሰን
የደንበኛ ትኩረት
በጣም

በጣም
ም

ሁ
1. የኢትዮጵያ ኤሌክትሪክ አገልግሎት፣ ባህር ዳር ዲስትሪክት
ከደንበኞች ጋር የሚሰራው አቅርቦቱን ማስተካከል 1 2 3 4 5
አለበት።
2. የኢትዮጵያ ኤሌክትሪክ አገልግሎት በባህር ዳር ወረዳ
ለዋነኛ ደንበኞች ግልጽ አላማዎችን እና ስትራቴጂዎችን 1 2 3 4 5
አስቀምጧል።
3. የኢትዮጵያ ኤሌክትሪክ አገልግሎት በባህር ዳር ወረዳ
ለዋነኛ ደንበኞች የሚሰጠውን አገልግሎት ለማሻሻል 1 2 3 4 5
የተቀናጀ ጥረት አድርጓል።
4. የኢትዮጵያ ኤሌክትሪክ አገልግሎት ባህር ዳር ወረዳ
ለዋነኛ ደንበኞች የላቀ እና ተጨማሪ እሴት እያቀረበ
1 2 3 4 5
ይገኛል።
5. የባህር ዳር ወረዳ ኤሌክትሪክ አገልግሎት ዋና
የደንበኞችን ፍላጎት በማሟላት ላይ ይገኛል። 1 2 3 4 5
6. በኢትዮጵያ ኤሌክትሪክ አገልግሎት ውስጥ ያሉ ሁሉም
ሰራተኞች ደንበኞቻቸውን ልዩ እንክብካቤ ያደርጋሉ። 1 2 3 4 5

67
ለ. የተደራጀ የደንበኞች ግንኙነት አስተዳደር

አልስማማም
አልስማማም

እስማማለሁ

እስማማለሁ
አልችልም
የተደራጀ የደንበኞች ግንኙነት አስተዳደር

መወሰን
በጣም

በጣም
1. የኢትዮጵያ ኤሌክትሪክ አገልግሎት ደንበኞችን የሚስብ
ጥሩ ድርጅታዊ መዋቅር አለው። 1 2 3 4 5
2. የኢትዮጵያ ኤሌክትሪክ አገልግሎት ሰፊ ድርጅታዊ
ሀብቶችን ለመጠቀም ቁርጠኛ ነው። 1 2 3 4 5
3. የኢትዮጵያ ኤሌክትሪክ አገልግሎት ተለዋዋጭ ድርጅታዊ
መዋቅር እና አደረጃጀትን ይቀበላል፡፡ 1 2 3 4 5
4. የደንበኞች ተኮር አገልግሎቶች ቅንጅት አለ።

1 2 3 4 5
5. የእኛ የኢትዮጵያ ኤሌክትሪክ አገልግሎት መዋቅር
በደንበኞቻችን ዙሪያ በጥንቃቄ የተነደፈ ነው። 1 2 3 4 5
6. አገልግሎቶቹን ለማስተባበር የተደራጀ ቡድን አለ።
1 2 3 4 5
ሐ. የደንበኛ እውቀት አስተዳደር
አልስማማም
አልስማማም

እስማማለሁ

እስማማለሁ
አልችልም

የደንበኛ እውቀት አስተዳደር

መወሰን
በጣም

በጣም

1. የኢትዮጵያ ኤሌክትሪክ አገልግሎት ቀጣይነት ያለው እና

ባለሁለት መንገድ ግንኙነት እንዲኖር ያስችላል፡፡ 1 2 3 4 5
2. ደንበኞች ጥሩ ተስፋ እንዲኖራቸው የሚያደርግ ጥሩ
የአስተዳደር አሠራር አለ። 1 2 3 4 5
3. ደንበኞችን ያማከለ ተግባራት በደንብ የሰለጠኑ እና
ተነሳሽነት ባላቸው ሰራተኞች የተሞሉ ናቸው. 1 2 3 4 5
4. የኢትዮጵያ ኤሌክትሪክ አገልግሎት ሁሉንም የደንበኞች
ግንኙነት በቋሚነት የላቀ እና ከደንበኛው ጋር ተዛማጅነት 1 2 3 4 5
እንዲኖረው ያስተዳድራል።

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5. የእውቀት አስተዳደር ስርዓት ስኬታማ ስርጭት አለ።
1 2 3 4 5
6. አስተዳደሩ በአካባቢው የተገኘውን አዲስ እውቀት ወደ
ድርጅት ደረጃ እውቀት የመቀየር ችሎታ አለው። 1 2 3 4 5
7. አስተዳደሩ የደንበኞችን ባህሪ የመሞከር ችሎታ አለው።
1 2 3 4 5
8. በኢትዮጵያ ኤሌክትሪክ አገልግሎት ውስጥ ያሉ
ሠራተኞች እንደየሥራቸው አሠራር ዝርዝር ዕውቀት 1 2 3 4 5
አላቸው።
9. የኢትዮጵያ ኤሌክትሪክ አገልግሎት ሰራተኞች ከሌሎች
ጋር የመገናኘት እና የመስራት አቅም አላቸው። 1 2 3 4 5
10. ሰራተኞች ደንበኞችን የማስተናገድ እና ቅሬታቸውን
የመፍታት ችሎታ አላቸው። 1 2 3 4 5
መ. በደንበኞች ግንኙነት አስተዳደር ላይ የተመሰረተ ቴክኖሎጂ

አልስማማ

አልስማማ

እስማማለ

እስማማለ
አልችልም
መወሰን
በደንበኞች ግንኙነት አስተዳደር ላይ የተመሰረተ

በጣም

በጣም
ቴክኖሎጂ

ሁ
1. የኢትዮጵያ ኤሌክትሪክ አገልግሎት የደንበኞቻችንን
አጠቃላይ የመረጃ ቋት ይይዛል፡፡ 1 2 3 4 5
2. የኢትዮጵያ ኤሌክትሪክ አገልግሎት ደንበኞቻችንን
የሚያገለግል ትክክለኛ ሃርድዌር እና ሶፍትዌር አለው። 1 2 3 4 5
3. የኢትዮጵያ ኤሌክትሪክ አገልግሎት የደንበኞችን ግንኙነት
ለመገንባት የኮምፒዩተር ቴክኖሎጂ አጠቃቀምን 1 2 3 4 5
በተመለከተ የቴክኒክ ድጋፍ ለመስጠት ትክክለኛ የቴክኒክ
ባለሙያዎችን መድቧል።
4. የኢትዮጵያ ኤሌክትሪክ አገልግሎት የደንበኞችን ግንኙነት
ለማስተዳደር በኮምፒዩተር የታገዘ ዲዛይን የመሰለ 1 2 3 4 5
የኢንፎርሜሽን ቴክኖሎጂ አገልግሎት ይሰጣል።
5. ሰራተኞቻችን የመስመር ላይ ሚዲያን በመጠቀም
ሁኔታቸው ምንም ይሁን ምን ለደንበኞቻችን ብዙ ትኩረት 1 2 3 4 5
እና ፈጣን አገልግሎቶችን ይሰጣሉ።
6. በትክክልበማዳመጥየጋራመግባባትናየመረጃልውውጥእን
ዲኖርአደርጋለሁ፡፡ 1 2 3 4 5
7. አስቸኳይ ጥያቄዎቻቸውን እና ፍላጎቶቻቸውን ለማሟላት 1 2 3 4 5
ከደንበኞቻችን ጋር በስልክ እንገናኛለን።

69
 ክፍል ሶስት፡- የስራ አፈፃፀም በተመለከተ

መመሪያ፡- ከዚህ በታች የተዘረዘሩት ጥያቄዎች የሰራተኞችን አፈፃፀም በትክክል ይገልፃሉ፡፡ በመሆኑም ከላይ
በተገለፀው መሰረት ከ1-5 ካሉት አማራጮች አንዱን በማክበብ መልስ ስጡ፡፡

አልስማማም
አልስማማም

እስማማለሁ

እስማማለሁ
አልችልም
መወሰን
በጣም

በጣም
የስራ አፈጻጸም

1. ለደንበኞቹ ብጁ የሆነ አገልግሎት የመስጠት ልምድ

ለኢትዮጵያ ኤሌክትሪክ አገልግሎት አፈጻጸም ከፍተኛ 1 2 3 4 5
አስተዋጽኦ አድርጓል።
2. የኢትዮጵያ ኤሌክትሪክ አገልግሎት አውራጃዎችና
ቅርንጫፎች ደንበኞቻቸው እንዲረዷቸው እና የኢትዮጵያ 1 2 3 4 5
ኤሌክትሪክ አገልግሎት አፈጻጸምን ለማሻሻል ምቹ ወይም
ምቹ በሆኑ ቦታዎች ላይ በትክክል ተቀምጠዋል።
3. ከዓላማው ጋር ተያይዞ የኢትዮጵያ ኤሌክትሪክ አገልግሎት
በኢንዱስትሪው ውስጥ ውጤታማ እየሆነ መጥቷል። 1 2 3 4 5
4. ያከናውናል፡፡ የኢትዮጵያ ኤሌክትሪክ አገልግሎት የሥራ
አፈጻጸሙን እያሳደገ እንዲሄድ በኢትዮጵያ ኤሌክትሪክ 1 2 3 4 5
አገልግሎት ውስጥ የሚተገበረው ቴክኖሎጂ ተገቢ ነው።

እውነተኛ መረጃ በትክክል ስለሞሉልኝ ከልብ አመሰግናለሁ!!!

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