Customer relationship management and bank profitability in the bank of Kigali: a case study of Nyagatare branch

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Kampala International University, College of Economics and Management
This study was about customer relationship management (CRM) and profitability in the Bank of Kigali and was motivated by the need to examine the impact of the reportedly grossly- neglected customer care and the less-focused-on customer retention, which can be derived from customer satisfaction, on profitability. Three objectives were followed in the study, first of all, to establish the relationship between customer care and profitability in the Bank of Kigali; secondly, to examine the relationship between customer satisfaction and profitability in the Bank of Kigali and, thirdly, to establish the relationship between customer retention and profitability in the Bank of Kigali. The study adopted descriptive and correlation designs that used quantitative and qualitative approaches, where applicable. The study established that there was a positive weak but significant relationship between customer care and bank profitability (r0.3 I 8**, P-value<O.05), customer satisfaction and bank profitability (r0.275**, P-value<O.05), customer retention and bank profitability (r=O.287**, P-value<O.05). And that customer relationship management concept alone contributes to the profitability of the bank 19.9% (adjusted R2 .199). The study concluded that good customer care and customer satisfaction lead to improved profitability levels. It also concluded that if organizations want to improve their profitability, then strategies to retain customers would best help since retained customers cost about five or six times lower than attracting new customers. It is recommended that banks should build strong customer relationship management programs because the study established a positive relationship between customer relationship management and bank profitability.
A research report submitted to the postgraduate studies and research directorate in partial fulfilment of the requirement for the award of a Master’s degree of Business Administration (Management) of Kampala International University
Customer relationship management, Bank profitability, Bank of Kigali