DETERMINANTS OF CUSTOMER RETENTION IN CBE IN CASE OF ROBE TOWN BRANCHES

Today, banking is regarded as a consumer-oriented services industry and banks have started
realizing that their business increasingly depends on the quality of the consumer service
provided and overall satisfaction and retention of the customer. Thus, this research aimed at
finding out the determinant of customer retention in Commercial Bank of Ethiopia. The primary
data was collected by a means of questionnaire. A total of 223 questionnaires were administered
to customers of CBE in four branches and 205 questionnaires were returned and 202 usable for
a comprehensive empirical analysis. Both descriptive and inferential statistics have been used to
find mean score, to test hypothesis, to investigate research problems, objective and questions.
The study had found variables that can determine customer retention in commercial bank of
Ethiopia of Robe town. Five variables are regressed with the dependent variable, i.e. Customer
retention; these variables include customer satisfaction, service quality, service charge,
corporate image and information technology. Multiple regressions model was used to see the
effect of customer satisfaction, service quality, service charge, corporate image and information
technology on customer retention. In addition to that, hierarchical regression model test was
used to test the mediating effect of customer satisfaction on the relationship between service
quality, service charge, corporate image, and information technology towards customer
retention. The results depicted that there was significant positive relationship in between service
quality and customer satisfaction and customer retention. However, the other determinants of
customer satisfaction that are service charge and corporate image have positive association with
customer satisfaction and retention. Information technology has also a significant effect on
customer retention. Thus, such factors should be considered seriously by the commercial banks
of Ethiopia in designing their marketing strategies by widening their branches and providing
good customers services to customers in order to retain their customers.2