Abstract:
This study explores the role of Customer Relationship Management (CRM) practices in shaping
customer loyalty at three Awash Bank branches in Holeta City, Ethiopia. The primary objectives
were to assess the current state of CRM implementation, evaluate its impact on loyalty, and identify
gaps between urban and rural service contexts. Employing a mixed‐methods explanatory
sequential design, we first surveyed 400 bank customers analyzing data with SPSS 28 (descriptive
statistics, Spearman’s correlation, ordinal logistic regression) and then conducted in‐depth
interviews with 45 branch staff, which were thematically analyzed. Key findings indicate
significant urban–rural disparities: urban branches achieved higher scores on Technology‐Based
CRM (mean 4.5/5) and Key Customer Focus (mean 4.4/5), correlating with superior loyalty levels
(mean 4.3/5), whereas rural branches lagged (technology mean 3.0; loyalty mean 3.2) due to
infrastructure and process constraints. Ordinal logistic regression identified Technology‐Based
CRM as the strongest predictor of loyalty (OR = 2.43, p < 0.001), followed by Key Customer
Focus, Knowledge Management, and CRM Organization, all exerting significant positive effects.
Qualitative insights corroborated these results, highlighting digital efficiency as a key driver of
satisfaction in urban areas and emphasizing that connectivity gaps and manual record‐keeping
undermine rural performance. In conclusion, our findings validate established CRM frameworks
in a semi‐urban Ethiopian context and underscore the need for tailored strategies. We recommend
that Awash Bank invest in offline‐capable CRM technologies, enhance staff training in rural
branches, leverage data analytics for targeted customer services, and advocate for policies to
improve digital infrastructure thereby bridging the urban–rural divide, strengthening customer
retention, and fostering broader financial inclusion
