What Is Service Quality And Customer Satisfaction

1.1 Introduction

Service quality is the assessment of expectations with performance. Quality customer service should be a top priority for any enterprise, whether a sole trader, or any bank. Success of a service provider depends on the high quality relationship with customers (Panda, 2003) which determines customer satisfaction and loyalty (Jones, 2002 as cited by Lymperopoulos et al., 2006). Satisfaction is an overall customer attitude or behaviour towards a service provider, or an emotional reaction towards the difference between what customers expect and what they receive, regarding the fulfillment of some desires, needs or goals (Hansemark, & Albinsson, 2004; Kotler, 2000; Hoyer, & MacInnis, 2001). Customer loyalty, on the other hand,

Banks must consider various antecedents (tangibles, reliability, assurance and empathy) of service quality in order to have delighted customers (Sharp, & Sharp, 1997) and to enhance their performance and profitability (Hackl et al., 2000). Furthermore, service quality and customer satisfaction were found to be related to customer loyalty through repurchase intentions (Newman, 2001; Caruana, 2002). It is said that ‘A customer loss is a customer gain for another competitor.’ According to Portela & Thanassolis, (2006), not only empirically studies of the relationship between service quality and customer loyalty in banking system are limited, but also the existing studies on bank branches efficiency in general do not account for the changing role of bank branches. Service quality is of utmost importance in analysing the performance of bank branches, since their survival depends on their service quality levels they provide (Portela &

Prabhakaran and Satya (2003) mentioned that a high customer satisfaction is highly significant in maintaining a loyal customer base in the banking industry. Besides they argue that there is a link between service quality and customers satisfaction. More recently Kumar, Kee and Manshor (2009) did a study and they found that a high quality of service will result in a high customer loyalty. Besides they found a high customer satisfaction will increases customer loyalty. In the same year, Naeem and Saift (2009) found that customer satisfaction is the outcome of high service quality within the banking sector. Customers evaluate service quality by comparing what they expect against what they perceive, situational and personal factors also are considered. To attain true customer satisfaction companies need to achieve quality not only by eliminating the causes for direct complains but need to provide their products or services with excellent, attractive quality provide the delight to the customer. Problems faced by customers are when they come in bank during the working hours it is too rigid and not flexible. Other issue that consumers face is the tedious queues in banks, standing in line for long time is non-productive and a sheer waste of