Determinants of service quality and its effect on customer satisfaction and loyalty: an empirical study of private banking sector

Abstract

PurposeThe main purpose of this study is to investigate the impact of various service quality dimensions, namely reliability, responsiveness, visibility, employee commitment and access to service on customer satisfaction in the private banking sector of Bangladesh. The research also investigates the relationship between customer satisfaction and loyalty and effect of demographic variables on customer satisfaction.Design/methodology/approachThe researchers distributed 320 self-administered survey questionnaires among private banks' customers in Bangladesh and obtained 200 useable responses with a 62.5% valid response rate. The research data were analysed using confirmatory factor analysis (CFA) and structural equation modelling (SEM) approaches. Analysis of variance and logistic regression have also been used to obtain the supplementary findings.FindingsThe research findings indicate that visibility, responsiveness and employee commitment have positive and significant effect on customer satisfaction, whereas reliability and access to service are found to have insignificant influence on customer satisfaction of private banking services. The findings of this study also revealed that customer satisfaction has positive and significant relationship with customer loyalty. But except respondents' occupation type, all other demographic variables have no statistically significant relation with customer satisfaction.Research limitations/implicationsThe research focused solely on the private banking sector of Bangladesh, and thus the results may not be applicable to other service sectors.Originality/valueThis study conducted on customers' perception of private banking services is based on extended service quality dimensions and its relationship with customer satisfaction towards loyalty. The present research findings are anticipated to offer the guidelines for improving the customer satisfaction and loyalty of private banking services in Bangladesh as well as other countries.

Do women customers love to talk about financial brands? An empirical evidence on the mediated service responsiveness and brand sincerity in creating a positive word of mouth

“…It has also been argued that although high service quality is associated with customer satisfaction, it gets dulled by category attitudes in the financial sector due to disruptive events, however, a responsive attitude helps in bridging the discontent (Farrag et al, 2020). The results are also aligned with the proposition that the use of technology to offer consistent and timely responses to customers has enhanced customer satisfaction (Iberahim et al, 2016;Islam et al, 2020). Hypothesis 2 stated that responsive brands significantly impacted WOM which was not supported in the results (β = 0.044, p = .563) and confirmed the proposition that customers want to experience the journey before speaking good words about a brand (Chaniotakis & Lymperopoulos, 2009;Choi et al, 2018;Sheng, 2019).…”

“…Responsiveness is an acknowledged service concept in the financial industry. Various researchers have highlighted that since the competition has soared because of the influence of technological changes, it has become extremely important for institutions to adopt agility and responsiveness (Islam et al, 2020;Malhotra & Mukherjee, 2004;Mariappan, 2006;Zhu et al, 2002). Responsiveness in the financial sector has been tested in various forms in the literature.…”

Service Quality and Customer Satisfaction of Mobile Banking during COVID-19 Lockdown; Evidence from Rural Area of Bangladesh

“…Service quality is one of the most important factors for customer satisfaction to gain competitiveness of a service organization (Raza et al, 2020). A number of previous researchers found the relations between service quality and customer satisfaction that indicates greater degree service quality leads to greater degree customer satisfaction (Pooya et al, 2020;Kant & Jaiswal, 2017;Vazifehdoost et al, 2014;Islam et al, 2020). The following sections offer the development of the hypotheses based on interconnection between different dimensions of service quality and customer satisfaction in COVID-19 situation.…”

“…Customer loyalty is the crucial element for business enterprises (Bhat et al, 2018), although it is a challenging task for a service firm to make and retain loyal customers (Mainardes et al, 2020). Many researchers pointed out that customer satisfaction influence positively on customer loyalty (Amin et al, 2013;Kashif et al, 2015;Ali & Naeem, 2019;Islam et al, 2020). Customer loyalty develops the customers in behavioral activity to buy the same products or services again and again (Fida et al, 2020).…”

Understanding mediators and moderators of the effect of customer satisfaction on loyalty

“…Satisfied customers share their experiences with others whereas dissatisfied customers share with much more customers about their unhappy experience resulting in the loss of business (Felix, 2017;Taliah, 2007). Moreover, dissatisfied customers may decide not to complain but rather abandon the firm and switch to competitors (Hasfar et al, 2020;Islam et al, 2020). Therefore, service providers should ensure that their customers are satisfied.…”