Introduction
This research mainly focuses on the connection between quality service and customers satisfaction in banks and businesses. Quality service according to Caruana is an evaluation to understand how effective a particular service meets customers’ needs and demands. This research also will confirm that these two constructs work independently but are related (Caruana, A. (2012). Typically, an increase in the type of service offered to customers leads to an increased effectiveness in meeting customers’ expectations. In addition, it is to customer satisfaction that customers’ loyalty is boosted. Generally, there are services that should be put in place for banks and businesses to achieve the objective of meeting customers’ demands and needs.
Literature Review
The type level and quality of service given offered to customers have a great impact on customer satisfaction. This is because customers expect to get the value of their money. Nevertheless, customers expect to have access to any important information which is important in decision making (Arokiasamy, A. A. (2013). Evidently, poor or low-quality services to customers lead to shifting of clients to other service providers. Some of the industries that are much affected by this are banking and hospitality industries. Typically, the quality of service as discussed later determines the loyalty of the customer.
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Customer loyalty is directly proportional to the quality of service and customer satisfaction. It is therefore worth mentioning that these elements are related to business. Evidently, many bank users and other business customers go for services in institutions where they are offered with highest quality services. A bank which has good services to customers experiences the same customers coming for the services from time to time. Although the number of competitors might increase, high-quality services provider institutions will continuously experience customer loyalty (Arokiasamy, A. A. (2013). More so, customer loyalty tends to attract more potential customers in that particular institution.
The banking industry and other industries use communication and technology in their operations. Effective communication and use of technology improve the efficiency and effectiveness of any business. These factors are important because they are the key element in maintaining and achieving customer loyalty. More precisely, a bank that has effective communication eliminates the middlemen and encourages direct interaction with clients with the industry itself. In addition, technology has become very crucial in every industry. Through technology, customer service is improved and time taken for the service is reduced. Technology has also played a major role in attaining customer loyalty and satisfaction (Bagherzad, A, Chavosh, A. Hosseinikhah, S. (2011). The case is similar in the banking industry where technology has taken almost every role. Banks which use a high level of technology have effective communication and increased customer loyalty. In addition, a customer can access services through the internet at homes and workplaces.
Services have several features which are based on how the services are offered to customers. These characteristics of services are that they are intangible, inseparable and heterogeneity of variable. Most bank services are not seen by the customers and their results are not seen. This type of service is intangible. Secondly, there are inseparable services which are offered in banks where loan renders become part of the service on how the loan is offered and granted to clients. Lastly, several banks have different branches which should offer similar services and the quality of service may be homogenous from branch to branch (Chakravarty, S. (2003). This type of service is said to have heterogeneity variability feature. Lastly, services are perishable and cannot be stored. For example, the time cashier is idle during a low business day cannot be used to provide extra service during a busy day in a certain bank.
Customer services in the banking industry are classified in the means of delivering the service and type of providers of the services. Bank services can be delivered through machines or the bank staffs. On the other hand, services are also classified according to the organization providing the services. Service providers include businesses, government and not –for profit making organization. Evidently, the intangibility of services is said to make its evaluation more difficult than for tangible products (Haumann, T., Quaiser, B., Wieseke, J., Rese, M. (2014). Although this is the case in banks, the characteristics make these services more subjective products. This is because the quality is a matter of how one feels and the feeling differs between individuals.
Method of data collection
The research considered management, staffs, and customer during data collection process. Out of the bank population, in the research, the sample consisted of five members of management, staff, and customers. This was through simple sampling process where all the management staff and subordinate staff and customers were provided. After the sampling, there were several research methods which we used to collect data and information. For the purpose and merits of this research, questionnaires and interviews were used. Through highly structured questions which are written and provided to specific respondents, specific questions were provided with solutions (Chakravarty, S. (2003).This research used open –ended and close ended type of questionnaire. In an open-ended questionnaire, the selected respondent was free to provide answers in their own opinions because they were not limited to select answers from the range of alternatives.
On the other hand, close-ended provided the responded with alternatives and simple answers were provided in the questionnaire where respondent was supposed to select an answer. To gather detailed information, this research used both primary and secondary methods of data collection. On primary methods, there was a collection of data from specific bank premises which was collected personally through the use of questionnaire and interviews. Through these methods of data collection under the primary category, original data was obtained for the purpose of this research. On the other hand, there was use secondary data which was necessary to ensure detailed research work. This method involved consultation and use of written articles and internet (Arokiasamy, A. A. (2013). Although primary sources gave information, this information was not detailed and explained; therefore the secondary method of data collection supplemented the data and explanations that were not given by primary sources.
Findings and discussion
Evidently, from the research methodologies, there were several outcomes as related to quality service and customer satisfaction. From interview and questionnaires, it was clear that there is a crucial need for service in business leave alone the banking industry. The need for service quality is influenced by several factors. From this research, service quality is driven by clients, employees and a changing business environment. This is because bank users are well informed of all alternatives of financial services on offer, the providers of the service and the advanced standard for service (Haumann, T., Quaiser, B., Wieseke, J., Rese, M. (2014). As a result, it was found that customers’ expectations rise and they become concern about the quality of service received.
More precisely, to get the number of bank customer that responded positively to the use of technology in offering bank services, a questionnaire shown that out of the five selected customer four were positive about the use of technology. Customers claimed that through self-service machines like automated teller machine, and mobile banking, there was less time used during bank transitions. For example, management staff in Ghana commercial bank argued that, before the initiation of machines in banks, they experienced long queues in the institutions (Arokiasamy, A. A. (2013). This resulted in a lot of time wastage by the customers.
Additionally, through an interview with five management staff of several banks, it was evident that technology has improved the quality of service in the banking industry. These staffs argued that through technology; there has been improved communication between the clients and the bank. For instance, a customer at his or her office would inquire about his bank statement through internet and mobile phone. Through the internet, any bank with online services provided better services (Chakravarty, S. (2003). Currently, with the growth in technology, it is illogical for a bank user to travel to the bank to have a bank statement. This service has been brought closer to the customers through the use of technology.
Besides, customer satisfaction was found to be dependent on the quality of service. Typically, every customer would want to be associated with institutions that offer good quality service. From the questionnaire and interviews, it was found that in banks where there are machines and effective communication, customers were satisfied with the services as it saved them money time and provided them security (Chakravarty, S. (2003). For instance, this research used one businessman as a customer sample. This customer said that through the self-service machines his security was improved. This is because in case of huge withdrawals it is only him and either his personal assistance would understand that there was huge sum of money withdrawn from an Automated Teller Machine. This was different from having queues in banks where everybody would see the amount of money one has withdrawn thus causing insecurity.
Additionally, it was found that there is a need for service in the banking industry. This is because knowledge and benefits of keeping current customers through quality service lead to attraction of new customers to those specific banks. More precisely, quality service was found to lead to customer satisfaction. Similar, customer satisfaction is closely related to customer loyalty. From interviews as the primary source of data, the research found that customers who were satisfied with the type of service provided always can for the services in the same banks (Jamal, A., Naser, K. (2012). This shown that service quality, customer satisfaction, and customer quality are closely related. Through an interview with the management staff, it was clear that 96% of customers from banks which had all the necessary equipment in service provision were always loyal to those institutions. In addition, due to the tightened loyalty, these customers attracted new clients in these banks.
The research also found that there are several benefits of service quality. The banking industry may face complaints from clients. Evidently, 50% of customers who are dissatisfied will complain and tell a number of other customers. From a questionnaire, the one dissatisfied customer claimed that in case of poor service, a letter was written to the management and still consultations from other customers were crucial. this research has shown that if a financial institution provides quality service to one customer, it gains three, and the case was different if it provided poor quality as if it provided low quality to one customer it losses three.
It was also found that through customer loyalty, which is determined by customer satisfaction, there is increased business as they lead to attraction of new customers; hence retention of customers is cheaper than attracting new customers. In addition, it was found that customer satisfaction leads to increased opportunities for cross-selling of services in banking and financial institutions. Similarly, good service quality also was found to enhance corporate image (Hutchinsona, J., Laib, F., Wang, Y. (2009). Evidently, customers are comfortable with banks that allowed them to make transactions even without visiting the bank physically. As technology continues to be in use, organizations improve not just the quality of communication, but also convenience. Customers can get most of their services through internet and at any time (Mosahab, R. (2010). According to this research, loyalty is also determined by the ability of the company to enhance continuous improvement through invention and innovation.
Analyzing the data collected it was clear that due to the use of machine and technology in banks, the transaction time is reduced by half as many customer use machines and online banking to do their transactions. From the Ghana commercial bank, it was found that the number of the new customers was as a result of retention of the previous customers (Haumann, T., Quaiser, B., Wieseke, J., Rese, M. (2014). Although services in financial sectors are intangible, there are several factors that determine the quality of service. These elements include the people supplying the service, process used in supplying the service and physical evidence. These factors are key influential on customer satisfaction.
Conclusion
Quality service is closely related to customer satisfaction. Customer satisfaction is not important in banking industry alone but also in other businesses. Through technology, banks have innovated Automated Teller Machine that makes transaction easier for customers. Similarly, banks have struggled to meet the objective of customer satisfaction. Form this research, customer satisfaction lead to customer loyalty and retention which is a great objective not only in banks but in all industries. Conclusively, service quality is an imperative element in the determination of prosperity of financial institutions. High-quality services create customer satisfaction, which consequently generates customer loyalty (Oliver, R.L. (2010). Customer loyalty leads to retention and attraction of more potential customers. Besides, banks and organizations ought to devise reliable systems of communicating to customers and potential customers about the available services. As the research was on banking, the use of technology in banks has improved the quality of service offered and this leads to business excellence.
References
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