INTRODUCTION

Banking retailers recognize that customer satisfaction (CS) plays a key role in a successful business strategy. What is unclear is the exact nature of that role, how precisely satisfaction should be managed, and whether managerial efforts aimed at increasing satisfaction lead to higher score in sales. Today, managers in the banking sector undertake substantial efforts to conduct CS surveys. Yet it appears that in most cases the data are used to simply monitor specific attributes, and especially overall satisfaction, over time. Unless the impact of customer satisfaction on revenues is assessed, managers have little basis for allocation of resources.

The concept of customer care is concern with customer satisfaction putting the customer first, anticipating needs and problems, tailoring the product and services to meet needs and being nice to customers it also includes service to the customer, delivery operation, employee relationship with customer and internal relationship between employee and management. In developing customer care strategies and programs, financial services organizations are managing products and services, delivery systems, environment and people so as to provide an efficient and caring service, getting things right the first time and maintaining standards.

Organizations are increasingly interested in retaining existing customers while targeting noncustomers; measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the market place.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which

A study on Customer Satisfaction in Banking sector

Ease of Access. although a large quantity of research in this area has recently been developed. Zeithaml and Berry between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. According to Garbrand. Value. Berry.correlate with satisfaction behaviors such as return and recommend rate. Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation. These factors are emphasized for continuous improvement and organizational change measurement and are most often utilized to develop the architecture for satisfaction measurement as an integrated model.defined ten 'Quality Values' which influence satisfaction behavior. Inter. Front line Service Behaviors. A study on Customer Satisfaction in Banking sector . care should be taken in the effort of quantitative measurement. Commitment to the Customer and Innovation. These ten domains of satisfaction include: Quality. further expanded by Berry in 2002 and known as the ten domains of satisfaction. Efficiency. Brodeur 1998. Work done by Parasuraman.departmental Teamwork. Because satisfaction is basically a psychological state. Work done by Berry. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Environment. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. customer satisfaction equals perception of performance divided by expectation of performance. Brodeur between 1990 and 1998. Timeliness.

This is done by asking clients whether they would consider the bank for their next service in these three areas. consumers are more sensitive to the pricing of this product. and correct problems when they happen.. as the "gap" between the importance of the pricing of a checking account and customer¶s satisfaction is comparatively high. Loans. and the "creep" of large non-banks into the checking business should be an alarm bell for banks who want to improve customer satisfaction. In the product arena. but it is interesting to note that on an overall A study on Customer Satisfaction in Banking sector ........ Loyalty" measures the strength of a customer's satisfaction. While banks have had the checking product pretty much to themselves in the past. They expect more from their accounts and want this increased functionality presented in an understandable way. But it goes beyond. These are among the attributes where banks score the lowest or where the gap between "importance" and "satisfaction" is the highest. but the format of the monthly statements which they receive. Of course.LITERATURE REVIEW It appears that what consumers are saying is that they expect good products and services from their bank and that what is important to them is to have courteous and professional employees whom they can trust to explain them. by far the most important issues surround the checking account of importance to consumers is not only the account itself. Deposit Services. Additional charts tables showing this detail may be seen on the site. and also indicates the "action ability" of that loyalty. The ABA Financial Client Satisfaction Index measures loyalty in three areas. the emergence of internet based banks.. Also. results will vary by both bank and customer. and Investments.

there is some probability that the loyalty score also measures the degree of competition (or alternative choices. Power. The key with this measure is that it be improving over time It has been observed by such experts in customer satisfaction as J. A model by Kay Storbacka. distributors. Fredrick Reichheld (1996) expanded the loyalty business model beyond customers and employees. employees.D and Associates. the score is much lower (3. The ABA Financial Client Satisfaction Index measures a customer's overall satisfaction with his/her bank as compared with other financial providers they use. This A study on Customer Satisfaction in Banking sector . shareholders. Power & Associates that "consumer expectations are growing faster than industries can meet them". 1999. or exceed. in general. Tore Strandvik. Since customer service expectations are growing and are influenced by customer experience with others. only 45% would consider it for their next investment.00 scale). while 75% would consider their bank for their next deposit account. J.industry basis. is more detailed than the basic loyalty business model but arrives at the same conclusion.D. In a way. from a customer's perspective) in that particular product marketplace. bankers. and with other companies. He looked at the benefits of obtaining the loyalty of suppliers. and the board of directors. Or viewed differently. the service quality model. and Christian Gronroos (1994). those in other areas. And the explosive growth of the Internet is shifting the power of information to the consumer. In it. customer satisfaction is first based on a recent experience of the product or service. The idea here is for a bank's overall satisfaction scores to keep up with. clients are more likely to consider their bank for their next deposit account than for either their next loan of their next investment. customers. And in the case of investments.33 on a 5.

assessment depends on prior expectations of overall quality compared to the actual performance received. it is priced low to reflect the mediocre quality). The maturing of services marketing. Likewise. Rationale of the Study: While relationships have been extensively studied in marketing channels . It is claimed by Reichheld and Sasser (1990) that a 5% improvement in customer retention can cause an increase in profitability between 25% and 85% (in terms of net present value) depending upon the industry.US. A study on Customer Satisfaction in Banking sector . Customer satisfaction can also be high even with mediocre performance quality if the customer's expectations are low. customer satisfaction is likely to be high. a customer can be dissatisfied with the service encounter and still perceive the overall quality to be good. the UK . However. Schlesinger and Heskett . The fundamental assumption of all the loyalty models is that keeping existing customers is less expensive than acquiring new ones. claiming that they result from faulty cross-sectional analysis. the increased recognition of potential benefits for customer and technological developments are the main factors driving the developments of relationship marketing. If the recent experience exceeds prior expectations. The final link in the model is the effect of customer loyalty on profitability. 1991. This occurs when a quality service is priced very high and the transaction provides little value. Carrol and Reichheld (1992) dispute these calculations. and some consumer setting in western cultural contexts such as Europe .and even Australia . The presence of these factors in the Indian banking sector motivated this research.few studies have examined the paradigm in an eastern cultural context such as India.industrial settings. or if the performance provides value (that is.

With better understanding of Customers' perceptions. In many places in the world. Customer satisfaction is quite a complex issue and there is a lot of debate and confusion about what exactly is required and how to go about it. Evidence is mounting that placing a high priority on CS is critical to improved organizational performance in a global marketplace. This research is an attempt to review the necessary requirements. where they stand in comparison to their competitors. Customer satisfaction measurement helps to promote an increased focus on customer outcomes and stimulate improvements in the work practices and processes used within the company. Satisfied customers are central to optimal performance and financial returns. and discuss the steps that need to be taken in order to measure and track customer satisfaction. A study on Customer Satisfaction in Banking sector . Forward-looking companies are finding value in directly measuring and tracking customer satisfaction (CS) as an important strategic success indicator.relationship marketing strategy to satisfy customers and improve their profitability has moved to the forefront. The vital role continues even today although the form of banking has changed today with changing need of the economy and individuals.With banks losing 8% of their clients every year 34. chart out path future progress and improvement. Customers are viewed as a group whose satisfaction with the enterprise must be incorporated in strategic planning efforts. companies can determine the actions required to meet the customers' needs. For centuries banks have played an important role in financial system of the country. They can identify their own strengths and weaknesses. business organizations have been elevating the role of the customer to that of a key stakeholder over the past twenty years.

y Business research. privacy. there are clearly circumstances where negative preconceptions of a service provider will lead to lower expectations. Factors affecting customers towards particular bank y y Relationship marketing. business innovation. However. customer research. for example. A study on Customer Satisfaction in Banking sector .and where positive preconceptions and high expectations make positive ratings more likely. Objectives of the study: There are following objectives of this study will be:  To identify customer satisfaction variables which lead to building relationship with customers in the Indian banking sector. Electronic banking. This would seem sensible.Expectations and Customer Satisfaction Expectations have a central role in influencing satisfaction with services. internet banking. E-commerce. financial performance.  To study the difference in perception of the customers of the bank towards various services provided by bank. online banking. but will also make it harder to achieve high satisfaction ratings . and these in turn are determined by a very wide range of factors lower expectations will result in higher satisfaction ratings for any given level of service quality. information technology. poor previous experience with the service or other similar services is likely to result in it being easier to pleasantly surprise customers..

 To analyze the satisfaction level of customers with respect to the various service provided by the banks. We will be able to reduce the biasness by using this scale. Hypothesis to be tested The key questions being posed or hypothesis tested in the research. H3: It is expected that Customers are satisfied with the responsiveness of bank. It is expected that Customers are satisfied with the credibility of bank.  To identify the strategies of banks to satisfy their customers. In this study we are going to frame the following hypothesis: Following are the null hypothesis (Ho) H1: H2: It is expected that Customers are satisfied with the competency of bank. A study on Customer Satisfaction in Banking sector . So by the consent of all the group members and literature review we have decided that we will use the LIKERT SCALE. Methodology: Now the question comes that by which method we sill conduct the research? OR What would be our methodology? Scale Scale is the very first thing in methodology that which type of scale is suitable for us.

. Phase-2 will constitute the main study and consist of hypothesis testing. It will also examine the impact of customer satisfaction towards the Banks. y Carrol. vol 13. CREDIT cards etc).H4: H5: H6: It is expected that Customers are satisfied with the communication of bank. P.D. C. It is expected that Customers are satisfied with the security of bank. Journal of Retail Banking.1990 to 1998 Buchanan. DEBIT cards. 1990. 1999 Berry. no 4. Power & Associates 1999 Investors Business Daily. European Management Journal. 1992. Brodeur 1998 ten domains of satisfaction. Research Design The primary data will be used to examine relationship between bankers and customers satisfaction. no 4. A study on Customer Satisfaction in Banking sector . Geert Verstraeten. y Buckinx W. Phase-1 will consist of try out study in which we will screen out the potential respondents of this study. July 9. vol 8. and Gilles. 1992 The fallacy of customer retention". 32 (1). 1990 Value managed relationship: The key to customer retention and profitability". R. It is expected that Customers are satisfied with the online banking (ATM cards." Expert Systems with Applications. References y y y J. and Reichheld. The study will be conducted in two phases. F. and Dirk Van den Poel 2007 Predicting customer loyalty using the internal transactional database.

y y y Reichheld. 1990. F. 1990. L. y Fornell. and Wernerfet. Harvard Business Review. Directors and Boards. no 4. B. Harvard Business School Press. C. International Journal of Service Industry Management. pp 21-28. Chris X. 1996. y Stieb. 17-28. spring. 1990 Zero defects: quality comes to services". and Heskett. 1991. and Reichheld. y Reichheld. Journal of Marketing Moloney. James A 2006 "Clearing Up the Egoist Difficulty with Loyalty". vol 63. A study on Customer Satisfaction in Banking sector . 1996 The Loyalty Effect.y Dawkins. J. 1991 "Breaking the cycle of failure in service". 1987 "Defensive marketing strategy by customer complaint management : a theoretical analysis". K. Boston. and Gronroos. W. no 5. vol 14. T. and Sasser. pp 105-111 Schlesinger. no 1Storbacka. F 1990 "Customer retention as a competitive weapon". vol 5. Journal of Business Ethics. Strandvik. . Sept-Oct. 1994. Sloan Management Review. C 1994 "Managing customer relationships for profit". F. P. pp.

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