Customer satisfaction is an evaluation by the customer, after buying goods
and services. The most time-honored view of customer satisfaction in the
academic world is that customer satisfaction is the judgment assumed out of the
comparison of pre-purchase expectations with post-purchase evaluation of the product or
service experience (Oliver, 1997). Customer satisfaction can result from any factor (it
may or may not be quality related) and its judgments may take place from
non-quality issues (e.g., needs, equity, and perceptions of `fairness') and require
experience with the service or service provider (Howard and Sheth, 1969; and Taylor
and Baker, 1994). Furthermore, a basic precept of marketing is that customer
satisfaction with a product will possibly lead to repeat purchases, acceptance of product
line extensions, and favorable word-of-mouth advertising (Cardozo, 1965).
Customer satisfaction is widely recognized as a key pressure in the formation of
consumers' future purchase intentions (Taylor and Baker, 1994). In today's highly
competitive, increasingly consolidated world, offering personalized and differentiating
services can be critical to a bank's success.
Customer satisfaction is one of the most significant factors for the
profitability of retail banking in India. It calls for the retention of customers for the long
term, which is more economical than attracting new customers (Reichheld and
Kenny, 1990). In the current circumstances of retail banking in India particularly with
banks becoming larger, the closure of branches and the widespread use of internet
banking, the issue arises whether the customers are satisfied or not and what are
the rudiments of retail banking which lead to the satisfaction or dissatisfaction of
its customers. The knowledge of current levels of satisfaction and, in particular,
the primary factors of satisfaction are beneficial to those in the industry, thereby
allowing them to focus and further strengthen the crucial areas that lead to highly
satisfied customers. Previous results have emphasized that in-branch factors and,
in particular, staff, branch location and convenience are the most noteworthy
factors that have some bearing on customer satisfaction in retail banking.
The banking industry like any other financial services industries is facing a
market that is rapidly changing; new technologies being introduced, fear of
economic uncertainties, fierce competition and more demanding customers and the
changing climate have presented an unparalleled set of challenges (Lovelock, 2001).
Banking, being a customer-oriented services industry, the customer is the centre of
attention and customer service has to be the distinguishing factor. The challenge for banks
is to lower costs, increase efficiency, while improving the quality of their service,
and increase customer satisfaction. Attention has now turned to improving the quality
of service encounter, when customers enter the bank and come into face-to-face
contact with bank staff (Chakravarty, 1996). |
