Service Quality; Customer Satisfaction and Loyalty: Experience from Commercial Bank of Ethiopia, Jimma Town Branches

Abstract

Service quality is determinant factors that enable banks to get superior advantage over their competitors by increasing customer satisfaction and loyalty.The main objective of the study was to investigate the influence of service quality on customer satisfaction and loyalty in seven branches banks found under CBE, Jimma Town branches. Since, BANKSERV model was especially developed to examine the services quality of banking sector; researchers selected this model to extensively test retail banking industry. The current study measured customer services quality and its relation with customer satisfaction and loyalty in the seven branches banks. Descriptive method used as the research method of the study. The sample consists of 398 respondents selected based on convenience sampling procedure. The dimensions of the study were tangibility, reliability, responsiveness, assurance, and empathy. Study data were collected using structured questionnaire and the questionnaire consisted of 26 items categorized under four dimensions of the BANKSERV model. Correlation and multiple regressions were used to investigate the relationship between dependent and independent variables. The correlation results indicate that there is a positive correlation between the dimensions of service quality and customer satisfaction. The results of the regression test showed that offering quality service have positive impact on overall customer satisfaction. The research findings also indicate offering high quality service increase customer satisfaction, which in turn leads to high level of customer commitment and loyalty