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Impact of service quality on customer satisfaction and customer loyalty an application on the banking sector
Pages 40 (10040 words)
Customer Experience in the Service Economy – a study in the Banking Sector ASBTRACT As the business environment has become competitive, competitive advantage has become imperative. Banks have come under heavy pressure to perform as service economy has taken shape where companies compete in service delivery.
With the aim to evaluate the impact of service quality and customer satisfaction on customer loyalty, three objectives were set in Chapter I. Based on a qualitative approach, only secondary data has been used for this study. With customer loyalty as the dependent variable, three independent variables – perceived value, service quality and customer experience have been considered in this study. The study finds that certain dimensions of service quality directly impact customer loyalty - reliability, empathy, responsiveness and assurance. Staff training is thus of importance in delivering quality training to evoke such feelings in customers. In the service economy the relationship between service quality and customer experience has gained immense importance. Customers base their future decisions on the ‘moment of truth’ and hence staging and designing an experience has become an important tool to gain competitive advantage in the banking sector. Banks need to understand individual customer needs and personalize service. Perceived value enhances customer satisfaction and this leads to enhanced customer loyalty. Customers evaluate the benefits they receive against the costs they pay for such services. Thus Perceived value in the banking sector independently impacts customer satisfaction leading to customer loyalty. ...
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