Service Quality Practices and Customer Satisfaction in Commercial Banks in Kenya

Abstract

The study set out to examine service quality practices and customer satisfaction in commercial banks in Kenya. The research was motivated by the fact that there is limited research on effect of service quality on customer satisfaction in commercial banks especially Kenya. The objective of the study was to determine the extent to which service quality practices were adopted by commercial banks in Kenya. Further most of the studies focus on a single firm rather than the whole industry. The literature review revealed mixed findings because some research employed five dimensions while others used six dimensions and nine dimension thereby giving different results. The study used cross sectional survey research design so as to cut across all the commercial banks and also to collect data on service quality and customer satisfaction simultaneously at one point in time. Primary data was collected from both the operational manager and bank customers using a likert type scale questionnaire. The census was used to collect data from operation manager while systematic random sampling was used to collect data from customers. The finding was that most of the commercial banks in Kenya uses the servQual dimensions to some extent. On average, all the managers agree to use assurance, tangibility, empathy and reliability in strengthening customer relationship while they were uncertain on the use of responsiveness. It was also found that on average, all the managers were also uncertain to use assurance and responsiveness while on average they agree to practice tangibility, empathy and reliability in appreciating customers. There was significant relationship between ServQual dimensions (reliability, assurance, tangibility, empathy and responsiveness) and indicators of customer satisfaction (customer loyalty, customers’ degree of appreciation and customer strengthened relationship). Therefore this study recommends that management should pay attention to service quality and other factors which may lead to customer satisfaction. They should also put more emphasis on ServQual dimensions in order to create customer satisfaction. The management should therefore train and motivate employees to practice all the ServQual dimensions on all the determinants of customer satisfaction so as to increase company’s customer base.