The Effects of Service Quality on Customer Satisfaction: A Study among Private Banks in Mekelle Town

Abstract

The focus on customer satisfaction in banking industry is becoming extremely prevalent as it is being employed to keep existing customers from switching to other banks and to sell them more services, and to attract customers from non banking community and competitors. The objective of the study is to examine the effects of service quality on customer satisfaction. Primary data were collected from 200 respondents that were selected from customers of privately owned Commercial Banks in Mekelle Town. The respondents were selected through quota sampling techniques. In addition, relevant ideas were collected from secondary sources. To determine the relationship between dependent and independent variables Pearson chi square test was applied. Moreover, to determine the relative importance of variables the econometrics model known as logistic regression was used. The results of the study reveals that having employees who give customers personal attention, providing customers best interest at heart, owning employees who understand customers specific needs are the variables that are statistically significant and have influence on customer satisfaction.

Keywords: Customer satisfaction, service quality