Significance of Service Quality And Customer Satisfaction In Zimbambwe’s Banking Sector.

Abstract

Customer satisfaction is essential for the success of service firms because it leads to repeated

purchases and word-of-mouth recommendations(Salaar,A et al,2004) .This case study sought to investigate the extent to which banks in Zimbabwe attempt to achieve customer satisfaction in order to reduce customer churn and attrition. Customer retention is now an important element of banking strategy in the Zimbabwean competitive environment..Furthermore, the study explored customer satisfaction determinants. Descriptive survey was used to collect data. A purposive sample consisting of ten banks was targeted including institutions like Barclays, Standard Chartered  , ZIMBANK ,Commercial Bank of Zimbabwe, and CABS Building Society among others. Research respondents included bank employees and customers who completed questionnaires and interviews. It was discovered that uncertainty within banking fraternity about Zimbabwe Government’s indigenization and empowerment Laws and regulations were stifling financial institutions’ capability to invest in customer satisfaction projects and strategies. Furthermore, it was realized that majority of customers are delighted in transacting with institutions like CBZ which provide loans for long –term capital investment in the form of houses construction etc. There is phenomenal rate of customer defection and attrition from commercial banks like Barclays etc which are not providing loans.  The study recommended that, organizations should always strive to ensure that their customers are very satisfied. Banks should always assess key determinants of service quality from the customer’s perspective. Furthermore, such institutions should monitor customer satisfaction through conducting meaningful market research

Key words: customer satisfaction, customer retention, retail banking, customer defection