EFFECT OF CUSTOMER SERVICE ON CUSTOMER SATISFACTION

CHAPTER ONE

GENERAL INTRODUCTION

1.0. BACKGROUND

Customer service is the provision of service to customers before, during, and after a purchase. Everyone in the organization is providing one or all of these- perhaps they recognize which ones perhaps not. Kurtenbach (2000) explains that those who are successful in customer service rank their customers' experience as the top priority.

Ettore (2001) is of the view that concentrating on current customers’ information can and should be obtained to better understand their view of the service provided.

The quality of service provided determines the level of satisfaction of the customer even though what is seen as quality by one customer may not necessarily be quality to another.

Customer satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectations. In a competitive marketplace where a business competes for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. Customer satisfaction is an asset that should be monitored and managed just like any physical asset. The relationship between customer service and customer satisfaction is a vital one.

In a competitive marketplace, understanding customer needs become crucial, therefore companies and banks, in this case, have moved from product-centric to customer-centric positions. Customer satisfaction is influenced by the type of service provided. Satisfaction is a challenge particularly in the bank-based service as customers can easily switch from one bank to another with a better service.

Considering the high costs of acquiring new customers and apparently, the high customer turnover of many banking services. It is very important to find out what causes customer satisfaction. (Siadat, 2008, cited Van Rie, Lijander and Jurriens 2001).

High levels of customer satisfaction bring several positive aspects to a company; it is believed that customer satisfaction has a positive relationship with economic profit (Anderson, Fornell, and Lehmann, 1994). Moreover, it will lower customer price sensitivity (Fornell, 1992), and contribute to the creation of loyal customers, which in turn implies a stable future cash flow (Matzler et al., 1996).

Any organization that has satisfied customers is bound to increase its customer base and hence profitability. Satisfied customers may sell your organization either consciously or unconsciously.

It is therefore important that service industries provide quality service to customers so as to satisfy them, make them loyal and retain them in the end.

Fidelity bank has customer service as one of the pillars on which the bank operates and this research seeks to find out whether the service being provided meets customer expectations and whether customers are being satisfied by those services and also which other ways the service can be improved so as to satisfy the customers.

1.1. PROBLEM STATEMENT

Customer satisfaction is the single most important issue affecting organizational survival. It has the most important effect on customer retention and in order to narrow it down, focus on customer service quality as one of the customer satisfaction factors.

Despite this fact, most companies have no clue what their customers really think. They operate in a state of ignorant bliss, believing that if their customers were anything less than 100 percent satisfied they would hear about it. Then they are shocked when their customer base erodes and their existence is threatened (http://www.amazon.com)

The key to competitive advantage is proactively gauging customer perceptions and aggressively acting on the findings. The techniques for doing this do not have to be difficult; they just have to be timely and effective.

The researcher is a customer of the Adum Branch of Fidelity bank, Kumasi, and once went to the bank to meet a customer who expressed dissatisfaction about some of the services provided in the branch. Another customer at a different time expressed the same dissatisfaction, this time about different services in the bank.

Meanwhile, the researcher noticed that there is pressure almost always on the customer service staff at the branch.

Knowing that customer service is a pillar of the bank, the researcher, therefore, decided to find out whether the kind of customer service being provided in the Adum branch of Fidelity has any effect on customer satisfaction and whether there are barriers that prevent quality customer delivery.

1.2. OBJECTIVES

1.3. RESEARCH QUESTIONS

4. Which other customer service activities will really satisfy customers at the Adum branch of Fidelity bank?

1.4. SIGNIFICANCE OF STUDY

Fidelity bank has customer service as one of its products, hence the need to find out whether they really are providing that service and what ways they can improve so as to have a competitive advantage over rivals in the market.

This work will therefore provide information regarding excellent customer service and its effects on customer satisfaction in the Ghanaian context. This piece will be available to the bank being researched for the management to know the perception of their customers on services being provided to them and to help improve service quality.

It will also benefit other business service providers to make informed decisions as far as service is concerned.

Educational institutions, corporate entities, business policymakers, and other researchers will also benefit from this research in making informed decisions when it comes to quality customer service to satisfy the customers.

1.5. OVERVIEW OF RESEARCH METHODOLOGY

Various techniques were used to get good results. A survey and self-administered open and close-ended questionnaires were used as a tool. From a total population of about 900 customers and 12 customer service staff, 80 was the sample size for customers, and all customer service staff was included in the sample. The observation was also used as another technique to back or confirm data collected through the questionnaire.

The data collected were analyzed using frequency tables, and percentages. Responses were analyzed with excel. Discussion of results was made in relation to the research questions.

1.6. SCOPE OF STUDY

The study comprises workers and customers of Fidelity bank, Adum Branch. Due to competition in recent times in the banking sector, the study covers employees of the bank who is always in contact with the customers and the difficulties they face in delivering their service as well as the customer's experiences with the employees of the bank.

The reason why Fidelity bank was selected is that the researcher, first of all, stays in Kumasi and saves with the bank, and secondly, because Fidelity is springing up very fast in Kumasi, currently; there are five branches in Kumasi within a space of about three years. But this research will be carried out at the main office of Fidelity which is at Adum, Kumasi.

1.7. LIMITATIONS OF THE STUDY

Because of time constraints, the research was limited only to Kumasi and Adum branches of Fidelity bank for that matter, which could not allow comprehensive research on a large scale.

Furthermore, the research was limited to only one bank whiles a comparison of different banks or different service sectors would have been better.

Also, due to the unique cultural background of the people in the study area, the outcome of the study may be difficult to replicate in other places.

Another limitation was that the entire questionnaire given out could not be retrieved for analysis.

1.8. ORGANIZATION OF STUDY.

The study was organized into five chapters; chapter one comprises the introduction which deals with the background of the study, the profile of the organization under study, the problem statement, objectives of the study, research questions, significance of the study, a brief summary of the method used, scope, limitation, and organization of the study.

Chapter two reveals both the theoretical and empirical literature about the topic. Chapter three looks at the methodology which is basically the research purpose, design, data collection methods, population, sampling technique for data collection, and questionnaire design as well as a brief profile of the organization. Chapter four presents, analyze, and discuss the empirical results.

How does customer service impact on customer loyalty at the Adum branch of Fidelity bank?
What are the barriers to quality customer service provision at the Adum branch of Fidelity bank?
How does of customer service influence customer satisfaction at the Adum branch of Fidelity bank?
To identify which other customer service activities, customers will regard as satisfactory in the Adum branch of Fidelity bank.
To establish how customer service impacts customer loyalty at the Adum branch of Fidelity bank.
To identify if there are some barriers to customer service provision by customer service staff of Fidelity bank, Adum.
To evaluate how customer service affects customer satisfaction in the Adum branch of Fidelity bank....

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