THE EFFECT OF SERVICE QUALITY ON CUSTOMER SATISFACTION THE CASE OF ABAY BANK

Abstract

This research was conducted to assess the effect of service quality on customer satisfaction in the case of Abay bank using service quality dimensions adapted from Parasuraman et al (1985). that are tangibles, reliability, responsiveness, empathy and assurance. In this context, the main objective of this study was to assess the customer satisfaction on the service quality of Abay Bank. A total of 225 questionnaires were administered to customers of Abay Bank in three branches (Tewodros square, Hayahulet, and Lebu) and 200 questionnaires were returned and usable for a comprehensive empirical analysis. Both descriptive and inferential statistics have been used to find mean score, to test hypothesis, to investigate research problem, objectives and questions. From the correlation analysis it was found that all the five service quality dimensions are positively correlated with overall customers’ satisfaction. From regression analysis empathy, reliability, responsiveness and tangibles found to be the most important dimension in affecting customer’s satisfaction with the highest beta value. However, the rest dimension that is assurance not that much significant impact on customer satisfaction. In addition to this, the result of overall customer’s satisfaction with the service quality analysis, score is above average i.e. the majority of the respondents feel that Abay Bank’s service quality is satisfactory.