THE RELATIONSHIP BETWEEN SERVICE QUALITY AND CUSTOMER SATISFACTION IN PUBLIC AND PRIVATE BANKS OF ETHIOPIA

Abstract

This study was set to assess service quality and customer satisfaction in private and public banks of Ethiopia; it was based on both descriptive and cross-sectional survey designs. Close ended questionnaire was used to collect primary data from 125 customers of three representative banks of public and private banks, CBE, AwB and AbB. Data were analyzed using software tools like, SPSS’s frequencies and percentages, means, and Pearson’s Linear Correlation Coefficient. The findings revealed that majority of the respondents were male, most of the respondent was a customer of CBE and all most all respondent were well learned. Both the level of service quality and customer satisfaction was at mean above 3 (high level). The findings from PLCC showed a significant and positive relationship between all independent variables (Assurance, tangibles, Empathy and Responsiveness) and customer satisfaction while Reliability has positive relation with no significance. The researcher recommended that if Banks is to improve on service it offers to their customers to ensure their satisfaction, Ethiopian banks should: (a) treat their customers like they are their boss, (b) build customer loyalty to increase customer satisfaction, (c) set customer expectation early.