QUALITY OF SERVICE DELIVERY AND ITS IMPACT ON CUSTOMER SATISFACTION IN AWASH BANK

Abstract

Service quality has been the core concept for the measurement of customer satisfaction in various industries and especially in the business sector. The research work of this thesis has undergone with the theme of measuring the level of customer satisfaction using attributes of the SERVQUAL instrument. Using a measure of customer satisfaction and the mean scores of the five dimensions of SERVQUAL (Tangibility, Responsiveness, Reliability, Assurance, and Empathy) a regression model was formulated. ANOVA was also calculated to see if any of the demographic variables had a statistically significant impact on any of the SERVQUAL dimensions. Convenience sampling was implemented to select a sample of 113 customers from four branches of Awash Bank, namely, Temenja Yaj Branch, Arat Kilo Branch, Stadium Branch and Bole Branch. Mean scores of the five dimensions were in the range of 3.6-3.7 with a standard deviation of roughly 1. Mean customer satisfaction was also around 3.65. The regression model developed showed that 61.7% of the variation in customer satisfaction was explained by service quality dimensions. Further, the service quality dimension of empathy (Beta = 0.377, p < 0.01) impacted satisfaction more than the other dimensions. Tangibility (Beta= 0.229, p < 0.01) was the second followed by assurance (Beta = 0.0.221, p < 0.05). Reliability was not found to have a statistically significant to customer's satisfaction. The research therefore concluded that customers perception of all the service quality attributes are quite average which is not a desired outcome for a service entity. The regression model indicated that the empathy dimension of service quality carries a bigger weight in customer satisfaction. It is therefore recommended that Awash Bank provide trainings to it customer service officers to provide individual attention to its customers. Improving the physical appearances and facilities of its branches should also be done to improve the tangibility of its services. Further, periodic measurement of service quality and customer satisfaction should be practiced.