Study of Service Quality, Customer Satisfaction & Customer Loyalty of Banks in India

Banks are required to attract potential customers as well as retain the existing ones. Service quality is defined as the degree of discrepancies between customers' expectations and perceptions of the performance of the service. The SERVQUAL model identifies reliability, tangibility, responsiveness, assurance&empathy as important dimensions affecting service quality and has been widely used in measuring service quality. The present study identifies the important factors affecting service quality and the gap between the customer's expectations and perception/satisfaction. It also studies the relationship between the service quality dimensions, customer satisfaction and customer loyalty. The study was conducted in January- February 2016 among bank customers of Indore city. It concludes that SERVQUAL is a suitable instrument for measuring service quality among Indian banking customers, Empathy is the most important service quality dimension and there is a positive relationship between service quality dimensions and customer loyalty and between customer satisfaction and loyalty.