Geerman TECHNOLOGY

PERCEPTIONS OF CUSTOMER SERVICE IN FINANCIAL
INSTITUTIONS: A PILOT STUDY AT THE
UNIVERSITY OF CENTRAL MISSOURI
by
Yvar Geerman
An Abstract
of a thesis submitted in partial fulfillment
of the requirements for the degree of
Master of Science
in School of Technology
University of Central Missouri
April, 2013
ABSTRACT
Customer services and technology used in today’s business are subjected to continuous
improvement in a pursuit to enhance work performance and customer satisfaction. The purpose
of this study is to determine the most important dimension of customer satisfaction perceived by
three different groups that financial institutions have: college students, employees, and retired
individuals of the University of Central Missouri. One-way ANOVA and SPSS 21.0 were
utilized as a statistical tool to determine the relationship among variables. The online
questionnaire was sent out with 126 respondents. This study concluded that there was no
significant difference in the most important dimension of customer satisfaction between the
groups. The results indicated that the most important dimension of customer satisfaction is
reliability. According to the respondents, 52.4% agreed that the method of banking they used
more often in the past 6 months was online banking. In addition, the study recommended for
further study to consider the replication with more focus on different industries.
by
Yvar Geerman
A Thesis
presented in partial fulfillment
of the requirements for the degree of
Master of Science
in School of Technology
University of Central Missouri
April, 2013
© 2013
Yvar Geerman
ALL RIGHTS RESERVED

by
Yvar Geerman
April, 2013
APPROVED:
Thesis Chair: Dr. Suhansa Rodchua
Thesis Committee Member: Dr. Ronald Woolsey
Thesis Committee Member: Dr. Jeffrey Ulmer
ACCEPTED:
Chair, School of Technology: Dr. Douglas Koch
WARRENSBURG, MISSOURI
AKNOWLEDGEMENTS
I would like to express my gratitude to all those who gave me the possibility to complete
this thesis. I am most grateful to God for the wisdom and perseverance that he has bestowed
upon me during this research project, and indeed, throughout my life. Without His love and
support, I would not have been able to meet all the amazing people I have met while getting my
education, but most important have blessed me with amazing parents, family, and friends that
supported me with any decision I have made in my life.
I would like also to thank my parents Ivy and Reynaldo Geerman for their teachings and
love, my sister Iddy for her support, and the rest of my family: Frolijk, Tromp, and Werleman.
Without their love and patience throughout this long process of study, all of my achievements
would have not been possible.
I am also grateful to my academic advisor and thesis chair, Dr Suhansa Rodchua, for her
understanding, guidance, and dedication of time during the period of my academic life at UCM.
Dr. Rodchua has always supported me and inspired me to keep me going. Special thanks are
expressed to my thesis committee members, Dr. Ronald Woolsey, and Dr. Jeff Ulmer. I really
appreciate them for their willingness to share insights and expertise, and to contribute to further
refinements to this study.
Thanks everyone who has helped me promote my questionnaire. This includes, but is not
limited to, Ms. Traci Via from Office of Alumni Relations and Development, Ms. Beth Rutt
from Student Recreation and Wellness Center, Dr. Suhansa Rodchua from the Graduate Program
of the School of Technology, and University Relations.

I also cannot forget the wonderful group of friends I got to meet not only in Missouri, but
also in Arkansas, Tennessee, and Florida while I was pursuing my master’s degree. Without their
inspiration, help, and tips, I would have not been able to achieve all my dreams so far. Special
thanks goes to Michael Sherer and family, Megan Listenbee, Cynthia Horta, Kevin Lenners, Bill
Groth, Chad Puryear, Vernadine Echevarria, Cicily Tubb, Rosalie Lovelace, and Susan Burks. I
would also like to thank Jose Cabrera, and Kevin Gourrier. Without their friendship and support,
I would have not able to get professional experience; they inspired me to learn more about
customer service.
TABLE OF CONTENTS
ABSTRACT………………………………………………………………………………………II
AKNOWLEDGEMENTS………………………………………………………………………VII
LIST OF APPENDICES………………………………………………………………………...IX
LIST OF TABLES……………………………………………………………………………….X
LIST OF FIGURES……………………………………………………………………………..XI
Chapter
1. INTRODUCTION………………………………………………………………………...1
Statement of the Problem…..…………………………………………………………..4
Purpose of the Study……………………………………………………………………5
Significance of the Study…..…………...……………………………………………...5
Research Questions……………………………………………………………….........6
Research Hypothesis…………………………………………………………………...7
Definition of Terms………………………………………………………………….....8
2. REVIEW OF LITERATURE……………………………………………………………10
Financial Institution…………………………………………………………………...11
Total Quality Management……………………………………………………………11
The Key Elements of TQM…………………………………………………………...12
Customer Focused…………………………………………………………………….15
Customer Relationship Management…………………………………………………16
Ten Dimensions of Customer Satisfaction …………………………………………...17
Customer Perception of Customer Service…………………………………………...18
Barriers in Having Successful Customer Service…………………………………….20
Summary……………………………………………………………………………...21
vii
3. METHODOLOGY………………………………………………………………………22
Population…………………………………………………………………………….23
Instrument and Apparatus…………………………………………………………….23
Data Collection……………………………………………………………………….25
Statistical Analysis……………………………………………………………………25
Research Procedure…………………………………………………………………...26
4. FINDINGS……………………………………………………………………………….27
Part 1: Demographics and Descriptive Information of the Respondents……………..27
Part 2: Ten Dimensions of Customer Satisfaction……………………………………30
Part 3: Data Analysis …………………………………………………………………32
Summary of Findings…………………………………………………………………37
5. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS………………………40
Statement of the Problem…………………………..…………………………………41
Purpose of the Study………………………………………………………………….42
Significance of the Study……………………………………………………………..42
Research Questions…………………………………………………………………...43
Research Hypothesis………………………………………………………………….44
Summary of Findings…………………………………………………………………44
Discussion…………………………………………………………………………….47
Recommendations for Future Studies…………..…………………………………….51
Conclusion…………………………………………………………………………….52
REFERENCES…………………………………………………………………………………..54
viii
LIST OF APPENDICES
A. Questionnaire………………………………………………………………………….57
B. Human Subjects Protection Program Review Approval Letter……………………….62
C. Consent Form………………………………………………………………………….63
ix
LIST OF TABLES
Table
1. Correlation between the ten dimensions and customer satisfaction……………………..19
2. Descriptive statistics of the respondents for the demographics questions……………….29
3. The mean for each dimension of customer satisfaction based on gender,
occupation, and overall respondents…………………………………………………….31
4. The ANOVA results for research question one………………………………………….33
5. The ANOVA results for research question two………………………………………….34
6. The ANOVA results for research question three………………………………………...35
7. The ANOVA results for research question four…………………………………………36
x
LIST OF FIGURES
Figure
1. Most important Dimension of Customer Satisfaction based on Occupation…………….48
2. Most important Dimension of Customer Satisfaction based on Age…………………….49
3. Most important Dimension of Customer Satisfaction based on Gender…………………50
xi
1
CHAPTER 1
INTRODUCTION
Customer service is an important element not only for the manufactory industry, but also
for the service industry. Like any other businesses in the service industry, financial institutions
need their customers in order to stay in business; otherwise they would not be able to stay in
business. An organization can bring a customer to the firm, but to retain the client is the most
delicate job for any kind of business. In a study made by J.D Power and Associates (2012) “9.6
percent of customers in 2012 indicate they switched their primary banking institution during the
past year to a new provider. This is up from 8.7 percent in 2011 and 7.7 percent in 2010”
(para. 3). It is for that reason that in the recent years more and more financial institutions have
started to take closer attention to their customer service.
Financial institutions needs to make sure that their client are not just satisfied but
impressed with the customer service that the firm has to offer. This way companies can be better
organized and present a better product to their customers. If they are able to do that then
customers will be satisfied and less likely to change the financial institution (s) that they would
like to do business with. A good example of this was the so called “Bank Transfer Day’’
movement that happened in 2011 organized by an angry group of customers of financial
institutions. Berman (2011) made a statement that “the Bank Transfer Day push touched a nerve
with customers who were fed up with banks charging fees for once-free services” (para. 4). The
aftermath of this was that many banks decided to back-tracked on their initial proposal of
charging fees for their services. It is for this reason that banks need to make sure their customers
are happy with the service they are receiving.

2
In order to have happy clients, companies need to make sure their clients are satisfied not
only with the product or the service they receive, but also with the customer service. That is why
a lot of companies have started a new division in their management: Customer Relationship
Management (CRM) has been created to help promote a better relationship between a company
and their customers. Han-Yuh Liu (2007) defines CRM as “business strategies, process and
information technology, which enable a company to optimize revenue and increase the value
through the understanding and satisfying the individual customer needs” (p 17).
Many researchers argue, “financial services may be facing more intense customer service
pressure than ever before” (Eisingerich and Bell, 2006, p. 87). This is because there are many
financial institutions for customers to choose. In November 2012, the Federal Reserve Bank of
St. Louis recorded that as of the fourth quarter of 2012 the United States had a total of 6006
commercial and insured banks (Federal Reserve of St Louis, 2013). This does not include
uninsured banks or other types of banks that exist. The financial institutions want to portray
superiority to their competitors so the customers can see they have the best product and price,
but most importantly, the best customer service in the industry.
It is for this same reason that financial institutions started to focus more on the quality of
the service they would like to offer to their clients. The Center for the Advancement of Process
Technology (2011) defines quality as “the performance, products, and services that consistently
meet or exceed the expectations of the customer by doing the right job, the right way, the first,
every time” (p. 268). A financial institution needs to meet or even exceed the expectations of
their customer. They only have one time to impress their clients with their products or services
they offer.
3
In addition, it is for that reason that many researchers started creating instruments that
can help them understand customer satisfaction better. Parasuraman, Zeithaml, and Berry created
in the mid-1980s the SERVQUAL scale to measure quality in the service industry. The
researchers believed that customer satisfaction is dependent on ten dimensions of service quality.
The ten dimensions of customer satisfaction were discussed in the article. They are tangibles,
reliability, responsiveness, competence, courtesy, credibility, security, access, communication,
and empathy (Parasuraman, Zeithaml, and Berry, 1988).
Thanks to the SERVQUAL instrument, financial institutions are able to find out what is
important to their customers in order to have their customers satisfied. Based on this study,
Lopez Alarcon did ‘The Dimensions of Customer Satisfaction in the Financial Services
Industry’. Lopez Alarcon was able to find the most important dimension perceived by the
customers of the financial services industry is reliability (Lopez Alarcon, 2003).
Per Lopez Alarcon, the top five dimensions rank significantly from highest to lowest are:
i. Reliability
ii. Responsiveness
iii. Tangibles
iv. Access
v. Communication
4
Statement of the Problem
A review of current literature review yields few studies made in the academic
environment to investigate what college students, employees, and retired individuals think about
customer service in financial institutions. All three mentioned groups of customers may have
different goals and expectations from their financial institutions. What may work with one group
does not mean it will work with the others.
Additionally technology can affect the quality of service the bank is trying to offer.
Nowadays there are many innovative and convenient services that did not exist years ago, such
as like mobile banking and online banking. Even though all of these services are extremely
helpful in giving customers flexibility of when they would like to use the bank services, it can
actually hurt the quality of service. Technology cannot be 100% trusted to be reliable and
effective; for example, the mobile banking application using a phone connection can crash. The
customers need to keep updating certain computer applications in order to use the service or even
customers need to have a certain electronic device in order to use a service. In a statement made
by Eisingerich and Bell (2006) “because of clients inability to evaluate technical service
outcomes can bias or obstruct service quality perception and affect their degree of confidence in
a firm” (p. 88) All of this can lead the customers to not enjoy the quality of service they were
expected to receive. Another aspect about technology is that it can be time consuming for the
clients. Banks try to offer a great variety of new services, but a lot of times customers need to
answer several security questions security questions before being able to use the product. On
many occasions there are no manual or workshop on how to use a certain product. Consequently
customers will spend hours trying to figure out how to do certain transaction, or finding out all
the possible services that can be accessed online without traveling to a branch office.
5
Purpose of the Study
The purpose of this study was to determine the most important customer service
dimensions of financial institutions perceived by three groups of customers: college students,
employees, and retired individuals. After the research has been conducted, the researcher
compared and contrasted the information collected related to customer service. The researcher
hopes the information be helpful for financial institutions in the future. This way financial
institution located around the world can compare and contrast their philosophies about which
dimensions of customer service are important, how their current focus affects the group(s) of
customers they are trying to attract and how they can improve their own customer service. The
study was also intended to help post-secondary education institutions with information that can
be presented to students to help them understand better the customer’s opinions about customer
service in financial institutions.
Significance of the Study
This study is intended for general customers of financial institutions to choose which
dimensions are perceived to be important. However, there has not been a specific study about
what college students, employees, and retired individuals in a university environment thinks
about the customer service they receive from their financial institutions. These three groups
represent customers of financial institutions with different needs. The first groups, college
students, are extremely important to any financial institutions. This group of customers usually
is going to be exposed to a more active relationship with their financial institution. College
students usually open their first checking account and get a credit card before they go to college.
This group is more likely to be involved in learning about all the services bank have to offer for
the first time. It is crucial for financial institutions to offer this group of clients the best first
6
impression possible of their services. If the financial institution has provided a great service
experience to college students, once they graduated they may continue use the same group for
their financial needs.
The second group is employees. This group of people have a full time job and may use
the financial institutions to pay their bills, get a mortgage to purchase their home, get car loans,
and for financial planning. They use the bank services a lot for any financial issues they may
encounter.
The third and last group is retired people. Retired people are also important to financial
institutions. This group have worked most of their life now are receiving a pension each month
and from their retirement account. This investigation has generated the following research
questions.
Research Questions
1. Is there a difference in the most important dimension of customer satisfaction between
college students, employees, and retired individuals?
2. Is there a difference in the most important dimension of customer satisfaction between
male and female customers?
3. Is there a difference between the gender of the customers and which method they prefer
to get assisted by their financial institutions?
4. Does the level of satisfaction of customers services received by financial institutions
depend on how often they go to their financial institutions?

7
Research Hypothesis
Ho1 : There is no significant difference in the most important dimension of customer satisfaction
between college students, employees, and retired individuals.
Ha1: There is a significant difference in the most important dimension of customer satisfaction
between male and female customers.
Ho3: There is no significant difference between the gender of the customers and which method
they prefer to get assisted by their financial institutions.
Ha3: There is a significant difference between the gender of the customers and which method
Ho4: There is no significant difference on how often the customers go to the bank and their
level of satisfaction.
Ha4: There is a significant difference on how often the customers go to the bank and their level
of satisfaction.
8
Definition of Terms
1. Customer Relationship Management (CRM). Han-Yuh Liu (2007) described Customer
Relationship Management as “business strategies, process and information technology,
which enable a company to optimize revenue and increase the value through the
understanding and satisfying the individual customer needs” (p. 17).
2. Quality. The Center for the Advancement of Process Technology (2011) defined quality
as “the performance, products, and services that consistently meet or exceed the
expectations of the customer by doing the right job, the right way, the first, every time”
(p. 268).
3. Tangibles. Parasuraman, Zeithaml, and Berry (1988) defined tangibles as “appearance of
physical facilities, equipment, personnel and communicating materials” (p. 25).
4. Reliability. Parasuraman, Zeithaml, and Berry (1988) defined reliability as “ability to
perform the promised service dependably and accurately” (p. 25).
5. Responsiveness. Parasuraman, Zeithaml, and Berry (1988) defined responsiveness as
“willingness to help customers and provide prompt service” (p. 25).
6. Competence. Parasuraman, Zeithaml, and Berry (1988) defined competence as
“possession of the required skills and knowledge to perform the service” (p. 25).
7. Courtesy. Parasuraman, Zeithaml, and Berry (1988) defined courtesy as “politeness,
respect, consideration and friendliness of contact personnel” (p. 25).
8. Credibility. Parasuraman, Zeithaml, and Berry (1988 defined credibility as
“trustworthiness, believability, honesty of the service provider” (p. 25).
9. Security. Parasuraman, Zeithaml, and Berry (1988) defined security as “freedom from
danger, risk or doubt” (p. 25).

9
10. Access. Parasuraman, Zeithaml, and Berry (1988) defined access as “approachability and
ease of contact” (p. 25).
11. Communication. Parasuraman, Zeithaml, and Berry (1988) defined communication as
“keeping customers informed in language they can understand and listen to” (p. 25).
12. Empathy. Parasuraman, Zeithaml, and Berry (1988) defined empathy as “making the
effort to know customers and their needs” (p. 25).
13. Total Quality Management (TQM). Summers (2010) defined Total Quality Management
as “a management approach that places emphasis on continuous improvement and system
improvement as a means of achieving customer satisfaction to ensure long-term company
success” (p. 13).

10
CHAPTER 2
REVIEW OF LITERATURE
In order for a human being to buy something currency or collateral is needed. Money is
an essential item that human beings need in order to survive and to be able to buy goods that they
need, such as water, clothes, home and the most important of all, food. When people get paid,
they will most likely not spend all their money or keep the money in their wallet. Instead many
people choose to put their money in a financial institution or invest the money in the stock
market.
Financial institutions are seen as very important in the eyes of the customers, because
customers trust them with their money. If a customer does not like the product or service they are
receiving there is a good chance that customers will change institutions. Lucas (2011) argued
that financial institutions need “to remember in serving others is that today’s consumers are far
more educated and informed than any point in history. They are also more selective, have more
choices, and are more demanding than their predecessors” (p. 33). For that same reason financial
institutions need to strive to offer their customers the best service possible. In a statement made
by Lopez Alarcon (2003) “Customer satisfaction is an important factor to the success of
businesses. One of the aspects that will make a customer choose certain products or companies
over others will be the level of customer satisfaction and support before and after the sales &
services provided” (p. 18). Customers are highly important to the financial institutions but also
any kind of business because without customers they would not be able to stay in business.
11
Financial Institutions
According to the Economic Policy Commission of the American Bankers Association
(1954) “a primary function of money is to serve as a medium of exchange to facilitate the
production and distribution of goods and services” (p. 3). It is for that reason that in today’s
economy the United States enjoys from different kinds of financial institutions that offers
different products and services. All of this is based on the interest and tailored to the customers
needs. It all depends on how and when a consumer would like to use their money. According to
Masson and Wikoff (1997), the different types of financial institutions are:
1. Commercial banks
2. Investment Banking and Brokerage firm
3. Thrift Institutions
4. Credit Unions
5. Mutual funds
6. Other financial institutions
Total Quality Management
Companies are always seeking to stand out from their competitors by the price, value,
features or nearly everything that they can think to differentiate themselves from others. In a
statement made by Weinstein (2012) “companies that deliver superior value to customers on an
ongoing basis are able to keep them over the long term” (p. 199). It is for that reason that more
companies in the service industry has started to pay more attention to the quality level of their
input and also their output, and financial institutions are no exception. As a consequence,
companies in the service sector began to implement more Total Quality Management (TQM)
12
principles into their daily operation. According to Summers (2010), TQM is “a management
approach that places emphasis on continuous improvement and system improvement as a means
of achieving customer satisfaction to ensure long-term company success” (p. 13). Furthermore
the American Society of Quality (2013) emphasizes that TQM is “a management approach to
long-term success through customer satisfaction. In a TQM effort, all members of an
organization participate in improving processes, products, services, and the culture in which they
work” (para. 1). In other words TQM tries to incorporate the participation of all its members of
an organization to help improve the processes, products and services that their company is
offering to the market.
The Key Elements of TQM
According to Lee (2006), the reason why TQM started getting more popular in the US is
because “quality management became a national concern in the 1980s as many US firms could
not compete effectively in the global market, especially in the face of the onslaught of Japanese
firms” (p. 5090). Companies started implanting TQM, without really paying attention to what
TQM is really about. In order for companies to adapt TQM into their business, they need to
make sure that they understand the key elements of TQM. This way companies can have an idea
on what TQM is about and on the different little details that the company needs to keep in mind
in order to be successful. TQM has a total of eleven key elements: strategically based, customer
focus, obsession with quality, scientific approach, long term commitment, teamwork, continual
improvement of systems, education and training, freedom though control, unity of purpose, and
employee involvement & empowerment (Gortsch & Davis, 1997). The first element is that the
company needs to be strategically based. In other words, the company needs to know itself
better. It is important for the company to have a vision, mission and activities that need to be
13
done to accomplish their objectives. This way companies can know better what kind of business
they are and how they see themselves in the future. The second element is customer focus. This
element is about the idea that the customer is very important. Gupta, McDaniel and Herath
(2005) argue that firms “should gain an understanding of customer needs and expectations before
designing and implementation of services quality improvements” (p. 395). The customers are the
ones who, at the end of the day, need to like the product or service a company tries to offer and
purchase it. The third element is obsession with quality. As previously mentioned, customers are
important to companies and they are the ones who define the quality of either a product or
service they would like to purchase. Any kind of organization needs to become obsessed with not
only meeting, but also exceeding the expectations of their clients.
The fourth element is the scientific approach, which entails the idea of using a scientific
approach in structuring work, using it in decision-making, and problem solving that is related to
the work. This means that any kind of company can collect data and establish benchmarks,
monitor their performance, and make changes for improvements in their processes or products.
By collecting data, companies would be able to analyze the level of quality of their products or
services better. The fifth element is long-term commitment. Since TQM is an approach that
teaches business to do business in a whole new way, it would take some time to see the results
and benefits from using it. Everyone in the company needs to be patient about seeing the results,
because it might take a while to see them. The sixth element is teamwork. It is important for
companies to have and promote teamwork inside their companies, not only within each
department, but also between departments when they are trying to reach to each other. It is also
important for companies to promote teamwork externally: for instance, with their partners and
14
suppliers. Internal and external teams of a company need to be aware of what the company is
trying to achieve and willing to help them. This way, the company can offer their product.
The seventh element is continual improvement of systems. In order to continually
improve the quality of products or services, companies need to be willing to continually improve
systems so that they can be more efficient. The eighth element is education and training.
Education and training are fundamental to TQM because it enables people to improve on a
continual basis. It is through education and training that people know how to work hard and
work smart.
The ninth element is freedom through control. This element entails involving and
empowering employees that will help to bring more people to think on a decision-making
process and increase the ownership employees’ feel in decisions that are made at the same time.
This can lead to the employees feeling proud of their company, while at the same time, be more
aware of the quality of the product or service. The tenth element is unity of purpose. In order for
the company to apply the total quality management approach, organizations must have a unity of
purpose. In other words, that internal politics has no place in total-quality organization, but
instead collaboration should be the norm. The eleventh element is the employee involvement and
empowerment. According to the Human Resource Management International Digest (2002),
“staff empowerment is all part of the philosophy of mutual respect that extends to employees
treating one another well. It supports the idea that if you feel confident about yourself, you will
treat others well, too” (p. 23). The basis for involving employees is twofold. First increase the
likelihood of making of a good decision, while at the same time it promotes ownership of
decisions by involving the people who will have to implement them.

15
Customer Focused
In the last couple of years more and more companies have started to focus on customer
needs and wants. Nowadays companies need to make sure that they know what their customer
wants and can anticipate the needs that the customer may not be able to express. They are the
ones who judges of the quality of the product and the service of a company. In a statement made
by Evans (2005), companies needs to understand “customer’s needs both current and future, and
keeping pace with changing markets requires effective strategies for listening and learning from
customers” (p. 32). In other words companies needs to do their best to satisfy the needs of their
customer in order to be successful. From a TQM perspective, all decisions that a company makes
needs to be based on what the consumer wants in the product and service.
For many years, companies have associated quality to manufactured goods. According to
Weistein (2012) “during the 1980s, a broadened definition of quality emerged to include services
as well as goods” (p. 90). Defining quality for services can be difficult than a manufactured
good because it is intangible. Customers of the service industry usually rely on the credibility of
the service provider to decide if either or not they would like to get a service from a particular
company. In a statement made by Liu and Wu (2007) “a good reputation can transfer guarantee
information for other products offered by a firm. When customers cannot discern any
differentiating features among products provided, a firm’s reputation can facilitate purchasing
related decision-making” (p. 134). In some occasions customers are not always sure what to
expect and may not know for some time know if the service was performed satisfactorily. It is
for that reason that companies in the service industry are trying to build a relationship with their
customers.
16
Customer Relationship Management
Businesses have started paying more attention to their customer service, because it can
have a huge impact on the success of a firm. It can help make business to be successful or it can
practically destroy a business. Customer service is being considered like a relationship with the
clients. Rootman, Tait, & Bosch (2008) described customer service in two stages: “first,
attracting the client and secondly, building managing and maintaining the relationship over time
so that the economic and social objectives of both parties are achieved. The second phase is
when the service provider attempts to maintain and enhance relationships and retain the clients”
(p. 53). These stages are essential to have a well-balanced relationship between the customers
and a company. Businesses can be focusing on areas that customers might think are not
important and that might be actually hurting the quality of customer service that the company is
trying to portray to their clients. This can hurt the clients in the long run with the consequence
that companies might suffer from severe financial problems.
Many companies in the service industry, including financial institutions use Customer
Relationship Management (CRM) to help them get to know their customer better by keeping
tracks of customer needs and record service provided. Financial institutions are doing their best
to not only attract but also to retain as many costumers as possible. Not only is it difficult to lure
back a costumer that a company has lost, but there are many other companies who offer the same
products and services as them. According to Elmuti, Jia and Gray (2009) “companies are looking
to combat this issue by developing relationships with customers through the use of Customer
Relationship Management (CRM). CRM systems are capable of creating the competitive
advantage that companies need to attract repeat customers” (p. 75). In other words CRM was
established to help businesses in understanding and satisfying the needs of the customers. CRM
17
might be described as business strategies that would help a company in optimizing revenue, and
increase the understanding and satisfaction of the needs of the customers.
CRM does not mean that companies will become best friends and know everything that is
transpiring going in their life, but rather to create a relationship with them. Instead a company
needs to introduce and train their employees skills that they will help the company to create a
positive relationship with their customers. In a statement made by Lucas (2005), companies need
to treat their customers “in a manner that leads them to believe that you care for them and have
their best interest at heart” (p. 32). Customers usually continue doing business in an organization
that they respect, trust and most important has developed a relationship.
Ten Dimensions of Customer Satisfaction
Customer satisfaction is highly important to any kind of businesses, including financial
institutions. It is for that reason that many researchers started creating instruments that can help
them understand customer satisfaction better. Parasuraman, Zeihaml, and Berry (1988) created in
the mid-1980’s the SERVQUAL scale to measure the service quality in the service industry.
According to Buttle (1996) SERVQUAL “is conceptualized as a gap between what the customer
expects by way of service quality from a class of service provider and their evaluations of the
performance of a particular service provider” (p. 9). In the original SERVQUAL, the researchers
believed that that customer satisfaction is dependent on ten dimensions of service quality. The
ten dimensions of customer satisfaction that were discussed in the article are tangibles,
and empathy. All of these dimensions are considered important in the opinion of the consumers
that business needs to keep in mind.

18
Consumer Perception of Customer Service
Based on the ten dimensions of customer satisfaction, Lopez Alarcon (2003) did a
research in Boca Raton, Florida area to study the ten dimensions of customer satisfaction among
the consumers of financial institutions. The researcher wanted to prove a couple of points. First,
even though Parasuraman, Zeihaml, and Berry stated that there are ten dimensions of customer
satisfaction, through this study the three authors wanted to prove that there were five dimensions
that ranked significantly higher than the other five dimensions; that is a big deal in forming an
overall level of customer satisfaction. The five dimensions in order from high to low are:
A. Reliability
B. Responsiveness
C. Tangibles
D. Access
E. Communication
Secondly, he wanted to prove that there was a relationship between customer satisfaction
and the dimensions of customer satisfaction. According to the Lopez Alarcon (2003) “all ten
dimensions had a significant positive correlation to customer satisfaction, with a significance
level of 0.1”(p. 74). presents the correlation between the ten dimensions and customer service.
The top five dimensions were:

19
A. Responsiveness
B. Reliability
C. Courtesy
D. Communications
E. Competence
Table 1
Correlation between the ten dimensions and customer satisfaction.
Correlation
Dimension:
coefficient:
Responsiveness .622 (**)
Reliability .613 (**)
Courtesy .560(**)
Communications .552(**)
Competence .541(**)
Credibility .538(**)
Tangibles .497(**)
Safety .487(**)
Access .479(**)
Empathy .393(**)
(** Correlation is significant at the 0.01 level (2-tailed))
Note: Data used from López Alarcón, J. S. (2003). The dimensions of customer satisfaction in
the financial services industry (p. 75).
Thirdly, the researcher wanted to test to what extent customer satisfaction is dependent on
the tangible, reliability, responsiveness, competence, courtesy, credibility, security, access,
communication and empathy decision. The researcher addressed this by conducting a regression
analysis on the data collected. The result of the regression analysis proved that the ten
20
dimensions of customer satisfaction were “0.516% of the level of customer satisfaction for the
subjects used” (p. 75). In other words, 51.6% of the variance in total customer satisfaction is
dependent on the ten dimensions of customer satisfaction.
Barriers in Having a Successful Customer Service
For business to have a successful customer service is not easy. There are many factors,
such as time and effort that those businesses need to invest in order to start seeing the fruit of it.
A statement made by Stone (2009) mentions that “Economic change causes customers to
reevaluate needs, whereas new laws and regulations often compel them” (p. 198). This will have
a consequence that the business needs to evaluate its current customer service strategies to make
sure that it does not only follow the business guidelines but also that it follows new laws or
regulation that have become effective. Another item that is a barrier is technology. Technology
keeps changing in a fast pace, and it can affect the company’s customer service severely.
According to Durkin and Howcroft (2000) an example would be the introduction and the effect
of ATM’s on customers “the growth in automated teller machines (ATM’s) has meant that the
ownership and usage levels of plastic cards have also increased among customers” (p. 13).
Nowadays many ATM’s offer a great variety of products and services, such as statements, mail
postages, and deposit money. Customers do not have to go inside in order to get helped. This
might affect the customer service of an organization if for example the business is trying to
exhibit nice buildings or friendly employees. The company might be spending money, time and
resources at the wrong area.

21
Summary
Customer service is becoming more and more important to any kind of business, which
includes financial institutions. They need to have clients in order to stay in business. In the recent
years, companies have started using Customer Relationship Management in their business
(CRM). CRM’s goal is to understand and satisfy the needs of the customers. This way customers
can be satisfied with the service they are receiving. In accordance to Knouse, Carson, Carson,
and Heady (2009) “a primary means of understanding customer satisfaction is through customer
feedback modes, like survey feedback, counts of customer complaints, and unsolicited customer
response” (p. 453). This way business can understand more in getting to know what exactly the
client wants. Business wants not only to attract but also retain the clients they have. The main
reason is because “poor service continues to be the major reason customers cite for changing
their bank, trading and actively managing service delivery is essential – and integral – to the
industry’s leader’s approach” (Strategic Direction, 2007, p. 23). Thanks to the information
received from CRM, business would be able “translate information from sensing into a statement
of targeting customers to deal with, a statement of customer requirements what customers need,
when then they need it and so on. They respond by giving customers what they want, and will
want, when they want it, at the right value – now for the future – through the right channel”
(Stone, 2009, p. 107). Even though they might have an idea what the clients wants, they would
be barriers in having great customer service. Barriers for customer service for the financial
institutions can include, for example, money, effort, economic changes and technological
changes. All of these can have a serious effect on the quality of customer service. However, the
success of the business is going to determine how the organization deals with it.
22
CHAPTER 3
METHODOLOGY
The purpose of this chapter is to describe the procedures used to test the following
hypotheses that this study is based on:
of satisfaction.
23
Population
The population of this research were students, employees, and retired individuals who
were 18 years or older, from University of Central Missouri located in Warrensburg, Missouri
(US) and have a bank account. All of these occupations use banks for different reasons. The
population of this research was invited by email and social media to participate in this research.
The researcher asked different departments of the University of Central Missouri to help
promote the questionnaire. Departments that helped promote this questionnaire were, Office of
Alumni Relations and Development, Student Recreation and Wellness Center, the Graduate
Program of the School of Technology, and University Relations.
Instruments and Apparatus
As mentioned in the previous paragraph, the researcher used an online questionnaire in
conducting this research. After the questionnaire was formulated, an expert panel was formed.
This committee consisted of four employees, and eight students of the University of Central
Missouri. The committee helped the researcher to validate the questionnaire regarding grammar,
wordings, and make sure that the questions on the questionnaire could be understood. After the
committee provided its recommendations, the questionnaire was revised. The committee found
a couple of grammar mistakes and a couple questions needed to be rephrased. After all the
revisions has made, the researcher sent a final draft of the questionnaire to the thesis committee.
The thesis committee went through the questionnaire again to make the questions can be
understood and the questions asked will answer the research questions. Once this process was
completed, the researcher submitted a copy of the questionnaire (Appendix A) to the Human
Subjects Protection Program, located at the University of Central Missouri. The Human
Subjects Protection Protection Program evaluated the questionnaire to make sure it does not
24
hurt or harm anyone who is going to take the questionnaire. Another task of the Human
Subjects Protection Program is to review the questionnaire for content, grammar, and wording.
The Human Subjects Protection Program approved this questionnaire on November 2, 2012
(Appendix B and Appendix C).
This questionnaire (See Appendix A) was divided into two sections:
• The first section of the questionnaire asked respondents to rank each subcategory in
each category. The ten customer dimensions of customer satisfaction: tangibles,
reliability, responsiveness, competence, courtesy, credibility, security, access,
communication, empathy were listed, and each dimension had subcategories for the
students, employees, and retired individuals to rank. For example, the first dimension
being asked was tangibles. This dimension had four subcategories listed: appearance of
physical facilities, appearance of equipment, appearance of personnel and appearance of
communication materials. The students, employees, and retired individuals were asked
to rank each sub-category and provide what is the most important for clients. The
options that was from 1 to 5: 1= not important, 2= less important, 3=neutral,
4=somewhat important, and 5= very important.
• The second section of the questionnaire was related to the demographics information of
the respondents. In this section, the first six questions of the questionnaire dealt with
demographics (question number one to six). These questions asked about personal
information about the participants. These questions asked about the participant’s
gender, age, occupations, which method of banking do they use more often, how often
they went to their bank and how satisfied they were with their current financial
institution.
25
Data Collection
After the purpose of the study and the research questions has been developed, the
research created a questionnaire that can be used on the Internet. For the purpose of this
research, the researcher used Microsoft Word in order to help come up with and prepare
questions for the questionnaire (See Appendix A).
After the questionnaire was formulated, the researcher formed a committee that consisted
of faculty, staff and students of the University of Central Missouri. The questionnaire was set on
the Internet through Google Docs. This link has been sent through an email to Office of Alumni
Relations and Development, Student Recreation and Wellness Center, the Graduate Program of
the School of Technology, and University Relations
After the data has been collected, the data has been projected in Microsoft Excel. The
researcher started collecting data on November 7, 2012 until December 11, 2012, for a total of
five weeks. After the data has been collected, the data has been projected in Microsoft Excel.
After the data has been projected in Excel, the researcher used Statistical Package for the Social
Sciences (SPSS) version 21.0. to help understand the data better.
Statistical Analysis
With the help Microsoft Excel, the data collected was easily transferred to SPSS version
21.0. When the data was transferred to SPSS and coded, the researcher did a frequency
calculation for the demographics questions. This was how the researcher was able to calculate
how many people responded and percentage out of total respondents for each question.
To get the mean for each dimension based on age, gender, and occupation, the researcher
did a descriptive statistics (correlations and test for mean differences). After all the mean of
questions related to a dimension has been calculated, an overall mean for each of the 10
26
dimensions has been computed. This step has been repeated three times to calculate the mean
for each dimension based on gender, age, and occupation. After this has completed, the
researcher used bar chart to not only rank the dimensions based on the gender, age or
occupation of the respondents but also to compare and contrast between with the other groups.
To test all four hypotheses, the researcher used one-way Analysis of Variance (ANOVA).
This study used alpha at the level of 0.05 statistical significance. The reason why 0.05 was
appropriate for this study is because the consequence of committing a type I error will not be a
threat to the participants.
Research Procedure
The first step was to do a literature survey. After the literature survey was completed, the
next step was to define research problems. These research problems helped to come up with
research questions. These research questions helped tremendously in narrowing down the
hypotheses. When the hypotheses were known, the next step was to do a review of literature.
After the review of literature has been done, the next thing was to come up with a questionnaire
that would help answer the research questions. When the questionnaire has been made and
validated by a committee formed by students, faculty, and staff, the thesis committee, and the
Human Subjects Protection program, it was set up on Google Docs. The next step after that was
to invite students, faculty, staff, and retired individuals of UCM take the survey. After five
weeks of collecting the data, the researcher started studying the data. When the researcher was
done studying the data, the last step involved writing a summary and conclusion of the findings.
27
CHAPTER 4
FINDINGS
The researcher started to collect data from the participants on November 7, 2012 and
ended collecting data on December 11, 2012, a total of five weeks. The results indicated a total
of 126 respondents completing the questionnaire. As described in Chapter One, the first purpose
of this study was to determine the most important customer service dimensions perceived by
three different groups of customers that financial institutions have: college students, employees,
and retired individuals. The second purpose of this study was to determine the most important
customer service dimensions perceived by the gender of customers that financial institutions
has: male and female. The third purpose of this study was to determine if the there is a
difference between the gender of the customers and which method they prefer to get assisted by
their financial institutions. The fourth purpose of this study was to determine if the level of
satisfaction of the customer depended on how often the customers go to their financial
institution. The findings are grouped in three major parts:
1. Demographic and descriptive information of the respondents.
2. Ranking of the ten dimension of customer satisfaction.
3. Data Analysis
Part One: Demographics and Descriptive Information of the Respondents
There were a total of six questions related to the demographics of the respondents. The
survey questions were as follows: the gender of the respondents, the age of the respondents, the
occupation of the respondents, the method of transaction that the respondent use more often, how
28
often the respondent goes to their bank and how satisfied are the customer with the services
provided by their financial institution.
The first question from the demographics section, asked the respondents in which age
group they belong to. The useable responses include 30 (23.8 %) in the 18-28 age group, 12 (9.5
%) in the 29-39 age group, 20 (15.9 %) in the 40-50 age group and 64 (50.8%) in the 51 or older
age group. The second question from the demographics section, asked the respondents’ gender.
The usable responses include 65 (51.6 %) identified themselves as female and 61 (48.4%)
identified as male.
The third question from the demographics section, asked the respondents for their
occupation. The usable responses include 39 (31 %) as college students, 37 (29.4 %) as retired
individual, and 50 (39.7 %) as employees. The fourth question from the demographics section
asked the respondents which method they used more often to do a transaction. The usable
response includes 66 (52.4 %) as online banking, 28 (20.6 %) as go inside a branch, 2 (1.6%) as
telephone banking, 13 (10.3 %) as drive-thru of your financial institution, 17 (13.5 %) as ATM,
and 2 (1.6%) as mobile banking.
The fifth question from the demographics section asked the respondents how often they
go to their bank. The usable response includes 63 (50 %) as fewer than 2 times per month, 23
(18.3 %) as I have not stepped inside a bank in the past 6 months, and 40 (31.7%) as more than 2
or more per month. The sixth question from the demographics section asked the respondents how
satisfied they were with the services provided by their current financial institution(s). The usable
responses included 3 (2.40 %) as not satisfied, 25 (19.8 %) as neither satisfied nor not satisfied’,
29
and 98 (77.8 %) as very satisfied. Table 2 displays the descriptive statistics of the respondents for
the demographics questions.
Table 2
Descriptive statistics of the respondents for the demographics questions
Demographic question Frequency Percent
Age 18-28 30 23.8
29-39 12 9.5
40-50 20 15.9
51 or older 64 50.8
Gender Female 65 51.6
Male 61 48.4
Occupation college student 39 31.0
retired individual 37 29.4
employee 50 39.7
Method online banking 66 52.4
go inside a branch 26 20.6
telephone banking 2 1.6
drive-thru of your 13 10.3
financial institution
ATM 17 13.5
mobile banking 2 1.6

30
Part Two: Ten Dimension of Customer Satisfaction.
In this section of the questionnaire, respondents were asked to rank each subcategory
within each category. The 10 dimensions of customer satisfaction were listed, and each category
had subcategories for the students, employees and retired individuals to rate. For example,
category one is tangible. This category was listed in four subcategories: appearance of physical
facilities, appearance of equipment, appearance of personnel, and appearance of communication
materials. The students, employees and retired individuals were asked to rank each category. The
scale was between 1 to 5 as; 1= not important, 2= less important, 3= neutral, 4=somewhat
important, and 5= very important. When the data was collected, the researcher calculated the
mean for each dimension of customer satisfaction.
Table 3 displays the mean for each of the 10 dimension of customer satisfaction by
gender, occupation, and overall respondents, based on gender. The female respondents scored
reliability as the most important dimension of customer satisfaction with a mean of 4.95. The
male respondents scored reliability also as the most important dimension of customer satisfaction
with a mean score of 4.96.
Based on occupation, college students scored both reliability and responsiveness the same
as the two most important dimensions of customer satisfaction with a mean score of 4.92. The
Retired Individual scored competence as the most important customer satisfaction with a mean
score of 4.99. The employees scored reliability as the most important dimension of customer
satisfaction with a mean score of 4.95.
Based on the overall opinion of respondent’s perception, the most important customer
satisfaction is reliability with a mean score of 4.95.

31
Table 3
The mean for each dimension of customer satisfaction based on the gender, occupation, and
overall respondents
Gender Occupation Overall
College Retired
Female Male Employee
Students Individuals
Tangibles 4.00 3.86 4.10 4.00 3.93 3.93
Reliability 4.95 4.96 4.92 4.95 4.95 4.95
Responsiveness 4.88 4.89 4.92 4.88 4.88 4.88
Competence 4.86 4.95 4.82 4.99 3.93 4.90
Courtesy 4.77 4.66 4.79 4.66 4.72 4.72
Credibility 4.83 4.91 4.83 4.95 4.87 4.87
Security 4.78 4.85 4.87 4.91 4.86 4.86
Access 4.05 3.99 4.21 3.85 4.02 4.02
Communication 4.52 4.63 4.58 4.66 4.58 4.58
Empathy 4.28 4.35 4.26 4.49 4.49 4.31

32
Part Three: Data Analysis
The first research question for this study: Is there a difference in the most
important dimension of customer satisfaction between college students, employees, and retired
individuals? The computation of the one-way ANOVA one-way was performed to test this
hypothesis; the F value was calculated at the level of 0.05 statistical significance.
Table 4 displays the ANOVA results for research question one. As can be noticed,
reliability was used in this ANOVA calculation, because the overall respondents rated this
dimension as the most important dimension of customer satisfaction (Table 3). For the
dimension reliability and the category of financial institution being able to the service
dependably and accurately, the F statistic is 0.798. The observed significance level is 0.453, so
the null hypothesis is not rejected, and the alternative of a difference is not tenable. In other
words, there is no significant difference in the most important dimension of customer satisfaction
between college students, full time employee, and retired individuals.

33
Table 4
The ANOVA results for research question one.
Sum of Squares df Mean Square F Sig.
Reliability: Between
dependably Groups 0.073 2 0.037 0.798 0.453
Within
& Groups 5.641 123 0.046
accurately Total 5.714 125
Research Question Two:
The second research question for this study is: Is there a difference of the most important
dimension of customer satisfaction between male and female customers? The computation of the
one-way ANOVA one-way was performed to test this hypothesis; the F value was calculated at
the level of 0.05 statistical significance.
Table 5 displays the ANOVA results for research question two. As can be noticed,
reliability was used in this ANOVA calculation because the overall respondents rated this
dimension as the most important dimension of customer satisfaction (Table 3). For the
dimension reliability and financial institution able to the service dependably, the F statistic is
0.567. The observed significance level is 0.453, so the null hypothesis is not rejected, and the
alternate is not tenable. For the dimension reliability and the category of financial institution
34
being able to provide the promised service, the F statistic is 0.006. The observed significance
level is 0.937, so the null hypothesis of no difference is not rejected. In other words, there is no
significant difference in the most important dimension of customer satisfaction between male
and female customers.
Table 5
The ANOVA results for research question two.
Sum of df Mean F Sig.
Squares Square
Reliability:
service Between
dependably Groups 0.026 1 0.026 0.567 0.453
Within Groups 5.688 124 0.046
Total 5.714 125
Reliability:
promised Between
service Groups 0.000 1 0.000 0.006 0.937
Within Groups 5.714 124 0.046
Total 5.714 125

35
Research Question Three:
The third research question for this study is: Is there a difference between the gender of
the customers and which method they prefer to get assisted by their financial institutions? The
computation of the one-way ANOVA one-way was performed to test this hypothesis; the F value
was calculated at the level of 0.05 statistical significance.
Table 6 displays the ANOVA results for research question three. The F value is 1.858.
The observed significance level is 0.175, so the null hypothesis of no difference is not rejected.
In other words, there is no significant difference between the gender of the customers on which
method they prefer when getting assisted by their financial institutions.
Table 6
The ANOVA results for research question three.
Between 4.450 1 4.450 1.858 .175
Groups
Within 297.050 124 2.396
Groups
Total 301.500 125

36
Research Question Four:
The fourth research question for this study is: Does the level of satisfaction of customers
by services received by financial institutions depend on how often they go to their financial
institutions? The computation of the one-way ANOVA one-way was performed to test this
hypothesis; the F value was calculated at the level of 0.05 statistical significance.
Table 7 displays the ANOVA results for research question four. The F statistic is 2.958.
The observed significance level is 0.056, so the null hypothesis is not rejected, and the alternate
is not tenable. In other words, there is no significant difference between how often the customers
go to the bank and their level of satisfaction with services provided
Table 7
The ANOVA results for research question four.
Between 1.347 2 .673 2.956 .056
Groups
Within Groups 28.026 123 .228
Total 29.373 125

37
Summary of Findings
The results included a total of 126 respondents who completed the questionnaire. The
survey results were gathered from the 126 respondents who at least18 years or older, were from
the University of Central Missouri community, and had a bank account. The questionnaire was
divided into two sections. The first section contained questions relating to the ten dimensions of
customer satisfaction. The first section let the respondents rank each subcategory in every
dimension. The students, employees and retired individuals were asked to rank each category.
The scale was between from 1 to 5 as; 1= not important, 2= less important, 3= neutral,
4=somewhat important, and 5= very important. When the data was collected, the researcher
calculated the mean for each dimension of customer satisfaction.
Based by gender, the female respondents scored reliability the highest as the most
important dimension of customer satisfaction with a mean of 4.95. The male respondents scored
reliability also as the most important dimension of customer satisfaction with a mean score of
4.96.
Based by occupation, college students scored both reliability and responsiveness the same
Based on the overall opinion of respondent’s perception, the most important dimension of
customer satisfaction is reliability with a mean score of 4.95.

38
The questions in the second section contained questions related to the demographics
information of the respondents. There were a total of six questions related to the demographics of
the respondents. The survey questions were as follows: the gender of the respondents, the age of
the respondents, the occupation of the respondents, the method of transaction that the respondent
use more often, how often the respondent goes to their bank and how satisfied are the customer
with the services provided by their financial institution.
age group.
The second question from the demographics section, asked the respondents’ gender. The
usable responses include 65 (51.6 %) identified themselves as female and 61 (48.4%) identified
as male.
individual, and 50 (39.7 %) as employees.
The fourth question from the demographics section asked the respondents which method
they used more often to do a transaction. The usable response includes 66 (52.4 %) as online
banking, 28 (20.6 %) as go inside a branch, 2 (1.6%) as telephone banking, 13 (10.3 %) as drive-
thru of your financial institution, 17 (13.5 %) as ATM, and 2 (1.6%) as mobile banking.
39
or more per month.
The sixth question from the demographics section asked the respondents how satisfied
they were with the services provided by their current financial institution(s). The usable
responses included 3 (2.40 %) as not satisfied, 25 (19.8 %) as neither satisfied nor not satisfied’,
and 98 (77.8 %) as very satisfied.
The first null hypothesis was not rejected; there is no significant difference in the most
important dimension of customer satisfaction between college students, full time employee, and
retired individuals
The second null hypothesis was not rejected; there is no significant difference in the most
important dimension of customer satisfaction between male and female customers
The third null hypothesis was not rejected; there is no significant difference between the
gender of the customers on which method they prefer to get assisted by their financial
institutions
The fourth null hypothesis was not rejected; there is no significant difference on how
often the customers go to the bank and their level of satisfaction.

40
CHAPTER 5
SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS
This chapter consists of three sections are: summary, conclusions, discussion, and
recommendations. The first section provides a summary of the statement of problems, purpose of
the study, significance of the study, research questions and hypothesis, and findings. The second
section concludes the results and discussion of this study. The third gives recommendation for
further study and conclusion.
Financial institutions needs to make sure their client are not just satisfied but impressed
with the customer service the firm has to offer. In order to have happy clients, companies need
to make sure their clients are satisfied not only with the product or the service they receive, but
also with the customer service. That is why a lot of companies have started a new division in
their management: Customer Relationship Management (CRM) has been created to help
promote a better relationship between a company and their customers. The financial institutions
want to portray superiority to their competitors so the customers can see they have the best
product and price, but most importantly, the best customer service in the industry.
It is for this same reason that financial institutions started to focus more on the quality of
the service they would like to offer to their clients. The Center for the Advancement of Process
Technology (2011) defines quality as “the performance, products, and services that consistently
meet or exceed the expectations of the customer by doing the right job, the right way, the first,
every time” (p. 268). A financial institution needs to meet or even exceed the expectations of
their customer. They only have one time to impress their clients with their products or services
they offer. In addition, it is for that reason that many researchers started creating instruments that
41
can help them understand customer satisfaction better. Parasuraman, Zeithaml, and Berry created
in the mid-1980s the SERVQUAL scale to measure quality in the service industry. The
researchers believed that customer satisfaction is dependent on ten dimensions of service quality.
The ten dimensions of customer satisfaction were discussed in the article. They are tangibles,
and empathy (Parasuraman, Zeithaml, and Berry, 1988).
Statement of the Problem
A review of current literature review yields few studies made in the academic
environment to investigate what college students, employees, and retired individuals think about
customer service in financial institutions. All three mentioned groups of customers may have
different goals and expectations from their financial institutions. What may work with one group
does not mean it will work with the others.
Additionally technology can affect the quality of service the bank is trying to offer. Even
though all of these services are extremely helpful in giving customers flexibility of when they
would like to use the bank services, it can actually hurt the quality of service. Technology cannot
be 100% trusted to be reliable and effective; for example, the mobile banking application using a
phone connection can crash. The customers need to keep updating certain computer applications
in order to use the service or even customers need to have a certain electronic device in order to
use a service. Banks try to offer a great variety of new services, but a lot of times customers need
to answer several security questions security questions before being able to use the product. On
many occasions there are no manual or workshop on how to use a certain product. Consequently
42
customers will spend hours trying to figure out how to do certain transaction, or finding out all
the possible services that can be accessed online without traveling to a branch office.
Purpose of the Study
The purpose of this study was to determine the most important customer service
dimensions of financial institutions perceived by three groups of customers: college students,
employees, and retired individuals. After the research has been conducted, the researcher will
compare and contrast the information collected related to customer service. The researcher
hopes the information be helpful for financial institutions in the future. This way financial
institution located around the world can compare and contrast their philosophies about which
dimensions of customer service are important, how their current focus affects the group(s) of
customers they are trying to attract and how they can improve their own customer service. The
study was also intended to help post-secondary education institutions with information that can
be presented to students to help them understand better the customer’s opinions about customer
service in financial institutions.
Significance of the Study
This study is intended for general customers of financial institutions to choose which
dimensions are perceived to be important. However, there has not been a specific study about
what college students, employees, and retired individuals in a university environment thinks
about the customer service they receive from their financial institutions. These three groups
represent customers of financial institutions with different needs. The first groups, college
students, are extremely important to any financial institutions. This group of customers usually
is going to be exposed to a more active relationship with their financial institution. College
students usually open their first checking account and get a credit card before they go to college.
43
This group is more likely to be involved in learning about all the services bank have to offer for
the first time. It is crucial for financial institutions to offer this group of clients the best first
impression possible of their services. If the financial institution has provided a great service
experience to college students, once they graduated they may continue use the same group for
their financial needs.
The second group is employees. This group of people have a full time job and may use
the financial institutions to pay their bills, get a mortgage to purchase their home, get car loans,
and for financial planning. They use the bank services a lot for any financial issues they may
encounter.
The third and last group is retired people. Retired people are also important to financial
institutions. This group have worked most of their life now are receiving a pension each month
and from their retirement account. This investigation has generated the following research
questions.
Research Questions
Is there a difference of the most important dimension of customer satisfaction between
college students, employees, and retired individuals?
Is there a difference of the most important dimension of customer satisfaction between
male and female customers?
Is there a difference between the gender of the customers and which method they prefer
to get assisted by their financial institutions?
Does the level of satisfaction of customers by services received by financial institutions
depend on how often they go to their financial institutions?

44
Research Hypothesis
Ho1: There is no significant difference in the most important dimension of customer satisfaction
of satisfaction.
Summary of Findings
The results included a total of 126 respondents who completed the questionnaire. The
survey results were gathered from the 126 respondents who at least18 years or older, were from
the University of Central Missouri community, and had a bank account. The questionnaire was
divided into two sections. The first section contained questions relating to the ten dimensions of
45
customer satisfaction. The first section let the respondents rank each subcategory in every
dimension. The students, employees and retired individuals were asked to rank each category.
The scale was between from 1 to 5 as; 1= not important, 2= less important, 3= neutral,
4=somewhat important, and 5= very important. When the data was collected, the researcher
calculated the mean for each dimension of customer satisfaction.
Based by gender, the female respondents scored reliability the highest as the most
important dimension of customer satisfaction with a mean of 4.95. The male respondents scored
reliability also as the most important dimension of customer satisfaction with a mean score of
4.96.
Based by occupation, college students scored both reliability and responsiveness the same
Based on the overall opinion of respondent’s perception, the most important dimension of
customer satisfaction is reliability with a mean score of 4.95.
The questions in the second section contained questions related to the demographics
information of the respondents. There were a total of six questions related to the demographics of
the respondents. The survey questions were as follows: the gender of the respondents, the age of
the respondents, the occupation of the respondents, the method of transaction that the respondent
use more often, how often the respondent goes to their bank and how satisfied are the customer
with the services provided by their financial institution.

46
age group.
The second question from the demographics section, asked the respondents’ gender. The
usable responses include 65 (51.6 %) identified themselves as female and 61 (48.4%) identified
as male.
individual, and 50 (39.7 %) as employees.
The fourth question from the demographics section asked the respondents which method
they used more often to do a transaction. The usable response includes 66 (52.4 %) as online
banking, 28 (20.6 %) as go inside a branch, 2 (1.6%) as telephone banking, 13 (10.3 %) as drive-
thru of your financial institution, 17 (13.5 %) as ATM, and 2 (1.6%) as mobile banking.
or more per month.
The sixth question from the demographics section asked the respondents how satisfied
they were with the services provided by their current financial institution(s). The usable
responses included 3 (2.40 %) as not satisfied, 25 (19.8 %) as neither satisfied nor not satisfied,
and 98 (77.8 %) as very satisfied.

47
The first null hypothesis was not rejected; there is no significant difference in the most
important dimension of customer satisfaction between college students, full time employee, and
retired individuals
The second null hypothesis was not rejected; there is no significant difference in the most
important dimension of customer satisfaction between male and female customers
The third null hypothesis was not rejected; there is no significant difference between the
gender of the customers on which method they prefer to get assisted by their financial
institutions
The fourth null hypothesis was not rejected; there is no significant difference on how
often the customers go to the bank and their level of satisfaction.
Discussion
Figure 1 displays the most important dimension based on the occupation of the
respondents. Based on occupation, the top five dimensions of customer satisfaction for college
students are reliability, responsiveness, security, credibility, competence, and courtesy. The
college students rated both reliability and responsiveness as equally important dimensions of
customer satisfaction with a mean score of 4.92. The top five dimensions of customer
satisfaction of retired individuals are competence, reliability, credibility, security and
responsiveness. The retired individual rated competence as the most important dimension of
customer satisfaction with a mean score of 4.99. The top five dimensions of customer
satisfaction for the employees are reliability, responsiveness, credibility, security, and courtesy.
The employee rated reliability as the most important dimension of customer satisfaction with a
mean score of 4.95.

48
5.00
4.90
4.80
4.70
4.60
Rating Sclae
4.50
4.40
4.30
4.20 college students
4.10
4.00 retired indivuals
3.90
3.80 employee
3.70
3.60
3.50
Dimensions of Customer Satisfaction
Figure 1. Most important Dimension of Customer Satisfaction based on Occupation
Figure 2 displays the most important dimension based on the age of the respondents.
Based on age, the top 5 dimensions of the customer satisfaction ffor

or the age group of 18-28
18 are:
reliability, responsiveness,, security, courtesy, and credibility. The 18-28

28 age group rated
reliability
eliability as the most dimension of customer satisfaction with a mean score of 4.90. The top five
dimensions of the customer satisfaction for the age group of 29

29-39 are: reliability,
liability, competence,
credibility, responsiveness,, security, and ccourtesy. The 29-39

39 age group rated both reliability
r and
competence
ompetence as equally important dimension
dimensions of customer satisfaction with a mean score of 5.00.
The top five dimensions of customer satisfaction for the age group oof 40-50
50 are: responsiveness,
competence, reliability, credibility,

redibility, security, and courtesy. The 40-50
50 age group rated both
responsiveness and competence

ompetence as equally important dimensions of customer satisfaction
satisfa with a
49
mean score of 4.98. The top five dimensions of the customer satisfaction for the age group of 51
or older are reliability,, competence, credibility, ssecurity, and responsiveness.. The 51 and older
age group rated reliability as the most important dimension of customer satisfaction with a mean
m
score of 4.97.
5.00
4.90
4.80
4.70
4.60
Rating Sclae
4.50
4.40
4.30
4.20
4.10 18-28
4.00
3.90 29-39
3.80
3.70 40-50
3.60
3.50 51 or older
Dimensions of Customer Satisfaction
Figure 2. Most important Dimension of Customer Satisfaction based on Age
Figure 3 displays the most important dimension based on the gender of the respondents.
Based on gender, the top 5 dimensions of customer satisfaction ffor the female respondents are:
reliability, responsiveness,, competence, ccredibility, and security.. The female respondents rated
reliability
eliability as the most important dimensions of customer satisfaction with a mean score of 4.95.
The top five dimensions of custome

customer satisfaction for the male respondents are: reliability,
competence, credibility, responsiveness

esponsiveness, and security.
ty. The male respondents rated reliability
r as
the most important dimensions of customer satisfaction with a mean score of 4.96.
4.96
50
5.00
4.90
4.80
4.70
4.60
4.50
Rating Scale
4.40
4.30
4.20
4.10
4.00 Female
3.90
3.80 Male
3.70
3.60
3.50
Dimension of Customer Satisfaction
Figure 3. Most important Dimension of Customer Satisfaction based on Gender
Based on this research, th

the researcher can conclude that reliability
eliability is the most important
dimension of customer satisfaction.

atisfaction. Based on Table 3, rreliability
eliability was ranked as the most
important customer satisfaction in the overall all respondents, with a mean score of 4.95 out of 5.
The college students, employees, and retired individuals all agreed that besides reliability,
r
there also need to be responsiveness

esponsiveness, security, and credibility for them to enjoy the service.
The 18-28 age group, 29--39 age group, 40-50

50 age group, and 51 or older age group all
agreed that besides reliability, there also need

needs to be responsiveness,, security, and credibility
c for
them to enjoy the service.
The female and malee gender both agreed that besides reliability, responsiveness
esponsiveness, security,
credibility, and competence are also important

important.
51
In other words, based by the opinion of the occupation, age, and gender, besides
reliability, responsiveness, security, and credibility are all important in order for them to enjoy
the service.
In order for customers to be happy with the services provided by their financial
institution, they need to know that their financial institutions will be able to perform the
promised service not only dependably but also accurately. Customers need to be assured that
their financial institution is willing to help them and that can provide prompt service. One way
that financial institutions can do this is to make sure that their customers know that they can have
a freedom from danger, risk or doubt with the services provided by them. Another way that
financial institutions can do this, is to assure to their customers they can always rely on the
trustworthiness, believability, and honesty of the financial institution.
Recommendations for Future Studies
It is the recommendation of this researcher that this subject be further studied in more
specific detail. This information is highly interesting and important to present not only to
schools, but also to businesses. The researcher feels that the following suggestions should be
focused upon:
First, the replication of this study and with more focus based on companies from other
industries. This information can be compared and contrasted see if customers from different
industry think the same as the ones of the financial industry
Second, this study could be replicated at another university. This way the researcher in
this study can compare and contrast the information collected and study if there is any
similarities or differences between the data.

52
Third, this study could be replicated with a revised questionnaire. For example the
researcher in this study can add more sections for ranking. This way the respondents will have
two chances to rank the dimensions. This will allow the researcher in this study, to study if the
ranking in both sections to compare response. Another way could be to conduct a pre- and post-
test to compare the responses of the respondents.
Conclusion
The findings of this research included that there was no significant difference in the most
important dimension of customer satisfaction between college students, full time employee and
retired individuals. There was also no significant difference in the most important dimension of
customer satisfaction between male and female customers.
Based on gender, there was also no significant difference between the gender of the
customers on which method they prefer to get assisted by their financial institutions. There was
also no significant difference on how often the customers go to the bank and their level of
satisfaction. According to the respondents, 52.4% agreed that the method of banking they used
more often in the past six months was online banking.
This research provides crucial information for how financial institutions located around
the world can compare and contrast their philosophies about which dimensions of customer
service are important, how their current focus affects the group(s) of customers they are trying to
attract and how they can improve their own customer service. However, this information can
help post-secondary education institutions with information that can be presented to students to
help them better understand the customer’s opinions about customer service in financial
institutions.
53
Like any other business, financial institutions need their customers in order to stay in
business; otherwise they would not be able to stay in business. That is why research in customer
satisfaction needs to be continuous process. An organization can bring a customer to the firm,
but to retain the client is the most delicate job for any kind of business. If a company is able to
have a superior customer satisfaction and can create long-term relationships with their
customers, they can be successful in the long term as well.

54
REFERENCES
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American Society of Quality. (2013, February 26). American Society of Quality. Retrieved from
http://asq.org/learn-about-quality/total-quality-management/overview/overview.html
Berman, J. (2011, November 9). Retrieved from The Huffington Post
http://www.huffingtonpost.com/2011/11/09/bank-transfer-day-40000-join-credit-
unions_n_1083744.html
Buttle, F. (1996). SERVQUAL: Review, Critque, research agenda. European Journal of
Marketing, 30 (1).
Center for the Advancement of Process Technology. (2011). Process quality. Upper Saddle
River, NJ: Prentice Hall.
Durkin, M., & Howcroft, B. (2000). Reflections on bank-customer interactions in the new
millennium. Journal of Financial Services Marketing, 5(1), 9-20.
Eisingerich, A. B., & Bell, S.J. (2006). Relationship marketing in the financial services industry:
The importance of customer education, participation and problem management for
customer loyalty. Journal of Financial Services Marketing, 10(4), 86-97.
Elmutti, D., Jia, H., & Gray, D. (2009). Customer relationship management strategic application
and organizational effectiveness: an empirical investigation. Journal of Strategic
marketing, 75-96.
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Evans, J. R. (2005). Total Quality: Management, Organizaiton and Strategy. Mason, OH:
Thomson/South-Western.
Federal Reserve of St. Louis. (2013, February 13). Federal Reserve of St. Louis. Retrieved from
http://research.stlouisfed.org/fred2/series/USNUM?rid=55&soid=6
Gortsch, D. L., & Davis, S. B. (1997). Introduction to Total Quality: Quality Management for
Production, Processing and Services. Upper Saddle River, NJ: Prentice-Hall, Inc.
Gupta, A., McDaniel, J. C., & Herath, S. K. (2005). Quality management in service firms:
sustaining structures of total quality service. Managing Service Quality , 15 (4), 389-402.
Knouse, S. B., Carson, P. P., Carson, K. D., & Heady, R. B. (2009). Improve constantly and
forever: The influence of W. Edwards Deming into the twenty-first century. The TQM
Journal, 21 (5), 449-461.
J.D. Power & Associates. (2012, February ). J.D Power & Associates. Retrieved from
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Lee, S., Zuckwiler, K., & Trimi, S. (2006). Modernization of the Malcolm Baldrige National
Quality Award. International Journal Of Production Research, 5089-5106.
Liu, H-Y. (2007). Development of a framework for customer relationship management in the
banking industry. Internatonal Journal of Management, 24(1), 15-32.
Liu, T-C., & Wu, L-W. (2007). Customer retention and cross-buying in the banking industry: An
integration of service attributes, satisfaction and trust. Journal of Financial Services
Marketing , 12 (2), 132-145.

56
Lopez Alarcon, J. S. (2003). The Dimensions of Customer Satisfaction In the Financial Services
Industry. Boca Raton, FL: Lynn University.
Lucas, R. W. (2005). Customer Service: Building succesful skills for the twenty-first century.
New York: McGraw-Hill/Irmin.
Lucas, R. W. (2011). Please every customer: Delivering stellar customer service across cultures.
New York: McGraw Hill.
Masson, D. J., & Wikoff, D. A. (1997). Essentials of cash management. Bethesda, MD: Treasury
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Parasuraman, A., Zeithaml, V.A., & Berry, L.L. (1988). SERVQUAL: A multiple item scale for
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57
APPENDIX A
Questionnaire
The researcher would like to thank you for filling in this questionnaire. You responses are
extremely important. Please be aware that the responses you give will be kept confidential and
will be used for research purposes only. If you have any questions, please do not hesitate in
contacting me at: geerman@ucmo.edu or by phone: (660)-543-4340. If you have any questions
about your rights as a research participant, please contact the Human Subjects Protection
Program at (660)-543-4624.
Please choose answer for all the questions on this page, when you are done click on "submit".
Disclaimer:
Please be aware that this study is completely voluntary, that there will be no compensation and
that your individual answers will be held in the strictest confidence and in no way will be
traceable to you.
o I agree
Section 1: Your opinion about customer service
Please answer the following questions based on what you think is important in order to enjoy the
services of your current financial institution(s).The options are not important, less important,
neutral, somewhat important, and very important. Check on your selected answer.
Not Less Neutral Somewhat Very

important important important important
Block 1: Tangibles
Appearance of physical
facilities, equipment, personnel
and communicating material.
Appearance of physical
facilities
Appearance of equipment
Appearance of personnel
Appearance of communication
material
58
Block 2: Reliability
Ability to perform the
promised service dependably
and promised service
accurately.
promised service dependably
promised service accurately
Block 3: Responsiveness
Willingness to help customers
and provide prompt service
Willingness to help customers
promptly
Ability to provide prompt
service
Block 4: Competence
Possession of the required
skills and knowledge to
perform the service
Having the required skills to
serve clients
Service personnel having the
knowledge necessary to
perform their duties
Block 5: Courtesy
Politeness, respect
consideration and friendliness
of contact personnel
Politeness of the service
personnel
Respect toward the customer
by the personnel
Consideration of the
customer’s needs by the
59
personnel
Friendliness of contact
personnel
Block 6: Credibility
Trustworthiness, believability
and honesty of the service
provider
Trustworthy of the company
and employees
Believability of the personnel
Honesty of the service

provider
Block 7: Safety
Freedom from danger, risk or
doubt
Safety of the clients’ funds
Trust in the institution’s ability

to manage the clients finances
effectively
Ability of the institution to
convey personal trust
Block 8: Access
Approachability and ease of
contact
Approachability; ease of
access to individualized
Ease of contact with service
personnel after business hours
Block 9: Communication
Keeping customers informed in
a language in which they can
understand and listen
60
Keeping customers informed
All communication is worked

easy to understand and listen
to
Block 10: Empathy

Making the effort to know
customers and their needs.
Making the effort to know
customers
Making the effort to
understand the customer needs
Feeling for the customer when
difficulty arises
Section 2: Demographics Information
Gender:
o Male
o Female
Age:
o 18-28
o 29-39
o 40-50
o 51 or older
On the UCM campus I am considered a(n)

o College Student
o Employee
o Retired Individual
In the past 6 months, if you needed to do a transaction from your bank account, which
method did you use more often?
o Online banking
o Go inside a branch
o Telephone Banking
o Drive-thru of your financial institution
o ATM
61
o Mobile Banking (for example, Apps, Text)
How often do you go to your bank?

o Less than 2 times per month
o I have not stepped inside a bank in the past 6 months
o More than 2 or more per month.
How satisfied are you with the services provided by your current financial institution(s)?
o Not very satisfied
o Not satisfied
o Neutral
o Satisfied
o Very satisfied
*******************************
Your response has been recorded. I really appreciate your answers and the time you took to fill in
this questionnaire
Any questions or comments that you might have, please feel free to contact me at phone number
660-543-4340 or geerman@ucmo.edu
Yvar Geerman
62
APPENDIX B
Human Subjects Protection Program Review Approval
63
APPENDIX C
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PERCEPTIONS OF CUSTOMER SERVICE IN FINANCIAL

INSTITUTIONS: A PILOT STUDY AT THE

UNIVERSITY OF CENTRAL MISSOURI

of a thesis submitted in partial fulfillment

of the requirements for the degree of

University of Central Missouri

INSTITUTIONS: A PILOT STUDY AT THE

UNIVERSITY OF CENTRAL MISSOURI

presented in partial fulfillment

of the requirements for the degree of

University of Central Missouri

ALL RIGHTS RESERVED

INSTITUTIONS: A PILOT STUDY AT THE

UNIVERSITY OF CENTRAL MISSOURI

Thesis Chair: Dr. Suhansa Rodchua

Thesis Committee Member: Dr. Ronald Woolsey

Thesis Committee Member: Dr. Jeffrey Ulmer

Chair, School of Technology: Dr. Douglas Koch

UNIVERSITY OF CENTRAL MISSOURI

supported me with any decision I have made in my life.

would have not been possible.

refinements to this study.

of the School of Technology, and University Relations.

Statement of the Problem…..…………………………………………………………..4

Purpose of the Study……………………………………………………………………5

Significance of the Study…..…………...……………………………………………...5

Total Quality Management……………………………………………………………11

The Key Elements of TQM…………………………………………………………...12

Customer Relationship Management…………………………………………………16

Ten Dimensions of Customer Satisfaction …………………………………………...17

Customer Perception of Customer Service…………………………………………...18

Barriers in Having Successful Customer Service…………………………………….20

Instrument and Apparatus…………………………………………………………….23

Part 1: Demographics and Descriptive Information of the Respondents……………..27

Part 2: Ten Dimensions of Customer Satisfaction……………………………………30

Part 3: Data Analysis …………………………………………………………………32

5. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS………………………40

Statement of the Problem…………………………..…………………………………41

Purpose of the Study………………………………………………………………….42

Significance of the Study……………………………………………………………..42

Recommendations for Future Studies…………..…………………………………….51

B. Human Subjects Protection Program Review Approval Letter……………………….62

1. Correlation between the ten dimensions and customer satisfaction……………………..19

2. Descriptive statistics of the respondents for the demographics questions……………….29

3. The mean for each dimension of customer satisfaction based on gender,

occupation, and overall respondents…………………………………………………….31

4. The ANOVA results for research question one………………………………………….33

5. The ANOVA results for research question two………………………………………….34

6. The ANOVA results for research question three………………………………………...35

7. The ANOVA results for research question four…………………………………………36

1. Most important Dimension of Customer Satisfaction based on Occupation…………….48

2. Most important Dimension of Customer Satisfaction based on Age…………………….49

3. Most important Dimension of Customer Satisfaction based on Gender…………………50

started to take closer attention to their customer service.

movement that happened in 2011 organized by an angry group of customers of financial

are happy with the service they are receiving.

but most importantly, the best customer service in the industry.

reliability, responsiveness, competence, courtesy, credibility, security, access, communication,

and empathy (Parasuraman, Zeithaml, and Berry, 1988).

customers of the financial services industry is reliability (Lopez Alarcon, 2003).

Statement of the Problem

does not mean it will work with the others.

Purpose of the Study