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Banking retailers recognize that customer satisfaction (CS) plays a key role in a successful

business strategy. What is unclear is the exact nature of that role, how precisely satisfaction

should be managed, and whether managerial efforts aimed at increasing satisfaction lead to

higher score in sales. Today, managers in the banking sector undertake substantial efforts to

conduct CS surveys. Yet it appears that in most cases the data are used to simply monitor

specific attributes, and especially overall satisfaction, over time. Unless the impact of customer

satisfaction on revenues is assessed, managers have little basis for allocation of resources.

The concept of customer care is concern with customer satisfaction putting the customer first,

anticipating needs and problems, tailoring the product and services to meet needs and being nice

to customers it also includes service to the customer, delivery operation, employee relationship

with customer and internal relationship between employee and management. In developing

customer care strategies and programs, financial services organizations are managing products

and services, delivery systems, environment and people so as to provide an efficient and caring

service, getting things right the first time and maintaining standards.

Organizations are increasingly interested in retaining existing customers while targeting non-

customers; measuring customer satisfaction provides an indication of how successful the

organization is at providing products and/or services to the market place.

Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the

state of satisfaction will vary from person to person and product/service to product/service. The

state of satisfaction depends on a number of both psychological and physical variables which

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correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction

can also vary depending on other options the customer may have and other products against

which the customer can compare the organization's products.

Because satisfaction is basically a psychological state, care should be taken in the effort of

quantitative measurement, although a large quantity of research in this area has recently been

developed. Work done by Berry, Brodeur between 1990 and 1998.defined ten 'Quality Values'

which influence satisfaction behavior, further expanded by Berry in 2002 and known as the ten

domains of satisfaction. These ten domains of satisfaction include: Quality, Value, Timeliness,

Efficiency, Ease of Access, Environment, Inter- departmental Teamwork, Front line Service

Behaviors, Commitment to the Customer and Innovation.

These factors are emphasized for continuous improvement and organizational change

measurement and are most often utilized to develop the architecture for satisfaction measurement

as an integrated model. Work done by Parasuraman, Zeithaml and Berry between 1985 and 1988

provides the basis for the measurement of customer satisfaction with a service by using the gap

between the customer's expectation of performance and their perceived experience of

performance. This provides the measurer with a satisfaction "gap" which is objective and

quantitative in nature. Work done by Cronin and Taylor propose the

"confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman,

Zeithaml and Berry as two different measures (perception and expectation of performance) into a

single measurement of performance according to expectation. According to Garbrand, customer

satisfaction equals perception of performance divided by expectation of performance. Berry,

Brodeur 1998.

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It appears that what consumers are saying is that they expect good products and services from

their bank and that what is important to them is to have courteous and professional employees

whom they can trust to explain them; and correct problems when they happen.

In the product arena, by far the most important issues surround the checking account of

importance to consumers is not only the account itself, but the format of the monthly statements

which they receive. They expect more from their accounts and want this increased functionality

presented in an understandable way. Also, consumers are more sensitive to the pricing of this

product, as the "gap" between the importance of the pricing of a checking account and

customer¶s satisfaction is comparatively high.

While banks have had the checking product pretty much to themselves in the past, the emergence

of internet based banks, and the "creep" of large non-banks into the checking business should be

an alarm bell for banks who want to improve customer satisfaction.

These are among the attributes where banks score the lowest or where the gap between

"importance" and "satisfaction" is the highest. Additional charts tables showing this detail may

be seen on the site...

Loyalty" measures the strength of a customer's satisfaction. But it goes beyond, and also

indicates the "action ability" of that loyalty. The ABA Financial Client Satisfaction Index

measures loyalty in three areas.... Deposit Services... Loans... and Investments. This is done by

asking clients whether they would consider the bank for their next service in these three areas. Of

course, results will vary by both bank and customer, but it is interesting to note that on an overall

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industry basis, clients are more likely to consider their bank for their next deposit account than

for either their next loan of their next investment. And in the case of investments, the score is

much lower (3.33 on a 5.00 scale). Or viewed differently, while 75% would consider their bank

for their next deposit account, only 45% would consider it for their next investment.

In a way, there is some probability that the loyalty score also measures the degree of competition

(or alternative choices, from a customer's perspective) in that particular product marketplace. The

key with this measure is that it be improving over time

It has been observed by such experts in customer satisfaction as J.D. Power & Associates that

"consumer expectations are growing faster than industries can meet them". And the explosive

growth of the Internet is shifting the power of information to the consumer.

Since customer service expectations are growing and are influenced by customer experience with

others, The ABA Financial Client Satisfaction Index measures a customer's overall satisfaction

with his/her bank as compared with other financial providers they use, and with other companies,

in general. The idea here is for a bank's overall satisfaction scores to keep up with, or exceed,

those in other areas. Power, J.D and Associates, 1999.

Fredrick Reichheld (1996) expanded the loyalty business model beyond customers and

employees. He looked at the benefits of obtaining the loyalty of suppliers, employees, bankers,

customers, distributors, shareholders, and the board of directors.

A model by Kay Storbacka, Tore Strandvik, and Christian Gronroos (1994), the service quality

model, is more detailed than the basic loyalty business model but arrives at the same conclusion.

In it, customer satisfaction is first based on a recent experience of the product or service. This

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assessment depends on prior expectations of overall quality compared to the actual performance

received. If the recent experience exceeds prior expectations, customer satisfaction is likely to be

high. Customer satisfaction can also be high even with mediocre performance quality if the

customer's expectations are low, or if the performance provides value (that is, it is priced low to

reflect the mediocre quality). Likewise, a customer can be dissatisfied with the service encounter

and still perceive the overall quality to be good. This occurs when a quality service is priced very

high and the transaction provides little value.

The final link in the model is the effect of customer loyalty on profitability. The fundamental

assumption of all the loyalty models is that keeping existing customers is less expensive than

acquiring new ones. It is claimed by Reichheld and Sasser (1990) that a 5% improvement in

customer retention can cause an increase in profitability between 25% and 85% (in terms of net

present value) depending upon the industry. However, Carrol and Reichheld (1992) dispute these

calculations, claiming that they result from faulty cross-sectional analysis. Schlesinger and

Heskett , 1991.

   

While relationships have been extensively studied in marketing channels ,industrial settings, and

some consumer setting in western cultural contexts such as Europe ,US, the UK ,and even

Australia ,few studies have examined the paradigm in an eastern cultural context such as India.

The maturing of services marketing, the increased recognition of potential benefits for customer

and technological developments are the main factors driving the developments of relationship

marketing. The presence of these factors in the Indian banking sector motivated this research.

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With banks losing 8% of their clients every year 34.relationship marketing strategy to satisfy

customers and improve their profitability has moved to the forefront.

For centuries banks have played an important role in financial system of the country. The vital

role continues even today although the form of banking has changed today with changing need

of the economy and individuals.

Satisfied customers are central to optimal performance and financial returns. In many places in

the world, business organizations have been elevating the role of the customer to that of a key

stakeholder over the past twenty years. Customers are viewed as a group whose satisfaction with

the enterprise must be incorporated in strategic planning efforts. Forward-looking companies are

finding value in directly measuring and tracking customer satisfaction (CS) as an important

strategic success indicator. Evidence is mounting that placing a high priority on CS is critical to

improved organizational performance in a global marketplace. With better understanding of

Customers' perceptions, companies can determine the actions required to meet the customers'

needs. They can identify their own strengths and weaknesses, where they stand in comparison to

their competitors, chart out path future progress and improvement. Customer satisfaction

measurement helps to promote an increased focus on customer outcomes and stimulate

improvements in the work practices and processes used within the company.

Customer satisfaction is quite a complex issue and there is a lot of debate and confusion about

what exactly is required and how to go about it. This research is an attempt to review the

necessary requirements, and discuss the steps that need to be taken in order to measure and track

customer satisfaction.

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Expectations have a central role in influencing satisfaction with services, and these in turn are

determined by a very wide range of factors lower expectations will result in higher satisfaction

ratings for any given level of service quality. This would seem sensible; for example, poor

previous experience with the service or other similar services is likely to result in it being easier

to pleasantly surprise customers. However, there are clearly circumstances where negative

preconceptions of a service provider will lead to lower expectations, but will also make it harder

to achieve high satisfaction ratings - and where positive preconceptions and high expectations

make positive ratings more likely.

-     ! "#

Y‘ Relationship marketing; financial performance;

Y‘ E-commerce; online banking; Electronic banking;; internet banking; information

technology; privacy;

Y‘ Business research; customer research; business innovation.

"$ %  

There are following objectives of this study will be:

‘ To identify customer satisfaction variables which lead to building relationship with

customers in the Indian banking sector.

‘ To study the difference in perception of the customers of the bank towards various

services provided by bank.

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 ‘ To analyze the satisfaction level of customers with respect to the various service provided

by the banks.

‘ To identify the strategies of banks to satisfy their customers.

'  

@ow the question comes that by which method we sill conduct the research?

OR

What would be our methodology?



Scale is the very first thing in methodology that which type of scale is suitable for us. So by the

consent of all the group members and literature review we have decided that we will use the

LIKERT SCALE. We will be able to reduce the biasness by using this scale.

&  "  

The key questions being posed or hypothesis tested in the research. In this study we are

going to frame the following hypothesis:

Following are the null hypothesis (Ho)

&': It is expected that Customers are satisfied with the competency of bank.

&(: It is expected that Customers are satisfied with the credibility of bank.

&): It is expected that Customers are satisfied with the responsiveness of bank.

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&*: It is expected that Customers are satisfied with the communication of bank.

&+: It is expected that Customers are satisfied with the security of bank.

&,: It is expected that Customers are satisfied with the online banking (ATM cards,

DEBIT cards, CREDIT cards etc).

 

The primary data will be used to examine relationship between bankers and customers

satisfaction. It will also examine the impact of customer satisfaction towards the Banks. The

study will be conducted in two phases.

-.' will consist of try out study in which we will screen out the potential respondents of this

study; -.( will constitute the main study and consist of hypothesis testing.



Y‘ J.D. Power & Associates 1999 Investors Business Daily, July 9, 1999

Y‘ Berry, Brodeur 1998 ten domains of satisfaction,1990 to 1998

Y‘ Buchanan, R. and Gilles, C. 1990 Value managed relationship: The key to customer

retention and profitability", European Management Journal, vol 8, no 4, 1990.

Y‘ Buckinx W., Geert Verstraeten, and Dirk Van den Poel 2007 Predicting customer loyalty

using the internal transactional database," Expert Systems with Applications, 32 (1).

Y‘ Carrol, P. and Reichheld, F. 1992 The fallacy of customer retention", Journal of

Retail Banking, vol 13, no 4, 1992.

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Y‘ Dawkins, P. and Reichheld, F 1990 "Customer retention as a competitive

weapon", Directors and Boards, vol 14, no 4, 1990.

Y‘ Fornell, C. and Wernerfet, B. 1987 "Defensive marketing strategy by customer

complaint management : a theoretical analysis", Journal of Marketing

Moloney, Chris X. .

Y‘ Reichheld, F. 1996 The Loyalty Effect, Harvard Business School Press,

Boston, 1996.

Y‘ Reichheld, F. and Sasser, W. 1990 Zero defects: quality comes to services",

Y‘ Harvard Business Review, Sept-Oct, 1990, pp 105-111

Y‘ Schlesinger, L. and Heskett, J. 1991 "Breaking the cycle of failure in service",

Sloan Management Review, spring, 1991, pp. 17-28.

Y‘ Stieb, James A 2006 "Clearing Up the Egoist Difficulty with Loyalty", Journal of

Business Ethics, vol 63, no 1Storbacka, K. Strandvik, T. and Gronroos, C 1994

"Managing customer relationships for profit", International Journal of Service Industry

Management, vol 5, no 5, 1994, pp 21-28.

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