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Customer Satisfaction in the Banking Sector

In: Business and Management

Submitted By wanj
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A SURVEY OF THE FACTORS INFLUENCING CUSTOMER SATISFACTION IN ORGANIZATIONS WITHIN THE BANKING SECTOR IN KENYA

ONE:

INTRODUCTION

1.1 Background to the study

Customer satisfaction within the banking institution is measured by many factors, which may or may not be quality related and is the key determinant as to whether a customer will be loyal to the baking service provider (Taylor and Baker, 1994). Satisfied customer will refer other to the same services by word of mouth. In the contrary, unsatisfied customers will seek better service elsewhere, give negative reference to the poor service provider, and blame their former service providers. Therefore, banks must aim at fostering long-term relations with their customers (File and Prince, 1992). Banks need to proposition their services from the operational to marketing aspects such as retail, business and corporate banking, insurance and investment. In order to satisfy each type of customer segments, the banks prefer to subdivide the tasks in different divisions. The Commercial bank of Africa and Barclays banks are examples of diversified banking institution which have been successful in satisfying customer needs even during current global market adjustments (Qin & Prybutok, 2009).

In Kenya, customer satisfaction is a bank’s strategy for increasing revenues, since it signifies the retention of customers which is much economical than drawing new customers. There are varied views about what satisfies a customer, given the operational and product innovations in the market. Pilot studies established that the competence of customer service staff, complaint management and quality of services, the nature of product and services and the location of the bank are most critical factors that determine customer satisfaction in banking institutions (Al-Hashash and Bahzadi, 2008).

The Kenyan banking sector has grown…...

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