customer satisfaction in bank

INTRODUCTION OF BANKING Service with a smile:

Today‟s finicky banking customers will settle for nothing less. The customer has come to realize somewhat belatedly that he is the king. The customer ‟s choice of one entity over another as his principal bank is determined by considerations of Customer satisfactionrather than any other factor. He wants competitive loan rates but at the same time also wants his loan or credit card application processed in double quick time. He insists that he be promptly informed of changes in deposit rates and service charges and he bristles with „customary rage‟ if his bank is slow to redress any grievance he may have. He cherishes the convenience of impersonal net banking but during his occasional visits to the branch he also wants the comfort of personalized human interactions and facilities that make his banking experience pleasurable. In short he wants financial house that will more than just clear his cheque and updates his passbook: he wants a bank that cares and provides great services. So does HDFC bank meet these heightened expectations? What are the customers‟ perceptions of Customer satisfactionof the banks? Which dimension of Customer satisfactionof HDFC bank is performing well? To find out answers to these questions I undertook a survey of 2 branches of HDFC bank. A lot of surveys have been done in the past to understand the aspect of customer satisfaction and to find out the customer friendly banks. My research is conducted to find out “CUSTOMER SATISFACTION OF HDFC BANK”.

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RESEARCH OBJECTIVE

RESEARCH OBJECTIVE The objective of the study is as follows: To examine the essential dimensions of Customer satisfaction i.e. RATERReliability, assurance, tangibles, empathy and responsiveness of HDFC bank and its effect on customer‟s satisfaction. To find out the level of perception of the customers from the Customer satisfaction offered by the banks. To know which Customer satisfaction dimension of the bank is performing well. To identify which dimension of Customer satisfaction needs improvement so that the quality of service of HDFC banks is enhanced.

IMPORTANCE AND SCOPE OF THE STUDY The study would try to throw some insights into the existing services provided by the banks, perceptions and the actual Customer satisfactionof the bank. The results of the study would be able to recognize the lacunae in the system and thus provide key areas where improvement is required for better performance and success ratio. In the days of intense competition, superior service is the only differentiator left before the banks to

attract,

retain

and

partner

with

the

customers.

Superior

Customer

satisfactionenables a firm to differentiate itself from its competition, gain a sustainable competitive advantage, and enhance efficiency

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SCOPE OF STUDY The scope of this research is to identify the Customer satisfactionof HDFC bank. This research is based on primary data and secondary data. This study only focuses on the dimensions of Customer satisfactioni.e. RATER. It aims to understand the skill of the company in the area of Customer satisfactionthat are performing well and shows those areas which require improvement. The study was done taking two branches of HDFC bank into consideration. The survey was restricted to the bank customers in Vijayawada only.

RESEARCH METHODOLOGY DATA SOURCE Primary Data: The primary data was collected by means of a survey. Questionnaires were prepared and customers of the banks at two branches were approached to fill up the questionnaires. The questionnaire contains 20 questions which reflect on the type and quality of services provided by the banks to the customers. The response of the customer and the is recorded on a grade scale of strongly disagree, disagree, uncertain, agree and strongly agree for each question. The filled up information was later analyzed to obtain the required interpretation and the findings.

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Secondary Data: In order to have a proper understanding of the Customer satisfaction of bank a depth study was done from the various sources such as books, a lot of data is also collected from the official websites of the banks and the articles from various search engines like Google, yahoo search and answers.com.

RESEARCH DESIGN The research design is exploratory till identification of Customer satisfaction parameters. Later it becomes descriptive when it comes to evaluating customer perception of Customer satisfaction of the banks. Descriptive research, also known as statistical research, describes data and characteristics about the population or phenomenon being studied. Descriptive research answers the questions who, what, where, when and how. Although the data description is factual, accurate and systematic, the research cannot describe what caused a situation. Thus, descriptive research cannot be used to create a causal relationship, where one variable affects another. In other words, descriptive research can be said to have a low requirement for internal validity. The description is used for frequencies, averages and other statistical calculations. Often the best approach, prior to writing descriptive research, is to conduct a survey investigation. Qualitative research often has the aim of description and researchers may follow-up with examinations of why the observations exist and what the implications of the findings are

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RESEARCH SAMPLE SAMPLING PLAN: Since it is not possible to study whole universe, it becomes necessary to take sample from the universe to know about its characteristics.

Sampling Units: Customers of HDFC bank Sample Technique: Random Sampling. Research Instrument: Structured Questionnaire. Contact Method: Personal Interview.

SAMPLE SIZE: The work is a case of HDFC Bank, one of the largest bank of Indian banking industry together representing over 25 per cent of the market share of Indian banking space. The survey was conducted in the city of Vijayawada with two branches of HDFC Bank, with 50 customers as respondent.

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DATA COLLECTION TOOL 1.

Strongly disagree

2.

Disagree

3.

Neither agree nor disagree

4.

Agree

5.

Strongly agree

Likert scaling is a bipolar scaling method, measuring either positive or negative response to a statement. The questionnaire consists of two parts. The first part consists of three questions concerning the demographic information of the respondent such as the name, age, educational qualifications and income. The second part consisting of 18 questions exploring the respondent‟s perception about the Customer satisfactionof HDFC. For evaluation of Customer satisfactionof HDFC bank Customer satisfactiondimension of reliability, assurance, tangibility, empathy and responsiveness is used in order to evaluate the actual Customer satisfactionof HDFC bank.

LIMITATIONS OF THE STRATEGY 6

 The study is only for the HDFC Bank confined to a particular location and a very small sample of respondents. Hence the findings cannot be treated as representative of the entire banking industry.

 The study can also not be generalized for public and private sector banks of the country.

 Respondents may give biased answers for the required data. Some of the respondents did not like to respond.

 Respondents tried to escape some statements by simply answering “neither agree nor disagree” to most of the statements. This was one of the most important limitation faced, as it was difficult to analyse and come at a right conclusion.

 In our study we have included 50 customers of bank because of time limit.

Industry profile

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BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reasons of India's growth process.

HISTORY:

The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below: · PHASE I - Early phase from 1786 to 1969 of Indian Banks · PHASE II - Nationalization of Indian Banks and up to 1991 · PHASE III - Indian Financial & Banking Sector Reforms after 1991 .

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PHASE I:

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established   

Bank of Bengal (1809), Bank of Bombay(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established

which started as private shareholders banks, mostly Europeans shareholders. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No.23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those day’s public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to the traders.

PHASE II:

Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban areas. Second phase of nationalization Indian Banking Sector Reform was carried out in 1980 with seven more banks. This step brought 80% of the banking segment in India under Government ownership.

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The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: · 1949: Enactment of Banking Regulation Act. · 1955: Nationalization of State Bank of India. · 1959: Nationalization of SBI subsidiaries. · 1961: Insurance cover extended to deposits. · 1969: Nationalization of 14 major banks. · 1971: Creation of credit guarantee corporation. · 1975: Creation of regional rural banks. · 1980: Nationalization of seven banks with deposits over 200 crores. After the nationalization of banks, the branches of the public sector bank India raised to approximately 800% in deposits and advances took a huge jump by 11,000%.Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.

PHASE III

This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up by his name which worked for the liberalization of banking practices. The country is flooded with foreign banks and their ATM stations. Efforts are being put to give a satisfactory service to customers. Phone banking and net banking is introduced. The entire system became more convenient and swift. The financial 10

system of India has shown a great deal of resilience. It is sheltered

from

any

crisis

triggered

by

any

external

macroeconomics shock as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, the Foreign Reserves are high, the capital account is not yet fully convertible, and banks and their customers have limited foreign exchange exposure.

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1.2 NATIONALIZED BANKS IN INDIA

Banking System in India is dominated by nationalized banks. The nationalization of banks in India took place in 1969 by Mrs. Indira Gandhi the then prime minister. The major objective behind nationalization was to spread banking infrastructure in rural areas and make available cheap finance to Indian farmers. Fourteen banks were nationalized in 1969. Before 1969, State of India (SBI) was only public sector bank in India. SBI was nationalized in 1955 under the SBI Act of 1955. The second phase of nationalization of Indian banks took place in the year 1980. Seven more banks were nationalized with deposits over 200 crores

1.3 PRIVATE BANKS

All the banks in India were earlier private banks. They were founded in the pre-independence era to cater to the banking needs of the people. But after nationalization of banks in 1969 public sector banks came to occupy dominant role in the banking structure. Private sector banking in India received a fillip in 1994 when Reserve Bank of India encouraged setting up to private banks as part of its policy of liberalization of the Indian Banking Industry. Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an ‘In principle’ approval from the Reserve Bank of India (RBI) to set up a bank in the private sector.

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Private Banks have played a major role in the development of Indian banking industry. They have made banking more efficient and customer friendly. In the process they have jolted public sector banks out of complacency and forced them to become more competitive.

COMPANY

PROFILE

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. HDFC Bank comprises of a dynamic and enthusiastic team determined to accomplish the vision of becoming a World-class Indian bank. HDFC bank‟s business philosophy is based on our four core values - Customer Focus, Operational Excellence, Product Leadership and People. They believe that the ultimate identity and success of their bank will reside in the exceptional quality of people and their extraordinary efforts. They are committed to hiring, developing, motivating and retaining the best people in the industry.

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BUSINESS FOCUS HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build sound customer franchises across distinct businesses so as to be the preferred provider of banking services for target retail and wholesale customer segments, and to achieve healthy growth in profitability, consistent with the bank's risk appetite. The bank is committed to maintain the highest level of ethical standards, professional integrity, corporate governance and regulatory compliance. HDFC Bank's business philosophy is based on four core values - Operational Excellence, Customer Focus, Product Leadership and People.

MISSION STATEMENT OF HDFC BANK

* World Class Indian Bank. * Benchmarking against international standards. * To build sound customer franchises across distinct businesses * Best practices in terms of product offerings, technology, service levels, risk management and audit & compliance

VISION STATEMENT OF HDFC BANK 14

The HDFC Bank is committed to maintain the highest level of ethical standards, professional integrity and regulatory compliance. HDFC Bank‟s business philosophy is based on four core values such as:-

1. Operational excellence. 2. Customer Focus. 3.Product leadership. 4. People.

The objective of the HDFC Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-step window for all his/her requirements. The HDFC Bank plus and the investment advisory services programs have been designed keeping in mind needs of customers who seeks distinct financial solutions, information and advice on various investment avenues.

BUSINESS STRATEGY *

Increasing market share in India‟s expanding banking

*

Delivering high quality customer service

*

Maintaining current high standards for asset quality through disciplined credit risk management

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*

Develop innovative products and services that attract targeted customers and address inefficiencies in the Indian financial sector.

DISTRIBUTION NETWORK HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable network of over 1229 branches spread over 444 cities across India. All branches are linked on an online real-time basis. Customers in over 120 locations are also serviced through Telephone Banking. The Bank's expansion plans take into account the need to have a presence in all major industrial and commercial centers where its corporate customers are located as well as the need to build a strong retail customer base for both deposits and loan products. Being a clearing/settlement bank to various leading stock exchanges, the Bank has branches in the centers where the NSE/BSE has a strong and active member base. The Bank also has a network of about over 2526 networked ATMs across these cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American Express Credit/Charge cardholders.

PROMOTER HDFC is India's premier housing finance company and enjoys an impeccable track record in India as well as in international markets. Since its inception in 1977, the Corporation has maintained a consistent and healthy growth in its operations to remain a market leader in mortgages. Its outstanding loan portfolio covers well over a million dwelling units. HDFC has developed significant expertise in retail mortgage loans to different market segments and also has a large corporate client base for its housing 16

related credit facilities. With its experience in the financial markets, a strong market reputation, large shareholder base and unique consumer franchise, HDFC was ideally positioned to promote a bank in the Indian environment.

MANAGEMENT Mr. C.M. Vasudev has been appointed as the Chairman of the Bank with effect from 6th July 2010 subject to the approval of the Reserve Bank of India and the shareholders. Mr. Vasudev has been a Director of the Bank since October 2006. A retired IAS officer, Mr. Vasudev has had an illustrious career in the civil services and has held several key positions in India and overseas, including Finance Secretary, Government of India, Executive Director, World Bank and Government nominee on the Boards of many companies in the financial sector. The Managing Director, Mr. Aditya Puri, has been a professional banker for over 25 years, and before joining HDFC Bank in 1994 was heading Citibank's operations in Malaysia. The Bank's Board of Directors is composed of eminent individuals with a wealth of experience in public policy, administration, industry and commercial banking. Senior executives representing HDFC are also on the Board. Senior banking professionals with substantial experience in India and abroad head various businesses and functions and report to the Managing Director. Given the professional expertise of the management team and the overall focus on recruiting and retaining the best talent in the industry, the bank believes that its people are a significant competitive strength. TECHNOLOGY HDFC Bank operates in a highly automated environment in terms of information technology and communication systems. All the bank's branches have online connectivity, which enables the bank to offer speedy funds transfer facilities to its 17

customers. Multi-branch access is also provided to retail customers through the branch network and Automated Teller(ATMs). The Bank has made substantial efforts and investments in acquiring the best technology available internationally, to build the infrastructure for a world class bank. The Bank's business is supported by scalable and robust systems which ensure that our clients always get the finest services we offer. The Bank has prioritised its engagement in technology and the internet as one of its key goals and has already made significant progress in web-enabling its core businesses. In each of its businesses, the Bank has succeeded in leveraging its market position, expertise and technology to create a competitive advantage and build market share. QUALITY POLICY SECURITY: The bank provides long term financial security to

their policy. The

bank does this by offering life insurance and pension products.

TRUST: The bank appreciates the trust placed by their policy holders in the bank. Hence, it will aim to manage their investments very carefully and live up to this trust.

INNOVATION: Recognizing the different needs of our customers, the bank offers a range of innovative products to meet these needs.

INTEGRITY

CUSTOMER CENTRIC

PEOPLE CARE “ONE FOR ALL AND ALL FOR ONE”

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TEAM WORK

JOY AND SIMPLICITY

BUSINESS HDFC Bank offers a wide range of commercial and transactional banking services and treasury products to wholesale and retail customers. The bank has three key business segments. Wholesale Banking Services The Bank's target market ranges from large, blue-chip manufacturing companies in the Indian corporate to small & mid-sized corporates and agri-based businesses. For these customers, the Bank provides a wide range of commercial and transactional banking services, including working capital finance, trade services, transactional services, cash management, etc. The bank is also a leading provider of structured solutions, which combine cash management services with vendor and distributor finance for facilitating superior supply chain management for its corporate customers. Based on its superior product delivery / service levels and strong customer orientation, the Bank has made significant inroads into the banking consortia of a number of leading Indian corporates including multinationals, companies from the domestic business houses and prime public sector companies. It is recognised as a leading provider of cash management and transactional banking solutions to corporate customers, mutual funds, stock exchange members and banks.

Retail Banking Services The objective of the Retail Bank is to provide its target market customers a full range of financial products and banking services, giving the customer a one-stop window for 19

all his/her banking requirements. The products are backed by world-class service and delivered to customers through the growing branch network, as well as through alternative delivery channels like ATMs, Phone Banking, Net Banking and Mobile Banking. The HDFC Bank Preferred program for high net worth individuals, the HDFC Bank Plus and the Investment Advisory Services programs have been designed keeping in mind needs of customers who seek distinct financial solutions, information and advice on various investment avenues. The Bank also has a wide array of retail loan products including Auto Loans, Loans against marketable securities, Personal Loans and Loans for Two-wheelers. It is also a leading provider of Depository Participant (DP) services for retail customers, providing customers the facility to hold their investments in electronic form. HDFC Bank was the first bank in India to launch an International Debit Card in association with VISA (VISA Electron) and issues the Mastercard Maestro debit card as well. The Bank launched its credit card business in late 2001. By March 2010, the bank had a total card base (debit and credit cards) of over 14 million. The Bank is also one of the leading players in the “merchant acquiring” business with over 90,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at merchant establishments. The Bank is well positioned as a leader in various net based B2C opportunities including a wide range of internet banking services for Fixed Deposits, Loans, Bill Payments, etc. Treasury

Within this business, the bank has three main product areas - Foreign Exchange and Derivatives, Local Currency Money Market & Debt Securities, and Equities. With the liberalisation of the financial markets in India, corporates need more sophisticated risk management information, advice and product structures. These and fine pricing on various treasury products are provided through the bank's Treasury team. To comply with statutory reserve requirements, the bank is required to hold 25% of its deposits in 20

government securities. The Treasury business is responsible for managing the returns and market risk on this investment portfolio.

CUSTOMER SATISFACTION IN BANKS In the days of intense competition, the banks are no different from any other consumer marketing company. It has become essential for the service firms in general and banks in particular to identify what the customer's requirements are and how those customer requirements can be met effectively. In the days where product and price differences are blurred, superior service by the service provider is the only differentiator left before the banks to attract, retain and partner with the customers. Superior Customer satisfactionenables a firm to differentiate itself from its competition, gain a sustainable competitive advantage, and enhance efficiency .The benefits of Customer satisfactioninclude increased customer satisfaction, improved customer retention, positive word of mouth, reduced staff turnover, decreased operating costs, enlarged market share, increased profitability, and improved financial performance. The construct of Customer satisfactionhas therefore been a subject of great interest to service marketing researchers. Customer satisfactionhas been defined by various experts in various ways as: 'Customer satisfactionis the difference between customers' expectations for service performance prior to the service encounter and their perceptions of the service received.' According to Gefan „Customer satisfactionis the subjective comparison that customers make between the qualities of service that they want to receive and what they actually get.' Parasuraman says, 'Customer satisfactionis determined by the differences between customer's expectations of services provider's performance and their evaluation of the services they received.

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Customer satisfactionis 'the delivery of excellent or superior service relative to customer expectations‟. Customer satisfactionis recognized as a multidimensional construct. While the number of dimensions often varies from researcher to researcher, there is some consensus that Customer satisfactionconsists of three primary aspects: outcome quality, interaction quality, and physical service environment quality. Outcome quality refers to the customer's assessment of the core service which is the prime motivating factor for obtaining the services (e.g. money received from ATM). Interaction quality refers to the customer's assessment of the service delivery process, which is typically rendered via a physical interface between the service provider, in person, or via technical equipment, and the customer. It includes, for instance, the consumer's evaluation of the attitude of the service providing staff. The physical service environment quality dimension refers to the consumer's evaluation of any tangible aspect associated with the facilities or equipment that the service is provided in/ with. It includes, for example, the physical conditions of an ATM machine. The most popular dimensions of service quality--features five dimensions: tangibles, reliability, responsiveness, empathy, and assurance. The tangibles dimension corresponds to the aforementioned physical environment aspect, the reliability dimension corresponds to the service outcome aspect, and the remaining three represent aspects of interaction quality. Both the costs and the revenue of firms are affected by repeat purchases, positive word-of-mouth recommendation, and customer feedback. Moreover, there is strong evidence that Customer satisfactionhas either a direct influence on the behavioral intentions of customers and/or an indirect influence on such intentions, mediated through customer satisfaction. RATER is an instrument that might be used to define and measure banking Customer satisfactionand to create useful quality-assessment tools.

The RATER may finally provide the following benefits to the HDFC bank: 1. It is the first approach to add and mix the customers ‟ religious beliefs and cultural values with other quality dimensions. 22

2. It provides for multi-faced analysis of customer satisfaction. 3. It links quality with customers‟ satisfaction and service encounter. 4. It provides information at several levels, already organized into meaningful groupings. 5. It is a proven approach, which results in usable answers to meet customers ‟ needs. 6. It is empirically grounded, systematic and well documented. Banks managers can use the RATER model and its dimensions first to identify the following issues:

R ESP O N SI V EN ES

TA N G IB IL IT E M PA TH Y

R ELI A B I L IT Y A S SU RA N C E

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DIMENSIONS OF SERVICE QUALITY

DIMENSIONS OF CUSTOMER SATISFACTION

TANGIBILITY: This dimension deal with modern looking equipments and visual appealing part of banks.

RELIABILITY: This dimension has a direct positive effect on perceived Customer satisfactionand customer satisfaction in banking institutions. Banks must provide error free service and secure online transactions to make customers feel comfortable.

RESPONSIVENESS: Customers expect that the banks must respond their inquiry promptly. Responsiveness describes how often a bank voluntarily provides services that are important to its customers. Researchers examining the responsiveness of banking services have highlighted the importance of perceived Customer satisfactionand customer satisfaction.

ASSURANCE: Customer expects that the bank must be secured and the behavior of the employees must be encouraging.

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EMPATHY: individual attention, customized service and convenient banking hours are very much important in today‟s service.

In order to achieve better understanding of Customer satisfactionin banking sector, the proposed five Customer satisfactiondimensions are conceptualized to illustrate the overall Customer satisfactionof the banking in relation to customers ‟ and providers perspective. Banking was in the sector featuring medium goods and higher customer producer interactions, since in banking, consumers and service providers interact personally and the use of goods is at a medium level. Hence, in banking, where there are high customer-producer interactions, the quality of service is determined to a large extent by the skills and attitudes of people producing the service. In the case of services, because customers are often either direct observers of the production process or active participants, how the process is performed also has a strong influence on the overall impression of the quality of service. A well-performed service encounter may even overcome the negative impression caused by poor technical quality as well as generate positive word-of-mouth, particularly if customers can see that employees have worked very hard to satisfy them in the face of problems outside their control. Employees are part of the process, which connects with the customer at the point of sale, and hence employees remain the key to success at these service encounters or “moments of truth”. It is these encounters with customers during a service that are the most important determinants of overall customer satisfaction, and a customer‟s experience with the service will be defined by the brief experience with the firm‟s personnel and the firm‟s systems. The rudeness of the bank ‟s customer service representative, the abruptness of the employee at the teller counter, or the lack of interest of the person at the check deposit counter can alter one ‟s overall

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attitude towards the service, perhaps even reversing the impression caused by high technical quality.

Another important Customer satisfactionfactor, competence, is defined by whether the bank performs the service right the first time, whether the employees of the bank tell customers exactly when services will be performed, whether the bank lives up to its promises, whether customers feel safe in their transactions with the bank and whether the employees show a sincere interest in solving the customers‟ problems. In short, this dimension is related to the banks‟ ability to perform the promised service accurately and dependably. Performing the service dependably and accurately is the heart of service marketing excellence. When a company performs a service carelessly, when it makes avoidable mistakes, and when it fails to deliver on promises made to attract customers, it shakes customers‟ confidence in its capabilities and undermines its chances of earning a reputation for service excellence. It is very important to do the service right the first time. In case a service problem does crop up, by resolving the problem to the customer‟s satisfaction, the company can significantly improve customer retention. However, companies fare best when they prevent service problems altogether and fare worst when service problems occur and the company either ignores them or does not resolve them to the customer ‟s satisfaction. Performing the service accurately is perhaps the most important factor in Customer satisfactionexcellence. The cost of performing the service inaccurately includes not only the cost of redoing the service but also the cost associated with negative word-ofmouth generated by displeased customers. In case of services, the factory is the field. Again, services are intangible and hence the criteria for flawless services are more subjective than the criteria for defect-free tangible goods. Hence for most services, customers‟ perceptions of whether the service has been performed correctly, and not provider-established criteria, are the major determinants of reliability. 26

The Customer satisfactionfactor tangible is defined by whether the physical facilities and materials associated with the service are visually appealing at the bank. These are all factors that customers notice before or upon entering the bank. Such visual factors help consumers form their initial impressions. A crucial challenge in service marketing is that customers cannot see a service but can see the various tangibles associated with it - all these tangibles, the service facilities, equipment and communication materials are clues about the intangible service. If unmanaged, these clues can send to the customer‟s wrong messages about the service and render ineffective the marketing strategy of the company. On the other hand, improving quality through tangibles means attention to the smallest details that competitors might consider trivial. Yet, these visible details can add up for customers and signal a message of caring and competence. Customers may reveal new aspects of Customer satisfactionin banking that are important to them, and these would have to be incorporated in the scale so as to further explore the concept of Customer satisfactionin the banking arena.

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THERORETICAL FRAME WORK

Customer Satisfaction Thus, consumers form judgments about the value of marketing offers and make their buying decisions based upon these judgments. Customer satisfaction with a purchase depends on the product’s performance relative to a buyer’s expectations. A customer might experience various degrees of satisfaction. If the product’s performance falls short of expectations, the customer is dissatisfied. If performance matches expectations, the customer is satisfied. If performance exceeds expectations, the customer is highly satisfied or delighted. But how do the buyer’s form their expectations? Expectations are based on the customer’s past buying experiences, the opinions of friends and associates, and marketer and competitor information and promises. Marketers must be careful to set the right level of expectations. If they set expectations too low, they may satisfy those who buy but fail to attract enough buyers. In contrast, if they raise expectations too high, buyers are likely to be disappointed. For example, Holiday Inn ran a campaign a few years ago called “No Surprises”, which promised consistently trouble-free accommodations and service. However, Holiday Inn guests still encountered a host of problems, and the expectations created by the campaign only made customers more dissatisfied. Holiday Inn had to withdraw the campaign. Still, some of today’s most successful companies are raising expectations and delivering performance to match. That companies embrace total customers are satisfaction. For example, Honda claims “One reason our customers are so satisfied is that we aren’t”. And Cigna vows “We’ll never be 100 percent satisfied until you are, too”. These companies aim high because they know that customers who are only satisfied will still find it easy to switch suppliers when a better offer comes along. For example, a study by AT&T showed that 70 percent of customers who say they are satisfied with a product or service would still be willing to switch to a competitor. In contrast, customers who are highly satisfied are much 28

less ready to switch. One study showed that 75 percent of Toyota buyers were highly satisfied and about 75 percent said they intended to buy a Toyota again. Thus, customer delight creates an emotional affinity for a product or service, not just a rational preference, and this creates high customer loyalty. Today’s winning companies track their customers’ expectations, perceived company performance, and customer satisfaction. However, customer satisfaction measures are meaningful only in a competitive context. For example, a company might be pleased to find that 80 percent of its customers say they are satisfied with its products. However, if a competitor is attaining 90 percent customer satisfaction and aiming for 100 percent, the company may find that it is losing customers to the competitor. Thus, companies must monitor both their own and competitors customer satisfaction performance. Marketing describes the ways in which companies can track customer satisfaction. Although the customer-centered firm seeks to deliver high customer satisfaction relative to competitors, if does not attempt to maximize customer satisfaction. A company can always increase customer satisfaction by lowering its price or increasing its services, but this may result in lower profits. In addition to customers, the company has many stakeholders, including employees, dealers, suppliers, and stock holders. Spending more to increase customer satisfaction might divert funds from increasing the satisfaction of these other “partners”.

Delivering Customer Value and Satisfaction Customer value and satisfaction are important ingredients in the marketer’s formula for success. But what does it take to produce and deliver customer value? To answer this, we will examine the concepts of a value chain and a value delivery system. Value Chain Michael Porter proposed the value chain as the major tool for identifying ways to create more customer value. Every firm consists of a collection of activities performed to design, produce, and market, deliver, and support the firm’s products. The value chain

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breaks the firm into nine value-creating activities in an effort to understand the behavior of costs in the specific business and the potential sources of competitive differentiation. The nine value- creating activities include five primary activities and four support activities. The primary activities involve the sequence of bringing materials into the business (inbound logistics), operating on them (operations), sending them out (out bound logistics), marketing them (marketing and sales), and servicing them (services). The support activities occur within each of these primary activities. For example, procurement involves obtaining the various inputs for each primary activity- only a fraction of procurement is done by the purchasing department. Technology development and human resource management also occur in all departments. The firm’s infrastructure covers the overhead of general management, planning, finance, accounting, and legal and government affairs borne by all the primary and support activities. Under the value-chain concept, the firm should examine its costs and performance in each value creating activity to look for improvements. It also should estimate its competitor’s costs and performances as benchmarks. To the extent that firm can perform certain activities better than its competitors, it can achieve a competitive advantage. For example, a credit department might attempt to reduce bad debts by rising credit standards; meanwhile, sales people get frustrated and customers must buy elsewhere. A distribution department might decide to save money by shipping goods by rail; meanwhile, the customer waits. In each case, individual departments have erected walls that impede the delivery of quality customer service. To overcome this problem, companies should place more emphasis on the smooth management of core business processes, most of which involve inputs and cooperation from many functional departments. Among other things, these core business processes include the following Product development process All the activities in identifying, researching, and developing new products with speed, high quality, and reasonable cost. 

Inventory management processAll the activities involved in developing and managing the right inventory levels of raw materials, semi finished materials, and 30

finished goods so that adequate supplies are available while avoiding the costs of high 

overstocks. Order-to-payment process All the activities involved in receiving orders, approving

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them, shipping the goods on time, and collecting payment. Customer service processAll the activities involved in receiving to reach the right parties within the company to obtain service, answers, and resolutions of problems.

Successful companies develop superior capabilities in managing these and other core processes. In turn, mastering core business processes gives these companies a substantial competitive edge. For example, one of Wal-Mart’s great strengths is its superiority in handling the inventory management and order flow process. As individual Wal-Mart stores sell their goods, sales information flows not only to Wal-Mart’s headquarters but to WalMart’s suppliers, who ship placement goods to Wal-Mart stores almost as far as the products move off the shelf. Value Delivery System In its search for competitive advantage, the firm needs to look beyond its own value chain and into the value chains of its suppliers and distributors, and ultimately, its customers. More companies today are “partnering” with the other members of the supply chain to improve the performance of the customer value delivery system. For example, Campbell soup operates a qualified supplier program in which its sets high standard for suppliers and chooses only the few who are willing to meet its demanding requirements for quality, on-time delivery, and continuous improvement. Campbell then assigns its own experts to work with suppliers to constantly improve their joint performance. Similarly, Honda has designed a program for working closely with its suppliers to help them reduce their costs and improve quality. For example, when Honda chose Donnelly Corporation to supply all of the mirrors for its U.S. – made cars, it sent engineers swarming over Donnelly’s plants, looking for ways to improve its products and operations.

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This helped Donnelly reduce its costs by 2 percent in the first year. As a result of its improved performance, Donnelly’s sales to Honda have grown from $5million annually to more than $60million in less than 10 years. In turn, Honda has gained an efficient, low-cost supplier of quality components. And as a result of Honda’s partnerships with Donnelly and other suppliers, Honda customers benefit from lower cost, higher quality cars. An excellent value delivery system connects jeans maker Levi Strauss with its suppliers and distributors. One of Levi’s major retailers is Sears. Every night, through electronic data interchange (EDI), Levi’s learns the sizes and styles of its blue jeans that sold through Sears and other major outlets.

Levi’s then electronically orders more fabric from Milliken Company, its fabric supplier. In turn, Milliken relays an order for more fibbers to Du Pont, the fibber supplier. In this way, the partners in the supply chain use the most current sales information to manufacture what is selling, rather than to manufacture based on potentially inaccurate sales forecasts. As companies struggle to become more competitive, they are turning, ironically, to greater cooperation. Companies used to vies their suppliers and distributors as cost canters, and in some cases, as adversaries. Today, however, they are selecting partners carefully and working out mutually profitable strategies. Increasingly in today’s market place, competition no longer takes place between the value delivery systems created by these competitors. Thus, if Levi Strauss has built a more potent value delivery system than Wrangler or another competitor, it will win more market share and profit. Retaining Customers Beyond building stronger relations with the partners in the supply chain, companies today must work to develop stronger bonds and loyalty ultimate customers. In the past, many companies took their customers for granted. Customers often did not have many alternative suppliers, or the other suppliers were just as poor in quality and service, or the market was growing so fast that the company did not worry about fully satisfying its customers.

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A company could lose 100 customers a week but gain another 100 customers and consider it sales to be satisfactory. Such a company, operating on a “leaky bucket” theory of business, believes that there will always be enough customers to replace the defecting ones. However, this high customer churn involves higher costs than if a company retained all 100 customers and acquired no new once. THE COST OF LOST CUSTOMERS Companies must pay close attention to their customer defection rate and under take steps to reduce it. First, the company must define and measure its customer retention rate. Then, the company must identify the causes of customer defection and determine which of this can be reduced or eliminated.

The company needs to prepare a frequency distribution showing the percentage of customers who defect for different reasons. Not much can be done about customers who leave the region, or about business customers who go out of business. But much can be done about customers who leave because of shoddy products, poor service, or prices that are too high. Companies can estimate how much profit they lose when customers defect unnecessarily. For an individual customer, this is the same as the customer’s lifetime value. For a group of lost customers, a major transportation firm estimated the profit loss as follows: The Company had 64,000 accounts. It lost 5 percent of its accounts (3,200 accounts) this year as a result of poor service. The average lost account represented $40,000 in lost revenue. Therefore, the company lost 3,200 X $40,000 = $128,000,000 in revenue. Given its 10 percent profit margin, the company lost $12,800,000 unnecessarily in a single year. The Key Customer Relationship Marketing Relationship marketing involves creating, maintaining, and enhancing strong relationship with customers and other stake holders. Increasingly, marketing is moving away from a focus on individual transactions and toward a focus on building value-laden relationships and value delivery networks. Relationship marketing is oriented more toward the long term. The goal is to deliver long term value to customers, and the measure of success 33

is long term customer satisfaction. Relationship marketing requires that all of the company’s departments work together with marketing as a team to serve the customer. It involves building relationships at many levels-resulting in high customer loyalty. We can distinguish five different levels of relationships that can be formed with customers who have purchased a company’s product, such as an auto mobile or a price of industrial machinery. 

Basic The company salesperson sells the product but does not follow up in anyway.

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Reactive The salesperson sells the product and encourages the customer to cal

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whenever he or she has any questions or problems. Accountable The salesperson phones the customer a short time after the sale to check whether the product is meeting the customer’s expectations.

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The sales person also solicits from the customer any product improvement suggestions and any specific disappointments. This information helps the company to

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continuously improve its offering. Proactive The sales person are others in the company phone the customer from time to time with suggestions about improved product use are helpful new products.

That a company’s relationship marketing strategy will depend on how many customers it has and their profitability. For example, companies with many low margin customers will practice basic marketing. Thus H. J. Heinz will not phone all of its ketchup buyers to express its appreciation for their business. At best, Heinz will be reactive by setting up a customer information service. At the other extreme, in markets with few customers and high margins, most sellers will move toward partnership marketing. Boeing, for example, will work closely with united airlines in designing its airplanes and insuring that Boeing airplanes fully satisfy United’s requirements. In between these two extreme situations, other levels of relationship marketing are appropriate. What specific marketing tools can a company use to develop stronger customer bonding and satisfaction? It can adopt any of three customer value building approaches: financial, social, or structural.

Financial Benefits

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The first value building approach relies primarily on adding financial benefits to the customer relationship. For example, airlines offer frequent-flyer programs, hotels give room upgrades to their frequent guests, and supermarkets give patronage refunds. Procter and Gamble recently offered a unique money-back guarantee on its Crest toothpaste in an effort to build a long term bond with customers. P&G advertises a toll-free number customer can call to join the Crest money-back guarantee program. It then supplies dental patients with evaluation forms that they take to their local dentists. Dentists check for cavities and tartars build up. After using crest for six months, buyers returns to the dentist for another check up. Those who haven’t improved can receive a refund on the money they spent on crest. Beyond assuring customers that crest delivers value, this promotion helps P&G build a customer data base containing the dental his-Tories of families that sign up. Using this data base, P&G can expand its relationships with customers by offering additional related products and services to them. Social Benefits Although such programs and other financial incentives build customer preference, they can be easily imitated by competitors and thus may fail to differentiate the company’s offer permanently. The second approach is to add social benefits as well as financial benefits. Here company personnel work to increase their social bonds with customers by learning individual customers’ needs and wants and then individualizing and personalizing their products and services. For example, Ritz-Carlton employees treat customers as individuals, not as nameless, faceless members of mass market. Whenever possible, they refer to guests by name and give each guest a warm welcome every day. They record specific guest preferences into the company’s customer database, accessible by all hotels in the world wide Ritz chain. A guest who requests a foam pillow at the Ritz in the Montreal will be delighted to find one waiting in the room when he or she checks into the Atlanta Ritz months later. To build better relationships with its customers, during the summer of 1944 Saturn invited all of its almost 700,000 owners to a ‘Saturn Homecoming’ at its manufacturing facility in Spring Hill, Tennessee. The two-day affair included family events, plant tours, and physical challenge activities designed to build trust and a team spirit. Says Saturn’s manager of corporate communications, “the Homecoming party is another way of building relationships, and it shows that we treat our customers differently than any other car company”. Structural Ties 35

The third approach to building strong customer relationships is to add structural ties as well as financial and social benefits. For example, a business marketer might supply customers with special equipment or computer linkages that help them manage their orders, pay roll, or inventory. McKesson Corporation, a leading pharmaceutical wholesaler, as invested millions of dollars in its electronic data inter change (EDI) system to help small pharmacies manage their inventory, their order entry, and their shelf space. As another example, Federal Express uses its power ship program, which it offers to more than 20,000 customer companies, to keep its best customers from defecting to competitors like UPS. It provides power ship customers with free computers linked to Federal Express headquarters. Customer firms can use the machines to check the status of their own Federal Express packages or those that they ship for their customers. To further enhance its relationships with important customers, Federal Express polls, 1,000 of its power ship customers each month seeking ways to improve service to them. Relationship marketing means that organizations must focus on managing their customers as well as their products. At that same time, although many companies are moving strongly toward relationship marketing, companies don’t want relationships with every customer. In fact, there are and undesirable customers for every company.

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Ideally is continually seeking feedback to improve customer satisfaction. Customer satisfaction provides a leading indicator of consumer purchase intentions and loyalty. Customer satisfaction data are among the most frequently collected indicators of market perceptions. Their principal use is twofold. 1. Within organizations, the collection, analysis and dissemination of these data send a message about the importance of tending to customers and ensuring that they have a positive experience with the company’s goods and services. 2. Although sales or market share can indicate how well a firm is performing currently, satisfaction is an indicator of how likely it is that the firm’s customers will make further purchases in the future. Much research has focused on the relationship between customer satisfaction and retention. Studies indicate that the ramifications of satisfaction are most strongly realized at the extremes. On a five-point scale, individuals who rate their satisfaction level as “5” are likely to become return customers and might even evangelize for the firm. (A second important metric related to satisfaction is willingness to recommend. This metric is defined as "The percentage of surveyed customers who indicate that they would recommend a brand to friends." When a customer is satisfied with a product, he or she might recommend it to friends, relatives and colleagues. This can be a powerful marketing advantage.) Individuals who rate their satisfaction level as “1,” by contrast, are unlikely to return. Further, they can hurt the firm by making negative comments about it to prospective customers. Willingness to recommend is a key metric relating to customer satisfaction. Construction (Measuring Customer Satisfaction) Organizations need to retain 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 marketplace. Customer satisfaction is measured at the individual level, but it is almost always reported at an aggregate level. It can be, and often is, measured along various dimensions. A hotel, for example, might ask customers to rate their experience with its front desk and checkin service, with the room, with the amenities in the room, with the restaurants, and so on. 37

Additionally, in a holistic sense, the hotel might ask about overall satisfaction “with your stay.” As research on consumption experiences grows, evidence suggests that consumers purchase goods and services for a combination of two types of benefits: hedonic and utilitarian. Hedonic benefits are associated with the sensory and experiential attributes of the product. 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 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. The usual measures of customer satisfaction involve a survey with a set of statements using a Liker Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the organization being measured. Their satisfaction is generally measured on a five-point scale.

Customer satisfaction data can also be collected on a 10-point scale. Regardless of the scale used, the objective is to measure customers’ perceived satisfaction with their experience of a firm’s offerings. It is essential for firms to effectively manage customer satisfaction. To be able do this, we need accurate measurement of satisfaction. Good quality measures need to have high satisfaction loadings, good reliability, and low error variances. In an empirical study comparing commonly used satisfaction measures it was found that two multi-item

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semantic differential scales performed best across both hedonic and utilitarian service consumption contexts. According to studies by Wirtz& Lee (2003), they identified a six-item 7-point semantic differential scale (e.g., Oliver and Swan 1983), which is a six-item 7-point bipolar scale, that consistently performed best across both hedonic and utilitarian services. It loaded most highly on satisfaction, had the highest item reliability, and had by far the lowest error variance across both studies. In the study, the six items asked respondents’ evaluation of their most recent experience with ATM services and ice cream restaurant, along seven points within these six items: “please me to displeased me”, “contented with to disgusted with”, “very satisfied with two very dissatisfied with”, “did a good job for me to did a poor job for me”, “wise choice to poor choice” and “happy with to unhappy with”. A semantic differential (4 items) scale (e.g., Eroglu and Michelet 1990), which is a four-item 7-point bipolar scale, was the second best performing measure, which was again consistent across both contexts. In the study, respondents were asked to evaluate their experience with both products, along seven points within these four items: “satisfied to dissatisfied”, “favorable to unfavorable”, “pleasant to unpleasant” and “I like it very much to I didn’t like it at all”. The third best scale was single-item percentage measure, a one-item 7-point bipolar scale (e.g., Westbrook 1980). Again, the respondents were asked to evaluate their experience on both ATM services and ice cream restaurants, along seven points within “delighted to terrible”. These results suggest that more careful pretesting would be prudent should these measures be used. Finally, all measures captured both affective and cognitive aspects of satisfaction, independent of their scale anchors. Affective measures capture a consumer’s attitude (liking/disliking) towards a product, which can result from any product information or experience. On the other hand, cognitive element is defined as an appraisal or conclusion on how the product’s performance compared against expectations (or exceeded or fell short of expectations), was useful, fit the situation, and exceeded the requirements of the situation.

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Benefits of Customer Satisfaction

Benefits of Customer Satisfaction Customer Profitability, Customer Satisfaction, Service Provider, Vendor Add. Customer satisfaction is valued highly in almost every commercial organization. Especially large firms spend an enormous amount of money on customer satisfaction programs. Therefore, an important question is: What are the benefits of customer satisfaction for the supplying company? A common assumption is that satisfied customers are more loyal in the sense that they stay in a longer relationship with the supplier. However, marketing research has proven that this linkage is not always so strong and that it largely varies by customer segment and industry. Therefore, vendors and service providers should not rely on such effect, also because the stand-alone value of customer loyalty is not very clear as I will outline in one of my future posts. A much clearer benefit of customer satisfaction seems to be a positive effect on willingness to pay and price sensitivity (per item but also in terms of overall spending).So, if customer satisfaction has a price-related value, the question then is 40

 What influences customer satisfaction? Product quality Well, one important driver in both consumer and business settings is product or service quality. In addition, for business customers the following attributes related to vendor performance have an impact on customer satisfaction: Sales representative performance This includes the ability of sales representatives and account managers to address customer issues, to understand key strategic issues of the customer, to know the customer business processes, to be easily reached, and to provide information on current market conditions. Interesting here is that a longer relationship between the account manager and the customer has an additional positive effect and can compensate for weaker performance in the other areas. Product line This relates to the breadth of the product line portfolio and the ability to deliver a comprehensive solution. Responsiveness This means the time between an addressed inquiry or issue and the response by the sales representative, the time to resolve issues, and the ability to provide quote responses in time Delivery This relates to the vendor’s ability to deliver the solution in the agreed time and quality. It also includes the degree of matching committed and delivered functionality and features as well as the ability to provide flexible delivery options. Revenue and Margin

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For cloud product vendors additionally important, but not crucial, criteria for customer satisfaction are the revenue and margin that your products generate for the customer (who in this case acts more as a channel partner).

Another two key findings are: 1. Negative performance has a greater impact on overall satisfaction than does positive performance 2. The link between customer satisfaction and willingness to pay is non-linear, so that from a certain point on increasing satisfaction does not translate into higher willingness to pay

The combination of these two suggest to focus more on avoiding customer dissatisfaction than on investing too much in customer satisfaction. To maximize overall satisfaction, attribute performance should be optimized, not maximized. For any given factor, negative performance should be eliminated first before focusing on positive performance. 42

Also, it is important to always monitor customer satisfaction, so you can react early enough and balance your measures. Since you want exploit higher willingness to pay also for higher prices, you need to create customer satisfaction already in the pre-sales phase as well. For that it is very important to both enable the customer to trial your product or service before the actual purchase and to have an excellent product presentation highlighting all the benefits without setting false expectations.

1. Encourage Face-To-Face Dealings This is the most daunting and downright scary part of interacting with a customer. If you’re not used to this sort of thing it can be a pretty nerve-wracking experience. Rest assured, though, it does get easier over time. It’s important to meet your customers face to face at least once or even twice during the course of a project. My experience has shown that a client finds it easier to relate to and work with someone they’ve actually met in person, rather than a voice on the phone or someone typing into an email or messenger program. When you do meet them, be calm, confident and above all, take time to ask them what they need. I believe that if a potential client spends over half the meeting doing the talking, you’re well on your way to a sale. 2. Respond To Messages Promptly & Keep Your Clients Informed This goes without saying really. We all know how annoying it is to wait days for a response to an email or phone call. It might not always be practical to deal with all customers’ queries within the space of a few hours, but at least email or call them back and let them know you’ve received their message and you’ll contact them about it as soon as possible. Even if you’re not able to solve a problem right away, let the customer know you’re working on it. A good example of this is my Web host. They’ve had some trouble with server hardware which has caused a fair bit of downtime lately. At every step along the way I was

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emailed and told exactly what was going on, why things were going wrong, and how long it would be before they were working again. They also apologized repeatedly, which was nice. Now if they server had just gone down with no explanation I think I’d have been pretty annoyed and may have moved my business elsewhere. But because they took time to keep me informed, it didn’t seem so bad, and I at least knew they were doing something about the problems. That to me is a prime example of customer service 3. Be Friendly and Approachable A fellow Site Pointer once told me that you can hear a smile through the phone. This is very true. It’s very important to be friendly, courteous and to make your clients feel like you’re their friend and you’re there to help them out. There will be times when you want to beat your clients over the head repeatedly with a blunt object – it happens to all of us. It’s vital that you keep a clear head, respond to your clients’ wishes as best you can, and at all times remain polite and courteous. This may not be too important when you’re just starting out, but a clearly defined customer service policy is going to save you a lot of time and effort in the long run. If a customer has a problem, what should they do? If the first option doesn’t work, then what? Should they contact different people for billing and technical enquiries? If they’re not satisfied with any aspect of your customer service, who should they tell? There’s nothing more annoying for a client than being passed from person to person, or not knowing who to turn to. Making sure they know exactly what to do at each stage of their enquiry should be of utmost importance. So make sure your customer service policy is present on your site — and anywhere else it may be useful. 4. Attention to Detail (Also Known As ‘The Little Niceties’) Have you ever received a Happy Birthday email or card from a company you were a client of? Have you ever had a personalized sign-up confirmation email for a service that you could tell was typed from scratch? These little niceties can be time consuming and aren’t always cost effective, but remember to do them. 44

Even if it’s as small as sending a Happy Holidays email to all your customers, it’s something. It shows you care; it shows there are real people on the other end of that screen or telephone; and most importantly, it makes the customer feel welcomed, wanted and valued Anticipate Your Client’s Needs & Go out Of Your Way to Help Them Out This is easier said than done! However, achieving this supreme level of understanding with your clients will do wonders for your working relationship. Take this as an example: you’re working on the front-end for your client’s exciting new ecommerce endeavor. You have all the images, originals and files backed up on your desktop computer and the site is going really well. During a meeting with your client he/she happens to mention a hardcopy brochure their internal marketing people are developing. As if by magic, a couple of weeks later a CD-ROM arrives on their doorstep complete with high resolution versions of all the images you’ve used on the site. A note accompanies it which reads: Large-scale copies of the graphics I’ve used on the site. Hopefully you’ll be able to make use of some in your "Hi, you mentioned a hard-copy brochure you were working on and I wanted to provide you with ochre." Your client is heartily impressed, and remarks to his colleagues and friends how very helpful and considerate his Web designers are. Meanwhile, in your office, you lay back in your chair drinking your 7th cup of coffee that morning, safe in the knowledge this happy customer will send several referrals your way. Honor Your Promises It’s possible this is the most important point in this article. The simple message: when you promise something, deliver. The most common example here is project delivery dates. Clients don’t like to be disappointed. Sometimes, something may not get done, or you might miss a deadline through no fault of your own. Projects can be late, technology can fail and sub-contractors don’t always deliver on time.

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Top 7 Strategies to Increase Customer Satisfaction & Loyalty Many businesses have evolved over the last decade into a more web-based industry. The result of this transition is that consumers seeking to buy something now have more options than ever before. In turn, businesses are experiencing the challenge of increased competition and, in some cases, less business. Certainly with repeat business and referrals being the bread and butter for many businesses – and undoubtedly essential to anyone in business – being able to satisfy clients becomes ever more important. Naturally, the more satisfied a client is, the more loyal that person will feel for years to come. It doesn’t take expensive gifts to make a client happy either. Here are seven ways to help you increase your customer satisfaction and create client loyalty. 1. Respond quickly – or at least within a reasonable time frame. The majority of people these days expect a response back from their inquiry within a reasonable time frame. Whether it would be an email or phone call, a prospect or client, it’s important to set up an effective communication system and make time out of your busy schedule to respond. It’s critical to be available to your customers’ schedules and not the other way around. 2. By doing so, you are proving that you care about them as a client and will take care of their needs. If you find yourself in a situation where you have not responded promptly, it still makes sense to respond with an apology for your tardiness. 3. Ask how your clients would like to be responded to. One way to increase customer satisfaction is to communicate with clients through their preferred method. For online consumers, email is the standard method. This allows them to maintain the anonymous status which is important to online consumers. Even when consumers provide a telephone number, they may be surprised when you contact them by phone. If you decide to place a call, take into consideration that it is a more personal and perhaps invasive action. Prepare notes or a list of questions beforehand to ensure you cover all your points and maximize the time. By contacting people in their preferred method, you will most likely have a better chance of reaching them with that reasonable time frame, communicating effectively and achieving your goals. 4. 46

5. Create a positive website experience. Once visitors lands on your website or landing page, you have about 10 seconds to capture their attention. People will judge your site quickly and determine whether they’d like to give you the opportunity to earn their business and be their Realtor. With an attractive layout, some photos, your contact information clearly laid out on the home page, you’re off to a good start. When you start providing additional information on your website about your market area, like neighborhoods, schools, other points of interest, you begin to increase the value of your site. You will give people a reason to come back and they’ll tell others about it, too. A blog is an easy and effective tool to communicate with readers. There you can post market information, daily updates, and any opinions that may help educate visitors. 6. Personalizeand customize. Everything you do once you connect with an Internet consumer should come across customized for the client. The Internet allows people flexibility and anonymity but once they reach out for information, they expect high quality customer service. Templates are an important tool to saving you time, but never forget to tailor several components to suit your client. People are becoming wiser and more Internet-savvy, so they’ll be able to see. 7. Think from the customer’s point of view. Buying something is an important and often emotional decision in a person’s life. Consumers will generally select someone whom they feel will take care of their needs best. Show that you are on their side, listen to their requirements and preferences and respond in a way that demonstrates or conveys that you consider them a close acquaintance or friend. Think from the customer’s perspective. This simple rule applies to any marketing initiative. Seeing things from the customer’s perspective will help keep their experience a positive one.

8. Educate your clients. Side by side with setting expectations, a common sense to working successfully in challenging markets is to educate clients and to better manage expectations of the customers. Having facts, documentation, news, blogs, etc. to provide to your clients will help them understand where you are coming from and validate your points. 47

Print out white papers or articles and have them readily available for handing out to clients. Being an expert in your market is paramount to building trust and, in turn, clients – and it’s your responsibility to understand and be able to convey the difference to help educate them. 9. Conduct surveys and track results. Surveys can prove to be a valuable tool and source of information. You can set up surveys to go to clients in the beginning of a relationship after you first meet a client, in the middle of a longer term transaction period, and/or at the very end when the transaction is finalized. Find out what clients like or dislike about you and/or your offered services. Analyze their answers to find out what you can improve about your approaches and methodologies. Keep results so that down the road you can analyze metrics about how your business has evolved and have the ability to chart a course of action based on empirical knowledge, not just guess work. Statistics and data will help you make wiser decisions about your business.

Customer 1.

If you have a lousy product or service, good luck selling it. There’s a reason the AMC Pacer and Chevy Vega aren’t around anymore. No amount of aggressive PR or marketing can save a product or service that just plain stinks. The consumer has to be happy with the quality of a product, at least to the “you get what you paid for” level. If you pay $350 for Bose’s Quiet Comfort noise-canceling headphones, you’re going to reach a level of quality that’s at the top rung. If you settle for the $20 headphones at Wal-Mart, don’t expect them to muffle the sound of an airplane engine, or the baby that’s sitting in the seat behind you.

2. Separation Anxiety In any market, there’s usually more than one of the same products, perhaps dozens. Tide, Biz, Cheer, Gain. The grocery store laundry aisle is stocked with laundry detergents, all seemingly the same product in a different package. Customer service may not work when choosing detergent, but word of mouth certainly plays into customer satisfaction. If a product is the best one among

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several identical products, then it’s necessary to separate it from the rest, through marketing, customer service and good-old fashioned product quality. 3.

Website contact information No search engine optimization No business, then. The age of the Internet has made finding products and services a snap. What used to take minutes of flipping through a phone book now takes seconds on the Web. Emailing and searching for products and services on the Internet has become such a central reference point, companies have invested millions in making sure access is extremely easy. Because, if it takes a Web surfer more than a few frustrating minutes to maneuver a site, they’re gone. Customers are satisfied when there are no barriers, or at the very least, limited barriers to access a service. Remember the phrase, “banking hours?” The competition made the banks step up and stay open later on weekdays and even open their doors on weekends. Work weekends? That’s something that would have made the banking industry shudder 20 years ago.

4. At Face Value When a product or service costs more, but is worth it, its value becomes acceptable to the consumer. When a consumer always buys Nike, Sony or goes for the $100 massage over the $35 one, the positive features of the products or service should outweigh the cost, creating a strong sense of good value.“I would happily pay more if necessary to have great customer service,” said Barry L. Brown, President of a Florida-based consulting firm. “Great customer service is rare these days. I drive 30 minutes to a particular location for a car wash and oil change when there are several within five minutes of my house. The difference? Great customer service. ”A Nice Atmosphere ask any sensible person and they’ll tell you that given the same product or service, they would rather shop at the place that offers a clean, safe and well-organized environment. Lowe’s knew this and capitalized on it when going up against hardware’s 2,000-pound gorilla, Home Depot. The North Carolina

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chain carried out extensive customer research and discovered that women initiate 80% of home-improvement decisions. So Lowe’s decided to do what Home Depot wasn’t doing, make its stores brighter, cleaner and more shopper-friendly. When you need a power drill that’s the same brand and the same price, the store that’s psychologically more inviting will win out every time. That’s why Lowe’s now has 1,375 stores in 49 states, and ranks 42nd on the Fortune 500 list. 5.

The Waiting Game When it takes 20 minutes to get your Bloom in’ Onion at Outback or the Christmas Amazon delivery comes on Dec. 27, the timing aspect of customer satisfaction is shot. When products and services miss their delivery milestones, customers start to see red. If they’re waiting at the restaurant, they tend to think there’s not enough staff working. If their products are late in the mail, then someone mishandled their order.

6. Excuses don’t fly when customers are counting on a service. One example is the dreaded time window. When the cable/repair guy says he will be there between 9 and 1, and doesn’t show, that tends to boil the blood of any customer. In a society that demands instant results for everything from food to foreign policy, a good business has to keep the wait time to a minimum 7. Company has a commitment to tell the truth. Hiding facts, figures and excessive small print doesn’t go far when it comes to customer satisfaction. If a company doesn’t stand by its product, or hassles the customer when a refund or exchange is in order that will stick. When something goes wrong with a product or service, if the supplier goes above and beyond the call of duty in taking responsibility, the end result is often that the customer is so impressed with the supplier’s response, it negates the original problem. 8. Hold on to what you’ve got repetition when it comes to customers is a good thing. When a company keeps a customer, it’s more profitable than finding a new one. As early as the 1980s, the American Consumer Association found that it was five times more expensive to win a new customer than to keep an existing one. That’s a major

50

windfall for companies. Brands like Apple and Starbucks know that the stronger the bond customers have with their products, the longer the relationship will last. 9. You’re in Good Hands; Hopefully There’s a reason Allstate’s “You’re In Good Hands” slogan has worked for so long. Customers like to know that a company cares. Corporations face a constant image problem, being portrayed as soulless fat cats interested in squeezing out as much profit as possible. When oil companies, drug makers and insurers reap billions in profits while consumers pay more and more for their products it makes people mad. Campaigns to show that the company cares are critical to keep customers satisfied. When customers are informed, and feel that their opinion matters, they are more satisfied. 10. Tech Isn’t Just for Geeks Technology means more than a fancy Flash website. In order to satisfy customers, companies have to keep up with the latest technological advances or suffer the consequences. Change is never easy, but business as usual isn’t a viable alternative anymore. Technology can help small and mid-size companies look like big companies by improving the quality of the purchasing experience without adding staff to the payroll.

51

SWOT Analysis Major Strengths 1) Premium rates are increasing and so are commissions 2) The variety of products is increasing. 3) Prospects expect more services from their brokers 4) Flexibility in payment of premium 5) Flexibility in investment option. 6) Open office structure. 7) Competitive environment. Major Weaknesses 1) Insurance companies are often slow to respond to changing needs. 2) There is an increasing trend of financial weakness among the companies. 3) There are more competitors for agencies to compete with banks and Internet players Opportunities 1) The ability to cross sells financial services is barely being tapped and can still be developed by collaborative efforts. 2) Technology is improving to the point that paperless transactions are available. 3) The client's increasing need for an "insurance consultant" can open new ways to service the client and generate income. Threats 1) The increasing cost and need for insurance might hit a point where a backlash with occur. 2) Government regulations on issues like health care, mold and terrorism can quickly change the direction of insurance. Increasing expenses and lower profit margins will hit hard on the smaller agencies and insurance companies. 3) Increasing expenses and lower profit margins will hit hard on the smaller agencies and insurance companies. 52

DATA

ANALYSIS

Ques. Age AGE CATEGORY

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

18-23 Years

10

20

20

24-29 Years

17

34

54

30-35 Years

15

30

84

35 Years and above

8

16

100

TOTAL

50

100

53

Sales

18-23 Year 24-29 Year 30-35 Year 35 and above

INTERPRETATION

From the table and graph above it can be seen that  20% respondent‟s age are 18 to 23 years.  34% respondent‟s age are 24 to 29 years.  30% respondent‟s age are 30 to 35 years..  16% respondent‟s age are 35 to above years.

Ques. Educational qualifications

CATEGORY

UNDER GRADUATE

FREQUENCY

PERCENTAGE

13

26

54

CUMULATIVE PERCENTAGE 26

GRADUATE

20

40

66

POST GRADUATE

17

34

100

TOTAL

50

100

Sales

UNDERGARDUATE GRADUATE POST GRADUATE

INTERPRETATION From the table above it can be seen that. 26% respondents are Under graduate. 40% respondents are Graduate. 34% respondents are Post graduate.

TANGIBILITY DIMENSION OF CUSTOMER SATISFACTION(Questions1 to 4): Physical facilities, equipments and appearance of personnel 55

Ques.1 HDFC bank has modern looking equipment. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

STRONGLY DISAGREE

5

10

10

DISAGREE

25

50

60

UNCERTAIN

16

32

92

AGREE

4

8

100

TOTAL

50

100

Sales

STRONGLY DISAGREE DISAGREE UNCERTAIN AGREE

INTERPRETATION HDFC bank has modern-looking and hi-tech equipments. Here analysis show that most of the respondents disagreed with this statement. Among the total respondents 50% disagreed, 32% were neutral and 8% agreed. After analysis I found that majority of the respondents think that HDFC Bank do not have modern looking equipments or no hi-tech equipments.

56

Ques.2 The bank's physical features are visually appealing. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

4

8

8

UNCERTAIN

29

58

66

AGREE

17

34

100

TOTAL

50

100

Sales

DISAGREE UNCERTAIN AGREE

INTERPRETATION HDFC bank‟s physical facilities are visually appealing. From this statement I found that 17 persons agreed. 29 persons were uncertain and 4 persons disagreed. This means 58% people

57

were uncertain about this statement. Out of the total respondents only 4% disagreed and no one strongly agreed or disagreed with the statement. 17% people agreed that HDFC bank‟s physical facilities are visually appealing.

Ques.3 The bank's reception desk employees are neat appearing. SCALE

DISAGREE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

5

10

10

UNCERTAIN

21

42

52

AGREE

18

36

88

6

12

100

50

100

STRONGLY AGREE TOTAL

Sales

DISAGREE UNCERTAIN AGREE STRONGY AGREE

58

INTERPRETATION HDFC bank‟s employees appear neat. Here analysis shows that majority were neutral. Among the total respondent 21 respondents were neutral, 18 people agreed and 6 respondents strongly agreed. The rest disagreed. From analysis I found that some respondents agreed with this statement but most of the respondents think the employees of the HDFC bank appear neat.

Ques.4 Materials associated with the service (such as pamphlets or statements) are visually appealing at the bank. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

7

14

14

UNCERTAIN

22

44

58

18

36

94

3

6

100

50

100

AGREE STRONGLY AGREE TOTAL

59

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION Materials associated with the service are visually appealing at HDFC bank. Here 36% respondents agreed with this statement and 6% strongly agreed with this statement. 44% were neutral that is most and 14% disagreed. There was no respondent who strongly disagreed. Hence, in general it can be concluded that materials associated with the services such as pamphlets or statements are visually appealing.

RELIABILITY DIMENSION OF CUSTOMER SATISFACTION(Questions 5 to 8): Ability to perform the promised service dependably and accurately Ques.5 When the bank promises to do something by a certain time, it does so. 60

SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

STRONGLY DISAGREE

2

4

4

DISAGREE

26

52

56

UNCERTAIN

5

10

66

AGREE

14

28

94

STRONGLY AGREE

3

6

100

TOTAL

50

100

Sales

STRONGLY DISAGREE DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION My sample size was 50. Here analysis shows that among the total respondents 26 respondents disagreed and 14 respondents agreed with this question. Also I found that 5 people were neutral and 2 people strongly disagreed. Hence I concluded that 61

majority of them disagreed that the bank when promises to do something by certain time, it does so.

Ques. 6 When you have a problem, the bank shows a sincere interest in solving it. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

3

6

6

UNCERTAIN

14

28

34

AGREE

26

52

86

STRONGLY AGREE

7

14

100

TOTAL

50

100

62

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION When you have a problem, HDFC bank shows sincere interest in solving it. After analysing this statement I found that most of the respondents agreed i.e. 52% respondents agreed. Also I found that 28% were neutral with this statement and 6% were committed with disagree. There was no one who strongly disagreed. Hence HDFC bank can be said to be reliable. Ques.7 The bank performs the service right the first time.

SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

STRONGLY DISAGREE

2

4

4

DISAGREE

8

16

20

UNCERTAIN

17

34

54

AGREE

17

34

88

63

STRONGLY AGREE

6

12

TOTAL

50

100

100

Sales

STRONGLY DISAGREE DISAGREE AGREE STRONGLY AGREE UNCERTAIN

INTERPRETATION Total sample size was 50. Here analysis shows that among the total respondents 17 people agreed with this statement. They think that HDFC bank performs the services right the first time. 6 people strongly agreed with this statement. Also 17 people were neutral and the rest of the respondents disagreed and strongly disagreed.

Ques.8 The bank insists on error free records.

64

SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

5

10

10

UNCERTAIN

10

20

30

AGREE

23

46

76

STRONGLY AGREE

12

24

100

50

100

TOTAL

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION Bank insists on error free records. HDFC bank has proved from my analysis that it surely insist on error free records as 46% respondents agreed with this statement and 24% strongly agreed. Only 10% respondents disagreed and no one strongly disagreed.

65

RESPONSIVENESS DIMENSION OF CUSTOMER SATISFACTION(Question 9 to 12): Willingness to help customers and provide prompt services Ques. 9 Employees in the bank tell you exactly when the services will be performed. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

STRONGLY DISAGREE

6

12

12

DISAGREE

8

16

28

UNCERTAIN

13

26

54

AGREE

18

36

90

STRONGLY AGREE

5

10

100

TOTAL

50

100

Sales

STRONGLY DISAGREE DISAGREE UNCERTAIN STRONGLY AGREE AGREE

66

INTERPRETATION Employees in the bank tell you exactly when the services will be performed. Majority of the respondents agreed with this statement. 26% respondents were uncertain. At the same time 16% disagreed and 12% Strongly disagreed with this statement.

Ques. 10 Employees in the bank give you prompt service. FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

5

10

10

UNCERTAIN

16

32

42

AGREE

27

54

96

STRONGLY AGREE

2

4

100

TOTAL

50

100

SCALE

67

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION Most of the respondents agreed with this statement. According to my analysis, employees in HDFC Bank give prompt service. Among the total respondents agreed respondents were 27 and strongly agreed were 2. 16 people were neutral and 5 disagreed. There was no respondent who strongly disagreed with this statement. Ques.11 Employees in the bank are always willing to help you SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

UNCERTAIN

12

24

24

AGREE

29

58

82

STRONGLY AGREE

9

18

100

TOTAL

50

100

.

68

Sales

UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION Employees in HDFC bank are willing to help you. With this statement no one disagreed or strongly disagreed. Strongly agreed were 9 people i.e. 18% respondents strongly agreed, 29 people agreed i.e. 58% respondents agreed and 24% respondents were neutral.

Ques.12 Employees in the bank are never too busy to respond to your request. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

1

2

2

69

UNCERTAIN

11

22

24

AGREE

27

54

78

STRONGLY AGREE

11

22

100

TOTAL

50

100

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION Employees in HDFC Bank ltd are never too busy to respond to your request. After analyzing this statement I found that most of the respondents agreed with this statement. Among the total respondents 22% strongly agreed and 54% agreed. 11 respondents were neutral and 1 respondent disagreed. No one strongly disagreed.

ASSURANCE DIMENSION OF CUSTOMER SATISFACTION(Question13 to 16):

70

Knowledge and courtesy of employees and their ability to inspire trust and confidence Ques.13 The employees of the bank are trustworthy. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

4

8

8

UNCERTAIN

13

26

34

AGREE

28

56

90

STRONGLY AGREE

5

10

100

TOTAL

50

100

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION The employees of the bank are trustworthy. According to my findings, 54% respondents agreed that employees at HDFC bank are trustworthy. 13% respondents were neutral and 4% respondents disagreed with this statement. 71

Ques.14 The behavior of employees in the bank instills confidence in you. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

28

56

56

UNCERTAIN

4

8

64

AGREE

13

26

90

STRONGLY AGREE

5

10

100

TOTAL

50

100

72

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

S

INTERPRETATION

The behavior of employees in HDFC bank instills confidence in you. Here analysis shows that most of the people disagreed. Among the total respondents 28 respondents disagreed, 13 agreed and 5 strongly agreed. There was no respondent who strongly disagreed. This means 56% respondent disagreed with this statement. Ques.15 You feel safe in your transactions with the bank. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

5

10

10

UNCERTAIN

16

32

42

AGREE

23

46

88

73

STRONGLY AGREE

6

12

100

TOTAL

50

100

100

Sales

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

INTERPRETATION

With this statement most of the respondents agreed. Among the total respondents 23 agreed with this statement and 6 strongly agreed. 32% respondents were neutral and 10% respondents disagreed. But there no one who strongly disagreed.

74

Ques.16 Employees in the bank have the knowledge to answer your questions. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

2

4

4

UNCERTAIN

9

18

22

AGREE

26

52

74

STRONGLY AGREE

13

26

100

TOTAL

50

100

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION

75

From my analysis I found that 54% respondents agreed that employees of HDFC bank have complete knowledge to answer their questions. 26% respondents strongly agreed to this statement and only 4% disagreed. 18% neither agreed nor disagreed.

EMPATHY DIMENSION OF CUSTOMER SATISFACTION(Question17 to 20): Caring and individualized attention that firm provides to its customers. Ques.17 The bank gives you individual attention.

SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

26

52

52

UNCERTAIN

12

24

76

AGREE

10

20

96

STRONGLY AGREE

2

4

100

TOTAL

50

100

76

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION HDFC bank is not able to give individual attention to its customers as out of the total respondents 54% disagreed with this statement. 12% of the respondents were neutral and only 12% agreed and 2% strongly agreed. From this finding it can be concluded that it is unable to give individual attention to its customers.

Ques.18 The bank has operating hours convenient to all its customers. SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

DISAGREE

2

4

4

77

UNCERTAIN

14

28

32

AGREE

27

54

86

STRONGLY AGREE

7

14

100

TOTAL

50

100

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPRETATION

HDFC bank has operating hours convenient to all its customers. Out of 50 respondents, 27 respondents agreed with this statement and only 2 respondents disagreed. Also 7 respondents strongly agreed that the bank has operating hours convenient to its customers.

Ques.19 The bank has your interests best at heart. 78

SCALE

FREQUENCY

PERCENTAGE

CUMULATIVE PERCENTAGE

STRONGLY DISAGREE

3

6

6

DISAGREE

5

10

16

UNCERTAIN

10

20

36

AGREE

25

50

86

STRONGLY AGREE

7

14

100

TOTAL

50

100

INTERPRETATION HDFC bank has your best interests at heart. Here analysis shows that 25 respondents agreed and 7 respondents strongly agreed with this statement. 20% were neutral and the rest disagreed and strongly disagreed.

Ques.20 The employees of the bank understand your specific needs. SCALE

FREQUENCY

PERCENTAGE

79

CUMULATIVE PERCENTAGE

DISAGREE

5

10

10

UNCERTAIN

21

42

52

AGREE

20

40

92

STRONGLY AGREE

4

8

100

TOTAL

50

100

Sales

DISAGREE UNCERTAIN AGREE STRONGLY AGREE

INTERPREATION Employees of HDFC bank understand specific needs. With this statement most of the respondents were neutral. Among the total respondents 20 respondents agreed and 4 respondents strongly agreed. 5 respondents disagreed with this statement.

80

MEASURING CUSTOMER SATISFACTIONDIMENSIONS

Measuring the quality of a service can be a very difficult exercise. Unlike product where there are specific specifications such as length, depth, width, weight, colour etc. a service can have numerous intangible or qualitative specifications. Parasuraman, Zeithaml, and Berry (1985) provide a list of determinants of service quality: access, communication, competence, courtesy, credibility, reliability, responsiveness, security, understanding, and tangibles. A total of five consolidated dimensions of Customer satisfactionare: Tangibles (ques.1 to 4) - Physical facilities, equipments and appearance of personnel Reliability (ques.5 to 8) - Ability to perform the promised service dependably and accurately Responsiveness (ques.9 to 12) – Willingness to help customers and provide prompt services Assurance (ques.13 to 16) – (including competence, courtesy, credibility and security) Knowledge and courtesy of employees and their ability to inspire trust and confidence Empathy (ques.17 to 20) – (including access, communication and understanding the customer) Caring and individualized attention that firm provides to its customer. In order to calculate which dimension of Customer satisfactionis performing well, a sample of the questions are used in the questionnaire. Using the questionnaire, obtain the score for each of the 20 statements. After analysis of the data, Overall score to 81

each statement is given on a scale of 1 to 5 i.e. 1 is given to strongly disagreed i.e. the lowest score, then 2= disagreed, 3= uncertain, 4= agreed and 5= strongly agreed. Sum the score for each dimension of Customer satisfactionto obtain a final score which tells which dimension is performing well and which dimension needs improvement.

The scores for each dimension are summed up and a final score is obtained:

CUSTOMER SATISFACTIONDIMENSION

Points 11

1. TANGIBILITY (1 TO 4) 13.5 2. RELIABILITY (5 TO 8) 16 3. RESPONSIVENESS (9 TO 12) 14 4. ASSURANCE (13 TO 16) 13 5. EMPATHY (17 TO 20)

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FINDINGS OF THE REPORT

The Reliability dimension of Customer satisfactionis better as compared to empathy and tangibility. Still the score is low. For most services, customer‟s perceptions of whether the service has been performed correctly, and not provider-established criteria, are the major determinants of reliability. Customers of the bank hesitate to rely on the bank. Whenever they have a problem, the bank shows sincere interest in solving it but the services are not performed by a certain time as promised. The employees should take this problem seriously and take steps to remove this. As score for Assurance is at second place after responsiveness, so the customers of HDFC bank are very confident and feel safe while transacting with the bank. Moreover the employees of the bank have proved to be trustworthy. Employees are also educated enough to answer all the questions. The score of Tangibility dimension of Customer satisfactionof HDFC bank is the lowest. The Customer satisfactionfactor tangible is defined by whether the physical facilities and materials associated with the service are visually appealing at the bank. These are all factors that customers notice before or upon entering the bank. Customer expectations regarding visual appealing of HDFC is very high. From my study I found 83

that Physical facilities and modern looking equipment are not sufficient in HDFC bank. Respondents were uncertain about the neat appearance of the reception desk employees. So they should work on that and try to fulfill the gap. According to my findings, the score of Empathy is not satisfactory but not unsatisfactory also. HDFC bank is unable to give individual attention to its customers and is unable to understand specific needs of its customers. But still bank has taken steps to satisfy its customers by keeping operating hours convenient to its customers and keeping their interest best at heart. In HDFC bank, the score of Responsiveness is highest so they are focusing on prompt service, employees are willing to help the customers and say the exact time when the services will be performed. Employees at bank give their customers first preference and are always ready to help them. Overall HDFC bank ‟s responsiveness dimension of Customer satisfactionis the highest. According to the customer perception, HDFC bank is highly responsive. Customers are assured while transacting with the bank. The reliability dimension is lower than the first to dimension. They feel that the bank is unable to give them individual attention and its equipments are not modern and sufficient for the bank. There is not much gap between all the dimensions, this shows that HDFC BANK is a better service provider in all the dimensions i.e. reliability, assurance, tangibility, responsiveness and empathy. As a result of which, the customers are satisfied with the service offered by HDFC bank.

84

CONCLUSION

Based on the study conducted it can be concluded that responsiveness, assurance and reliability are the critical dimensions of Customer satisfactionof HDFC bank and they are directly related to overall service quality. The factors that may delight customers tend to be concerned more with the intangible nature of the service, commitment, attentiveness, friendliness, care, and courtesy. The employees give prompt services, always are ready to answer the questions and are trustworthy. The main sources of dissatisfaction appear to be cleanliness, up to date technology modern equipments, and neatly dressed up employees. The Tangibility dimension of Customer satisfactionof HDFC bank is highly disappointing and serious steps are needed to be taken to enhance this dimension. Customers of the bank are dissatisfied with the empathy dimension. To satisfy these customers, the management can take some attempts, noted earlier as recommendations. The study brings about the areas which require urgent attention of the employees, the management, and the policy makers of the industry. These are areas in which customers are hugely dissatisfied with the services of the banks against their expectation. This high degree of dissatisfaction resulting from the services received clearly questions the design of services or subsequent response of the bank employees. These limitations are too serious to be avoided as these question the front-line people dealing with the customers and the approach of the management in taking customers seriously. The management should understand the benefits of service quality. It include increased customer satisfaction, improved customer retention, positive word of mouth, reduced staff turnover, decreased operating costs, enlarged market share, increased profitability, and improved financial performance. In the days of intense competition, superior service is the only differentiator left before the banks to attract, retain and partner with the customers. 85

Superior Customer satisfactionenables a firm to differentiate itself from its competition, gain a sustainable competitive advantage, and enhance efficiency. Thus, improving Customer satisfactionleads to the customer satisfaction and, ultimately, to customer loyalty.

RECOMMENDATIONS

Reliability is an obvious place to start. Customers of the bank want to know their resources are safe and within trustworthy institutions. A way to ensure this peace of mind would be to take steps to ensure bank employees are well trained, so each bank associate is able to offer complete and comprehensive information at all times. Consistent policies combined with a knowledgeable staff will foster a high degree of institutional cohesion and reliability. Responsiveness, again when associated with a well-trained staff and timely answers to service-related questions, would make significant inroads into causing HDFC bank be regarded as responsive. Staff should be encouraged to present relevant options to banking customers in a manner that does not resemble salesmanship so much as a desire to serve. Intangibles please customers just as much as tangibles in the banking industry. People tend to visit the same branch of a bank over and over again. Usually, this is a location close to their home or their workplace. It is natural that customers become comfortable and habituated to these branch banks, for the same reason they develop familiarity with a neighborhood supermarket or convenience store. It makes sense that

86

bank employees would be encouraged to learn to recognize these regular customers, learn their names, and begin to identify their basic service requirements. Learning to understand customers‟ needs will allow bank associates to offer enhanced services, perhaps lowering customers‟ banking costs and increasing their investment potential. This could also open up the possibility of increased profits for banks, for when perceived as more service and customer oriented, they will, in effect, become a useful and pleasant way to “shop.” Keeping the bank with up-to-date technologically are important factors. Modern equipments, new improved technology should be replaced with the old ones. If the staff inside is pleasant and well-informed, in an aesthetically pleasing environment, then customer satisfaction will be high. The five-dimensional structure could possibly serve as a meaningful framework for tracking a bank‟s Customer satisfactionperformance over time and comparing it against the performance of competitors. Items on some dimensions should be expanded if that is necessary for reliability. Thus, the banking industries must continuously measure and improve these dimensions in order to gain customers‟ loyalty.

87

BIBLIOGRAPHY

88

References Kotler Philip, marketing management, (Pearson education, 12th edition) Malhotra K. Naresh, marketing research (An applied orientation), Research design, (Prentice hall of India pvt. 5th edition) Zeithmal V. A., Grembler D.D., Bitner M.j., and Pandit A.: Service Marketing Integrated customer Focus across the Firm” (4th Edition) M.K. Rampal : Service Marketing Websites www.hdfcbank.com www.hdfcindia.com www.wikipedia.org www.marketresearch.com

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ANNEXURE QUESTIONNAIRE

Name: Age: Educational Qualifications

QUESTIONS

Strongly Disagree

Disagree Neither agreeNor disagree

1.HDFC

bank

has

modern

looking equipment. 2. The bank's physical features are visually appealing 3. The bank's reception desk employees are neat appearing. 4. Materials associated with the service (such as pamphlets or statements) are visually 90

Agree

Strongly Agree

appealing at the bank. 5. When the bank promises to do something by a certain time, it does so. 6. When you have a problem, the bank shows a sincere interest in solving it. 7. The bank performs the service right the first time. 8. The bank insists on error free records. 9.

Employees in the bank tell

you exactly when the services will be performed. 10. Employees in the bank give you prompt service. 11. Employees in the bank are always willing to help you. 12. Employees in the bank are never too 91

busy to respond to your request. 13. The employees of the bank are trustworthy. 14. The behavior of employees in the bank instills confidence in you. 15.

You

feel

safe

in

your

transactions with the bank. 16. Employees in the bank have the knowledge to answer your questions. 17. The bank gives you individual attention. 18. The bank has operating hours convenient to all its customers 19. The bank has your best interests at heart. 20. The employees of the bank understand your specific needs. 92

93