INTRODUCTION OF BANKING

Service with a smile:

Todays 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.

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 customers 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

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.

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

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.

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 respondents 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

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 .

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 days 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.

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.

11

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.

12

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 banks 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.

13

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 Banks 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 Indias expanding banking

Delivering high quality customer service

Maintaining current high standards for asset quality through

disciplined credit risk management

15

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

18

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.

21

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

23

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.

24

EMPATHY: individual attention, customized service and convenient banking hours

are very much important in todays 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 customers experience with the service will be defined by the brief experience
with the firms personnel and the firms 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

25

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 customers 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
customers 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.

27

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 products performance relative to a buyers expectations. A customer might experience
various degrees of satisfaction. If the products 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 buyers form their expectations? Expectations are based on the
customers 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 todays 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 arent. And
Cigna vows Well 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
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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.
Todays 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 marketers 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 firms 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 firms
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 competitors 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
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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

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-Marts 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-Marts headquarters but to WalMarts 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 Donnellys 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, Donnellys 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 Hondas 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 Levis major retailers is Sears. Every night, through
electronic data interchange (EDI), Levis learns the sizes and styles of its blue jeans that sold
through Sears and other major outlets.

Levis 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 todays 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 customers 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
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is long term customer satisfaction. Relationship marketing requires that all of the companys
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 companys 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.

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

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 customers expectations.

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

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 companys 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
Uniteds 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 havent 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 companys 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 companys 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
Saturns 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
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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 dont 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 companys 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 firms 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 firms 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

38

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 didnt 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 consumers
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 products 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
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 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 vendors 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.
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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 youre not used to this sort of thing it can be a pretty nerve-wracking experience.
Rest assured, though, it does get easier over time. Its 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
theyve 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, youre 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 youve received their message and youll contact them about it as soon as
possible. Even if youre not able to solve a problem right away, let the customer know youre
working on it.
A good example of this is my Web host. Theyve had some trouble with server
hardware which has caused a fair bit of downtime lately. At every step along the way I was

43

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 Id have been pretty annoyed and may have moved my
business elsewhere. But because they took time to keep me informed, it didnt 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. Its very important to be friendly, courteous and to make your clients
feel like youre their friend and youre 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. Its 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 youre 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 doesnt work, then what?
Should they contact different people for billing and technical enquiries? If theyre not
satisfied with any aspect of your customer service, who should they tell?
Theres 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 arent
always cost effective, but remember to do them.
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Even if its as small as sending a Happy Holidays email to all your customers, its 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 Clients 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: youre working on the front-end for your clients 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 youve used on the site. A note accompanies it which reads:
Large-scale copies of the graphics Ive used on the site. Hopefully youll 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
Its 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 dont 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 dont 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 doesnt 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, its important to set
up an effective communication system and make time out of your busy schedule to
respond. Its 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.
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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 theyd 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, youre 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 theyll 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 theyll be able to see.
7. Think from the customers point of view. Buying something is an important and often
emotional decision in a persons 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 customers perspective. This simple rule applies to any marketing
initiative. Seeing things from the customers 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 its 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. Theres a reason the
AMC Pacer and Chevy Vega arent 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 Boses Quiet Comfort noise-canceling headphones, youre going
to reach a level of quality thats at the top rung. If you settle for the $20 headphones
at Wal-Mart, dont expect them to muffle the sound of an airplane engine, or the baby
thats sitting in the seat behind you.

2. Separation Anxiety In any market, theres 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

48

several identical products, then its 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, theyre 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? Thats 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 theyll 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. Lowes knew this and capitalized on it when
going up against hardwares 2,000-pound gorilla, Home Depot. The North Carolina

49

chain carried out extensive customer research and discovered that women initiate
80% of home-improvement decisions. So Lowes decided to do what Home Depot
wasnt doing, make its stores brighter, cleaner and more shopper-friendly.
When you need a power drill thats the same brand and the same price, the store
thats psychologically more inviting will win out every time. Thats why Lowes 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 theyre waiting at the restaurant, they tend to
think theres not enough staff working. If their products are late in the mail, then
someone mishandled their order.

6. Excuses dont 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 doesnt 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 doesnt go far when it comes to customer satisfaction.
If a company doesnt 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
suppliers response, it negates the original problem.
8. Hold on to what youve got repetition when it comes to customers is a good thing.
When a company keeps a customer, its 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. Thats 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. Youre in Good Hands; Hopefully Theres a reason Allstates Youre 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 Isnt 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 isnt
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

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% respondents age are 18 to 23 years.
34% respondents age are 24 to 29 years.
30% respondents age are 30 to 35 years..
16% respondents 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

10

10

DISAGREE

25

50

60

UNCERTAIN

16

32

92

AGREE

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

UNCERTAIN

29

58

66

AGREE

17

34

100

TOTAL

50

100

Sales

DISAGREE
UNCERTAIN
AGREE

INTERPRETATION
HDFC banks 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 banks physical facilities are visually appealing.

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

SCALE

DISAGREE

FREQUENCY

PERCENTAGE

CUMULATIVE
PERCENTAGE

10

10

UNCERTAIN

21

42

52

AGREE

18

36

88

12

100

50

100

STRONGLY
AGREE
TOTAL

Sales

DISAGREE
UNCERTAIN
AGREE
STRONGY AGREE

58

INTERPRETATION
HDFC banks 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

14

14

UNCERTAIN

22

44

58

18

36

94

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

DISAGREE

26

52

56

UNCERTAIN

10

66

AGREE

14

28

94

STRONGLY
AGREE

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

UNCERTAIN

14

28

34

AGREE

26

52

86

STRONGLY
AGREE

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

DISAGREE

16

20

UNCERTAIN

17

34

54

AGREE

17

34

88

63

STRONGLY
AGREE

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

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

12

12

DISAGREE

16

28

UNCERTAIN

13

26

54

AGREE

18

36

90

STRONGLY
AGREE

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

10

10

UNCERTAIN

16

32

42

AGREE

27

54

96

STRONGLY
AGREE

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

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

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

UNCERTAIN

13

26

34

AGREE

28

56

90

STRONGLY
AGREE

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

64

AGREE

13

26

90

STRONGLY
AGREE

10

100

TOTAL

50

100

72

Sales

DISAGREE
UNCERTAIN
AGREE
STRONGLY AGREE

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

10

10

UNCERTAIN

16

32

42

AGREE

23

46

88

73

STRONGLY
AGREE

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

UNCERTAIN

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

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

77

UNCERTAIN

14

28

32

AGREE

27

54

86

STRONGLY
AGREE

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

DISAGREE

10

16

UNCERTAIN

10

20

36

AGREE

25

50

86

STRONGLY
AGREE

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

10

10

UNCERTAIN

21

42

52

AGREE

20

40

92

STRONGLY
AGREE

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)

82

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, customers 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.

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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.
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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 banks 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

89

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.
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93