The Effect of Service Quality on Customer Satisfaction: A Case Study of Commercial Bank of Ethiopia Adama City

The importance of service quality for any business performance has been recognized in the literature through the direct impact on customer satisfaction. The paper studied the effect of service quality on customer satisfaction in commercial Bank of Ethiopia Adama city. SERVPERF model by Cronin and Taylor’s (1992) is used to identify the effect and the relationship. Quantitative means of data collection method is employed to collect the data through questionnaire. This study used descriptive and causal research design and both primary and secondary data. The sample consists of 398 respondents selected based on convenience sampling procedure. The collected data was analyzed with the help of SPSS version 20.Correlation and multiple regressions were used to investigate the relationship between dependent and independent variables. The finding of this study indicates that customers were most satisfied with the assurance dimensions of service quality and dissatisfied with network quality dimension. The findings of the study also indicated that there are positive and significant relationships between seven service quality dimensions and customer’s satisfaction. And also except responsiveness all service quality dimensions have positive and significant effect on customer satisfaction. Furthermore, 72.8% of the variation in customer satisfaction is explained by service quality dimensions in commercial bank of Ethiopia Adama city. The study recommends that the bank should improve the service quality dimensions especially network quality, responsiveness, empathy and security in order to satisfy customers. Keywords: Service quality, Customer satisfaction, SERVPERF model DOI : 10.7176/JMCR/58-01 Publication date :July 31 st 2019