MEASURING THE SERVICE: INTRODUCTION

INTRODUCTION

The banking industry is highly competitive, with banks not only competing among each other; but also with non-banks and other financial institutions (Kayak and Kucukemiroghu, 1992; Hull, 2002). Most bank product developments are easy to duplicate and when banks provide nearly identical services, they can only distinguish themselves on the basis of price and quality. Therefore, customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in today’s ever-increasing banking competitive environment.

Analysing markets based on customer perceptions, designing a service delivery system that meets customer needs, and enhancing the level of service performance are all pertinent objectives for banks seeking to gain and retain a competitive advantage ( Brown and Swartz, 1989; Yavas, Benkenstein and Stuhldreier, 2004 ). Service quality has received much attention because of its obvious relationship with costs, financial performance, customer satisfaction and customer retention ( Ranaweera and Neely, 2003; Zeithaml, Berry and Parasuraman, 1996; Alexandris, Dimitriadis and Markata, 2002; Reichheld, 1993).

The literature has provided a rigorous investigation of traditional service quality outcomes in which face-to-face interaction between customers and employees was the primary focus. Recently, however, technology has had a remarkable influence on the growth of service delivery options ( Dabholkar and Bagozzi, 2002 ) and a profound effect on services marketing ( Bitner, Brown and Meueter, 2000). Customer acceptance of the new automated channels of service delivery in banks brings a dramatic change in the way retail banks build and maintain a close relationship with their customers ( Mols, 2000).

Retained customers are profitable customers ( Reichheld, 1996) and that customer retention rates can be connected to profitability ( Payne and Frow, 1997 ). The driver of a higher rate of customer retention was found to be customer satisfaction ( Berry and Parasuraman, 1991; Rust and Zahorik, 1993). In other studies, ( Storbacka et al, 1994), found customer satisfaction drove longevity. Other authors ( Oliver, 1980; Zeithaml et al, 1990; Storbacka et al, 1994; Rust et al, 1995; Hallowell, 1996; Heskett et al, 1997) found that satisfaction drove customer loyalty and also exerted influence on purchase intention ( Cronin and Taylor, 1992 ).

The antecedent of customer satisfaction ( Parasuraman et al, 1985 and Cronin and Taylor, 1992) is service quality. Perceived service quality caused bank customers to feel satisfied or dissatisfied (Storbacka at al, 1994) and service quality was also found to have a positive relationship with customer retention ( Keaveney, 1995 and Hocutt, 1998).

Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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