Relationship among Service Quality, Customer Satisfaction and Customer Loyalty: A study of Commercial Banks in Cambodia

Abstract

This research is conducted to find out the relationship among service quality, customer satisfaction, and customer loyalty of Cambodian Commercial banks. This study used translated version of the SERVQUAL instrument questionnaire. The questionnaire included 22 items of service expectations, 22 items of service performance perceptions, two different single items of overall service quality and overall customer satisfaction, and 4 items of customer loyalty to explore the relationship among service quality, customer satisfaction and customer loyalty of Cambodian Commercial banks. Total sample sizes of 200 respondents were chosen, distributed and collected from Commercial banks’ customers in Phnom Penh Capital city. Of the 200 questionnaires distributed, 147 respondents were collected back from customers of 8 Commercial banks. After descriptive and factor analysis, multivariate regression analyses were performed to study the impact of banking service quality on both customer satisfaction and customer loyalty of Cambodian Commercial banking industry setting. Factor analysis was performed among five dimensions of the SERVQUAL instrument and resulted in three new dimensions naming Tangibles, Reliability and Human Skills dimensions. The results from findings revealed that the expectations of Cambodian Commercial banks were higher than their perceptions in terms of service quality. Their expectations were not met and that the largest gap was found in Human Skills dimension. The findings from regression suggested that banking service quality was significant influence on overall customer satisfaction and thus banking service quality will lead to customer satisfaction. In addition, the results from multiple regressions showed that the Reliability dimension had the largest influence on overall customer satisfaction. Regression analysis also posited that overall customer satisfaction was positively influent on customer loyalty. However, Banking Service Quality had the indirect and positive impact on customer loyalty and this result was proved by performing two different models of regression. First, regression was analyzed using customer loyalty as dependent variable and banking service quality as independent variable. Second, regression analysis was performed using customer loyalty as dependent variable, banking service quality as independent variable, and customer satisfaction as mediator independent variable. In this study, managerial implications were provided to Management of Cambodian Commercial banks with the tested model of service quality that measures banking service quality and its attributes which had influences on overall customer satisfaction and then led to customer loyalty. Also, limitations of the study were provided and the directions for future research were suggested for further study on this field of banking service quality, customer satisfaction and customer loyalty. Contributions of this study were provided to both academic research and managerial practitioners in this field.