Customer Service Quality Y - Retail Banking Academy

1 DO NOT COPYRETAIL Banking I152 Retail BANKINGACADEMYC ourse Code 107 - Customer Service Service QualityDO NOT COPY153 Retail Banking Academy , 2014 Retail Banking IRETAIL BANKINGACADEMYC ourse Code 107 Customer Service QualityIntroductionAs was emphasised in the Marketing module, Banking services (as opposed to products) are intangible and hence the delivery ( , Customer experience) is more important than it would be for traditional businesses that deal in tangible products. A predominant issue in Retail Banking (as in all Service industries) is summarised as follows:It is not only what is delivered but also how it is delivered and by asserted by Chowdhary and Prakash (2007)* the academic literature has yet to arrive at a consensus on a clear definition of Customer Service Quality .

2 A common definition, proposed by Parasuraman, Zeithaml and Berry (1985) is that Customer Service Quality is the difference between the bank s performance as perceived by the Customer and the level of performance that the Customer expected. There are two implications of this definition: firstly, Service Quality does not necessarily mean best in class but only Quality performance with respect to Customer expectations; second, as pointed out by Poll and Boekhurst (2007) , Quality for customers in one market segment does not mean the same for another.

3 In the consideration of the family life cycle, there is evidence that expectations of Service Quality vary by segments. What the senior citizen sees as excellent Service may lie in the form of high-touch branch personnel with whom they feel comfortable asking important financial questions such as with product experts, yet to the young adult or student, excellent Service may lie in the form of mobile Banking access and online chat with a Service provider. * Nimit Chowdhary, Monika Prakash, Prioritizing Service Quality dimensions Managing Service Quality , Vol.

4 17 Iss: 5, - 509 (2007). Parasuraman, Zetthami and Berry, A conceptual model of Service Quality and its implications for future research . Journal of Marketing 49 (Fall): 41-50 (1985). This is commonly called disconfirmation , a concept that implies customers psychologically interpret the discrepancy between the expectation and actual perceived performance. Poll and Boekhorst, Measuring Quality : Performance measurement in Libraries. 2nd revised ed. (Muchen: Saur, 2007).

5 Course Code 107 - Customer Service QualityDO NOT COPYRETAIL Banking I154 Retail BANKINGACADEMYC ustomer segments which are based on current or potential profitability can also differ in what they consider Quality Service . High-value clients tend to classify excellent Service Quality based on their access to a high-touch relationship manager and professional assistance, where the mass market consumer client would define Service Quality as having access to the most convenient locations and lowest price. Within the small business segment research we find similar differences.

6 The measurement of excellent Service Quality to the SOHO (Small Office Home Office) client can be in the ease of online access or consolidation of the business and personal accounts, where the larger small business may consider the availability of a relationship manager that knows their business as a minimum requirement of Service Quality . The professional literature has documented several benefits to the bank for providing a high level of Customer Service Quality , ( , Dabholkar, Shephard and Thorpe, 2000,* Zeithaml, 2002 ).

7 These benefits include: Customer retention leading to repeat business Customer advocacy in the form of referrals and hence Customer acquisition Avoidance of price competition since Customer Service Quality becomes a differentiation strategy Employee engagement since there is evidence of a feedback loop from satisfied customers to engaged employees Cost reduction and hence increased profitability since increased productivity is associated with lower average rest of this module is organised as follows:Chapter 1.

8 A Brief Historical Journey Customer Service in Retail Industries in the US and EuropeChapter 2: Drivers of Customer Service Quality Chapter 3: Linking Customer Service Quality to Customer Satisfaction Chapter 4: Linking Customer Satisfaction to Customer LoyaltyChapter 5: Resolution of Customer Service Failures The GAPs ModelThis module concludes with a summary and review order to place Customer Service Quality in Retail Banking in context, we take a historical journey into the evolution of Customer Service in Retail industries to ascertain what lessons can be learned.

9 * Dabholkar, P. A, Shepherd, CD, Thorpe, D, A comprehensive framework for Service Quality : an investigation of critical conceptual and measurement issues through a longitudinal study . Journal of Retailing 76(2), 139-173 (2000). Valarie A Zeithaml, Service excellence in electronic channels , Managing Service Quality , Vol 12 Iss: 3, - 139 (2002).Course Code 107 - Customer Service QualityDO NOT COPY155 Retail Banking Academy , 2014 Retail Banking IRETAIL BANKINGACADEMYC hapter 1: A Brief Historical Journey Customer Service in Retail IndustriesThe emergence of Customer Service as a key differentiator can be traced back to the last third of the 19th Century in Chicago, where a city grew out of the ashes of a devastating fire that had levelled it in 1871.

10 One of the industries that most benefited from the revitalised city was retailing. There were households to be re-established and homes to be redecorated and modernised. An entrepreneur by the name of Marshall Field, then a young but hardy veteran of retailing in Chicago, understood that most of his sales were to the women in Chicago who were spearheading the revitalising of local households an early recognition of the value of knowing your Customer . Field had already founded a multiple-line Retail establishment, and forged a new path in retailing, purveying a sense of Service in addition to an impressive array of clothing and home apparently told employees at his eponymously named establishment that the Customer is always right , and created a consumer-friendly environment.