Name : Nguyễn Chúc Quỳnh CQ50/51.04 Topic: “Improving customer service in Military commercial join stock bank – Hoang Quoc Viet Branch. CHAPTER 1: LITERATURE REVIEW This chapter related a review of literature related to the research work as documented by authorities on customer service. It will cover the definitions of customer service, the definitions of customer service quality, definitions of customer satisfaction, definitions of customer loyalty. It will also take a look into the SERVQUAL MODEL to assess service quality dimension, customer service quality and some factors affecting customer service in banking sector.1 Definition of customer service According to Wikipedia “Customer service is the provision of service to customers before, during and after a purchase.
Accordingly, it may vary by product, service, industry and individual customer. The perception of success of such interactions is dependent on employees "who can adjust themselves to the personality of the guest". According to Paul Mckinney (2015), Customer service is the act of taking care of the customer's needs by providing and delivering professional, helpful, high quality service and assistance before, during, and after the customer's requirements are met.102) said that good customer service means providing product and service which has high quality, answering queries, making customer easy to purchase goods and delivering on time. According to consultant Sudhir Andrews (2007, p.198), customer service not only satisfies a customer but also reflects the professionalism of the LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com organization as the result of building its image.
He believed that good customer service can build trust and customer loyalty. Employees can also get rewards and develop the friendship with customers if they provide good services. In general, Customer service relates to the service provided to customers before, during and after a purchase. Some characteristics of good customer service include: Promptness: Promises for delivery of products must be on time.
Delays and cancellations of products should be avoided. Politeness: Politeness is almost a lost art. For any business, using good manners is appropriate whether the customer makes a purchase or not. Professionalism: All customers should be treated professionally, which means the use of competence or skill expected of the professional.
Professionalism shows the customer they're cared for. Personalization: Using the customer's name is very effective in producing loyalty. Customers like the idea that whom they do business with knows them on a personal level. Definition of customer service quality According Parasuraman, Zeithaml and Berry (1985), the quality of service is the customer's perception of service has generated a good level of customers’ previous expectations.
Also according to Parasuraman, the expectation in service quality is the desire of the customer, which means they feel the right provider will perform and not perform the service requested. Bitner and Hubert (1994) stated that the perception of service quality can occur at multiple levels in an organization. Research by Caruna (2000) revealed that service quality is an important input to customer satisfaction, LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com therefore the main point of management attention should be on customers, of which service quality is an important antecedent. Customers receive products through active communication, information and comments received.
To evaluate customer service quality at banks, customers must come and perform transactions, assess the facilities, the service attitude of staff, level of satisfaction of products and services, etc.3 Customer loyalty Customer loyalty (Customer loyalty, 2002) is both an attitudinal and behavioral tendency to favor one brand over all others, whether due to satisfaction with the product or service, its convenience or performance, or simply familiarity and comfort with the brand. Customer loyalty encourages consumers to shop more consistently, spend a greater share of wallet, and feel positive about a shopping experience, helping attract consumers to familiar brands in the face of a competitive environment. Journal Citation Ciation Report (Thomson Reuters, 2014) Customer loyalty is viewed as the strength of the relationship between an individual's relative attitude and repeat patronage. The relationship is seen as mediated by social norms and situational factors.
Cognitive, affective, and conative antecedents of relative attitude are identified as contributing to loyalty, along with motivational, perceptual, and behavioral consequences. Albert Canuana,2002 stated that service loyalty, with its final effect on repurchasing by customers, appears to have received relatively little attention. This study starts by first delineating the concept of service loyalty and proceeds to distinguish between service quality and customer satisfaction. A model that links service quality to service loyalty via customer satisfaction is proposed.
Appropriate measures are identified and a postal survey is undertaken among 1,000 retail banking customers. A response rate of 20.5 per cent is obtained. Results indicate that LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com customer satisfaction does play a mediating role in the effect of service quality on service loyalty. In general, it is agreed that customer satisfaction measurement is a post- consumption assessment by the user, about the products or services gained (Churchill and Surprenant, 1982; Yuksel and Rimmington, 1988).4 Customer satisfaction Many researchers have definitions customer satisfaction.
According to Cambridge Dictionary Customer satisfaction is a measure of how happy customers feel when they do business with a company. Journal of Marketing (January 1982) is defined customer satisfaction has a direct impact on the primary source of future revenue streams for most companies. Satisfaction is as a judgment following a consumption experience - it is the consumer’s judgment that a product provided (or is providing) a pleasurable level of consumption-related fulfillment ( Oliver Richard L 1997). Most research confirms that the confirmation or disconfirmation of pre- consumption expectations is the essential determinant of satisfaction.
This means that customers have a certain predicted product performance in mind prior to consumption. During consumption, customers experience the product performance and compare it to their expected product performance level. Satisfaction judgments are then formed based on this comparison. The resulting judgment is labeled positive disconfirmation if the performance is better than expected, negative disconfirmation if it is worse than expected, and simple confirmation if it is as expected.
In short, customers evaluate product performance by comparing what they expected with what they believe they received. The performance implications of the customer satisfaction instrument are also explored. What is shown is that customer segments, in fact, yield statistically LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com different satisfaction scores, which verifies the managerial value of customer segmentation practices. Finally, the facets of customer satisfaction as explanatory cues for the switching behavior of individual and business customers were tested successfully.
Factors affecting customer service in banks 1. External factors The bank is operating in conditions which often change due to a lot of diverse relations between it and the various economic actors. All relationships constitute operating environment and business of commercial banks. To be able to develop rapid and sustainable services, commercial banks need to research about the operating environment affecting our business.
Environmental activities include: economic environment, legal environment; social and cultural environment and technological environment.1 Economic environment Any business organizations are affected by the economic environment on their business activities. In particular, commercial banks are subject having an intimate relationship with most of the other economic sectors. Therefore, when the economic environment changes in any direction, the operations of commercial banks are also affected strongly. For individual customers, income is the main factor, the most important factor impacting on their use of financial and banking services.
During the developing economies, per capital income increases, the demand for people with the products and services of banks will increase, which will boost the commercial bank of constantly open wide business operations, improve service quality and product, diversify new services to increase market share and satisfy every customer's needs. In contrast, the economy falls into instability, difficulty will make the unemployment rate rose, consumption declined, people's incomes go down, LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com the things that impact directly on the banks as the amount of deposited money in banks will decline, lending individual customers become more difficult and risky, etc.2 Social and cultural environment Customary practices, conception of life, the social and cultural factors, etc. have decided to influence preferences and consumption habits of bank service individual customers. Although Vietnam's population is relatively large, the number of participants in banking transactions is very low, and the majority of people still have the habit of using cash for payments.
To be able to change consumption habits of people, banks should take measures to propagate and advertise the utilities from using banking services, help people feel secure and confident when using services. Besides that, some factors of population such as population density, average age, education level, income, etc. in each region also affect the development of banking services in the area. The study of the socio-cultural factors not only determine their impact on the behavior using banking products and services of customers, but also help the bank managers active in participate in formulating policies, regulations and procedures in the design business and organizational models consistent with the cultural characteristics of each region and market sector both domestically and internationally.
Therefore, banks need to delve on the above factors, from which subgroups of customers, to be able to provide appropriate services to more customers, help develop better banking services.3 Technological environment The rapid development of science and technology also has strong impact to the commercial banks. Based on the application of information technology LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com software advanced, high-speed processes has helped the administration of commercial banking effectively; offer new better services which meet customer needs. Thus, the commercial banks have to capture the change of environment technology to applications of scientific and technical achievements in service to satisfy customers’ demand. In fact, the changes in information technology have a strong impact to the banking business.
New technology allows banks to not only process innovation professionally, but also renew the distribution method, develop new products and services such as the development of computer networks that allows bank network to provide 24/24 banking services. Changes in technology has a strong impact to the complex production of the industry, and also has an influence on how the use of banking products and services to the population. This has created new demands on products and banking services banking activities as the birth and development of electronic commerce has put forward new requirements for the banking sector in the provision of payment services, etc. Internal factors Subjective factors are factors affecting the banking of the development of banking services.
These factors are crucial to the operation of commercial banks as well as the development of services for individual customers. The subjective factors include: the development point services for individual customers, the bank's marketing activities, financial strength and reputation of the bank, technological capacity and qualification of personnel banker, etc.1 Attitude on service development for individual customers Any business that wants to develop fast and sustainably needs to build a development strategy from which long-term direction of action, creating fundamental basis for policy and business decisions. Development strategy of LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com banking services should be developed on the basis of the survey, the business climate survey and customers, and it is important to rely on bank resources. When there is a well-developed strategy, it will help banks to improve the activeness, ability to grasp the opportunity and flexibility in the responses to these challenges may occur, which may change methods and ways of management when needed.
Moreover, the needs of individual customers are always very complex and uneven, so each bank should have a policy or service development standpoint for specific individual customer. To be able to develop services for individual customers in the best way, the strategy of each bank should specify that the bank needs to focus on groups of individual customers, the market segment is promising and consistent performance.2 Education and skills In business, the human factor is always key, critical to the success or failure of a business.