Customer Satisfaction and Service Loyalty In Wegagen Bank, Mekelle Branch

In the highly competitive banking industry, the success and failure of a business organization merely depends on how well it satisfies the needs and wants of customers. Customer satisfaction and service loyalty are compelling issues for managers. If a bank has to stay competitively in the industry it has to continuously meet the needs and wants of customers. This study assessed the interaction among service quality, corporate image, price, customer satisfaction and service loyalty from customers’ perspective. The main objective of the study was to assess and analyze customer satisfaction and service loyalty in Wegagen Bank, Mekelle Branch. A self-administered questionnaire was used to collect the primary data. Data gathered were treated using statistical software program namely Statistical Package for Social Science (SPSS version16) for analyses and summarization purposes. The researcher applied confirmatory factor analysis and new scores were created for further subsequent analyses. Multiple Regressions test was used to test the effect of service quality, corporate image and price on customer Satisfaction and service loyalty. In addition to that, Hierarchical Regression Model test was used to test the mediating effect of customer satisfaction on the relationship between service quality, corporate image, and price towards service loyalty. Finally, One Way ANOVA test was used to find out the demographic aspect that has an impact on customer satisfaction and service loyalty. Overall findings from this study revealed the dimensions of service quality vary in the degree to which they drive customer satisfaction and service loyalty. The results depicted that there was significant positive relationship in between service quality and customer satisfaction. Both service quality and corporate image were found to have positive and significant association with service loyalty. Price though positively related has no significant impact both on customer satisfaction and service loyalty. In addition to these, there was a significant relationship between customer satisfaction and service loyalty. The regression test also presented that customer satisfaction plays a mediating role in between the independent variables service quality, corporate image and price towards service loyalty. Dissatisfaction of customers with the service offering of the bank didn’t lead to switching to other banks. The results depicted that Wegagen Bank, Mekelle Branch, has to focus more effort in improving the quality of the service it is offering to the customers. Of course, substantial work has to be done to enhance the benefits that can be acquired from corporate image. As to the price is concerned, the bank should continuously monitor the environment for changes with a motive of addressing the pricing policies of the rival banks and it should differentiate its service offerings in a way that could enable the bank to gain a competitive advantage. The bank is, thus, recommended to devise operations and marketing strategies that focus on the dominant service quality dimensions in order to enhance customer satisfaction and, in turn, foster positive service loyalty.