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Background of the study
Customer satisfaction, abusinessterm, is a measure of how products and services supplied by a company meet or exceed customer expectation. Customer satisfaction is defined as "the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services exceeds specified satisfaction goals. Within organizations, customer satisfaction ratings can have dominant effects. They focus employees on the importance of satisfying customers' expectations.In a cutthroat marketplace where businesses struggle for customers, customer satisfaction is seen as an input differentiator and more and more has become a key element of business strategy.
For many years the center of attention of customer satisfaction has been on the agenda, in recent time this has gained speedily. According to the DGs' resolution of May 2006, the main focal point of the common European work and efforts regarding customer satisfaction should be on the compilation of best practices and the preparation of strategies for questionnaires to measure customer satisfaction.
Quality assurance, orQAfor short, is the orderly monitoring and assessment of a variety of aspects of a project, service or facility to make best use of the probability that minimum standards of quality are being attained by the production process. QA cannot absolutely assure the production ofqualityproducts. Qualityis determined by the product users, clients or customers, not by society in general. It is not the equivalent to expensive or high quality. Low priced products can be considered as having high quality if the product users verify them as such.
Since the commencement of the Bank in 1957, NBB has actively pursued a dedicated Corporate Social Responsibility programmed. The programme was conceptualized to support community development in the Kingdom and provide a better quality of life to all its residents. The Bank has continually endeavored to grow its business in a socially responsible way while addressing the business interests of our stakeholders.
NBB has consistently strived to develop a culture which underlines the fact that the Bank's success is wholly dependent on the customers and the community in which it operates. Over the years, society has demanded that businesses work in a more sustainable manner. At NBB, this has been ingrained into the psyche of its employees. At every opportunity, steps are taken to ensure inclusion of the community and aid the less privileged sections to play an equal role in community development.
National Bank of Bahrain has always been at the front position of community development in the Kingdom of Bahrain. The Bank has repeatedly strived to develop an association which plays a significant role in ensuring a philosophy which encompasses community growth as part of its answerability to the society. The Bank eventually owes its success to its customers and the society in which it conducts its business. There has been an increasing demand from society to ensure that businesses work in a sustainable manner. NBB not only shares this opinion, it passionately ensures that this principle is actively followed.
Statement of the problem:
The research aims to study the customer satisfaction & quality insurance with respect to National Bank of Bahrain. The study focuses on the needs of the customers, factors that lead to consumer satisfaction, effects of customer satisfaction on the organization. The study also focuses on the quality of Insurance provided by the conventional Insurance companies, components of good quality insurance that bring success in the organization. And will attempt to answer the following question:
- Is Customer satisfaction the prime motive of every institution?
- What is the level of effectiveness of customer satisfaction to the organization?
- Can customer satisfaction helps in build corporate image in the economy?
- What is the role of customer satisfaction in an organization?
There is a great impact of the customer satisfaction and quality assurance in any organization on smoothing the functioning of the organization and to build a good image of the organization.
Significance of the study:
This study will come in handy to serve various sections of economy thus; it will be significant for the following groups:
- Customers:Â The research study will act as an important reference point for the customers as they will get a bit familiar with the aims and objectives that are set by a particular institution which further lead to customer satisfaction to help them get to know about the working of an organization. Hence, it would provide an insight for the customers regarding the working of an organization.
- Various private Players: Along with the customers, the research study will be an important source of knowledge for various private players in the industry. The discussions in the study may provide insights to the players such that they can advocate implementation of the same. Moreover, since its discussion on customer satisfaction that has direct impact on private players it will be a study of interest for such players.
- Other Researchers: The study will act as a case study for other researchers who may be looking to strengthen their understanding in this topic.
- Employees: The most important beneficiaries in the line of this project will be employees of any conventional organization. As they get a knowhow of the opinions and views of the customers which would help them to take their future steps to be taken in line with the working of the organization.
- MBA student: The result of the study will provide information about NBB bank practices and their services and this will help the MBA student for their thesis if they choice similar subject.
- In the field of Business administration Â The result of the study will provide helpful information to discuss in the lecture of management or marketing in AMA University.
Scope and limitations:
The study will highlight the impact of the customer satisfaction and maintaining quality assurance and will evaluate the performance of the company on this very basis. The study also aims to create awareness regarding the benefits of maintaining customer satisfaction on the organization which brings in good turnover to the company. The scope of the study is limited to the study of the employees of NNB bank of Bahrain
The major limitation of the study it does not go beyond the NBB bank the employees taken for data collection are also from the same company. The study aims at finding the impact of customer satisfaction only focusing on the employees of one particular bank.
Definition of terms:
For better understanding of the terms used in the study, this will be defined conceptually.
- Impact: The effect on certain thing, to know about the influence or the affect on certain thing.
- Employees: Apersonwho is hired toprovideservicesto acompanyonregularbasis inexchangefor compensation and who does not provide these services as part of anindependent business.
- Organization: Social unit of people systematically arranged and managed to meet aneedor to pursue collectivegoalson continuingbasis. All organizations have amanagement structurethat determinesrelationshipsbetweenfunctions andpositions, and subdivides and delegatesroles, responsibilities, andauthorityto carry out definedtasks. Organizations areopen systemsin that they affect and are affected by theenvironmentbeyond their boundaries.
- Customer satisfaction: Customer satisfaction, abusinessterm, is a measure of how products and services supplied by a company meet or surpass customer expectation.
- Quality Assurance: Quality assurance, orQAfor short, is the systematic monitoring and evaluation of the various aspects of a project, service or facility to maximize the probability that minimum standards of quality are being attained by the production process.
- Profit:Â The positive gain from an investment or business operation after subtracting for all expenses. Opposite of loss.
- Financial services:Â Services provided by the finance industry. The finance industry encompasses a broad range of organizations that deal with the management of money. Among these organizations are banks, credit card companies, insurance Companies, consumer finance companies, stock brokerages, investment funds and some government sponsored enterprises.
1. Metawa, S. and Almossavi, M. (1998) Banking behaviour of Islamic bank customers: Perspectives and implications.
Author, focused their study on customers of Bahrain Islamic Bank and Faisal Islamic Bank of Bahrain, finding that clients considered their Islamic principles the key important factor in selecting a bank, followed by rewards extended by the banks, influence of family and friends, and convenient location. Metawa and Almossawi reached the conclusion that socio-demographic factors such as age, income and education were essential criteria in bank selection, a finding that indicates religion as the key reason for customers patronizing Islamic banks. Customer satisfaction is the feeling or attitude of a consumer in the direction of a product/ service after it has been used.
He exclaimed that, satisfied consumer will repeat the purchase of the product and convey positive messages about it to others. By contrast, an unsatisfied consumer is more likely to switch to an alternative product/ service the next time he/ she recognizes the similar need. Not only this, but also his/ her dissatisfaction will be reflected in a negative word of mouth which might have a grave damaging effect on the business. Therefore, it is crucial that ï¬rms ensure customer satisfaction for their products/ ser- vices. This has led to the rising popularity of measuring customer satisfaction in recent years. Banking is one of those industries in which consumer satisfaction has attracted the attention of many researchers of the major reasons is that a ï¬ercer level of competition is becoming the infleuncing factor in deter mining the competitiveness of banks.
2. Webb, D. (2000), "Understanding Customer Role and its Importance in the Formation of Service Quality Expectations", The Service Industries Journal:
Most service organizations today realize that delivering excellent service is significant to the success of their business, and bank industry is no exception. Interest in service quality research has been ongoing for over two decades, resulted in having a literature rich of various studies dealing with this crucial issue from different dimensions. He emphasized on need of improvement of product and service quality has been widely discussed in the literature as a suitable competitive strategy for achieving sustainable competitive advantage. This requires management to continuously examine current processes against the demands of customers in the marketplace and then update their operations in line with market requirements. Improving service quality will strengthen customers' satisfaction, which help to retain existing customers and attract new ones, lead to both market expansion and gains in market share. The importance of service quality to the success of business is best concluded in this sound statement: "Excellent service is a profit strategy because it results in more new customers, more business with existing customers; fewer lost customers, more insulation from price competition, and lessen mistakes requiring reperformance of serivces.
To get the fruits of improvements in quality it has to be investigated with an understanding of its competitive implications. The significance of service quality necessitates examining service quality in the context of strategic management of firms. However, the issue of how the implementation of quality strategies might lead to the attainment of one's firm competitive gain is perhaps inadequately covered in the service marketing literature.
3. Payne, Adrian and PennieFrow(2005). “A Strategic Framework for CustomerManager:
Author explained, Customer relationship management (CRM) is a strategy that can aid them to build long-lasting relationships with their customers and increase their revenues and profits. CRM in the banking sector is of greater significance. I this study they aimedÂ at this study is to explore and analyze the strategic implementation of CRM in selected banks, identify the benefits, the problems, as well as the success and failure factors of the implementation and develop a better understanding of CRM impact on banking competitiveness as well as present a greater understanding of what constitutes good CRM practices. The evidence supports that CRM is gradually being practiced in studied banks; however the true spirit of CRM is still needed to be on the active agenda of the banking sector. This study contributes to the financial services literature as it is one of the very few that have examined CRM applications, a relatively new technology, in the Pakistani banking sector, where very limited research has taken place on the implementation of CRM.
It has been defined in many ways since the beginning of the concept. However, the best definition of CRM is developed by stating that ‘CRM is a strategic approach that is concerned with creating improved shareholder value through the development of suitable relationships with key customers and customer segments. CRM unites the potential of relationship marketing strategies and IT to generate profitable, long-term relationships with customers and other key stakeholders. CRM provides improved opportunities to use data and information to both understand customers and create value.
He emphasized, CRM is a sound business strategy to identify the bank's most profitable customers and prospects, and devotes time and attention to expanding account relationships with those customers through individualized marketing, reprising, discretionary decision making, and customized service-all delivered through a variety of sales channels that the bank uses. Consequently, IT and marketing departments must work closely to put into practice CRM efficiently. It is said that CRM is not a product or service; it is an overall business strategy that helps companies to effectively manage relationships with their customers. It provides an integrated view of a company's customers to each one in the organization. With the intensified competition, companies realized that they have to take care of their customers with respect. Customers have added choices and they do not have to be loyal to any company.
Customer relationships are becoming even more important for banks as market conditions getting tough. Competition is increasing, margins are eroding, customers are becoming more demanding and the life-cycles of products and services are restricting dramatically. All these forces make it necessary for banks to intensify the relationship with their customers and offer them the services they need via the channels they like better.
4. David Cohen & Christopher Gan(2009): Customer Satisfaction: A study of bank customer retention in New Zealand
There has been a compelling argument in this review, for bank management to carefully consider the factors that might increase customer retention rates, with research providing ample justification for customer retention hard work by banks. He mentions others studies have focused on developing measures of customer satisfaction, customer value and customer loyalty without specifically looking into other potential meaningful constructs. Instance of such constructs are competitive advantage, customer satisfaction, switching barriers, corporate image, and bank services characteristics. These shape the basis for the present investigation. There have been few, if any, attempts to link them to customer retention. This is curious, for if retention criteria are not healthily managed, customers may still leave their banks, no matter how hard bankers seek to retain them.
This is evident in the banking industry, where many banks are providing more or less the same products for nearly the same price. Unless a bank is able to extend its product quality beyond the core service with additional and potential service features and value, it is doubtful to gain a sustainable competitive advantage. Further he argued that nearly three-quarters of the banking customers mentioned teller courtesy as a main consideration in choosing a bank. The study also showed that improved use of service quality/sales and professional behaviors (such as formal greetings) improved customer satisfaction and reduced customer attrition.
Indeed, customer satisfaction has for several years been perceived as key in determining why customers leave or stay with an organization.
Organizations need to know how to keep their customers, even if they come into view to be satisfied. He suggests that unsatisfied customers may choose not to defect, because they do not expect to receive better service somewhere else. Additionally, satisfied customers may look for other providers because they believe they might receive better service somewhere else. However, keeping customers is also dependent on a number of extra factors. These embrace a wider range of product choices, superior convenience, better prices, and enhanced income, in his study of Swedish consumers, notes that although client satisfaction and quality materialize to be important for all firms, satisfaction is more essential for loyalty in industries such as banks, insurance, mail order, and automobiles.
He further proposed that product differentiation is impossible in a competitive environment like the banking industry. Banks everywhere are delivering the same products. For example, there is generally only minimal variation in interest rates charged or the range of products available to customers. Bank prices are predetermined and driven by the marketplace. Thus, bank management tends to make a distinction of their firm from competitors through service quality. Service quality is a very important element impacting customers' satisfaction level in the banking industry. In banking, quality is a multi-variable concept, which includes differing types of convenience, reliability, services portfolio, and critically, the staff providing the service.
5. Karen Nicholson (2010), QualityAssurance in Higher Education:
As the author expressed, have seen quality assurance in banks seeks primarily to maintain quality through a combination of accreditation, assessment, and audit. There are several of approaches to quality assurance, each of which incorporates various combinations of (self-) assessment, audit or peer review, and performance indicators.
In this literature review, he have provided an overview of some of the main themes related to quality assurance in banks: the debate surrounding the meaning and measures of Quality Assurance Framework seeks to build on “well-tested [quality assurance] processes” in order to balance needs for accountability and normal curricular evolution. The Quality Assurance Framework is described as “more streamlined, more effective, more transparent, and more publicly accountable” than existing quality assurance processes quality in banking firms, the purpose and processes of quality assurance, and common features of quality assurance in banking organizations. Quality Assurance Framework maintains innovation and improvement which cultivating a culture of transparency and accountability i.e. quality assurance that produces quality enhancement.
In conclusion, provisions for fostering innovation and encouraging enhancement form part of the requirements for the Institutional Quality Assurance Process (IQAP), designed and implemented by each institution in accordance with its own institutional mission statement, and which forms the core of the Framework. These include “evidence of any significant innovation or creativity in the content and/or delivery of the program relative to other programs” and “initiatives taken to enhance the quality of the program and the associated banking and finance”.
6. Shanti N. Tiwari (2009), Customer Satisfaction in Call Center
In 2009, author conceptualize that satisfaction is based on the customer's experience of both contact with the organization (the moment of truth) and personal outcomes. According to her, satisfaction can be experienced in a variety of situations and connected to both goods and services. To another extent, she defined satisfactions as a “highly personal assessment” that is greatly influenced by “individual expectations”. This definition views “individual” element as powerful force to create satisfaction.
Author concludes satisfaction into two general conceptualizations: transaction-specific satisfaction and cumulative satisfaction. Transaction-specific satisfaction is a customer's evaluation of his or her experience and reactions to a particular service come across. Cumulative satisfaction refers to the customer's in general evaluation of the consumption experience to date. In his view customer satisfaction is highly variable assessment individuals do based on their experiences with specific features of products and services they receive, it makes sense for servicing organizations to engage customer satisfaction measurement as their meaningful benchmark for development.
She considers that service quality and customer satisfaction “share a close relationship”. Service quality is the key to measure user satisfaction.Â She identified several factors that precede customer satisfaction. And argued that there are 5 antecedents that contribute to satisfaction: clear understanding of customer needs and expectations, perceived value, service quality, internal satisfaction and complaint management. This leads to Service quality is one major attribute of satisfaction. Accordingly, reported that the service quality divisions are related to overall service quality and or customer satisfaction by expressing that satisfaction is a consequence of service quality.
From this review of literature it can be inferred that performance of service delivery can result in level of customer satisfaction.
1. Research Design:
The research aims to study the customer satisfaction & quality insurance with respect to National Bank of Bahrain.
Every project work is based on definite methodology, which is a way to methodically solve the problem or achieve its objectives. It is a very significant principle and lead to completion of any project work through observation, data collection and data analysis. Framing of questionnaire is done considering the objectives of the research.
2. Sampling Technique Used:
This research has used convenience sampling technique.
Convenience sampling technique: Convenience sampling is used in exploratory research as we are interested in getting an inexpensive estimation of the truth. It is a non-probability sampling technique where subjects are chosen because of their convenient accessibility and proximity to the researcher. As the name implies, convenience samplinginadvertently excludes a great proportion of the population. In this survey this technique is used as it is the fast, inexpensive, and easy and thesubjects are readily available.
3. Sample Size:
For the survey, a sample size of 50 has been taken into consideration.
4. Data Source
For the purpose of this research, data is collected from both primary and secondary sources. Research will be based on two sources:
A. Primary data
Primary survey has will be conducted with questionnaires filled by individuals, having jobs in different organizations and also by sending questionnaires to the companies which are practicing Islamic insurance practices.
B. Secondary data
Secondary data would be collected from secondary sources like existing research works, books, journals, articles and other publications. In addition to this data will also be collected from various conventional banking companies as well as Islamic banking organization such as “Bank of Bahrain, HSBC & ICICI” are to name a few.
Results and Discussions
Since the study is intended to find out the impact of applying customer satisfaction and quality assurance in an organization, the questionnaires were distributed on banking company's employees to see how they are going to respond, few of those questions data is provided below.
Firstly, it was asked to them regarding their personal view, in your opinion, how important is patient satisfaction within your organization.
As illustrated above, the majority of the respondents think that implementation of customer satisfaction and quality assurance impact organization, its employees & customer. As the through these means company is able to better satisfy its customer by assuring quality service.
Secondly, does your organization have managers/staff dedicated to customer satisfaction matters?
Reply received by the employees regarding the dedication in the staff to care about customer satisfaction in their organization is as shown above in the chart. Maximum number of respondents replied positive with 77%, whereas 20% of the respondents express that customer satisfaction dedication among staff in the organization to some extent, followed by rest 3% not sure about practice in their organization.
Thirdly, how often does your organization conduct surveys to evaluate customer satisfaction.
Answers received from respondents in regards with evaluation of customer satisfaction by the means of survey, from those 20% of the respondents replied survey done on monthly basis. 30% of the respondents' organizations conduct surveys on quarterly basis, 40% on yearly and 10% were not aware of any such surveys whether conducted by their company.
Next they were asked, what the customer satisfaction difference is before and 3 years after since implementation of strict measures on customer satisfaction.
37% of the respondents replied that implementation of the practice of strictness towards customer satisfaction & quality assurance has increased the customer satisfaction level to around 15-25% before and 3 years after. Followed by 19% of the respondents opinioned 10-15%, 17% of the respondents believed that it made a difference of around 5-10%, 15% respondents considered it very effective and rated the difference to 25-50% & lastly, 12% thinks it made the difference of 0-5% only.
Then question asked was, what is the most compelling reason for your organization to improve customer satisfaction. Response collected from through the questionnaire was the 46% of the respondents expressed that organization Fear of losing patients to competitors, 22% responded Fear of losing employer contracts, 7%Â Fear of increase regulation, 15% replied due to Fear of damage to organization's reputation & rest replied other reasons.
Later they were asked which one of the following means is used to evaluate patient satisfaction, to the results on customer satisfaction and quality assurance.
Maximum number of respondents replied telephonic feedback, 25% by consultants are appointed or not, whereas 17% replied suggestion box and rest 23% get feedback through email.
Lastly they were questioned, in your opinion, has customer satisfaction and quality assurance been shown to have a direct effect on your organization's bottom line.
Respondents reply was nearly 68% reply is this has to affect the organization, followed 25% said no for it and not aware with the effect to the organization.
Conclusions and Recommendations
The following conclusions were drawn after analyzing the data collected through first hand and secondary data collection methods:
- Each program that was reviewed should develop a set of casted proposals for Corporate Planning Committee consideration that are designed to lessen the risks of producing erroneous data.
- Second, we believe that training simply to raise awareness of quality assurance is not a main part of the solution. Among the program managers, there is already a eager awareness of quality issues. In some cases, taking staff away from already-tight production schedules to go to training courses could even be counter-productive. Instead, training courses on quality assurance should focus on disseminating the many helpful best practices that we found.
- Customer satisfaction is considered as a strategic business development tool. Customer satisfaction does have a constructive effect on an organization's profitability, satisfied customers form the foundation of any successful business as customer satisfaction leads to repeat purchase, brand loyalty, and positive word of mouth. Satisfied customers are most likely to share their experiences with other people to the order of possibly five or six people. Equally well, dissatisfied customers are more likely to tell another ten people of their ill-fated experience. Research has demonstrated that even a dissimilarity between a totally satisfied customer and a somewhat satisfied customer could lead to an increased revenue contribution of a factor.
- Human resources are the leading risk factor. The number one risk factor well-known in virtually all programs relates to human resources. There are a number of dimensions to this, counting significant staff shortages, the need for staff with specialized skills, over-dependence on specific individuals, and difficulty in recruiting staff to work on monthly programs, succession issues and retention issues.
- To build the strong customer connections that produce improved financial benefits, a more complete view of customer requirements is needed, which incorporates an understanding of the emotional dimensions of customer assurance. Customers want more than transactions -- they want relationships.
- The existence of a research and analysis capacity separate from the production operation is a key factor in assuring quality. One factor that emerged as being fundamental to good quality assurance is the existence of a research and analysis capacity, separate from the production operation, which can “challenge” the data from side to side subject matter analysis. This capacity can take a number of forms. In a few programs, such as the MSM, the challenge function is played by another division (the Industry Accounts Division), who feed back to the MSM doubtful estimates that they find in the data and ask for an explanation.