| SMART JOURNAL OF BUSINESS MANAGEMENT STUDIES |
VOL. 2 |
NO. 2 |
PAPER 3 |
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THE RELATIONSHIP BETWEEN SERVICE QUALITY AND PROFITABILITY: AN EMPIRICAL STUDY IN BANKING INDUSTRY |
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| T. Vanniarajan* and P. Vikkraman** |
| * Reader, Department of Business Administration, N.M.S.S.V.N. College, Madurai, India |
| ** Assistant Professor, P.R. Institute of Management, P.R. Engineering College, Vallam, Thanjavur, India |
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| This paper focuses on the link between customers’ satisfaction and organizational performance. Three groups of banks namely, Associates of State Bank of India, Nationalised Banks and Private Sector Banks. were included in the study. The empirical data on customer satisfaction on the quality of various services offered by the banks and its business performance were collected through interview schedule. Based on the empirical data, authors identified the important items in the service quality of banks as Empathy, Assurance, Reliability, Tangibles and Responsiveness. The study identifies the positive impact of customer satisfaction on service quality of banks resulting in its net profit. The significant impact on net profit is created by the customers’ satisfaction on the service quality factors, namely, Empathy, Assurance and Tangibles. The study concludes that the suitable strategy to increase the profit among the banks is “creating, maintaining and enhancing appropriate service quality to the customers (customer orientation)”. |
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