To survive in this competitive environment, banks especially private banks realized the strategic importance of customer value and have been continuously structuring innovative and competitive products and services in order to enhance customer relationship. Private banks have been experiencing a phenomenal growth and have brought about a revolutionary change in the money market of Bangladesh. Among private commercial banks, Islam Bank Bangladesh Limited (BIBLE) has been found to be the leader of the market with respect to the volume of transactions, profits, assets, market coverage etc.
This dominance of BIBLE in the market Is attributed to the satisfaction of customers. In this context, the present study has been undertaken aiming at Identifying the factors Influencing the satisfaction of customers of BIBLE by employing the sophisticated methodology – Factor Analysis. The study has considered 22 variables out of which, 12 variables are related to service quality, 5 variables to service features and 5 variables to future intentions.
The study has finally found three most important successful factors such as personalized services, need based quality services and growth based competitive offers in order of their magnitudes, which are influencing Customer satisfaction of ‘BULB. ] Keywords: Customer Satisfaction, Banks, Services, Quality, Factor Analysis. 1. 1 Statement of the Problem needs of customers in order to have a profitable niche in this competitive world. During the past decade the financial market has undergone a lot of changes.
This is because of severe competition, increased demand for new and existing services, international flow of funds, globalization of trade, increased deregulation etc. In these changed scenarios, the occurrence of committed and often inherited legislations between a customer and his or her bank is becoming increasingly scarce (Levees and McDougall, 1996). Therefore, several policies and strategies have been followed to retain customers, in which satisfaction plays a pivotal role (Median, 1996).
Satisfied customers concentrate their business with one bank and pay premium for services and provide more numbers of customers to the bank. Winsomely (1997) clearly shows that customer satisfaction is not only linked to loyalty as such, but is also linked to bank revenue generation by different means and ways. Financial markets across the world are getting more and more competitive. This market has been experiencing emergence of new banks and financial institutions, development of new products and services, technological advances and appliances, changes in preferences of customers etc.
These shifts in financial market call for designing and redesigning financial products and need-oriented services, aiming at satisfying customers and enjoying their loyalties to the bank concerned. Customer satisfaction and retention drive, revenues, cost of doing business are key factors in the profitability of a business (Federal Express, 1992). So banks and financial institutions across the world have been providing products according to the needs of clients / customers and offering service before and after sales of financial products according to their demands.
In the present banking environment, customer satisfaction is a local issue for bankers as well as policy makers. This has been increasingly becoming a corporate goal as more and more banks and financial institutions are striving for quality in their products and services (Bitter and Hubert, 1994). A review of literature suggests that our understanding of the relationship between customer satisfaction Judgments ND service quality perceptions remain a problematic issue (Taylor and Baker, 1994).
My bank performs the service accurately My bank tells you exactly when service will be performed Employees in my bank have the required skill and knowledge to perform the Employees in my bank are always willing to help Employees in my bank are consistently courteous My bank gives me individual attention Employees of my bank understand my specific needs My banks physical facilities are visually appealing My bank employees are neat in appearance My bank offers a complete range of service My bank has convenient branch location EX.: It is very easy to get in and out of my bank quickly XSL 7: My bank offers competitive profit rate
XSL 8: Considering every thing, I am extremely satisfied with my bank XSL 9: My bank always meets my expectations EX.: The overall quality of the services provided by my bank is excellent EX. : If people ask me, I would extremely recommend that they deal with my bank EX.: Things happened at my bank that made me want to switch my account elsewhere. These factors have been adopted from person’s literature dealing with service quality and customers satisfactions (Maser et. Al. , 1999; Levees and McDougall, 1996).
Ha: The factors as stated above have significant relationship with the customer 1. Scope of the Study The study has covered customers of 5 Branches of BIBLE, located in prime location of Chitchatting city. BIBLE has been chosen for three reasons. First, this Bank is a Shari’s based bank and is drawing attention of millions of customers to its products and services. Second, this is the largest and strongly profitable among private commercial banks in Bangladesh. Third, it offers a wide range of products and services and has customers of different classes of the society. . 5 Methodology of the Study The study is both theoretical and empirical one. Both primary and secondary data have been used. . 5. 1 Collection of Data The researchers have selected five branches of BIBLE, located in prime location of Chitchatting city first. Then collected a list of customers from the selected branches. The study has selected 1 50 customers (taking 30 from each selected branch) randomly. The researchers have designed a structured questionnaire, which incorporated socio-economic features as well as related attributes of customer satisfaction.
The researchers have followed both direct method as well as indirect method. In this case, Researchers themselves have conducted interview of selected respondents. At he same time, three research assistants were engaged for conducting interview of selected sample respondents through structured questionnaire. The responses of respondents to the attributes of customer satisfaction have been selected on 5 point Liker scale. However, the study has finally found 98 questionnaires, which have been used for the purpose of the study. 1. 5. 1. Collection of Secondary Data The study has also used secondary data collected by consulting existing literature, books, Journals and websites. 1. 5. 2 Analysis of Data The data thus collected have been tabulated first. Then, the data have been analyzed tit the help of sophisticated methodology Principal Component Bavaria Rotated Factor Analysis Technique. Factor Analysis Factor analysis is a method for reducing a large numbers of variables (tests, scales, items, persons and so on) to a smallest numbers of presumed underlying hypothetical entities called factors (Further, 1967).
It tries to simplify and diverse relationship that exists among a set of observed variables by uncovering common dimensions or factors that link together the seemingly unrelated variables and consequently provides insight into the underlying structures of the data (Dillon and Goldstein, 1984). In order to define the group membership, an algorithm may be used to uncover structure purely on the basis of the correlation structure of input variables. Then, the number of principal components to be retained in the study has been decided on the basis of Gene value 1.
Principal components having low reliability coefficients are obviously not much reliable and such components may or may not be obtained in other similar studies. Then, the communality, symbolized h2o are worked out which show how much of each variable is accounted for by the underlying factors taken together. Then, the variables are regressed against each factor loading and the resulting recessions coefficient are used to generate what are known as factor scores. It can be mentioned that SPAS program (version-10) has been used for conducting Factor Analysis method.
The study has been basically conducted aiming at identifying important factors influencing the level of customer satisfaction of ‘BULB. Of course, different factors might influence the satisfaction levels of different classes of customers of BIBLE differently. In view of this, the study has collected socio-economic features of efferent classes of customers of BIBLE branches located at different places of Chitchatting city. The socio-economic features of 98 sample customers of BIBLE have been highlighted in Appendix-I.
It has been found that the sample respondents represent different classes of society with different educational backgrounds. It has also been found while conducting the study that most of the sample respondents have been dealing with the BIBLE for many years. Besides, most of the sample respondents have accounts with banks as well as long-term relationship with BIBLE and other banks are likely to be most important dimensions, enabling customers to efferent service of BIBLE from those of other banks with respect to service quality, service features and future intentions.
The variables that influence the level of customer satisfaction considered in this study are of independent nature. In order to define the group membership, an algorithm has been used to uncover a structure purely on the basis of the correlation structure of the items. One such popular algorithm of generating a cluster is an explanatory factor analysis of the item by item correlation matrix; using a principal axis factor analysis followed by a Bavaria rotation. The correlation matrix of the elevate variables considered was future subjected to principal component analysis.
The gene value found from PICA leads to the rotation of a number of principal components. Then, the factor matrix as obtained in the principal component analysis was further orthogonally rotated using Bavaria rotation algorithm. The analysis of variables through Factor Analytic Approach has been made in the following paragraphs: 2. 1 Correlation Matrix The correlation matrix of 22 variables influencing the level of customer satisfaction has been presented in appendix II (A).
The correlation matrix reveals that variable XX (My bank performs the service right he first time), XX (My bank provides its services at the time it promises to do so), XSL (When my bank promises to do something by a certain time, it does so), XX (My bank performs the service accurately), XSL 1 (My bank physical facilities are visually appealing), XII (Employees of my bank understand my specific needs) and XX (My bank tells you exactly when service will be performed) are found statistically significant.
This implies that they have considerable influence on the level of customer satisfaction. Variable EX. (My bank always meets my expectations) has higher positive and significant relationship with EX. (My bank offers a complete angel of service), EX. (My bank has convenient branch location), XSL 7 (My bank offers my bank), EX. (My bank always meets my expectations), and EX. (The overall quality of the services provided by my bank is excellent).
The high magnitudes of correlation between these variable imply that each factor has accounted for higher variation. Variable EX. (It is very easy to get in and out of my bank quickly) has been found positively and significantly correlated with XSL 5 (My bank provides easily understood statement) and negatively and significantly correlated with EX. (Things happened at my bank that make me want to switch my account elsewhere). This sort of relationship between these variables expresses true scenario of service culture of banks.
The study has also found variable XX (Employees in my bank have the required skill and knowledge to perform the service) significantly correlated with variable XX (Employees in my bank are always willing to help), XX (Employees in my bank are consistently courteous), and XX (My bank gives me individual attention). The interesting finding is that variables EX. (If people ask me, I would extremely recommend that they deal with my bank) and variable XSL 2 (My bank employees are eat in appearance) are found independent of other variables considered in this study.
Analysis of correlation matrix indicates that some of the variables have a tendency to form different clusters and each cluster is independent of others clusters. 2. 2 Factor Analysis The correlation matrices of all 22 variables were further subjected to principle component analysis. The gene values, the percentage of total variance explained by each component, the communicative percentage of total variance have been presented in Appendix II (B). An examination of gene values has led to the retention f five factors. These factors have accounted for 43. 974%, 7. 938%, 6. 46%, 4. 780% and 4. 567% of total variation I. E. The total variance accounted for by all the seven factors is 67. 705% and the remaining variance is explained by other factors. The factor matrix as obtained in the principal components analysis was further subject to Bavaria rotation. The result of the rotated principal component factor matrix has been presented in appendix II (C). The discussion of principal factors has been made as follows: 2. 2. 1 Factor 1: Need based qualitative services This factor has explained 21. 70 % of total variation existing in the variable set.
The significant factor loadings on this factor extracted from appendix “(C) have been presented in Table-I as follows: Table 1: Factor-I I Need Based qualitative services I Factor Loadings I XIX: When my bank promises to do something by a certain time, it does so. 10. 800 10. 796 10. 737 10. 584 10. 633 10. 637 21 . 370% XIX: My bank provides its services at the time it promises to do so XIX: My bank performs the service accurately XIX: My bank tells you exactly when service will be performed IXIA: Employees of my bank understand my specific needs
XIX 1: My banks physical facilities are visually appealing I Total Variation Explained Factor -1 has high significant positive loadings on variables XSL, XX, XX, XX, XX, XII, and XSL 1, which have formed the major cluster. Variables with relatively higher loadings signify that they have profound influence on the level of customer satisfaction. Further this factor provides basis for conceptualization of a dimension which may be identified as ‘Need Based Qualitative Services. ‘ 2. 2. 2 Factor-II: Growth based competitive offers This factor accounts for 14. 345% of total variation existing in the data set.
The significant factor loadings on this factor extracted from appendix II (C) have been presented in Table-2 as follows: Table 2: Factor-II I Growth based competitive offers I IXIA: My banks offers a complete range of service I IXIA: My bank has convenient branch location I IXIA: My bank offers competitive profit rate 10. 668 10. 620 10. 628 I IXIA: Considering every thing, I am extremely satisfied with my bank 0. 663 10. 672 excellent | 14. 345% I IXIA: My bank always meets my expectations I IXIA: The overall quality of the services provided by my bank is 10. 588 I I Total Variation Explained
Factor II consists of constellation of variables EX., EX., XSL 7, EX., EX., and EX., which have positive and moderate loadings. This indicates as strong association among aforesaid variables, which are of interrelated in nature. Analysis of these variables substantiates the likely argument that customer satisfaction is the key to the successful existence of business enterprises irrespective of nature of firms. This has provided a basic dimension of customer satisfaction, which can be identified as ‘Growth Based Competitive Offers. ‘ 3. Factor Ill: Factor of Swift Service and Robust Relationship This factor has counted for 13. 72% of total variation existing in the data set for customer satisfaction. The factor loading on this factor extracted from Appendix “(C) have been presented in the following table: Table-3: factor Ill I Factor of Swift Service & Robust Relationship I XIX 5: My bank provides easily understood statement I IXIA: It is very easy to get in and out of my bank quickly 10. 693 10. 833 I IXIA: Things happen at my bank that make me want to switch my account elsewhere. 10. 597 This factor has been composed of three variables XSL 5, EX., and EX., which have loading ranging from moderate to high.
Analysis of these variables indicates that variable EX. has been found significantly and positively correlated with variable XSL 5; but significantly and negatively correlated with EX.. This sort of relationship indicates a crucial aspect of relation policy that ability of providing expected service to the customers within reasonable duration can enable banks in retaining existing customers and then expanding their customers base through spontaneous endeavor of existing customers to bring more customers in the satisfied banks.
