MEASURING SERVICE QUALITY DIMENTIONS AND ITS EFFECT ON CUSTOMER SATISFACTION (The Case of CBE Sor Branch Mattu)

Service quality is considered very important because it leads to higher customer satisfaction and retention. The general objective of the research is measuring service quality dimensions and its affect on customer satisfaction in Commercial Bank of Ethiopia sor branch Mattu. In this research expectation and perception about service quality of the bank are measured. The researcher used quantitative research approach, survey research design as a research design and it also used non-probability sampling using convenience sampling as a sampling design.. In the research the SERVQUAL instrument developed by Parasuraman (1985) has been applied in designing the questionnaire by using five dimensions of service quality; tangibility, reliability, responsiveness, assurance and empathy with five point Likert scale from “1” strongly disagree to “5” of strongly agree. In the study 395 questionnaires were distributed to saving account customers and interviews were asked to employees of CBE Sor branch. From these questionnaires 245 were returned by respondents which are the response rate is 62%. The researcher analyzed data by using correlation and regression analysis. The correlation result shows that positive correlation between service quality dimensions and customer satisfaction, from this tangibility has the highest . The regression result shows service quality dimensions have positive effect. It was found that the overall service quality perceived by consumers was not satisfactory meaning expectations exceeded perceptions and all the dimensions showed higher expectations than perceptions of service. It also confirmed that there is a positive and strong correlation between the service quality dimensions and customer satisfaction. The findings suggest that the bank need to improve all the dimensions of service quality from the gap analysis carried out.