ASSESEMENT OF SERVICE QUALITY DIMENSION AND ITS EFFECT ON CUSTOMER SATISFACTION IN SELECTED PRIVATE BANKS IN AWASH TOWN

Abstract Service quality is a critical factor in determining customer satisfaction, particularly in the competitive banking sector. As customer expectations evolve, banks must continuously assess and improve their service delivery to retain customers and maintain a competitive edge. This study focuses on assessing the dimensions of service quality and their impact on customer satisfaction, using private banks in Awash Town as a case study. Grounded in the SERVQUAL model, the research evaluates five key dimensions of service quality: tangibility, reliability, responsiveness, assurance, and empathy. These dimensions are used to measure the gap between customer expectations and the actual service performance of banks. The study employs both descriptive and explanatory research designs, utilizing a quantitative research approach to assess the relationship between service quality dimensions and customer satisfaction. Primary data will be collected through questionnaires distributed to customers of two main branches of selected private banks in Awash Town. The independent variable, service quality, is measured using the five dimensions, while customer satisfaction serves as the dependent variable. The findings of this study. The independent variable that service quality of the banks is measured by using the five service quality dimensions including tangibility, reliability, responsibility, assurance and empathy and while customer satisfaction is considered for dependent variable. the regression output also briefly show that there was a statistically weighty link between service quality dimensions and customer satisfaction which is more sustained by R2 result explaining that the dependent variable is explained more than 80% by the five service quality dimensions. Assurance dimension takes the highest fraction in influencing customer satisfaction followed by reliability, tangibility, responsiveness and empathy. As customer expectations are changing over time, bank managers are advised to measure their customer expectation against the actual performance regularly and handle complaints timely and effectively.