The Influence of Perceived Service Quality on Customer Satisfaction and Loyalty: A Case Study of Four Banks in Famagusta, North Cyprus

Consumers all around the globe have become more and more quality conscious. This has led to a demand for higher quality service by customers. Customer satisfaction will remain the success back bone of every successful organization. The main objective of my study is to determine the impact of perceived service quality whether positive or negative on customer satisfaction and loyalty that is to access the level of quality service delivery in four banks in the Famagusta region of Turkish Republic of Northern Cyprus, Koop, Ish, Iktisat and HSBC. A total of 258 were analyzed. Each questionnaire was divided in to four parts, service quality, customer satisfaction, customer loyalty and demography. The outcome of study will enrich the Bank‟s competitive position in the banking industry and guarantee its survival. Convenient sampling technique was engaged in the study with Statistical Package for Social Scientist (SPSS) used to run data for in the analysis. The expectations and perceptions of the customers of these four banks were assessed under the five dimensions of SERVQUAL (Parasuraman, et al 1988). Cronbach’ alpha was used to test the internal consistency of the items in the construct. Factor analysis was used to reduce and summaries inter-correlated variables of service quality to a manageable level data and the Gap model was used to test the level of satisfaction of respondents by looking at the difference between perception and expectation. iv This study found that there is a positive influence of service quality on customer satisfaction and positive impact of customer satisfaction on loyalty customer satisfaction on loyalty. Keywords: Service quality, customer satisfaction, brand loyalty, banking sector, Turkish Republic of Northern Cyprus