Call center services and customer loyalty a study in the vietnamese banking industry

This study aims to explore the impact of perceived service quality, customer satisfaction, and customer orientation on customer loyalty towards banking call center service.. This study w

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Le Hong Nhung

CALL CENTER SERVICES AND CUSTOMER LOYALTY

A study in the Vietnamese banking industry

MASTER OF BUSINESS (HONOURS)

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Le Hong Nhung

CALL CENTER SERVICES AND CUSTOMER LOYALTY

A study in the Vietnamese banking industry

ID: 22120061

MASTER OF BUSINESS (HONOURS)

SUPERVISORS: PROF NGUYEN DONG PHONG

DR NGUYEN PHONG NGUYEN

Ho Chi Minh City – Year 2015

TABLE OF CONTENTS

ABSTRACT 4

CHAPTER 1: INTRODUCTION 5

1.1 Research background 5

1.2 Research gap 7

1.3 Research questions and objectives 7

1.4 Research scope and methodology 8

1.5 Thesis Structure 9

CHAPTER 2: LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT 11

2.1 Theoretical foundation 11

2.1.1 Definition of a call center 12

2.1.2 Customer Loyalty 13

2.1.3 Perceived Customer Orientation 14

2.1.4 Customer Satisfaction 16

2.1.5 Perceived Service Quality 17

2.2 Proposed research model and hypotheses 20

Figure 1: Conceptual model 21

CHAPTER 3 - RESEARCH METHODOLOGY 23

Figure 2: Research process 24

3.1 Measurement of constructs 24

3.1.1 Perceived service quality 25

3.1.2 Perceived customer orientation 26

3.1.3 Customer satisfaction 26

3.1.4 Customer loyalty 27

3.2 Sample 28

3.3 Data analysis method 29

CHAPTER 4: DATA ANALYSIS AND RESULTS 32

4.1 Reliability Analysis 32

Table 1: Item Statistics 33

4.2 Exploratory Factor Analysis (EFA) 34

4.2.1 EFA for individual construct 34

4.2.2 Multidimensional constructs – Perceived service quality and Customer loyalty 34

4.2.3 Customer orientation 35

4.2.4 Customer satisfaction 35

Table 2: KMO and Bartlett's Test 36

4.2.5 EFA for all variables 36

Table 3: KMO and Bartlett's Test 36

Table 4: RESULTS OF JOINT FACTOR ANALYSIS FOR ALL SCALES 37

4.3 Regression analysis 38

4.3.1 Simple regression analysis 38

Table 5: Model Summary of simple regression analysis 38

Table 6: ANOVA of simple regression analysis 39

Table 7: Coefficients of simple regression analysis 40

4.3.2 Multiple regression analysis: 40

Table 8: Model Summary of multiple regression analysis 41

Table 9: ANOVA of multiple regression analysis 41

Table 10: Coefficients of multiple regression analysis 43

Table 11 46

Summary of hypotheses testing result 46

CHAPTER 5: DISCUSSION AND IMPLICATION 47

5.1 Discussion 47

5.2 Implication 48

5.3 Limitations and directions for future research 50

REFERENCES 52

APPENDICES 62

Appendix 1: Questionnaire: Call center service and customer loyalty in bank services 62

APPENDIX 2: 65

EFA AND RELIABILITY TEST RESULTS - SCALES WITHOUT MODIFICATION 65

APPENDIX 3: 67

RESULTS OF UNIDIMENSIONALITY AND RELIABILITY TEST - REFINED SCALES 67

This study aims to explore the impact of perceived service quality, customer satisfaction, and customer orientation on customer loyalty towards banking call center service

A sample of 223 customers who used banking call center service in Ho Chi Minh City, Viet Nam was surveyed to test the model

Structural equation modeling was used to analyze the data It found that customer satisfaction and customer orientation had positive effects on customer loyalty It also found that perceived service quality had positive effects on customer satisfaction

Limitation of this study shows that the sample is selected conveniently and just from several districts in Ho Chi Minh City, so it is not representative of the population

The finding suggests that banking managers should concentrate on service quality, make their services different and prominent from other banks

Keywords

Call center, customer loyalty, commercial bank, customer orientation

CHAPTER 1: INTRODUCTION

Banks play an important and active role in the financial and economic development of a country An effective banking system greatly influences the growth of a country in various sectors of the economy This study would like to explore the impact of perceived service quality, customer satisfaction, and customer orientation on customer loyalty towards banking call center service The first chapter shows you research background, research gap in Viet Nam situation, research questions and objectives, research scope and methodology, and thesis structure of the study

1.1 Research background

In recent years, the banking industry plays an important role in Vietnam’s economy The contribution of commercial banks to increasing economic development is great The commercial banks not only continue being a great capital flow channel but also contributing

to keep stable monetary purchasing power in economy As the role of finance intermediary, commercial banks fund surplus money from savers and transfer into loans for borrowers who do not have enough money to carry out a desired activity This helps enterprises and economy running smoothly and be an effectively capital flow channel (Mof, 2012).The commercial banks enforce monetary policy of the State Bank of Viet Nam (SBV) In 2013, SBV decreased operation interest rate 2% a year, decrease VND short-term interest rate 3%

a year for priority sectors; decreases VND deposit interest rate ceiling 1% a year (Cafe F, 2014) Credit growth in 2013 reached 11%, higher nearly 8.91% than end of 2012 Raising capital maintained high growth rate at end of 2013, reached 15.6% compared to end of 2012 (Security Investment, 2014) These evidences show that the commercial banks become

important capital flow channel for economy and contribute to keep monetary purchasing in stable Prof Dr Tran DinhThien – Director of Viet Nam Institute of Economics mentioned that control inflation rate around 6.04% was important contribution in operation of Government, attempt of the Banking industry and Finance in 2013 (Deposit Insurance of Vietnam, 2014)

Allowance foreign banks’ investment brings to commercial banks many opportunities and challenges Practitioners in the banking industry face a large number of complex challenges in the global marketplace (Malhotra and Mukherjee, 2004) First of all, competition in banking industry becomes fierce According to the terms at joining in WTO

in 2006, the Vietnamese banking industry has opened for seven years Foreign finance institutes have been allowed to hold Vietnamese commercial joint stock banks, and foreign bank appearance In the Vietnamese banking industry, switching cost of new commercial banks for attracting customers is not high, because current banks in Vietnam have not been outstanding in banking products and services strategy Competitive pressure of bank industry increases when foreign banks join in Vietnam market Foreign banks have a lot of advantages in professional services and modern technology Furthermore, foreign banks have wide networks all over the world (The Saigon Times, 2009) Foreign banks with professional products and services force Vietnamese commercial banks to have a change Customer service is still a big problem for Vietnamese commercial banks, and established call centers as a solution for them A competitiveness bank has a strong customer service, especially, in after-sell service The relationship of customer and bank should not end at the bank door Customers’ access after transaction adds value to the transaction (Feinberg et al, 2002) Bank call centers in Viet Nam have just established for less than ten years The first call center in Vietnamese commercial banks is Call center 247 of Asia Commercial Bank, established in 2005 This call center hasbeen appreciated since established (Viet Stock,

2005) Overall, banks in Viet Nam have less experience in this operation Call center is still

a new service in Vietnam banking system

1.2 Research gap

Call center allow bank to build, maintain, and manage customer relationships by conducting transactions, giving information, answering questions, solving problems and resolving complaints quickly, and less expensively than face to face contact Indeed, it appears that customers now expect and demand telephone and internet access to banks 24 hours a day seven days a week 365 days a year (Feinberg et al, 2002) In the literature, a number of studies about banking call center services (Feinberg et al, 2002; Dean, 2004; Keiningham et al, 2006; Jaiswal, 2008; Whiting &Donthu, 2009; Lau et al, 2013) have been conducted up to now There is little research developed for examining the determinants of customer loyalty on banking call center services In addition, very few scholars do the research about this issue in Asia, especially, in Viet Nam Therefore, this research aim is to test the effects of factors such as service quality, customer orientation, customer satisfaction

on customer loyalty in Vietnamese bank call centers The expectation result appreciates customer loyalty in Vietnamese commercial bank through call center service Based on this result, bank managers can satisfy customer needs, enhance service quality, build, and improve their call center service

1.3 Research questions and objectives

The main purpose of this study is to identify adoption and development of Vietnamese commercial bank call center services through call center factors influencing directly to customer loyalty to the bank for a developing country case as well as how the call center factors influencing customer loyalty to the bank in Vietnam The study hopes to add to limited knowledge of Vietnamese banking customers by clarifying which factors are essential and critical for call center services Factors influencing the customer loyalty to the

bank may be the foundations of related organizations that can help them to develop services more effective This study aims to examine key call center factors influencing the customer loyalty to the bank with these specific objectives identified as following

To identify significant call center factors that influence customer loyalty to the bank The corresponding research question developed is:

RQ1: What are the main factors influencing customer loyalty to the bank in Vietnam?

To explore how the call center factors affect customer loyalty to the bank in Vietnam The corresponding research question developed is:

RQ2: How do the factors influence customer loyalty to the bank in Vietnam?

This study aims to research the customer loyalty to bank in Vietnam by examining influencing factors such as service quality of the call center service, customer satisfaction toward the call center and customer orientation of call center service Call center services is

a broad field but according to the specific of the context of this study, questionnaires of this study was only collected among people who have experience and tendency in using call center services over years in Ho Chi Minh City of Vietnam for necessary analysis

1.4 Research scope and methodology

The study was carried out in Ho Chi Minh City using a sample of adults in working age Adults in working age have experience with bank services, because, nowadays, most of companies use salary payment service through ATM cards Moreover, adults in working age

have more chances and needs to access bank services They can be potential informants of this study

Participants included male and female customers living in Ho Chi Minh City at some banks and public places were conveniently selected to distribute the questionnaires by email The sample was selected using none-probability method – convenience sampling The sample size in this study is expected to collect enough questionnaires to run model testing and give a significant result A sample should provide usable data from the larger of either

100 cases or 5 times the number of observed variables (Hatcher and Stepanski, 1994) Number of variables in this study is 43 variables, be shown in below That means the sample size equals 5 times variable (5*43=215 observations) Returned questionnaires was expected

at least 215 for running statistic testing

1.5 Thesis Structure

This study is organized into five chapters

It starts with the introduction which presents an outline of this research This chapter includes background of the research, motivation for doing research, and research objectives Besides, the significance that this study contributes to management practice as well as scope of the research and methodology of data analysis are also mentioned in the first chapter

Chapter two reviews and synthesizes the theories in the literature of five concepts, including call center, customer loyalty, customer orientation, customer satisfaction, and perceived service quality This chapter also describes the research model and proposed hypotheses

Chapter three introduces the research methods used to empirically test the research model

Chapter four presents the results of data analysis

The final chapter discusses summarily the study’s core findings, suggests some recommendations for improving call center baking services based on findings, and finally points out some limitations of the research

CHAPTER 2: LITERATURE REVIEW AND HYPOTHESIS DEVELOPMENT

This chapter mainly introduces the theories, which are proposed by many scholars in academic fields, relate to each of factors in the model, and research model of the study The foundational theories, definition of a call center and the related theories of each construct, including customer loyalty, customer orientation, customer satisfaction, and perceived service quality are discussed respectively Then, conceptual model is proposed, simultaneously, its constructs and relationship hypothesized among these constructs are also discussed

2.1 Theoretical foundation

According to the survey of tax, auditing and finance consulting firm, Ernest and Young

in May 2014, Vietnamese customers are not loyal to retail banks, as 65-67 percent of surveyed people were ready to close their banking accounts and change to another bank (Viet Nam News, 2014).The most important antecedents of customer loyalty are customer satisfaction, trust, corporation image, and service quality Customer satisfaction must be viewed as a key area of focus, capable of enhancing customer loyalty in the banking sector (Tariq and Moussaoui, 2009) Previous research in the field of customer loyalty has typically employed customer satisfaction, service quality and customer orientation as predictors (Bloemer et al., 1999; Parasuraman et al., 1988; Dean, 2002; Yee et al., 2010) Both service quality and perceived customer orientation of call centers affect customer loyalty to the organization Given that call centers are the major customer interface in many organizations; their management is therefore worthy of significant investment In particular, attention needs

to be directed to the elements of service quality: customers achieving a desired outcome,

ensuring a prompt response and appropriate service time, and training and managing service consultants so that they are knowledgeable, helpful and courteous (Dean, 2002) Loyalty is the direct result of customer satisfaction, which is greatly influenced by the value of services provided to customers (Lau et al., 2013)

2.1.1 Definition of a call center

The definition is adopted from Taylor and Bain (1999) and has three essential elements First, the call center is a dedicated operation with employees focused entirely on the customer service function Second, those employees are using telephone and computers simultaneously and, third, the calls are processed and controlled by an automatic distribution system

Customer call centers have emerged as an important tool for providing higher customer satisfaction (Anton, 1997) In call centers, human agents and / or automatic voice response machines handle computer assisted telephonic communications with customers (Moon et al., 2004) Companies use call centers for establishing direct communication with their customers The primary of objective of call center operations is customer care and achievement of high levels of customer satisfaction (Jaiswal, 2008)

Over the past decade, many organizations have developed or extended their service provision by using call centers, resulting in a rapidly expanding industry (Anton, 2000; Feigberg et al., 2000; Martin and Smart, 1994) In providing call center services, organizations are concerned with customization of their products to suit the increasing expectations of consumers.At present, call centers are becoming more multidisciplinary in nature As opposed to just servicing customers, they are required to provide multiple functionalities (Malisuwan et al., 2014)

Banks and financial institutions depend on telephone call centers to meet the needs of a changing and ever more demanding consumer access 24 hours a day seven days a week 365 days of the year (Feinberg et al., 2002)

In ensuring the modern call center is implemented successfully, knowledge management

is required to resolve issues such as reducing customer representative training time and costs, improve call response and handling time, increase customer satisfaction, employees are more able to provide accurate information to customers, more flexibility in handling customer call center processes, able to cooperate with other business departments, and lastly ensure fewer calls are transferred to help desks (Malisuwan et al., 2014)

2.1.2 Customer Loyalty

Oliver (1997, p.13) defined loyalty as “… a deeply held commitment to buy or patronize a preferred product consistently in the future, despite situational influences and marketing efforts having the potential to cause switching behavior” The cost of serving a loyal customer is five or six times less than a new customer (Pfeifer, 2005) This is the important of customer loyalty The loyalty of a consumer is determined by the strength of the relationship between attitude and behavior so that true loyalty only ensues when levels of both relative attitude and intention to purchase are high (Jones and Jillian, 2007) For instance, customer loyalty is appreciated as customer’s first choice among alternatives, or the service that initially comes to mind when forming a purchase decision (Pont and McQuilken, 2005)

re-In general, loyalty development has been an objective traditionally aimed at by managers (Andreassen, 1999) since it enables higher future purchase intention To be precise, loyalty may be defined as a customer's intention or predisposition to purchase from the same organization again (Edvardsson et al., 2000) As a consequence, loyalty has been considered

to be a key factor in order to achieve company success and sustainability over time (Flavián

et al., 2006; Keating et al., 2003)

Loyalty is an important issue because it has a positive impact on the company‘s bottom line This is because it is easier, more direct, and less expensive to sell to existing customers (Barlow and Moller, 1996)

Service quality, customer satisfaction, and loyalty programs are the important factors that can increase the loyalty of a customer towards its bank When banks focus on customer loyalty, account holders will not only keep their accounts with the bank, but they will also feel comfortable referring to family and friends Hence in order to be successful, banks should focus on building customer loyalty by offering quality products and by treating people how they want to be treated for better and greater customer satisfaction (Hafeez and Muhammad, 2012)

2.1.3 Perceived Customer Orientation

Customer orientation has been used to describe a type of organizational orientation where customer needs are the basis for planning and designing organizational strategy (Irene et al., 2005).The importance of orienting a company's activities towards the customer has long been known In fact many marketing theoreticians cite Drucker (1954) as the precursor of the idea, for suggesting that the whole organization, not only the marketing department as a specialized function, should focus on the customer

Deshpandé et al (1993, p 27) consider customer or market orientation as part of an organizational culture and define it as "the set of beliefs which place the customer's interests first, without excluding those of other publics such as owners, managers and employees with the aim of making the organization profitable in the long term" Saxe and Weitz (1982) defined customer orientation as the marketing concepts used by salespersons when they

interact with potential customers Naver and Slater (1990) also pointed out that customer orientation is to understand the customers’ value chain, including current and future changes

In conclusion, the central essence of customer beliefs is to emphasize customer first and a long term relationship with customers

Customer orientation is a major component of service climate In terms of the practices related to service climate, Schneider et al (1998) suggested three areas: customer orientation, managerial practices, and customer feedback Customer orientation is the degree

to which an organization emphasizes meeting customer needs and expectations for service quality (Dean, 2002)

Customer orientation of the company also appears to be linked to customer loyalty A market orientation results in a customer-driven company, which is rewarded with customer loyalty and retention, and consequently superior performance (Naver and Slater, 1990) Schneider et al (1998) suggest that the common element, customer orientation, is likely to

be associated with both service quality and customer loyalty Customer orientation of call centers affects customer loyalty to the providing organization (Dean, 2002) Customer orientation is directly related to customer loyalty, with some of the effect transmitted by perceived service quality This means that customers use the quality of call center service interactions as an indicator of an organization's commitment to understanding and meeting their needs (Dean, 2007)

In view of the literature above, the following hypothesis is formulated to guide the study:

H1: Perceived customer orientation of the call center is positively related to customer loyalty to the commercial bank

Anderson, Fornell and Lehman (1994) develop a more clear explanation for customer satisfaction: the customer satisfaction was one kind of purchase behaviors and the use experience of product, and it is the result which was generated by the buyer expected; customer satisfaction would be evaluated between that people used product consistency and the product performance and belief before purchase If there is consistency, the customer will satisfy; otherwise, they will generate unsatisfied result

Focusing attention on services, satisfaction may be defined as an affective customer condition that results from a global evaluation of all the aspects that make up the customer relationship with the service provider (Severt, 2002) Satisfaction is understood as a global evaluation or attitude that evolves over time resulting from the interactions produced by the customer and the organization in the relationship (Eshghi et al., 2007)

Every time a customer contacts a call center, an opportunity exists to transform a customer problem into a positive experience, resulting in a positive view of the organization (Barlow and Moller, 1996) Call centers which fail to provide a level of service that satisfies the customer are likely to face negative word of mouth publicity and loss of business to competitors (Wade, 2007)

The precise nature of the interaction between customer satisfaction and loyalty is notoriously elusive but satisfaction would appear to have a positive effect on service loyalty

(Bloemer et al., 1999) Customer satisfaction is defined as the attitude resulting from what customers believe should happen (expectations) compared to what they believe did happen (performance perception) (Neal, 1999) Customers exhibit repeat purchase behavior from a service provider when they possess a positive attitudinal disposition toward the provider and consider using only one provider when a need for this service exists (Gremler& Brown, 1996) If a customer is satisfied with a firm, service or product, then a greater level of customer loyalty can be achieved (Lau et al., 2013) Customer satisfaction and loyalty are essential for banking service providers as the main source of customer acquisitions is word-of-mouth of the existing clientele Moreover, the acquisition of new customers is a lengthy and costly process Thus, providers should ensure customer satisfaction and loyalty of its existing clientele (Seiler et al., 2013)

Loyalty is vulnerable because even if the customers are satisfied with the services rendered by the financial institutions, there is always an element of defect if they think they can get better value for money in other institutions Satisfaction is essential but not enough to gauge loyalty among customers In other words, we can have customer satisfaction without loyalty but it is difficult to comprehend having loyalty without satisfaction Therefore, all organizations should try and satisfy their customers and to ensure their loyalty (Anantha Raj, 2013)

The following hypothesis is offered:

H2: Customer satisfaction has a positive influence on customer loyalty

2.1.5 Perceived Service Quality

Perceived service quality is defined as: “the consumer’s judgment about an entity’s excellence or superiority … it is a form of attitude … and results from a comparison of expectations with perceptions of performance” (Parasuraman et al, 1988, p.13)

Service quality involves around the ideas that it is the result of comparisons which customers make between their expectations about a service and their perceptions of the way the service has been performed Poor quality places a firm at a competitive disadvantage.(Christopher et al., 2005) For example, if customers perceive unsatisfied quality, they may change their business to elsewhere Service quality is difficult to identify and priorities performance improvements that are required, unless both perceptions and expectation of service are measured (Wu et al., 2014)

Parasuraman, Berry, and Zeithaml(1991) refined into five dimensions to measure customer’s perceived value of service quality, which is known as SERVQUAL

SERVQUAL Dimensions in Relation to the Banking Sector

Five dimensions of SERVQUAL have been developed for the service sectors: tangibility, reliability, assurance, responsiveness, and empathy

Tangibility represents physical facilities, equipment, and appearance of personnel Examples of the tangible factor related to banks include comfortable store designs, up-to-date equipment for customer use and sufficient staff to provide service These aspects are important for retail banks, because there are extensive face-to-face contacts between a customer and an employee Therefore, maintaining a professional and comfortable store environment can increase customer satisfaction

The next dimension is responsiveness, which represents the willingness to help customers and provide prompt service This service aims to enhance customer satisfaction

Reliability means the ability to perform the promised service dependably and accurately The major reason for customers to choose banks for investment funds is because of the dependability and reputation of banks Banks always promise customers a high level of security during transactions Banking service can increase customers’ confidence and trust if

employees are able to provide appropriate service to each customer For instance, understanding the needs of each individual customer, such as knowing the customers’ expected retirement age, annual income, and hobbies are required to help provide a good match of insurance and fund products for customers

Assurance is the knowledge and courtesy of employees and their ability to inspire trust and confidence Bank commitments are important, as customers may save a large sum of money in banks For complicated products such as insurance, funds, and margins, employees must provide a clear explanation of each product to customers, so that customers can feel confident about the services provided by banks

The final dimension is empathy, which represents the individualized attention that firms provide to its customers Employees who show understanding of customer needs and are knowledgeable to solve customer problems are success factors for the service industry Friendly customer service pleases customers when they walk into a bank The purpose of this dimension is to retain customers to keep using the bank service (Van Iwaarden et al., 2003)

There are few report studies on service quality in call centers Feinberg et al (2000) found that the operational factor in call centers that was most significantly related to caller satisfaction was the percentage of calls closed on first contact Understanding and meeting customer needs is largely transmitted to loyalty by service quality Therefore, it appears that customers receive and interpret messages about the organization based on what happens during the voice to voice encounter in a call center This reinforces the importance of the service quality interface and the commitment to customers which underlies its (Dean, 2002) Service quality has a positive influence on customer satisfaction (Yee et al., 2010)

The following hypothesizes are offered:

H3: Perceived service quality of the call center has a positive effect on customer loyalty

H4: Perceived service quality of the call center has a positive influence on customer satisfaction

2.2 Proposed research model and hypotheses

The study is aim to test factors influencing on the customer loyalty in bank call center service in Vietnam and providing managerial implications for improving the loyalty of customers who using banking services This study gives conceptual model to measure customer loyalty in bank services in Vietnam based on above previous studies

The conceptual model is presented in Figure 1 and consisting of four hypotheses from H1 to H4 In there, Perceived service quality and customer orientation of H1 and H3 are independent and quantitative variables, they affect directly on customer loyalty, as a dependent variable Perceived service quality of H4 also effects on customer satisfaction In turn, customer satisfaction is considered as the influent factor of customer loyalty The relationship is mention in the second hypotheses (H2)

Figure 1: Conceptual model

H1: Perceived customer orientation of the call center is positively related to customer loyalty to the commercial bank

H2: Customer satisfaction has a positive influence on customer loyalty

H3: Perceived service quality of the call center has a positive effect on customer loyalty

H4: Perceived service quality of the call center has a positive influence on customer satisfaction

In summary, this chapter presents theoretical background of each concept in the model Based on discussion of literature review, customer loyalty is affected by three factors; these are perceived customer orientation, customer satisfaction and perceived

Perceived

service quality

H3 (+) H4 (+)

service quality The influence of customer satisfaction on customer loyalty is also considered Such factors are selected to build the model because their relationship has already tested by many previous scholars through their studies There are four hypotheses proposed for this research

CHAPTER 3 - RESEARCH METHODOLOGY

This chapter would present a detailed account of a research methodology of this study First, measurement scales were presented to develop questionnaire Then, sample description was presented, followed by data collection and research process This chapter also presented the research approach and the purposes of using that method

In this study, the research process would be shown in Figure 2

Figure 2: Research process

3.1 Measurement of constructs

Questionnaire items were developed based on those used in previous studies Measurement scales for four components of customer loyalty were adjusted from those

developed by Bloemer et al (1999) A perceived service quality scale was adapted from Parasuraman et al (1991) A customer satisfaction scale was adapted from Simpson (2006)

A customer orientation scale was adapted from Dean (2004) Customer loyalty and perceived service quality were multidimensional constructs

Specifically, customer loyalty was operationalized using Bloemer et al (1999) four dimensions of customer loyalty (word of mouth communication, purchase intentions, price sensitivity, complaining behavior) Word of mouth communication and complaining behavior were measured with three items and four items, while purchase intentions and price sensitivity were measured with two items each

Perceived service quality was operationalized with five dimensions (tangible, reliability, responsiveness, assurance, empathy) from the work of Parasuraman et al (1991) In total, 20 items were used to measure these five dimensions Tangible was measured with two items Reliability and empathy were measured with five items each, while responsiveness and assurance were measured with four items each The Appendix 1 details the items used to measure each construct These scales, which were translated into Vietnameseusing a translated and back-translated procedure, were a seven-point Likert type (1 = extremely disagree; 7 = extremely agree)

3.1.1 Perceived service quality

SERVQUAL was the strong scale to measure service quality Parasuraman et al (1988) mentioned that SERQUAL instrument was specifically designed to measure service quality using both the gap concept, service quality dimensions, and was designed to be organizations in any service sector According to Parasuraman et al (1991), this study used SERVQUAL to measure perceived service quality Including 22 items with five dimensions: Tangibles, Reliability, Responsiveness, Assurance, Empathy had been modified tangibles from 4 items to 2 items, because specified tangibles of call center sector

(1) Tangibles, which pertain to the physical facilities, equipment, personnel andcommunication materials;

(2) Reliability, which refers to the ability to perform the promised servicesdependably and accurately;

(3) Responsiveness, which refers to the willingness of service providers to helpcustomers and provide prompt service;

(4) Assurance, which relates to the knowledge and courtesy of employees and theirability to convey trust and confidence; and

(5) Empathy, which refers to the provision of caring and individualized attention tocustomers

3.1.2 Perceived customer orientation

A nine-item scale measures customer orientation (Dean, 2004) Each item was scored on

a seven point range from 1 (strongly disagree) to 7 (strongly agree) A total of six items were adopted directly from the customer orientation scale developed by Naver and Slater (1990) Three items were added to investigate specific actions that might be taken by organization, such as “encouraging informal feedback regarding services” (Schneider et al., 1998, Sin and Tse, 2000)

In the studies mention above, employees had assessed customer orientation In the present study, the customer view was sought and considerable

3.1.3 Customer satisfaction

The six item scale used to measure customer satisfaction, with a focus on the attitudes and perceptions of the customers in response to the service experience as well as intention to

continue doing business with the company (Simpson, 2006) Six item including Feelings about doing business, Will you refer, Overall satisfaction, Use for future checking, Use for future loan, Use for future investment, this study only used three items to measure customer satisfaction because of fitting to call center service

3.1.4 Customer loyalty

Bloemer et al (1999) was initially comprised of the following four main dimensions to measure customer loyalty: word of mouth communications, purchase intention, price sensitivity, and complaining behavior This study used the 13 item scale with four dimensions by Bloemer et al (1999) to measure customer loyalty

Word of mouth communication

Word of mouth communications refer to the extent in which a customer informs friends, coworkers, and relative about products or services that satisfies customer’s needs On the other hand, word of mouth communications refer to the informal communications that are transferred among society members about characteristics of a business or product (Christian and Tax, 2000) Word of mouth communications play an important considerable role in the formation of consumers' attitude and behavior influences it The results of several studies indicate that the word of mouth communications have more effects on the customers in comparison to other sources such as suggestions or advertisements (Kazemi et al., 2013) The reason is that word of mouth communications offer more reliable information than other advertisement instruments(Jalilvand and Samiei, 2012).The consumers will transfer the product to their friends and relatives if they love it (Ismail and Spinelli, 2012)

Therefore, based on the study of Bloemer et al (1999), word of mouth communication is one of four dimensions to measure customer loyalty

3.1.5 Survey questionnaire

Questionnaires for respondentsincludedfour parts The first part includes 20 questions related to Perceived service quality The second part consisting of nine questions related to Perceived customer orientation The third part of the questionnaire had three question related

to customer satisfaction The last construct customer loyalty was measured by 11 questions The questions of this questionnaire used seven-point Likert scale questions from 1 for

“Strongly disagree” to 7 for “Strongly agree” In order to avoid misunderstanding the meaning of the questions due to lack of English proficiency that might affect the objectiveness of the research results, the questions were translated into Vietnamese

3.2 Sample

The model and hypotheses were tested using data collected using convenience sampling method with a structured questionnaire As mention above the minimum sample size needed for data analysis was 215 To collect the data for the study, a total of 350 individualized questionnaires were distributed by mail to students of International School of Business and

by paper to students of University of Economics Ho Chi Minh City, who were customers of commercial banks A total of 223 usable questionnaires were obtained from customers who used banking call center services in different banks in Ho Chi Minh City, the principal business center of Vietnam

By the cut of date for data collection, 223 usable questionnaires were returned for a response rate of 63.71 percent The purposed of this survey was to validate the measures and

to conduct the regression analysis The simple regression analysis and multiple regression analysis were employed to test the theoretical model and hypotheses

3.3 Data analysis method

The collected data was processed by SPSS software version 16 using enter method Various statistical tests were extracted using SPSS The simple regression analysis and the multiple regression analysis to test the theoretical model and hypotheses were also conducted using SPSS First, the validity and reliability of the scale instrument were checked in the current study using Cronbach’s Alpha analysis and Exploratory Factor Analysis (EFA) The items which were not satisfied the conditions of reliability and validity would be deleted

Exploratory Factor Analysis (EFA)

Factor analysis is a collection of methods for explaining the correlations among variables

in terms of more fundamental entities called factors The goals of factor analysis are to determine the number of fundamental influences underlying a domain of variable, to quantify the extent to which each variable is associated with the factors, and to obtain information about their nature from observing which factors contribute to performance on which variables (Cudeck, 2000)

Exploratory factor analysis (EFA) is a widelyutilized and broadly applied statistical technique in thesocial sciences It is also a complex, multi-step process (Anna and Jason, 2005).EFA, traditionally, has been used to explore the possible underlying factor structure of

a set ofobserved variables without imposing a preconceived structure on the outcome (Child, 1990) Exploratory factor analysis (EFA) could be described as orderly simplification of interrelated measures.By performing EFA, the underlying factor structure is identified

The exploratory factor analysis model is a statistical method for investigating common but unobserved sources of influence in a collection of variables (Cudeck, 2000)

Cronbach’s Alpha

One of the most popular reliability statistics in use today is Cronbach’s Alpha (Cronbach, 1951) Cronbach’s alpha determines the internal consistency or average correlation of items

in a survey instrument to gauge its reliability (Santos, 1999)

Alpha was developed by Lee Cronbach in 1951to providea measure of the internal consistency of a test or scale Internal consistencydescribes the extent to which all the items

in a testmeasure the same concept or construct and hence it isconnected to the relatedness of the items within thetest Internal consistency should be determined before a test can be employed for research or examination purposesto ensure validity

inter-All constructs were deemed reflective constructs since the items reflect the meaning of the constructs.Perceived service quality was defined and measured as a multidimensional construct and formed measures for each dimension by averaging scores across items representing that dimension Reflective indicators were created under the perspective that they all measure the same underlying phenomenon (Chin, 1998)

Specifically, the scores of each set of items comprising tangible, reliability, responsiveness, assurance, and empathy to measure perceive service quality since the use of scores to represent the construct as a partial aggregation model acknowledges its multidimensional nature (Bagozzi and Heatherton, 1994) Strong correlations among tangible, reliability, responsiveness, assurance, and empathy provided empirical justification for treating the five as indicators of perceived service quality The same procedure was followed for the measurement customer loyalty

After that, the simple regression analysis and the multiple regression analysis were conducted to test the theoretical model and hypotheses

In summary, this chapter described the choice of sample size, measurement scale construction, and research method employed to process the collected data A paper-based questionnaire was developed for data collection; it was distributed directly and email to respondents This study was designed into two phases: first was qualitative phase (in-depth interview), second was quantitative phase (main survey) The in-depth interview was conducted to modify the measurement scale After the qualitative phase, the questionnaire was adjusted slightly before the official survey Main survey had sample size which included total 223 valid questionnaires that were used for data analysis with regression method The next chapter will present data analysis results of main survey

CHAPTER 4: DATA ANALYSIS AND RESULTS

This chapter presented the data analysis process and results Cronbach’s Alpha was used

to analyze the reliability of constructs The Statistical Package for Social Science (SPSS) has been used to test the survey data In particular, the simple regression model has been employed to examine the Hypothesis 4; the multiple regression model has been employed to examine the Hypothesis 1, Hypothesis 2, and Hypothesis 4

4.1 Reliability Analysis

To ensure the reliability of the instrument developed for this research, Cronbach’s Alpha had been conducted as an indicator for internal consistency of scales The Cronbach’s Alpha test helped to remove unstandardized scale items The Cronbach’s Alpha test helped to remove unstandardized scale items It was required the value of Cronbach’s Alpha should be above or at least equal 0.6 to guarantee internal reliability (Nunnally&Burnstein, as cited in Nguyen, 2011) Beside Cronbach’s Alpha, the Corrected Item – Total Correlation was also very important Normally, if the correlation of each specific item with total of the other items in the scale was quite high or higher than 0.3 (Nunnally&Burnstein, as cited in Nguyen, 2011), such item was assumed that most likely correlated with most of other scale items and would become a good part of this total rating rate On the other hand, if the Corrected item – Total correlation of any item was negative or too low (less than 0.3), it was necessary to re-consider the item in terms of wording problems and conceptual appropriateness (Leech et al., 2005) A modification or deletion for such items in this case was essential The Corrected item – Total correlation of Orient4 was 0.214 (less than 0.3) Then, Orient4 was deleted

The result of EFA and reliability test for each constructs in the model was summarized in Appendix 2.As shown in Appendix 2, the results indicated significantly high or very high internal reliability for most tested item scales including perceived service quality, customer orientation, customer satisfaction, and customer loyalty with the value of Cronbach’s Alpha above 0.8

Purchased intention was one of components of customer loyalty – a multidimensional construct Cronbach’s Alpha of this component was lower than 0.6 To delete one of two items of this component was considered A high standard deviation showed that the data was widely spread (less reliable) and a low standard deviation showed that the data was clustered closely around the mean (more reliable) As shown in Table 1, standard deviation of

Purcintent1 (Consider call center your first choice to use bank services.) was higher than standard deviation of Purcintent2 (Do more business with bank in the next few years.) For this reason, item Consider call centers your first choice to use bank services was deleted

from the scale

Table 1: Item Statistics