Exploring Relationship between Service Quality and Positive Word of Mouth at Retail Banks in Rural India

One of the major concerns of management in today’s competitive business world,is to deliver superior customer service leading to satisfaction, loyalty, and positive word of mouth (+WOM). This study explores perceived service quality and identifies most significant predictors of +WOM at rural banks. Taking a cue from extant service quality literature, five dimensional performance-only SERVPERF scale was developed in English and later translated into vernacular Hindi employing back translation method. Structured research instrument was administered on 480 customers, who were contacted at the premises of designated rural branches of public sector banks located in the most populous province of Uttar Pradesh in India. To extract relevant factors, statistical tools such as Exploratory Factor Analysis (EFA), t-Test, and linear regression were employed. Reliability, predictive validity, and dimensionality of the scale has also been explored. To detect multi-collinearity and data structure, Variance Inflation Factor (VIF) and box-plot technique have been used. Study reports high levels of perceived service quality across all five dimensions while results of regression analysis show that reliability and empathy are potent contributors in explaining +WOM. Original 22-item SERVPERF scale was not found to be universally applicable and thus the study proposes a refined and shorter 13-item SERVPERF scale for assessing service quality at rural banks in India. Findings can be of vital importance to banking industry in re-structuring and prioritizing service quality dimensions and also developing appropriate promotional strategies by highlighting relevant aspects of service quality for generating desired +WOM.