Service quality represents a modern approach for quality in enterprises and organizations and serves the development of a truly customer-focused management and culture. Measuring service quality offers an immediate, meaningful and objective feedback about clients' preferences and expectations. In this paper, we study the relationship between customer perceptions from service encounter quality and loyalty of customer to organization and employees. The proposed study is implemented for banking sector in Iran using SERVQUAL factors and considers various factors influencing the quality of service. The results of the survey indicate that service quality systems, customer satisfaction are the most desirable factors based on the feedback we received from the customers. In addition, response to customers and loyalty to employees, service encounter quality, service and loyalty to organization, arrangements are in the next levels, respectively.

Gazor, H., Nemati, B., Ehsani, A & Iran, K. (2012). Analyzing effects of service encounter quality on customer satisfaction in banking industry.Management Science Letters -, 2(3), 859-868-.

Au, N, Ngai, E. W. T., & Cheng, T. C. E. (2008). Extending the understanding of end user information systems satisfaction formation: An equitable needs fulfillment model approach. MIS Quarterly, 32(1), 43–66.

Berry, L.L., Zeithaml, V.A., & Parasuraman, A. (1985). Quality comes in services, too. Business Horizon, 28, 44-52.

Brady, M.K. and Cronin, J.J. Jr. (2001). Some new thoughts on conceptualizing perceived service quality: a hierarchical approach. Journal of Marketing, 65 (3), 34-49.

Choi, J., Seol, H., Lee, S., Cho, H., & Park, Y. (2008). Customer satisfaction factors of mobile commerce in Korea. Internet Research, 18(3), 313–335.

Clarke, K. (2001). What price on loyalty when a brand switch is just a click away? Qualitative Market Research: An International Journal, 4(3), 160–168.

Curry, A., & Sinclair, E. (2002). Assessing the quality of physiotherapy services using SERVQUAL. International Journal of Health Care Quality Assurance, 15 (4/5), 197-205.

Deng, Z., Lu, Y., Wei, K.K., & Zhang, J. (2010). Understanding customer satisfaction and loyalty: An empirical study of mobile instant messages in China. International Journal of Information Management, 30 (4), 289-300.

Edvardsson, B. (1998). Service quality improvement. Managing Service Quality, 8 (2), 142-149.

Eggert, A., & Ulaga,W. (2002). Customer perceived value:Asubstitute for satisfaction in business markets. Journal of Business & Industrial Marketing, 17(2–3), 107– 118.Fornell, C. (1992). A national customer satisfaction barometer: The Swedish experience. Journal of Marketing, 56(1), 6–12.

Gabbie, O., & O’Neill, M. (1997). SERVQUAL and the Northern Ireland hotel sector: a comparative analysis – part 2. Managing Service Quality, 7 (1), 43-49.

Ghobadian, A., Speller, S., & Jones, M. (1994). Service quality: concepts and models. International Journal of Quality & Reliability Management, 11 (9), 43-66.

Gronroos, C. (1982). Strategic Management and Marketing in Service Sector, Marketing Science Institute, Cambridge, MA.Gronroos, C. (1990). Service Management and Marketing, Lexington Books, Lexington, MA.Harvey, J. (1998). Service quality: a tutorial. Journal of Operations Management, 16 (5), 583-97.Kang, G., & James, J. (2004). Service quality dimensions: an examination of Gronroos’s service quality model. Managing Service Quality, 14 (4), 266-277.

Kang, G. (2006). The hierarchical structure of service quality: integration of technical and functional quality. Managing Service Quality, 16 (1), 37-50.

Karatepe, O.M., Yavas, U., & Babakus, E. (2005). Measuring service quality of banks: Scale development and validation. Journal of Retailing and Consumer, Services 12 (5) 373–383.

lehtinen, J.R., & lehtinen, U. (1982). Service quality: a study of quality dimensions”, unpublished Working Paper, Service Management Institute, Helsinki.Liao, C., Palvia, P., & Chen, J.-L. (2009). Information technology adoption behavior life cycle: Toward a technology continuance theory (TCT). International Journal of Information Management, 29(4), 309–320.

Meredith, J.R., & Shafer, S.M. (2002). Operations Management for MBAs, 2nd ed., John Wiley & Sons, New York, NY.Mihelis, G., Grigoroudis, E., Siskos, Y., Politis, Y., & Malandrakis, Y. (2001). Customer satisfaction measurement in the private bank sector. European Journal of Operational Research, 130 (2) 347-360

Ninichuck, B. (2001). Service quality is the key to good business. Pest Control, 69 (9), 12-13.

Oliver, R. L. 1981. Measurement and evaluation of satisfaction processes in retail settings. Journal of Retailing, 57(3), 25–48.

Oliver, R.L. (1997). Satisfaction: A Behavioral Perspective on the Consumer. McGraw-Hill, New York, NY.Parasuraman, A., Zeithaml, V.A., & Berry, L.L. (1985). A conceptual model of service quality and its implications for future research. Journal of Marketing, 49(Fall), 41-50.Parasuraman, A., Zeithaml, V.A. & Berry, L.L. (1988). SERVQUAL: a multiple-item scale for measuring consumer perceptions of service quality. Journal of Retailing, 64, 12-40.

Saleh, F., & Ryan, C. (1991). Analyzing service quality in the hospitality industry using the SERVQUAL model. The Service Industries Journal, 11(3), 324-45.Stevenson, W., 2002, Production and Operations Management, 7th ed., McGraw-Hill, New York, NY.Sultan, F., & Simpson, M.C. (2000). International service variants: airline passenger expectations and perceptions of service quality. The Journal of Services Marketing, 14 (3), 188-216.

van der Wal, R.W.E., Pampallis, A., & Bond, C. (2002). Service quality in a cellular telecommunications company: a South African experience. Managing Service Quality, 12 (5), 233-6.

Walsh, G., Dinnie, K., & Wiedmann, K.-P. (2006). How do corporate reputation and customer satisfaction impact customer defection? A study of private energy customers in Germany. Journal of Services Marketing, 20(6), 412–420.

Wisniewski, M. (2001). Using SERVQUAL to assess customer satisfaction with public sector services. Managing Service Quality, 11 (6), 380-91.

Yazdanpanah, A.A., & Gazor, H. (2012). Detecting success factors of electronic customer relationship management (e_CRM) system to establish an appropriate model in police call Centre of Iran. Management Science Letters, Vol. 2(1), 339-350.

Zeithaml, V.A., & Bitner, M.J. (2000). Services Marketing, McGraw-Hill, New York, NY.