ijcrb.webs.com INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS COPY RIGHT © 2014 Institute of Interdisciplinary Business Research 261 JANUARY 2014 VOL 5, NO 9 Effect of Customer Service Practices on Performance of Banks: A survey of Commercial Banks in Kitale Town, Kenya. Daniel Wabuyabo Sakwa, MBA Student at Jomo Kenyatta University of Agriculture and Technology, Kenya. Customer service consultant, Kenya commercial Bank. P.O. BOX 118 -50106 Shianda, Kenya Dr. Margaret Oloko, Lecturer, Jomo Kenyatta University of Agriculture and Technology, Kenya; P.O. BOX 62000 – 00200 Nairobi, Kenya ABSTRACT Customer service is the series of activities designed to enhance the level of customer satisfaction-that is, the feeling that a product or service has met the customer‟s expectation and even beyond his/her expectation. Customers evaluate a product or service in terms of whether that product or service has met their needs and expectations. Customer satisfaction is derived largely from the quality and reliability of products and services. Commercial banks encounter similar problems in meeting customer„s expectation of services and customer satisfaction. The general purpose of this paper was to assess effect customer service on performance of commercial banks in Kenya. Target population was 202 employees of Banks drawn from eight commercial banks operating in Kitale town. Simple random sampling was used to select a sample size of 61employees Data was collected using questionnaires and analyzed and presented using descriptive statistical tools including the use of frequency, tables and Pearson Correlation Coefficient and multiple regressions with the help of Statistical Package for Social Sciences (SPSS). Research findings revealed that waiting situation affects the performance of the banking sector (β 1 =0.169, ρ<0.05). Segmentation affects the performance of the banking sector (β 2 =0.279, ρ<0.05). Service delivery channels is a key determinant in the performance of the banking sector (β 3 =0.249, ρ<0.05) and that communication does affect the performance of the banking sector (β4 =0.236, ρ<0.05). From the study findings there is evidence that waiting situation practices allows customers to save on time and avoid lengthy procedures which creates dissatisfaction on segmentation that seem to play a pivotal role in performance of the bank sector. Multiple service delivery roles positively on performance of the bank sector communication has tremendously increased performance in the banking sector thus the study advocates for better and efficient ways of saving on time in order to increase customer satisfaction. Thus the managers should increase market and customer segmentation because this will have a significant positive effect on bank performance. In addition, bank sector should adopt advanced technological methods such as self-inquiry facility for inquiries and view of transactions in the account Keywords: Delivery Channel, Customer Service Practices, Internal Segmentation, Waiting situation Introduction The goal of every organization is to meet the needs and the requirements of its stakeholders not only ensure the survival of the organization but also allow it to flourish. Customers are presumed to be one of the most important stakeholders in any organization because without them, organizations are not likely to succeed. Hence, marketers emphasize on research in the area of