A superior level of service quality is an important objective for
South African retail banks. This paper investigates the levels of
perceived service quality among 550 clients and 559 branch contactpersonnel
in retail banks in central South Africa. The perceptions
are compared, and the findings reveal that clients regard the levels
of service they receive to be better than what the contact-personnel
perceive them to be experiencing. The physical branch environment
was also shown to be an important dimension of perceived service
quality among retail clients. A cluster analysis identified three
market segments to use when adopting marketing strategies, and
the demographic factors of age, race and geographical location
were found to be important considerations when developing these
marketing strategies. An explicit micro-market marketing approach
that is flexible and tailor-made to the characteristics of the location
of the branch is a recommendation of the paper.