Problem 1. Customer satisfaction and service quality are intertwined; however, experts have not been able to completely explain the relationship between the two. On one hand, there are those who believe customer satisfaction leads to perceived service quality, and on the other hand, there are those who believe that the reverse happens, and service quality leads to customer satisfaction. What most experts do agree on, however, is that "customer satisfaction is a short-term, transaction-specific measure, whereas service quality is an attitude formed by a long-term, overall evaluation of a performance" (Hoffman & Bateson, 2011). Both aspects, given their interconnectedness, are not only important to the customer, but also to the organization as a whole. Since customer satisfaction "compares perceptions to what customers would normally expect" and service quality "compares perceptions to what customers should expect" the two essentially go hand-in-hand (Hoffman & Bateson, 2011). Furthermore, after each transaction, the customer evaluates the service, and over time, these evaluations "help revise customers' overall service quality of the firm's performance" (Hoffman & Bateson, 2011).
Hoffman, D. and Bateson, J. (2011). Service Marketing: Concepts, Strategies, & Cases. South-Western, Cengage.
Problem 2. When it comes to customer satisfaction and service quality, they are related by how they help each other out. It can be argued by many that customer satisfaction leads to enhanced service quality while others will say that it is service quality that leads to excellent customer satisfaction. Well customer satisfaction does happen when the goods or service meets or exceeds the buyer's needs or expectations. In sale trainings, they are always teaching to under sell and over deliver. In other words, sell the highlights of the service or item (normally those that satisfy the customer's needs at the moment); then, let the good or service deliver everything else it offers that will exceed the buyer's expectations.
As for service quality, I have always understood that it is the expected and perceived quality of a service offering. In other words, if poor customer service is provided then that will give the perception to other potential customers that the business does not aim for customer satisfaction. According to Hoffman and Bateson, most experts agree that customer satisfaction is a short-term, transaction-specific measure, where service quality is an attitude formed by a long-term, overall evaluation of performance (Hoffman & Bateson, 2011).
The importance lies in knowing how to get from delivering excellent service quality and getting to wonderful customer satisfaction. Just like trying to figure out which came first, the chicken or the egg - many will argue that customer satisfaction is more important than service quality. I personally do not think that one is more important than the other.