Customer Loyalty a Key to Success: A Case Study in Telecom Sector of Pakistan

Abstract

This paper identified the role of the independent variable like service quality, taking perceived value, word of mouth and customer satisfaction (mediation/ intervening variables) in creating customer loyalty (dependent variable) among the telecom user (mobile phone users). The empirical portion have extensive literature regarding the mentioned variables and shown their impact towards the customer loyalty. The telecom industry has been facing cut throat competition due to the market saturation, decrease in ARPU (average revenue per user), and shift to internet based (cheaper sources) communication tools, unexpected mergers, higher cost and decreasing the margin. Thus, telecom companies have been thinking about devising the best possible suitable strategies for creating the customer to maintain their survival and growth. The simple random techniques are used for sample selection and self-administration questionnaire is the tool for collecting data. A sample of 300 universities students from Rawalpindi and Islamabad is base for analysis. Amos 20 is the software and SEM is the tool for extracting result. Dual relationship is tested likewise direct (service quality and customer loyalty) and indirect through mediating variables. Results showed that customer satisfaction is the strongest mediator in developing a high-quality customer loyalty service, and it has more effect than the direct link between quality of service and customer loyalty. It leads industrial professionals to develop a strategy based on customer satisfaction. It is concluded that customer satisfaction increases the level of the industrial professionalism. Hence the customer satisfaction increases the service quality and customer loyalty services. In nutshell, the cooperate image and switching barrier can be possible leads for the future research.