Abstract
Generally, the current scenario in the hyperactive corporate world, and specifically in the telecom sector, renders companies to compete concurrently on two fronts: Expansion of their customer base and the retention of their current customers. In order to explore and examine the latter concept, the current study hypothesizes the effects of sustainable service quality on customer loyalty with a mediating role of customer satisfaction conceptualized through the reciprocity theory. The study also considers the suggested moderating role of switching cost by theorizing the Apostle model. Pertinently, the satisfied customer may not be loyal if the switching cost is low, since the dynamics of the switching cost provide a useful insight into the phenomenon of retaining the customers through customer satisfaction. The research opts for explanatory study where data were conveniently collected. The study has used the PROCESS macro model 4 and 14 to analyze the data. Findings reveal that the role of customer satisfaction is significant but the effect of the switching cost was considered to be insignificant, elucidating that a satisfied customer will remain loyal even if the switching cost is low. It means that sustaining service quality longitudinally did not affect customer loyalty in the presence of a low switching cost. With a view to complement the study, managerial implications of a switching cost have also been discussed.
Highlights
Introduction and BackgroundUnder the current scenario of the booming mobile phone service industry of Pakistan, service providers are becoming ever-vigilant to pursue a strategy to sustain their market share by retaining existing customers
The research tool for the present study was adopted through various sources: Customer loyalty was measured by the six-item scale of Dimitriades (2006) [53]; customer satisfaction was adapted from Walsh et al (2006) [54]; the SERVQUAL scale was adapted from Parasuraman et al (1988) [30] and Irfan et al 2016 [6] with some modification; and switching cost was adapted from the operationalized definition by Burnham et al (2003) [55]
The results proved that customer satisfaction had a strong mediating role in establishing the direct relationship between sustainable service quality and customer loyalty
Summary
Under the current scenario of the booming mobile phone service industry of Pakistan, service providers are becoming ever-vigilant to pursue a strategy to sustain their market share by retaining existing customers In this context, Yankee Group (2001) [1] has pointed out the mobile operators’ estimation to win over a fresh client costs seven times more than the yearly cost of keeping an existing client. To achieve the desired results, the service providers in the cellular phone sector generally remain focused either on certain standard and time-tested strategies or resort to some innovative mechanics to target existing customers to retain them as loyal customers Their emphasis is on the provision of sustainable quality services for the satisfaction of their customers, for which they strive consistently by adopting the approach of improvising their processes and procedures
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