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The influence of satisfaction on customer retention in mobile phone market

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  • Ruiz Díaz, Gonzalo

Abstract

This study examines the determinants of customer satisfaction and customer loyalty in the Peruvian mobile phone market. Based in a survey to 1259 customers, Multinomial Logit and GSEM estimations show how determinants of customer satisfaction can be assessed when satisfaction is measured through ordered categorical data. The results confirm that in mobile phone market Customer Satisfaction influences strongly on Customer Loyalty, and in turn Loyalty is an important determinant of Customer Retention. In contrast with previous literature, this study identified the differentiated influence of diverse factors on positive and negative customer satisfaction categories. Indeed while results show that quality of service assessments made by customers had a significant impact on both negative and positive customer satisfaction categories; assessments of other service attributes like customer care, information on tariffs and plans and billing clarity, only showed a significant statistical influence on positive categories of customer satisfaction. Similar asymmetrical results were found with regard to other economic, socioeconomic and geographical determinants of customer decisions. As well, an analog effect is also observed in the relationship between customer satisfaction and loyalty, where only positive satisfaction assessments helps to explain the loyalty of users. Finally, results show that while satisfaction can be identified as a powerful cause of CR, switching barriers did not deter more demanding customers to switch to alternative carriers, suggesting that recent pro-competition regulatory reforms implemented in Peru contributed to reduce these barriers to competition in mobile markets.

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  • Ruiz Díaz, Gonzalo, 2017. "The influence of satisfaction on customer retention in mobile phone market," Journal of Retailing and Consumer Services, Elsevier, vol. 36(C), pages 75-85.
    • Handle: RePEc:eee:joreco:v:36:y:2017:i:c:p:75-85
    DOI: 10.1016/j.jretconser.2017.01.003
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    2. Jin, Haofeng, 2022. "The effect of overspending on tariff choices and customer churn: Evidence from mobile plan choices," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    3. Chen, Pin-Zheng & Liu, Wan-Yu, 2019. "Assessing management performance of the national forest park using impact range-performance analysis and impact-asymmetry analysis," Forest Policy and Economics, Elsevier, vol. 104(C), pages 121-138.
    4. Assarzadegan, Parisa & Hejazi, Seyed Reza, 2021. "A game theoretic approach for analyzing the competition between national and store brands by considering store loyalty," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    5. Audrezet, Alice & Parguel, Béatrice, 2018. "Using the Evaluative Space Grid to better capture manifest ambivalence in customer satisfaction surveys," Journal of Retailing and Consumer Services, Elsevier, vol. 43(C), pages 285-295.

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