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How value and trust influence loyalty in wireless telecommunications industry

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  • Karjaluoto, Heikki
  • Jayawardhena, Chanaka
  • Leppäniemi, Matti
  • Pihlström, Minna

Abstract

Despite making significant investments in enhancing the customer service experience, long-term customer loyalty remains an elusive dream for many service providers. Particularly in the telecommunications industry, switching providers even from within continuous contract relationships is easy and companies struggle to retain their customers. Trust and value are considered cornerstones of long-term relationships, so it is perhaps surprising that previous research on how relationship age and usage level actually affect value, trust and loyalty is inconclusive. The current research is set in the telecommunications services field and draws on a large-scale survey undertaken in Finland. The findings support the contention that perceived value relates positively to loyalty, and that trust mediates that relationship. Surprisingly, in the telecommunications industry, increasing relationship age and usage level strengthen neither value and loyalty nor the links between trust and loyalty. The results may be explained by the unique characteristics of the highly competitive mobile telecommunications sector, and confirm the view that loyalty does not pay without strategies that value long-term customers and thereby build trust with new customers.

Suggested Citation

  • Karjaluoto, Heikki & Jayawardhena, Chanaka & Leppäniemi, Matti & Pihlström, Minna, 2012. "How value and trust influence loyalty in wireless telecommunications industry," Telecommunications Policy, Elsevier, vol. 36(8), pages 636-649.
    • Handle: RePEc:eee:telpol:v:36:y:2012:i:8:p:636-649
    DOI: 10.1016/j.telpol.2012.04.012
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