IDEAS home Printed from https://ideas.repec.org/a/eee/telpol/v36y2012i8p636-649.html
   My bibliography  Save this article

How value and trust influence loyalty in wireless telecommunications industry

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0308596112000729
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Evanschitzky, Heiner & Iyer, Gopalkrishnan R. & Plassmann, Hilke & Niessing, Joerg & Meffert, Heribert, 2006. "The relative strength of affective commitment in securing loyalty in service relationships," Journal of Business Research, Elsevier, vol. 59(12), pages 1207-1213, November.
    2. Chiou, Jyh-Shen & Wu, Lei-Yu & Chuang, Min-Chieh, 2010. "Antecedents of retailer loyalty: Simultaneously investigating channel push and consumer pull effects," Journal of Business Research, Elsevier, vol. 63(4), pages 431-438, April.
    3. Kim, Byoungsoo, 2012. "The diffusion of mobile data services and applications: Exploring the role of habit and its antecedents," Telecommunications Policy, Elsevier, vol. 36(1), pages 69-81.
    4. Michael R Mullen, 1995. "Diagnosing Measurement Equivalence in Cross-National Research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(3), pages 573-596, September.
    5. Tenenhaus, Michel & Vinzi, Vincenzo Esposito & Chatelin, Yves-Marie & Lauro, Carlo, 2005. "PLS path modeling," Computational Statistics & Data Analysis, Elsevier, vol. 48(1), pages 159-205, January.
    6. Eric T. Anderson & Duncan I. Simester, 2004. "Long-Run Effects of Promotion Depth on New Versus Established Customers: Three Field Studies," Marketing Science, INFORMS, vol. 23(1), pages 4-20, February.
    7. Lai, Fujun & Griffin, Mitch & Babin, Barry J., 2009. "How quality, value, image, and satisfaction create loyalty at a Chinese telecom," Journal of Business Research, Elsevier, vol. 62(10), pages 980-986, October.
    8. Eshghi, Abdolreza & Haughton, Dominique & Topi, Heikki, 2007. "Determinants of customer loyalty in the wireless telecommunications industry," Telecommunications Policy, Elsevier, vol. 31(2), pages 93-106, March.
    9. Kim, Moon-Koo & Park, Myeong-Cheol & Jeong, Dong-Heon, 2004. "The effects of customer satisfaction and switching barrier on customer loyalty in Korean mobile telecommunication services," Telecommunications Policy, Elsevier, vol. 28(2), pages 145-159, March.
    10. Gerpott, Torsten J. & Rams, Wolfgang & Schindler, Andreas, 2001. "Customer retention, loyalty, and satisfaction in the German mobile cellular telecommunications market," Telecommunications Policy, Elsevier, vol. 25(4), pages 249-269, May.
    11. Bearden, William O & Etzel, Michael J, 1982. " Reference Group Influence on Product and Brand Purchase Decisions," Journal of Consumer Research, Oxford University Press, vol. 9(2), pages 183-194, September.
    12. Sheth, Jagdish N. & Newman, Bruce I. & Gross, Barbara L., 1991. "Why we buy what we buy: A theory of consumption values," Journal of Business Research, Elsevier, vol. 22(2), pages 159-170, March.
    13. Ruth N. Bolton, 1998. "A Dynamic Model of the Duration of the Customer's Relationship with a Continuous Service Provider: The Role of Satisfaction," Marketing Science, INFORMS, vol. 17(1), pages 45-65.
    14. Bartikowski, Boris & Walsh, Gianfranco & Beatty, Sharon E., 2011. "Culture and age as moderators in the corporate reputation and loyalty relationship," Journal of Business Research, Elsevier, vol. 64(9), pages 966-972, September.
    15. Keramati, Abbas & Ardabili, Seyed M.S., 2011. "Churn analysis for an Iranian mobile operator," Telecommunications Policy, Elsevier, vol. 35(4), pages 344-356, May.
    16. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:joreco:v:21:y:2014:i:6:p:1047-1058 is not listed on IDEAS
    2. repec:eee:joreco:v:36:y:2017:i:c:p:124-136 is not listed on IDEAS
    3. Seyed Hosseini & Alireza Ziaei Bideh, 2014. "A data mining approach for segmentation-based importance-performance analysis (SOM–BPNN–IPA): a new framework for developing customer retention strategies," Service Business, Springer;Pan-Pacific Business Association, vol. 8(2), pages 295-312, June.
    4. M. Balaji, 2015. "Investing in customer loyalty: the moderating role of relational characteristics," Service Business, Springer;Pan-Pacific Business Association, vol. 9(1), pages 17-40, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:36:y:2012:i:8:p:636-649. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.