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The Effect of Customer Satisfaction, Switching Barriers Mediated by Customer Loyalty to Customer Retention in ISP Industry

In: Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024)

Author

Listed:
  • Cindy Sutanto

    (Swiss German University)

  • Fiter Abadi

    (Swiss German University)

Abstract

The rapid growth of Internet usage in Indonesia contrasts with a notable decline in sales and market share for one particular Internet Service Provider (ISP). In the fiercely competitive ISP sector, major players such as Biznet, CBN, Linknet, Moratel, and Indonet stand out, among 1341 registered ISPs, many of which do not focus on corporate sales (B2B) but rather on retail (B2C) divisions. This study delves into the crucial factors of customer satisfaction and switching barriers, mediated by customer loyalty, and their collective impact on customer retention within the ISP industry. Given the indispensable role of internet connectivity in contemporary business operations, understanding corporate client behavior is paramount. This research aims to analyze the positive influence of customer satisfaction on customer loyalty, analyze the positive influence of switching barriers on customer loyalty, analyze the positive influence of customer loyalty on customer retention. A comprehensive quantitative approach was employed, with convenience and judgmental sampling techniques to gather data from corporate ISP users, specifically targeting IT decision-makers. A total of 140 questionnaires were distributed. The study reveals the critical importance of addressing impediments to customer churn, given the substantial switching costs and operational disruptions involved. Effective relationship management, characterized by personalized assistance and proactive engagement, emerges as a key factor in nurturing enduring customer relationships. The findings underscore the necessity of prioritizing customer retention strategies to foster competitive advantage and refine marketing strategies tailored to the unique needs of business clients within the ISP landscape. This research not only contributes valuable insights to the academic field but also offers practical guidance for ISPs aiming to enhance service delivery and maintain competitive positioning in a dynamic market.

Suggested Citation

  • Cindy Sutanto & Fiter Abadi, 2024. "The Effect of Customer Satisfaction, Switching Barriers Mediated by Customer Loyalty to Customer Retention in ISP Industry," Advances in Economics, Business and Management Research, in: Soebowo Musa & Eric J. Nasution & Derek Ong Lai Teik & Hanny N. Nasution & Gilbert M. Tumibay & Amiz (ed.), Proceedings of the 5th International Conference on Global Innovation and Trends in Economy 2024 (INCOGITE 2024), pages 643-656, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-585-0_43
    DOI: 10.2991/978-94-6463-585-0_43
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