Determinants of Customer Retention with Special Reference to Mobile Telecommunication Industry in Sri Lanka

Abstract

The objectives of the study were to examine the factors affect to retention of customers of Mobile Telecommunication Industry, to identify appropriate retention Strategies for the industry and to test whether or not the demographic factors (gender, age, education, occupation, income and marital status) affect the retention. To achieve these objectives nine hypotheses were developed and tested. Based on the literature review on customer retention, researcher recognized that marketers can use different tools relating to independent variables (Customer satisfaction, Payment Equity, Affective & Cumulative Commitment, Customer Loyalty Programs & Triggers) in order to determine the retention strategy practices. However, the validity and the reliability of the measurement scales were tested against the survey data. The study is a cross-sectional in time and the primary data collected from a conveniently selected sample of 154 adult consumers in Sri Lanka. The unit of analysis is at individual level. To test the hypotheses, Chi square Tests, independent samples T-tests, ANOVA and Regression tests have been performed. Findings of the study revealed that post-paid retention was 2.56 times more likely than the pre-paid due to medium size effect from customer satisfaction on post-paid customers. Therefore, marketers should pay their attention on satisfaction of the pre-paid customers in designing appropriate marketing strategies such as segmenting, targeting, positioning and marketing mix strategies. Further, there were significant impacts from customer satisfaction, payment equity, Effective Commitment & Trigger on customer retention. As the other dimensions have no significant impact on customer retention, the above dimensions could be identified as the customer retention determinants in the Sri Lankan context & the marketers should pay attention on these dimensions to retain the customers. The findings of this study are important for corporations and future researchers on Customer Retention.