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Barween Al Kurdi
Hashimate University
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Muhammad Alshurideh
Ass. Prof, The University of Jordan, Marketing Department. Jordan
Tel: +962 6 5355000; Ext: 24262; 0795526539
E-mail: m.alshurideh@ju.ac.jo
Barween Alkurdi
Marketing Department - Middle East University
Jordan and PhD Candidate at Durham University
United Kingdom, Teaching Staff
E-mail: b.h.alkurdi@dur.ac.uk
Abstract
This study is mainly intended to ascertain the extent to which customer satisfaction affects
customer retention among the major three cellular phone companies in the Jordanian
mobile sector, which are Zain, Orange and Umnia. Measuring the relationship between
customer satisfaction and retention is insufficient without studying the main causes of
customer satisfaction. Thus, the study also measures customer satisfaction with various
aspects: the effect of customer-supplier relationship duration on customer satisfaction, and
customer satisfaction with varieties of mobile phone services provided to users and call
centre services.
The study employed a quantitative method to test the study hypothesis and collect
surveys from Jordanian mobile users. 500 questionnaires were distributed with a response
rate of 72.8%. A Chi-Square test was used to test the study’s hypothesis. The study found
that customer satisfaction does affect customer retention in the Jordanian mobile behaviour
setting. This result is supported, and the study also found a direct relationship between
customer-supplier relationship duration and customer satisfaction. Various mobile services
provided directly to mobile users as well as services provided by call centres also affect
customer satisfaction and contribute essentially to customer retention. Further explanation
has been presented in this paper and is supported by some significant concluding remarks
and recommendations.
Keywords: Service Marketing, Mobile Phone Sector, Jordanian Mobile Phone Sector,
Satisfaction, Customer Retention, Relationship Marketing, Relationship
Duration, Call Centre.
70 European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)
1. Introduction
According to Buttle (1996), organizations usually have a variety of relationships with different types of
customers and with other organizations to achieve their objectives using a specific marketing mix.
Gummesson (1996, pp. 6) affirmed that marketing can be seen “as interactions, relationships and
networks”. Hence organizations’ relationships can be classified into three different categories:
company/intermediary, company/consumer and company/employee, as translated by Gummesson
(1996). This study will focus on the consumer/company relationship.
According to Berry (1995), relationship marketing is described as “attracting, maintaining and,
in multi-service organizations, enhancing customer relationships” (p.25). Given that customer
acquisition is a critical part of the marketers’ duties, this stresses the point that maintaining and
enhancing customer relationships is of equal or greater significance to the organization in the long run
than customer acquisition in the short run. The tendency to focus on existing customers is derived from
the fact that the majority of service organizations face problems in gaining new customers, especially
in markets described as having high penetration rates such as the mobile phone service sector. In
Jordan, for example, the penetration rate reached a saturation point of 96% at the end 2009 (as reported
by Jordan Telecom, 2011). Other resources reported that the penetration rate exceeded 106% in 2010
and is expected to reach 133% in 2015 (JTR, 2011). As confirmed by many researchers, such as
Buchanan and Gillies (1990), the cost of acquiring new customers is higher than the cost of serving the
existing ones, and the high cost of acquiring new customers pushes organizations to strengthen
business relationships with customers. Even if there are many existing customers, new customers who
are in the growth stage of their relationship cost organizations more than those who have spent years
with the same organizations. This issue has been confirmed by Reichheld and Schefter (2000), who
claimed that new customers cost from 20% to 40% more than old customers. Even though the cost of
serving existing customers, who have long-term relationships with specific organizations, tends to fall
and their purchases increase during their lifetimes, organizations should take a different approach to
handling such valuable relationships. The solution has been mentioned by Grınroos (1990, cited by
Yang and Wu, 2007, p. 270), when he provided another definition of relationship marketing: “the role
of relationship marketing is to identify, establish, maintain and enhance relationships with customers
and other stakeholders, at a profit, so that the objectives of all other parties involved are met; and that
this is done by a mutual exchange and fulfillment of promises”. This definition shows that relationship
marketing is a continuous process of caring in a variety of markets to serve both existing customers
and new ones in the long term. Also, the definition demonstrates that relationship marketing is a
multifunctional and integrative process because marketing is viewed as integrative activities involving
functions across the organization, with emphasis on facilitating, building and/or maintaining
relationships over time with all other partners inside and outside the organization (Coviello et. al.,
1997).
The core of Customer Relationship Marketing (CRM) is Customer Retention (CR). Thus,
customer retention is thought to be the repeated patronage of a marketer or supplier by a customer;
retention is also used interchangeably with other terms including customer loyalty. Hennig-Thurau and
Hansen (2000) explained that retention and loyalty differ from repeat purchasing behaviour in that they
both entail an intentional component; in other words, the purchase doesn’t occur by chance - there are
specific reasons for it (Klee and Hennig, 1996).
One of the main issues to have been investigated thoroughly by researchers is customer
satisfaction. Satisfaction has been described by many researchers such as Ennew & Binks (1996) and
Barnes & Howlett (1998) as one of the main relationship marketing drivers. In another study, Berry
(1995) reported that relationship marketing was portrayed as a “new-old concept”, stating that “the idea
of a business earning the customers’ favour and loyalty by satisfying their wants and needs was not
unknown to the earliest of merchants”. The study by Jessy (2011) demonstrated a direct relationship
between satisfaction and loyalty; usually, satisfied customers become loyal, and dissatisfied customers
tend to choose other companies.
71 European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)
2. Research Aim
The study aims to answer the following question: To what extent does customer satisfaction directly
affect customer retention in the Jordanian telecommunication sector? Based on the research question,
the study aims to find suitable answers to the following issues:
What are the main factors affecting customer satisfaction in relation to customer retention in the
Jordanian telecommunications sector?
Does customer satisfaction differ from one mobile phone supplier to another?
Identifying the main factors that affect customer switching and retention.
Defining the main mobile service providers’ issues that are seen as important from the
customers’ perspective.
3. Conceptual Model
4. Study Objectives
4.1. Object Number One: Customer Satisfaction and Customer Retention
Studying customer satisfaction is not a new phenomenon in the field of relationship marketing but in
Jordan such a study will add value to the knowledge on customer-supplier relationships in one of
today’s most active and changeable sectors. Customer satisfaction can be witnessed in various
behavioural contexts and is related to both services and goods. It also relies on both customer
expectations and customer evaluation depending on how much the customer is expecting when buying
goods and/or services. Moreover, satisfaction is based on the customer’s encounter with the
organization (moment of truth) and personal results.
Customer satisfaction is a highly personal perception influenced by numerous variables such as
individual anticipations and demographic profile. Some scholars, such as Bamford and Xystouri
(2005), have shown that customer satisfaction or dissatisfaction depend on whether or not the
individual’s expectations are being met regarding the service or product. Others, such as Hanan and
Karp (1989), declared that a satisfied customer is one that collects considerable added value.
Some researchers have sought to define the factors that affect customer satisfaction in various
telecommunications sectors. Jessy (2011), for example, analyzed customer loyalty in the telecom
company Bharath Sanchar Nigam Limited, India, and researched the following factors: value-added
services, ability to make calls even in peak hours, image, relationship, trustworthiness, low premature
termination of calls, quality of customer care and the inconvenience of switching phone numbers. Also,
Kima et al. (2004) studied the effects of customer satisfaction and the switching barrier on customer
loyalty in Korean mobile telecommunication services using the following factors: call quality,
customer support and value-added services.
Object Hypothesis
H1: Customer satisfaction has a direct effect on customer retention
72 European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)
H2: There is a difference in the level of customer satisfaction among the three main cellular
mobile phone service providers.
4.3. Object Number Three: Types of Services Provided and Customer Satisfaction
The competition in the mobile phone sector is high in nature in most countries, including Jordan, and it
causes great customer confusion and a high churn rate (Turnbull and Leek et al., 2000). Mobile service
providers compete with one another by providing a variety of mobile services to professionally serve
their customers, such as providing customer care before, during and after the purchase, providing good,
quick and friendly customer service and choosing and employing well-trained and knowledgeable
employees to provide high-quality services.
The reason for investigating the mobile service elements is to determine the extent to which
existing customers are happy with such services. Studying the effects of service variety will help in
ascertaining the extent to which customers are satisfied and wish to continue their relationships with
their mobile suppliers. This is because customers are usually interested mainly in the variety (bundle)
of services provided by mobile service suppliers. Kim et al. (2004) showed that mobile carriers, in
order to increase their customers’ satisfaction and enhance customer retention, must concentrate on
service variety and quality and provide customer-oriented services to raise customer satisfaction. It was
found that customer satisfaction changes according to the situation and the goods or services. A
customer may be satisfied with a variety of things including the product or service, the experience, the
purchase decision, the salesperson, store, service provider or even an attribute. (Rodrigo A. Padilla,
2004)
H4: The variety of mobile services provided by the service providers has a direct effect on
customer satisfaction.
Some scholars such as Anton (1997), Dawson (1998) and Aksin and Harker (1999) have highlighted
the issue of promoting customer call centres as a leading strategy to increase customer satisfaction.
Call centres do not merely allow companies to build and preserve customer relationships; they also
solve and handle conflicts and settle complaints rapidly, answer questions, provide information and are
available at all times (Prahabkar et al., 1997). There are many services usually provided by call centres.
This study chose to focus on the four main ones: making time to serve the customers (not wasting
consumers’ time) (Townsend, 2005; Ward, 1999); ability to help (Feinberg et al., 1990; Tuten and
Neidermeyer, 2004); friendliness (Bennington et al., 2000; Rafaeli et al., 2008); and the speed of
answering service (Feinberg et al., 1990; Grandey et al., 2004; Grandey et al., 2005).
H5: Call centre service utilities have a direct effect on customer satisfaction.
5. Methodology
The planned data were collected using quantitative research methods based on former studies that
shaped the basic understanding of the study variables. Previous studies helped in designing a specific
questionnaire to collect the planned data from the sample. 500 questionnaires have been distributed.
Data for analysis have been collected from 364 Jordanian mobile phone users by using a convenience
sample. The response rate was 72.8%. The survey reliability was 83.5% and this seems suitable for
such research, as found in other similar studies. A Chi-Squire test has been used to test the study
hypotheses.
6. Data Analysis
Data analysis shows that Zain had the highest customer satisfaction level followed by Orange and then
Umnia. Zain had more satisfied customers; 84.1% of its customers were satisfied while 77.8% of
Orange’s customers were satisfied. Umnia had the fewest satisfied customers at 58.6%.
Zain’s satisfied customers usually attributed their satisfaction to good customer service and
great variety of services. Meanwhile, Umnia’s customers was satisfied only with the low mobile
service pricing and complained about the services provided. In addition, many were happy to change
their current company. Regarding the relationship duration, which was measured in the number of
years the customer spent with the company, Zain’s customer retention was the highest followed by
Orange and then Umnia, proving that customer satisfaction indeed affects customer retention.
58% of the customers who spent only 1-2 years with the company were satisfied while 74.5%
of the customers who spent 3-4 years were also satisfied; last, but not least, 88.6% of the customers
who spent more than 5 years with the same company were satisfied with the services provided. This
shows us that satisfaction has a major effect on customer retention. Also, 88% of our satisfied
customers will not change the telecommunication company they are using. Of those, 55.9% stated that
they were satisfied with the services provided while 30.5% responded that they had been with the
company for so long they were no longer willing to change. Once again, these results prove that
customer satisfaction does indeed affect customer retention.
Data analysis shows that the “variety of service” factor is the most important factor from the
customers’ perspective with 79.1% regarding it positively and just 5.6% regarding it negatively. Next,
behaving in a friendly manner to customers is also positively regarded with 78% finding it positive and
just 11% finding it negative. Customer care and being helpful to customers are also important to
customers with about 75% of customers regarding it positively and only about 10% regarding it
negatively. Customer service had a positive image with 70% of respondents followed by not wasting
customers’ time with about 64%.
6.1.2. Object Number One - B: Do Customers’ Satisfaction Levels Differ Among Mobile Phone
Service Providers?
Chi-Square tests have been used to test this hypothesis. Data analysis results show that the significant
p-value is 0.012, which is less than 5%; this indicates that the first hypothesis has been supported in its
proposal that that there is a difference in the levels of satisfaction among the three Jordanian cellular
mobile phone companies. Results showed that the average level of satisfaction among all the sample’s
respondents is 78.5%. Data show that Zain’s customers’ satisfaction is high and reached 84.1% while
Orange’s customers’ satisfaction was very good with 77.8% and Umnia’s customers’ satisfaction is the
lowest with just 58.6%.
6.3. Object Number Three: Types of Services Provided and Customer Satisfaction
The variety of services provided by the mobile phone suppliers has not attracted as much attention
from scholars as other factors such as service quality effects. This is because the number and types of
mobile services differ from one mobile offer to another within the same time period and from one
75 European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)
mobile supplier to another. Other similar service issues have been investigated; for example, the
variety of mobile device types has been investigated by Kim et al. (2004). Initially, the number of
mobile services was discussed in different terms such as service value; as services increased in terms of
types and numbers, the value perceived by mobile users increased within different behavioural contexts
(Pura, 2005). That is because, as the services provided to customers increased, the benefits gained by
the consumers increased, which increased the overall value to the customers (Brynjolfsson, 1993).
Data analysis shows that the p-value is 0.001 which is below the 5% significance level, thus
supporting the hypothesis confirming the positive relationship between the variety of services provided
and customer satisfaction. There is a dependent relationship between the perceived value of all the
services provided and customer satisfaction. This in turn helps to establish future intention to repeat the
purchasing behaviour (McDougall and Levesque, 2000). Based on that, perceived value is considered
one of the most important drivers of customer satisfaction, as confirmed by many scholars such as
Krishnan et al. (1999) and McDougall and Levesque (2000). Thus it’s important to tackle the main
customer satisfaction drivers and explain them within actual behaviour modules that include a variety
of services as well as other issues such as service quality.
6.4. Object Number Four: Customer Satisfaction and Call Centre Services
Data analysis shows that the p-value for the call centres’ effect is 0.054 which is above the 5%
significance level; this does not prove the hypothesis that suggests that call centres’ services have a
direct effect on customer satisfaction. In order to check the main effects of call centre services, the
analysis results show that not wasting consumers’ time, ability to help and friendliness factors have no
effect on consumers’ satisfaction, with p-values of 0.145, 0.129 and 0.116 which are all above the
significance value of 5%. However, the speed of answering factor does have a direct effect on
consumers’ satisfaction, with a p-value of 0.048 which is below the significance value of 5%.
Investigating such call centre services is important for caller satisfaction, especially those related to
average waiting times, particularly during peak calling times, or calls terminated during the first
contact (Feinberg et al., 2000).
satisfaction. While satisfaction is a major driver of retention, providing continuous and suitable
customer services before, during and after the encounter stage is the core of retention, especially when
mobile phone providers are competing with one another to add new services or enhance service quality
to increase the satisfaction level. The last issue is to investigate customer satisfaction with one of the
main mobile cellular services that affect the customer-supplier relationship: the call centre services.
Results showed that call centre services affect customer satisfaction in the Jordanian mobile market
and not only help organizations to stay in touch with customers but also help in solving customer
complaints and collecting feedback.
This study is essential for tackling the main customer pre-satisfaction issues which eventually
lead to customer retention. However, it is not enough to have a full picture of the satisfaction/retention
relationship among mobile users in the Jordanian mobile cellular phone sector. More investigation is
needed to study other post-satisfaction issues which indeed lead to customer retention, such as
customer benefits and punishments in terms of entering long-term relationships. Also, this study has
initially tackled the effect of call centre services on mobile phone users’ satisfaction. However, it is
important to take other services into consideration when investigating the main factors that affect caller
satisfaction and when studying call centres’ effect on the customer-supplier relationship and customer
repeat purchasing behaviour, as noted by Feinberg et al. (2000).
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