173 Seth, Momaya, Gupta
AN EXPLORATORY INVESTIGATION OF CUSTOMER LOYALTY AND RETENTION IN CELLULAR MOBILE COMMUNICATION
Anita Seth Kiran Momaya H.M. Gupta
Cellular mobile industry has undergone rapid changes as a result of liberalization and globalization. In such a ever changing scenario, expansion and maintaining the loyal customer base seems to be a great challenge for the mobile service providers. As a result of increased competition, customer loyalty and retention have become important goals for mobile service operators. Reacting to the pressures, most of the cellular mobile service providers are trying to attract subscribers by not only reducing their tariff rates but also giving ...view middle of the document...
2001). Various researchers (Duffy, 1998; Griffin, 1995; Kandampully, 1998) also advocated that developing and maintaining customer loyalty is the key to the survival and growth of service firms. Mobile operators have realized that consistently high levels of customer loyalty can not only create longterm relationships with customers but also lead to competitive advantage. Researchers also agree that customer loyalty is one of the major sources of sustainable competitive advantage for service firms
Journal of Services Research, Special Issue, (December, 2005) © 2005 by Institute for International Management and Technology. All Rights Reserved. Journal of Services Research, Special Issue, (December, 2005)
174 An Exploratory Investigation (Bharadwaj et al., 1993). Reichheld and Sasser (1990) also showed that a 5 percent decrease in customer attrition translate to a 25 to 85 percent increase in profits, depending on the service industry. Various researchers (Reichheld and Sasser, 1990; Aaker, 1991), emphasized that loyal customer base generate more predictable sales, steady cash flow and an improved profit stream. Further, loyal customer base not only serve as a marketing force by providing recommendations and spreading positive word-of-mouth, but also cost less as they require less information (Raman, 1999). Thus, maintaining a loyal customer base seems to be meaningful strategy for cellular mobile service providers (CMSP) in order to survive and succeed in this competitive telecomm market. It is now realized by CMSPs that customer loyalty and retention are important intermediate goals for them to achieve economic success in liberalized telecom markets. As a result, an increasing amount of attention is placed by researchers on the investigation into customer loyalty and retention. Though the literature pertaining to customer loyalty and retention is rich in theoretical and empirical studies, but majority of the studies are focused on the data from the developed countries. The literature seems to have white spots for related studies on cellular mobile services with the focus on developing countries. Also, the review highlighted that even within the available literature of loyalty-retention, the linkage with profitability and competitiveness has been less explored. In this regard, the purpose of the present paper is to gain practical insights of the subject through review of literature and by conducting exploratory interviews with the cellular mobile customers. The study also provides useful guidelines for CMSPs in devising methods to enhance their loyal customer base. Finally, based on the observations, this paper presents a rich research agenda for further research. The present paper is structured as follows. A brief synthesis of the extant literature on conceptual issues concerning customer loyalty is presented. Research methodology involving exploratory interviews is described next. Managerial implications of the research and rich agenda for...