1.1 Introduction
The aim of this paper is to identify the main factors that influence customer loyalty in Kenya’s mobile telecommunication sector. To obtain an accurate and reliable information on these factors, a study was conducted among the key stakeholders in the sector namely; mobile telecommunication firms’ managers and customers. For data collection, four customers and four managers, representing the four main providers; Safaricom, Airtel, Orange and YU mobile were interviewed. The paper first gives an overview of the mobile telecommunication industry in Kenya, outlining its major players. The second section of the paper narrows down on the main determinants of customer loyalty in the sector. The paper then concludes with the way forward for mobile telecommunication firms to attract and retain their customers.
1.1 Factors That Influence Customer Loyalty To Your Network Provider?
The mobile telecommunication in Kenya is currently experiencing unprecedented competition. Unresponsive mobile telecommunication firms are therefore likely to lose their customers in the scramble by others to expand their customer base. The major mobile telecommunication firms in Kenya are Safaricom, Airtel, Orange and YU Mobile. To study the factors that influence customer loyalty in the industry, firm managers and customers were interviewed. The interview results with the 4 managers revealed that service quality is the main factor that contributes to customer loyalty in the Kenyan mobile telecommunication sector. On the other hand, the four customers interviewed were of the opinion that customer loyalty is greatly influenced the image a mobile telephony company has created in the competitive industry. The Safaricom manager interviewed opined that his company became the market leader in Kenya because of superior value services. The manager added that Safaricom attracts and retains its clients mainly by its Value Added Services (VAS). The Airtel manger interviewed said that barriers to switching users that Safaricom uses have made it quite difficult for its customers to switch to cheaper providers such as Airtel, Orange and Yu. The Orange and Yu managers agreed to the statement by the Airtel Manager.
The interviews also revealed that customers are discouraged by unprofessional and rude customer service or call centre staffs. Because of poor etiquette and lack of response from customer service representatives, many customers easily shift from one provide to another. The interviews with the customers showed that in most cases, calls to customer service representatives are rarely answered, leaving the customers with no options but to try new providers. Unfortunately, it seems to be the norm in the industry that customer representatives do not work to the expectations of their customers (xxxxxxx).
1.2 The Strategies the Kenyan Network Service Providers Use to Retain their Current Clients
To retain current customers, mobile telecommunication firms in Kenya should implement several strategies. First, the firms should review and improve the quality of their services. For the mobile telephony sector, better services imply improved reliability, accessibility, performance and serviceability (xxxxxxx). It is also recommended that mobile telephone companies performing poorly in the market improve their brand image. Brand image can be improved through more intense marketing and corporate social responsibility. The role of the government in assisting mobile telecommunication firms achieve customer loyalty is equally important (xxxxxxxx). For instance, the government can develop regulatory mechanisms that eliminate or reduce switching barriers. Once these barriers are reduced or eliminated, it would be easier for customers to change loyalty, depending on the quality and the cost of services offered. In addition, the government can provide better infrastructure (xxxxxxx). Mobile telecommunication firms should also ensure that their customers’ issues are solved as soon as they are reported (xxxxxxxx). Otherwise, a firm may lose its customers to its competitors in the industry.
1.3 Strategies by the Kenyan Network Service Providers to Acquire New Clients
To attract new customers, the mobile telephone service providers in Kenya should first improve their services, especially network strength, clarity and coverage. Once the networks are improved, the firms should initiate and implement campaign or marketing drives to publicize their services, each portraying itself as the best and preferred service provider in the sector (xxxxxxxx). Corporate Social Responsibility is the other strategy by which mobile telecommunication service providers in Kenya can attract new clients. CSR helps companies have a good public reputation, endearing them to the public.
Observably, in Kenya, Safaricom ranks highest in CSR compared to its competitors, giving it a competitive edge over the others (xxxxxxx). Hence, the other players in the sector should take cue and engage in similar CSR campaigns. What is more, to attract new clients, mobile service providers should ensure they keep in touch with the ever-changing needs and tastes of the local market. Lagging behind in satisfying customer needs would imply a provider loses out on the younger generation with needs and tastes quite unlike the older generation’s tastes (xxxxxxxxx). Moreover, the services must be relevant to the target customers. Flexibility and innovativeness would also be quite effective in attracting new customers who prefer new and more creative and interesting products.
1.3 Factors That Influence Brand Loyalty among Customers in the Kenyan Mobile Telecommunications Industry
The interview outcomes are similar to the findings of a study entitled ‘Factors Influencing Customer Loyalty in Telecommunication Industry in Kenya,’ by Allan S. N. Kihara and Gordon K. Ngugi, both of Jomo Kenyatta University of Science and Technology. Kihara and Ngugi (2014) established that service quality, value added services, brand image, and switching barriers are some of the key factors affecting brand loyalty by customers in Kenya’s mobile telecommunication sector. The findings of the interviews thus concur with the findings of the literature review conducted in the present study in that both identified service quality and value added services as the main factors affecting customer loyalty in the mobile telecommunication industry.
1.4 The Influence of Brand Management On Customer Loyalty in the Kenyan Mobile Telecommunications Industry
Brand management is also a key factor influencing customer loyalty. Thus, it is the duty of every firm to ensure its customers and the public perceive its products as superior to its competitors’ products. Once a product is portrayed as of superior quality, the expectations of the customers on the product also become higher (Kihara & Ngugi, 2014). Hence, mobile telecommunication firms must manage the brand image attained by ensuring the products exceed the high customer expectations. The firms must also have a positive corporate image, which translates into good brand image.
1.5 Conclusion
The interviews revealed that the Kenyan telecommunication sector is quite competitive with all key providers outdoing one another to attract and retain customers. The study identified several factors as instrumental in achieving customer loyalty. These factors are service quality, value added services, Corporate Social Responsibility (CSR), customer service, switching barriers and brand image. To attract and retain their customers, the Kenyan Network service providers should engage in more CSR, marketing campaigns and improve their customer relations services. Importantly, the mobile telecommunication firms should improve the quality and the coverage of their services. To attract new customers, the firms should be flexible and innovative enough to cater for both old and new generation clients. That is, the services must address the divergent tastes and needs of clients of different socioeconomic, cultural and generational statuses. The factors that influence brand loyalty among customers in the Kenyan mobile telecommunications industry include fair prices that motivate clients to increase their purchase and their likelihood to return.
References
Kihara, A. S., and Ngugi, G. K. (2014) “Factors Influencing Customer Loyalty in Telecommunication Industry in Kenya.” International Journal of Social Science and Entrepreneurship, 1(2); 1-16.
Moloney, C. X. (2006) “Winning Your Customer’s Loyalty: The Best Tools, Techniques and Practices.” AMA Workshop Event(s).
Storbacka, K., Strandvik, T., and Gronroos, C. (1994) “Managing Customer Relationships for Profit.” International Journal of Service Industry Management, 5(5): 28.
1.1 What do you think are the factors that influence customer loyalty to your network provider?
The interview results with the 4 managers revealed that brand image, service quality,trust and customer satisfaction influence customer loyalty while that with 4 customers mainly showed that customer satisfaction, trust,switching barriers and brand image influence customer loyalty.The Safaricom manager explained that the service quality offered to customers should be good,he pointed out that they always ensure that their services are upto standard and customer care representative are courteous,knowledgable and always available to assit their customers the Airtel manger revealed that corporate image of a company is vital to ensure customer loyalty because, customers feel proud to be associated with a company of good reputation in the market. On the contrary, the Orange and Yu managers stated that trust and communication is important. Customers always want to be informed whenever there is a change in policies or any relevant issue and the company has to provide a platform of feedbacks from clients as a means of maintaining regular dialogue with them. Similarly, if customers trust a company they share personal information and they will trust it and make recommendations about their products and services to their friends.
Comparing the interview results with the information retrieved from Serkan and Gorhan (2004) , Fornell (1992) and Andereassen and Linstead (1998) it is more evident that corporate image, trust, service quality and switching barriers have been found to help establish and maintain loyal relationship with customers.
Both the literature and the interviews therefore show that corporate image of a company and service quality. There seems to be to be a slight difference/similarity between the interview findings and the Andereassen and Linstead (1998) literature. The similarity according to Andersen and Linstead (1998) is that good corporate image has been found to help ground and sustain a firm relationship. Equally, Fornell (1992) stated that, high service quality leads to high level of customer retention, which can constitute profitability and Lau and Lee (1998) pointed out that ,a customer who trusts a certain brand in likely to form positive buying retention towards the brand. In general,
FACTORS INFLUENCING CUSTOMER LOYALTY TO NETWORK PROVIDERS.
Conceptual framework
The telecommunication industry is the fastest growing industry in the world. For telecommunication firms to maintain customer loyalty several factors have to be considered i.e branding and visibility, calling rates, availability of airtime, service quality, customer satisfaction, network coverage, signal strength, sales promotion, customer trust, switching barrier and efficiency in care center
Meaning of Customer loyalty in the context of mobile telecommunication industry
Customer loyalty is a long term emotional and functional relationship created and maintained by a company to its customers so that they belief the company offers services or products superior to its competitors. Also customer loyalty can be an attachment of customers to the supplier or company no matter the circumstance. A company which has build and maintained a long term relation with its customers, has a potential profit, success and competitive advantage compared to its competitors (Andres, 2007)
Meaning of brand loyalty in the context of mobile telecommunication industry
Brand loyalty if customer’s faithfulness and commitment to buy repeatedly brands from the same supplier or company despite the market pressure. Brand loyalty is a guaranteed profit and sustainable market share to the particular company.
Customer loyalty and brand loyalty in the Kenyan mobile telecommunication industry
Telecommunication industry in Kenya has its roots at days of colonization. The earliest telecommunications to outside world were submarine cables (Tyler et al, 1994). In early years the industry was dominated by public firms, however it opened for competition with other firms coming to market i.e. Safaricom, Bharti Airtel, Orange Kenya, Cssar telecom and equity among others. It is rated as the fastest growing industry and which has contributed to a high percentage rate in economic growth of the country.
Customer loyalty also brand loyalty is the most important keys for an organization to keep its profit and success in market (Ganesh, 2000). According to research retaining customers is the most difficult task as compared to getting new customers (Coyles & Gokey, 2005). The telecommunication industry in Kenya uses various ways of retaining customer loyalty including ;
Always thankful to customers for choosing to do business with you. This concept has been applied by most telecommunication firms e.g safaricom, orange, airtel and YU service subscribers. Also the product suppliers usually write
Staying in conduct with the existing customers and trying to win new customers through advertisements, road shows. This helps maintains the customer loyalty to the company
Providing a good customer care unit with well trained employees. Customer care will assist customers build a loyalty through answering to their questions and attending to uprising issues and needs.
Anticipating for bonus and promotions as well as competitions for various items within the company. Safaricom has used this feature severally and it’s yielding a lot of profits. Under this is also good to maintain promises made to the customer especially if they win the said item. This increases the customer loyalty and it sells the organizations to more customers if they find out its trustworthy.
The Factors Influencing Customer Loyalty to Brands in the Mobile Telecommunications Industry in Africa
Several factors are influencing customer loyalty i.e. branding and visibility, calling rates, availability of airtime, service quality, customer satisfaction, network coverage, signal strength, sales promotion, customer trust, switching barrier and efficiency in care center.
Brand visibility is communicating the new brands and new technologies the company has featured into. This creates awareness and understanding to the customer.
The rates of calling impact customer loyalty so much. When the calling rates are high the customer tends to grieved and may decide to quite, while when the rates are moderate the customer feels free to communicate. Hence moderating the calling rates increases the customer loyalty.
Availability of airtime, network coverage and service quality influence customer loyalty in that they have to find supplier whose services and products are accessible and available.
Switching barrier is the expense incurred by customers in switching from one supplier to another. Many customers tend to stick to one single supplier because the cost is too high and if they are business customers they may loose contact of their esteemed customers.
The variables that affect brand loyalty to network providers
The variable affecting brand loyalty is;
Customer satisfaction. It is ensuring that customers have exactly or almost what they needed in terms of service or product.
Core offering. This is giving the best according to customer’s requirement. The core offering is maintained by an organization through research on what the customer needs at what time.
The market place. This involves things like switching cost for the customer, network coverage and availability of airtime.
Demographic variables like information dissemination to customer and purchasing behaviour information. This greatly affects brand loyalty.
The factors that influences the loyalty of customers to mobile network operators in mobile telecommunications industry in Kenya
Several factors are influencing customer loyalty i.e. branding and visibility, calling rates, availability of airtime, service quality, customer satisfaction, network coverage, signal strength, sales promotion, customer trust, switching barrier and efficiency in care center.
Brand visibility is communicating the new brands and new technologies the company has featured into. This creates awareness and understanding to the customer.
The rates of calling impact customer loyalty so much. When the calling rates are high the customer tends to grieved and may decide to quite, while when the rates are moderate the customer feels free to communicate. Hence moderating the calling rates increases the customer loyalty.
Availability of airtime, network coverage and service quality influence customer loyalty in that they have to find supplier whose services and products are accessible and available.
Switching barrier is the expense incurred by customers in switching from one supplier to another. Many customers tend to stick to one single supplier because the cost is too high and if they are business customers they may loose contact of their esteemed customers
Conclusion.
Customer loyalty also brandy loyalty are the most important and difficulty tasks to maintain for any company that need to keep its potential in market as well as increase profits. Factors influencing customer loyalty have to be highly managed in order to retain customers to the business.
References.
Bello, O. (n.d.). Mobile telecommunication customer loyalty in Nigeria: Determining factors.
Kuusik, A. (2007). Affecting customer loyalty: Do different factors have various influences in different loyalty levels ? Tartu: University of Tartu, Faculty of Economics and Business Administration.
Lommerud, K., & Rgard, L. (2002). Entry in telecommunication: Customer loyalty, price sensitivity and access prices. London: Centre for Economic Policy Research.
The Factors That Influence Customer Loyalty to Network Providers in Kenya
Customer loyalty refers to the context of retaining particular customers and attracting other new customers. Research findings show that it is difficult to retain existing customers compared to attracting new customers. Additionally, the increase in competition and globalization challenges, especially in production of goods and provision of services, makes it difficult for business organizations to secure customers. It prompts for organizations to adopt systems that are oriented on providing satisfactory goods and services to encourage customer loyalty and attract new customers (Kihara & Ngugi, 2014). In this regard, with the surge of network providers in Kenya such as Safaricom, Orange, Airtel and Yu, it is among key objectives of every network service provider to use strategic frameworks that focus on attracting and retaining customers. As such, this paper seeks to describe the factors that influence customer loyalty to network providers in Kenya.
Khurshid (2013) explains that extensive network coverage of a particular network provider in the country does not only attract many customers, but also tends to retain the customers. For instance, by reflecting on the common adage that states, “The early bird catches the worm,” the first wireless network providers in Kenya such as Safaricom and Airtel, took necessary measures to provide network services in the entire country. The extensive coverage, therefore, encourages many people to use a particular network to stay connected with many of their clients countrywide. By doing so, the customers enjoy constant network connection tariffs, enjoy surety of connection with any person at any given place locally and globally, enjoy access to the internet everywhere and enjoy a common sense of identity and belonging. In this context, the common identity gives the customers ‘strength of masses’ to dictate social and corporate responsibilities of a particular business organization. In a nutshell, the wider the coverage of the network service provider in the country, the higher it stands a chance of attracting new customers and encouraging customer loyalty (Khurshid, 2013).
Alternatively, Kihara & Ngugi (2014) attribute customer loyalty to the tariffs’ quality and charges such as call quality and rates, GPRS quality and rates, and SMS quality and rates, among other charges of a particular network service provider. With the knowledge of increasing competition for network providence in the country, many network service providers focus on providing quality communication tariffs at affordable charges. Therefore, in addition to the wide coverage, the network service providers are constantly changing the quality and charges on their particular tariffs to retain existing customers. The idea is to prevent loyal customers from switching networks in search of affordable and quality communication tariffs. With regards to Ooko, Nzomoi & Mumo (2014), customers are loyal to a network provider that considers not only the quality of communication tariffs, but also the affordability of the tariffs with the changes in the economic trends of the country. In summary, low-priced quality communication tariffs attract customer loyalty compared to low-priced and low quality communication tariffs.
Finally, the awareness of the network service provider increases both attraction and retention of customers. According to Ooko, Nzomoi & Mumo (2014), the promotions of a particular network provider in Kenya via the use of tariff advertisements, sales promotion, price promotion, and public relations does not only increase the public awareness of that particular network provider, but also attracts new customers. After attracting new customers, the particular network service provider ensures that they provide satisfactory services to the customers as a way of encouraging them to constantly and continuously use the given network. Alternatively, other network service providers exploit the opportunities of offering additional services to increase the awareness and usability of their network. For example, Safaricom offers M-Pesa services that allow customers to transfer money, pay bills and buy airtime, and M-Shwari services that provide mini-banking services to the Safaricom customers. Such initiatives increase awareness of Safaricom, attract new customers and retain existing customers. In other words, regardless of the method used by different network providers in Kenya, increase in network awareness attracts new customers and increases customer loyalty.
In conclusion, the paper identified three main factors that influence customer loyalty to network providers in Kenya. They include wide network coverage, quality and affordability of the communication tariffs, and public awareness of the particular network provider in Kenya. Although the wide network coverage relies on the initial arrival of wireless network provider in Kenya, the increasing competition dictates the tariffs’ quality and affordability together with increase in awareness. It is recommendable for a particular network service provider to put into consideration the three discussed factors to increase customer loyalty.
References
Khurshid, M. (2013). Determinants of Customer Loyalty, its Causes and Influences in Telecom Industry. A Study of Mobile Telecom industry Peshawar Pakistan. International Review of Social Sciences, 1(1): 1-12.
Kihara, A. S., & Ngugi, G. K. (2014). Factors Influencing Customer Loyalty in Telecommunication Industry in Kenya. International Journal of Social Sciences and Entrepreneurship, 2, 14-25.
Ooko, D., Nzomoi, J., & Mumo, R. (2014). Determinants of Consumer Switching Behavior in Mobile Telephony Industry in Kenya. International Journal of Business & Commerce, 3(5): 82-98.
