Customer Retention in Telecom Industry

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Customer Retention: With Special Reference to Telecommunication Industry in Sri Lanka

K. A. Silva
Lanka Com Services (Pvt) Limited, Colombo, Sri Lanka
S. T. W. S. Yapa
Department of Decision sciences, University of Sri Jayewardenepura,
Nugegoda, Sri Lanka samanyapa@sjp.ac.lk ABSTRACT
The landscape of the telecommunication industry in Sri Lanka has been changed drastically since the deregulation of telecommunication sector in early 1990s. Number of service providers has been increased from one, i.e state monopoly, to more than 70 within a short period of time. With the increased competition telecom service providers find it difficult to retain the existing customers. In that context the objective of this research explanatory study was to identify the main factors that determine the customer loyalty of corporate telecommunication customers. A questionnaire survey done among 131 users of corporate sector revealed that the most important factor determining the customer loyalty was the ability of the service provider to add value to customer’s business process, contrary to the common belief that the low price keeps the customer with the same provider. However, it was found that relative importance of the factors is not the same between two different groups, i.e. IT personnel and Non-IT personnel. Therefore, the findings of this research provide a guideline for service providers in designing customer loyalty programmes.

Keywords : Customer Loyalty, Telecommunication Industry, Information and Communication Technology

INTRODUCTION

The world has taken cognizance of the emergence of the service industry as a prominent contributor to its economy over the last century. A number of countries in the last few decades have experienced a dramatic change in the importance of services and the role of the services sector in their economies (Sharma, 2002; Nankervis and Pearson, 2002; Edwards and Croker, 2001).

Sri Lanka too experienced a significant growth in



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