The impact of customer satisfaction, trust, switching costs and social media engagement on customer retention : a study of Malaysia mobile service providers

As the competition is getting more and more intense in today’s business, many companies are shifting their focus from new customer acquisition to customer retention in their marketing strategies. Therefore, relationship marketing has become important especially in the service centric industry such as telecommunications. Unlike discrete-based transactions, within this industry, the company-consumer relationship is formed on contractual-based transactions; customers are required to subscribe to the service from mobile service providers to get continuance access to cellular networks for mobile services. Thus keeping the customers is crucial for sustainable and profitable business. There are many different relationship marketing campaigns implemented with the ultimate objective to retain existing customers. Thus, knowing which factors have significant impact on customer retention will produce effective results. The objectives of this study is to examine the relationship between customer satisfaction, trust, switching costs, customer loyalty and customer engagement with provider’s social media content on customer retention in mobile service market. An analytical model is developed to test the relationship between the factors and customer retention. The data was collected via a questionnaire survey of mobile service users in Malaysia. 207 useable responses were analysed using SPSS program. Multiple regression analysis was conducted to evaluate the relationship between the factors on customer retention. The findings demonstrate that both customer satisfaction and customer loyalty have significant effect on customer retention whereas trust and switching costs had no effect on customer retention. When examining the moderating role of tenure, it was found that for customers who have longer tenure with the mobile service provider, a stronger relationship was observed between customer engagement with provider’s social media content and trust. The results illustrate the need for firm to develop strategies to retain customers by focusing on satisfying loyal customers and developing long-term relationships with customers via engagement activities on social media channels. Discussions on the theoretical and managerial implications, several practical recommendations and suggestions for future study are presented in this report