Determinants of customer loyalty in Pakistan's Telecom sector: An exmination of differences between stayers and switchers

Customer loyalty has gained foremost attention among the practitioners and the academic researchers because of its proximity to organizational growth, profit and survival. Based on existing literature, this study has highlighted a few critical issues related to the telecommunication sector in Pakistan such as the decline in subscriber growth, decrease in average revenue, and the increasing trend of users switching among the telecom operators. The objective of the present study was to analyze the impact of perceived service quality, price fairness, justice to service and relational bonds on customer loyalty with the mediating role of customer satisfaction and the moderating role of corporate image. This study also investigated the perceptions of stayer- and switcher- users on the determinants of customer loyalty. The framework of the present study was based on the Oliver Four Stage Model, the Expectancy Confirmation Model and the Principles of Reciprocity. Data for the current study was
collected from 539 prepaid subscribers based in four major capital cities of Pakistan through questionnaires by adopting the proportionate stratified random sampling. The collected data was analyzed by using SPSS version 23 and the Smart PLS Structure Equation Modeling (PLS-SEM). The findings of the study revealed that perceived service quality and customer satisfaction are the main driving forces to customer loyalty. Moreover, customer satisfaction successfully mediates perceived service quality, price fairness, justice to service recovery and relational bonds. However, corporate image does not moderate the relationship between customer satisfaction and customer loyalty. Meanwhile, perceived service quality and relational bonds to loyalty relationship are important to the stayer- users, while price fairness and justice to service recovery are important to switchers. The present study has also suggested some theoretical and practical contributions.