Abstract: Due to the increase in competition and increasing market liberalization, firms in the telecommunications industry are facing a threat to the profit sustainability. As market players’ increase and offerings diversify, the market share reduces causing decrease in profit. Furthermore, customers’ preferences are dangerously volatile, and satisfaction of their diverse needs can prove arduous and the heightened customer awareness results in search for better alternative offerings in the market. As a result, customers may voluntarily switch from one vendor to the other. The general objective of the study was to assess of effect of service strategies adopted by internet service provider on customer retention. A case of Airtel Rwanda Ltd. The study was guided by the following specific objectives: to examine the effect of service quality on customer retention in internet service providers in Rwanda, to investigate the effect of loyalty programs on customer retention in internet service providers in Rwanda, to determine the effect of market penetration on customer retention in internet service providers in Rwanda and to determine the effect of price on customer retention in internet service providers in Rwanda. The study adopted a descriptive research design. The target population for the study was 150 full time employees of Airtel Rwanda that included IT and Network staff, Heads of the following departments: Customer Care, business Market, Marketing and Finance department. A sample size of 110 respondents was determined using Yamane’s formula. Simple random sampling technique was used to select a sample size from the departments of IT and Networking, whereas Census was applied for departments where only heads were considered. The study used both primary and secondary data. Structured questionnaires and interview were used for data collection. Data collected was analyzed through SPSS version 21. Data analysis involved statistical computations for averages, percentages, and correlation and regression analysis. Results revealed that a strong relationship exist between the factors that influence customer retention in Rwanda. The questionnaires were analyzed using SPSS. Likert scales and descriptive data was used to determine frequencies. Chi-square was used to establish the relationship between retention variable factors and the customer category to establish the major determinants of retention. The Chi- square was obtained at 95% confidence level and at 68 degrees of freedom. Pearson Product Moment Correlation was used to establish the relationship between the independent variable (retention factors) and dependent variable (customer satisfaction). The results confirm that the variable factors observed have a positive impact on customer retention in the Internet Service Providers in Rwanda. From the above regression equation, it was revealed that holding Service quality, loyalty programs, market penetration and price to a constant zero, customer retention in Airtel Rwanda would be at 0.455. A unit increase on service quality would lead to increase in customer retention in Airtel Rwanda by a factor of 0.016, a unit increase in loyalty programs would lead to increase in customer retention in Airtel Rwanda by a factor of 0.182, a unit increase in market penetration would lead to increase customer retention in Airtel Rwanda by a factor of 0.153 and unit increase in price would lead to increase in customer retention in Airtel Rwanda by a factor of 0.204.
Keywords: Service quality, customer retention, internet service providers in Rwanda.
Title: EFFECT OF SERVICE STRATEGIES ADOPTED BY INTERNET SERVICE PROVIDER ON CUSTOMER RETENTION: A CASE OF AIRTEL RWANDA LTD
Author: GISELE UWAMAHORO KAYIGI, Dr. PATRICK MULYUNGI
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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