Mediating effect of customer satisfaction on the relationship between customer relationship management practices and customer retention among mobile phone users in selected public universities in Kenya

Abstract

Customers have become more sophisticated and they are enjoying more alternative options of brands, for any organization, there is a need to understand what kind of service or products it offers, and for whom. Organizations have embraced the concept customer relationship management practices since it focuses on managing relationship between its current and prospective customer base hence helping in building long lasting relationships which consequently give the organization the joy of retained customers. The specific objectives of study were; to determine the effect of customer relationship management practices on customer retention, to assess the effect of customer satisfaction on customer retention and to assess the mediation effect of Customer Satisfaction on the relationship between customer relationship management practices and customer Retention. The study was guided by the social exchange theory which focused on the fundamental principle that humans in social situations choose behaviors that maximize their likelihood of meeting self-interests in those situations. Descriptive and explanatory research designs were utilized in this study and the following networks were sampled; Safaricom, Airtel,Orange and , yuMobile A questionnaire was used to collect data from sample size of 250 respondents who were sampled from the staff of public universities in the Western region which included Moi, Masinde Muliro, Maseno, Jaramogi Oginga Odinga, University of Eldoret and Kisii University. Data collected was analyzed by use of descriptive and inferential statistics.Multiple regressions were used to establish the effect between customer relationship management practices, customer satisfaction and customer Retention. Mediation test was conducted by following Baron and Kenny (1986) four steps. Further, sobel test were used to test the level of significant of the mediation. The results revealed that Perceived value, Customer relational experience and Loyalty programs had significant effect on Customer retention while Network quality was not significant in predicting Customer retention. Further, Perceived value, Customer relational experience and Loyalty programs had significant effect on Customer satisfaction, while Network quality was not significant in predicting Customer satisfaction. Also it was established that, Customer satisfaction was significant in predicting customer retention. Finally, Customer satisfaction had partial mediation effect on the relationship between Customer relationship management practices and Customer retention. The study recommends that service providers should put more emphasis on Customer Relationship Management Practices since they influence customer satisfaction and hence customer retention. The study provides new theoretical insight into factors influencing customer retention by incorporating customer satisfaction as a mediator in the relationship between Customer Relationship Management Practices and customer retention.