How to avoid customers leaving: the case of the Estonian telecommunication industry

Abstract

PurposeThe purpose of this paper is to show that the major factors affecting loyalty are dependant on the level of loyalty of customers.Design/methodology/approachA model of relationship between factors of loyalty and loyalty levels of customers was constructed and tested on the empirical data about 1,000 private customers from the Customer Satisfaction Survey of Elion, the biggest telecommunication company in Estonia. Logit model was used in order to examine which factors influence the probability of the customers remaining on their loyalty level or to moving to another loyalty level.FindingsThe findings of the study revealed that it is not accurate to treat all customers equally in terms of methods of increasing their loyalty. The results reveal that four analysed factors affecting customer loyalty (satisfaction, trustworthiness, image and importance of relationship) are playing different roles in the different levels of customer loyalty. The overall satisfaction and importance of a relationship build the foundation of any kind of loyalty. The reliability of products or trustworthiness of the vendor is most critical for behavioural loyalists and the image creation is the main tool for getting committed customers.Research limitations/implicationsThe method for collecting the source data set certain constraints on the adequacy of the model.Practical implicationsThe results presented in this paper could be used by firms developing targeted approaches as part of the aim of increasing customer's loyalty.Originality/valueThis paper introduces an original approach combining factors affecting the customers' loyalty with the customers' different loyalty levels. Also, the ladder of customer loyalty levels could be used in other research areas.

Service Quality, Company Image, Trust and Its Influence On Customers’ Satisfaction and Loyalty at Bank Shariah Mandiri (BSM) Meulaboh Branch Office

“…The result of this study is in line with the theory; the level of customer confidence is measured through the indicators of trust as said by Mitchell in Egan (2004), which includes: probity, equity, and reliability. According to Kuusik et. al (2009), trust is one of the main groups of factors affecting loyalty.…”

Turnover prediction using attitudes towards benefits, pay, and pay satisfaction among employees and entrepreneurs in Estonia, Latvia, and Lithuania

“…Other compensation related variables could also be investigated in terms of their prediction of turnover such as pay equity (Carraher and Carraher, 2005;Fields et al, 2005;Jaques, 1961), organizational justice (McDowall and Fletcher, 2004), fairness (Edgar and Geare, 2005), pay-for-performance perceptions (Chang and Hahn, 2006), pay system changes (Morrell et al, 2004), household or family income rather than personal salary (Adamache and Sloan, 1985;Jones, 1993;Turvey et al, 2009), reasons for working (economic vs non-economic;Carraher et al, 2003a, b), economic conditions, number of levels of organizational hierarchy included in the sample ( Jaques, 1961), and organizational financial instability (Arthaud-day et al, 2006). In regards to consequences, benefits might be useful for influencing individual's general performance (Welsh et al, 1993), hospitality and customer service (Carraher et al, 1998;McBride et al, 1997;Welsh and Swerdlow, 1992), organizational commitment (Kazlauskaite et al, 2006) leadership (Tuulik and Alas, 2009) or other organizationally important behaviors (Vadi and Türk, 2009) which could retain employees and customers (Carraher, 2006;Carraher and Buckley, 2005;Kuusik and Varblane, 2009)? A fourth area for research could be to examine what other individual level variables might influence the relationship between compensation/benefits and both employee and organizational turnover. Some possible variables to examine include demographic differences within samples such as racial composition, national culture of the sample, and educational attainment; personality, feedback seeking behaviors, and personal orientation towards being innovative (Banzhaf, 2005;Carraher, 1992;Carraher et al, 2006a, b;Duobienė et al, 2007;Gustainienė and Endriulaitienė, 2009;Harvey et al, 2009;Lilly et al, 2006;...…”

The influence of customer loyalty on small island economies: an empirical and exploratory study

“…Whilst these can reveal contradictory needs and expectations, it also allows a thematic thread to be identified and integrated into CRM strategies. Whilst CRM software can support churn analysis to predict potential leavers (Kuusik and Varblane, 2009) it is also important to recognise the factors of product performance, perceived value, organisational norms, relationship strength and the wider competitive environment that collectively impact the loyalty orientation respective market segments.…”