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Does customer satisfaction impact linearly on loyalty and retention levels?

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Considering the highly competitive telecommunications market, Mobile Service Providers need to understand the concepts of customer satisfaction, loyalty and retention since they have become important keys to help creating strategies to retain their customers. This dissertation intends to have a deeper knowledge about the impact (linear or nonlinear) of satisfaction on loyalty and retention levels, in other words, to understand what persuades a satisfied customer with prior consumption experience to become loyal to the respective company or service and remain loyal even if, in the future, the company/service does not always live up to expectations. Moreover, it is essential to understand which are the determinants influencing these two main variables. After a review of the literature on the most important antecedents, it is presented an adaptation of the ECSI model, introducing one new variable, Trust, and eliminating one variable, Claims. Regarding the methodology, it was used an online questionnaire and it was obtained a final sample of 371 participants. Data processing was done through a statistical analysis with SPSS, followed by an analysis of structural equations using the SmartPLS3 program and an analysis of the adjustment of the model in R software. The results showed that, in general, the respondents were satisfied with their mobile service. It was also concluded that satisfaction has a positive impact on loyalty as well as the antecedents of satisfaction. However, there is evidence to affirm that this relationship between customer satisfaction and customer loyalty is not linear and tends to have a better fit with models that have curvatures. Furthermore, it was proved that the variable Trust has a mediator influence on the Customer Satisfaction-Customer Loyalty relationship. This study contributes to the telecommunications market in order to understand possible points of improvement where respondents are less satisfied with. Additionally, it may help to better understand how satisfaction affects loyalty and how that relation evolves with the increase of satisfaction.

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Dissertation presented as the partial requirement for obtaining a Master's degree in Statistics and Information Management, specialization in Information Analysis and Management

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Customer satisfaction Customer loyalty Retention levels PLS-SEM

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