Customer Satisfaction AnddSwitching Cost Toward Trust In The Brand and Customer Retention of Simpati In Jember
Year: 2018
Type: article
Study design: Observational Study
Abstract: ABSTRACTThe aim of this research was to examine the effects of customer satisfaction towards trust in the brand, switching cost towards trust in the brand, customer satisfaction towards customer retention, switching cost towards customer retention and trust in the brand towards customer retention. A total sample of 120 respondents living in the town of Jember was collected through purposive sampling technique. The model analysis applied was Structural Equation Modeling (SEM). The results showed that customer satisfaction effected significantly positive towards trust in the brand; switching cost effected significantly positive towards trust in the brand; customer satisfaction has no effect towards customer retention; switching cost has no effect towards customer rete ntion; and trust in the brand effected significantly positive towards customer retention.Keywords: customer satisfaction, switching cost, trust in the brand, customer retention.(ProQuest: ... denotes formula omitted.)INTRODUCTION:The decreasing market growth and heavy market competitions, especially in the telecommunications sector, cause companies tend to maintain its market share by focusing on retaining existing customers (Lee and Feick, 2001). Developing a long-term and mutual relationship with customers can retain existing ones and can stimulate positive influence through word -of-mouth which is an effective and efficient way to influence new customers, and eventually increase the market share and company profitability.In order to retain existing customers, companies need to create customer loyalty. However, a loyal behavior is inadequate to ensure its survival, but there needs to be actual action from the real loyal customer to the company, which is the existence of customer retention (Buttle, 2004). Consequently, many companies have adopted a customer retention technique to improve the company's performance. The Government policy of the Republic of Indonesia is set out in the Law No. 36, Year 1999 on telecommunications, i.e. the government is open to emergence of new players in telecommunications sector, thus becomes the beginning of competitive environment in this sector. Many telecommunication companies are competing tightly for market shares due to the fact that there is still huge business potential in this sector. The developing number of cellular phone subscribers in Indonesia is considered arguably very high, while the telecommunication market penetration rate is not yet maximized, as evidenced by the level of the cellular phone tele-density in Indonesia which was around 76.48% (Ditjen Postel, 2010). The cellular phone market in Indonesia is dominated by three main operators, namely Telkomsel, Indosat and Excelcomindo. Telkomsel is the largest cellular phone operator in Indonesia that provides cellular services operating on a network of dual-band (i.e., 900-1800 MHz) and 3G networks in Indonesia with international independent network in 197 countries. Most Telkomsel customers are the simPATI card users.However, the Telkomsel dominance, particularly simPATI card in the telecommunications world, does not guarantee to withstand against the competitors in ARPU decline (Average Revenue Per User). Although the SimPATI ARPU level is higher than the industry average, there is a yearly decrease in ARPU occurs. The increasing number of alternative cellular phone cards available in the market due to increasing number of operating cellular phone card manufacturers should be of particular concern for Telkomsel. The choice for customers to switch or use more than one card from another operator affect the intensity of customers to use Telkomsel products, especially simPATI card. Therefore, further research needs to be carried out to address this specific phenomenon.Customer satisfaction is the beginning in creating customer retention, but it is noteworthy if it is not only customer satisfaction but also forming trust behavior towards the brand or products offered by the company and make sure the customers to repeat purchases that have becom e the customer retention for the company (Kotler et al, 2010). …
Author: Mohamad Dimyati
Language: English
Subfield: Marketing
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W892000706