THE INFLUENCE OF SWITCHING COSTS AND CUSTOMER SATISFACTION TO CUSTOMER LOYALTY

• Main Author: Adi Nugroho (NIM 23403042), Arsanto
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/7323
• Institution: Institut Teknologi Bandung

ABSTRACT: <br /> <br /> <br /> In the prepaid GSM mobile phone service provider industry, customer loyalty plays an important role on the customer retention program. The measurement of customer satisfaction and the identification of switching costs need to be conducted in order to achieve that goal. An attempt to attract competitors customer/new customer cost much higher than retaining current customers. Thus, the objective of this research is to measure the direct influence of customer satisfaction and switching costs to the loyalty of customer on prepaid GSM mobile phone service industry. In addition, the objective is also to examine the moderating role of switching costs in the relationship between customer satisfaction and loyalty in prepaid GSM mobile phone service market. <br /> <br /> <br /> The research was begun by understanding the theoretical concepts and the findings of former researches in order to form the research model and to identify the variables used. Data was obtained from 111 returned questionnaires which were distributed to prepaid GSM mobile phone service users in Surakarta. The data was tested by factor analysis to ensure the validity of the measurement instrument and by Cronbach Alpha to ensure the reliability. Then the data was analyzed by multiple regression method to test the entire hypothesis. <br /> <br /> <br /> From the findings, one of the three hypotheses was not supported. Examined independently, it was found that customer satisfaction as well as switching costs as a moderator variable each have a direct positive influence on customer loyalty in the prepaid GSM mobile phone service market. Meanwhile, switching costs was not proved to have positive and significant influence on customer loyalty in the prepaid GSM mobile phone service market. With respect to the findings, it is concluded that customer satisfaction play an important role to influence customer loyalty of prepaid GSM mobile phone service. Therefore, in order to retain its existing customers, prepaid GSM mobile phone service provider must be able to maintain, ensure and even increasing the satisfaction of its customers in overall service provided, whether it is in the form of the main service (signal quality, coverage area, voice quality, success call ratio), or complementary service/application (ring tone, feature variety).