The moderating role of loyalty programmes and personalised pricing between customer satisfaction and customer loyalty in the South African telecommunication industry

Abstract

The customer loyalty (CL) landscape has changed with advances in technology. In an increasingly competitive and regulated telecommunications sector (telco), it is imperative for telco companies (telcos) to maintain customer relationships through customer satisfaction (CS) and CL. In order to address CL, telcos invest significantly in loyalty programs (LPs), furthermore through advancements in data collection, telcos are able to offer personalised pricing (PP) to customers in the hopes of positively influencing CL. However, the effectiveness of these offerings and their components have produced mixed results within the extensive LP and developing PP literature. This study used a descripto-explanatory quantitative research approach that tested the moderating effects of LPs and PP on a sample of 214 SA telco respondents. The research found a positive relationship between CS and CL, which concurs with the existing findings within the telco industry. The results of the overall constructs of LPs and PP did not find moderating effects on the relationship between CS and CL. However, looking further into LPs and PP components, significant positive moderation exists through interactions of LPs’ financial and social benefits, as well as PP special treatment on components of CL. Telcos may leverage these findings to prioritise and improve their offerings to customers to enhance CS and CL, as well as gain the most benefit from their investments.