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Study Of Customer Churn In The Telecom Industry Using Structural Equation Modelling

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  • Abbas Al-Refaie
  • Murad Al-Tarawneh
  • Nour Bata

Abstract

This study examined the relationships between switching cost (SC), customer satisfaction (CS), trust, communication, value added services (VASs), customer expectations (CEs), customer complaint management systems, brand image, and price perception (PP) with their effects on customer churn (CC) in the Jordanian telecom industry. A structural model was first proposed for mapping the relationships between the model factors. A total of 700 questionnaires were distributed in person and online. The model was then tested regarding all of the survey data from respondents who lived in the Amman area and those who were customers of the Orange mobile service provider (MSP). The results showed that SC and VASs contributed insignificantly to CC. Moreover, CS was the key factor in reducing the churn rate. Finally, satisfying CEs significantly affected CS. In conclusion, to decrease CC,MSPs must enhance their overall service quality, establish a good and trustworthy reputation, create an efficient billing system, offer new VASs at competitive prices, address customer complaints promptly, and conduct professional training courses for frontline employees. The results of this study provide valuable feedback for MSP decision makers regarding approaches to improving their performance and reducing CC.

Suggested Citation

  • Abbas Al-Refaie & Murad Al-Tarawneh & Nour Bata, 2018. "Study Of Customer Churn In The Telecom Industry Using Structural Equation Modelling," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 12(1), pages 393-411.
    • Handle: RePEc:isp:journl:v:12:y:2018:i:1:p:393-411
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    References listed on IDEAS

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    1. KwabenaAdjei & Richard Denanyoh, 2014. "Determinants of Customer Loyalty among Mobile Telecom Subscribers in the Brong Ahafo Region of Ghana," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(1), pages 82-95, January.
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    3. Abbas Al-Refaie, 2011. "A Structural Model to Investigate Factors Affect Patient Satisfaction and Revisit Intention in Jordanian Hospitals," International Journal of Artificial Life Research (IJALR), IGI Global, vol. 2(4), pages 43-56, October.
    4. Ellinger, Alexander E. & Daugherty, Patricia J. & Plair, Quentin J., 1999. "Customer satisfaction and loyalty in supply chain: the role of communication," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 35(2), pages 121-134, June.
    5. Yu-Te Tu & Hsiao-Chien Chang, 2012. "Corporate Brand Image and Customer Satisfaction on Loyalty: An Empirical Study of Starbucks Coffee in Taiwan," Journal of Social and Development Sciences, AMH International, vol. 3(1), pages 24-32.
    6. KwabenaAdjei & Richard Denanyoh, 2014. "Determinants of Customer Loyalty among Mobile Telecom Subscribers in the Brong Ahafo Region of Ghana," International Journal of Business and Social Research, LAR Center Press, vol. 4(1), pages 82-95, January.
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    Cited by:

    1. Thangeda, Rahul & Kumar, Niraj & Majhi, Ritanjali, 2024. "A neural network-based predictive decision model for customer retention in the telecommunication sector," Technological Forecasting and Social Change, Elsevier, vol. 202(C).

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    More about this item

    Keywords

    customer churn; structural equation modelling; telecom industry; switching cost; value added services;
    All these keywords.

    JEL classification:

    • A - General Economics and Teaching

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