European Journal of Economics, Finance and Administrative Sciences

ISSN 1450-2275 Issue 47 (2012)

EuroJournals, Inc. 2012
http://www.eurojournals.com/EJEFAS.htm

The Effect of Customer Satisfaction upon Customer

Retention in the Jordanian Mobile Market:
An Empirical Investigation
Muhammad Alshurideh
Ass. Prof, The University of Jordan, Marketing Department. Jordan
Tel: +962 6 5355000; Ext: 24262; 0795526539
E-mail: m.alshurideh@ju.ac.jo
Ra'ed (Moh'd Taisir) Masa'deh
Ass. Prof, Management Information System Department
The University of Jordan, Jordan
Tel: +962 6 5355000; Ext.24286
E-mail: r.masadeh@ju.edu.jo
Barween Alkurdi
Marketing Department - Middle East University
Jordan and PhD Candidate at Durham University
United Kingdom, Teaching Staff
E-mail: b.h.alkurdi@dur.ac.uk
Abstract
This study is mainly intended to ascertain the extent to which customer satisfaction affects
customer retention among the major three cellular phone companies in the Jordanian
mobile sector, which are Zain, Orange and Umnia. Measuring the relationship between
customer satisfaction and retention is insufficient without studying the main causes of
customer satisfaction. Thus, the study also measures customer satisfaction with various
aspects: the effect of customer-supplier relationship duration on customer satisfaction, and
customer satisfaction with varieties of mobile phone services provided to users and call
centre services.
The study employed a quantitative method to test the study hypothesis and collect
surveys from Jordanian mobile users. 500 questionnaires were distributed with a response
rate of 72.8%. A Chi-Square test was used to test the studys hypothesis. The study found
that customer satisfaction does affect customer retention in the Jordanian mobile behaviour
setting. This result is supported, and the study also found a direct relationship between
customer-supplier relationship duration and customer satisfaction. Various mobile services
provided directly to mobile users as well as services provided by call centres also affect
customer satisfaction and contribute essentially to customer retention. Further explanation
has been presented in this paper and is supported by some significant concluding remarks
and recommendations.
Keywords: Service Marketing, Mobile Phone Sector, Jordanian Mobile Phone Sector,
Satisfaction, Customer Retention, Relationship Marketing, Relationship
Duration, Call Centre.

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1. Introduction
According to Buttle (1996), organizations usually have a variety of relationships with different types of
customers and with other organizations to achieve their objectives using a specific marketing mix.
Gummesson (1996, pp. 6) affirmed that marketing can be seen as interactions, relationships and
networks. Hence organizations relationships can be classified into three different categories:
company/intermediary, company/consumer and company/employee, as translated by Gummesson
(1996). This study will focus on the consumer/company relationship.
According to Berry (1995), relationship marketing is described as attracting, maintaining and,
in multi-service organizations, enhancing customer relationships (p.25). Given that customer
acquisition is a critical part of the marketers duties, this stresses the point that maintaining and
enhancing customer relationships is of equal or greater significance to the organization in the long run
than customer acquisition in the short run. The tendency to focus on existing customers is derived from
the fact that the majority of service organizations face problems in gaining new customers, especially
in markets described as having high penetration rates such as the mobile phone service sector. In
Jordan, for example, the penetration rate reached a saturation point of 96% at the end 2009 (as reported
by Jordan Telecom, 2011). Other resources reported that the penetration rate exceeded 106% in 2010
and is expected to reach 133% in 2015 (JTR, 2011). As confirmed by many researchers, such as
Buchanan and Gillies (1990), the cost of acquiring new customers is higher than the cost of serving the
existing ones, and the high cost of acquiring new customers pushes organizations to strengthen
business relationships with customers. Even if there are many existing customers, new customers who
are in the growth stage of their relationship cost organizations more than those who have spent years
with the same organizations. This issue has been confirmed by Reichheld and Schefter (2000), who
claimed that new customers cost from 20% to 40% more than old customers. Even though the cost of
serving existing customers, who have long-term relationships with specific organizations, tends to fall
and their purchases increase during their lifetimes, organizations should take a different approach to
handling such valuable relationships. The solution has been mentioned by Grnroos (1990, cited by
Yang and Wu, 2007, p. 270), when he provided another definition of relationship marketing: the role
of relationship marketing is to identify, establish, maintain and enhance relationships with customers
and other stakeholders, at a profit, so that the objectives of all other parties involved are met; and that
this is done by a mutual exchange and fulfillment of promises. This definition shows that relationship
marketing is a continuous process of caring in a variety of markets to serve both existing customers
and new ones in the long term. Also, the definition demonstrates that relationship marketing is a
multifunctional and integrative process because marketing is viewed as integrative activities involving
functions across the organization, with emphasis on facilitating, building and/or maintaining
relationships over time with all other partners inside and outside the organization (Coviello et. al.,
1997).
The core of Customer Relationship Marketing (CRM) is Customer Retention (CR). Thus,
customer retention is thought to be the repeated patronage of a marketer or supplier by a customer;
retention is also used interchangeably with other terms including customer loyalty. Hennig-Thurau and
Hansen (2000) explained that retention and loyalty differ from repeat purchasing behaviour in that they
both entail an intentional component; in other words, the purchase doesnt occur by chance - there are
specific reasons for it (Klee and Hennig, 1996).
One of the main issues to have been investigated thoroughly by researchers is customer
satisfaction. Satisfaction has been described by many researchers such as Ennew & Binks (1996) and
Barnes & Howlett (1998) as one of the main relationship marketing drivers. In another study, Berry
(1995) reported that relationship marketing was portrayed as a new-old concept, stating that the idea
of a business earning the customers favour and loyalty by satisfying their wants and needs was not
unknown to the earliest of merchants. The study by Jessy (2011) demonstrated a direct relationship
between satisfaction and loyalty; usually, satisfied customers become loyal, and dissatisfied customers
tend to choose other companies.

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European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)

2. Research Aim
The study aims to answer the following question: To what extent does customer satisfaction directly
affect customer retention in the Jordanian telecommunication sector? Based on the research question,
the study aims to find suitable answers to the following issues:
What are the main factors affecting customer satisfaction in relation to customer retention in the
Jordanian telecommunications sector?
Does customer satisfaction differ from one mobile phone supplier to another?
Identifying the main factors that affect customer switching and retention.
Defining the main mobile service providers issues that are seen as important from the
customers perspective.

3. Conceptual Model

4. Study Objectives
4.1. Object Number One: Customer Satisfaction and Customer Retention
Studying customer satisfaction is not a new phenomenon in the field of relationship marketing but in
Jordan such a study will add value to the knowledge on customer-supplier relationships in one of
todays most active and changeable sectors. Customer satisfaction can be witnessed in various
behavioural contexts and is related to both services and goods. It also relies on both customer
expectations and customer evaluation depending on how much the customer is expecting when buying
goods and/or services. Moreover, satisfaction is based on the customers encounter with the
organization (moment of truth) and personal results.
Customer satisfaction is a highly personal perception influenced by numerous variables such as
individual anticipations and demographic profile. Some scholars, such as Bamford and Xystouri
(2005), have shown that customer satisfaction or dissatisfaction depend on whether or not the
individuals expectations are being met regarding the service or product. Others, such as Hanan and
Karp (1989), declared that a satisfied customer is one that collects considerable added value.
Some researchers have sought to define the factors that affect customer satisfaction in various
telecommunications sectors. Jessy (2011), for example, analyzed customer loyalty in the telecom
company Bharath Sanchar Nigam Limited, India, and researched the following factors: value-added
services, ability to make calls even in peak hours, image, relationship, trustworthiness, low premature
termination of calls, quality of customer care and the inconvenience of switching phone numbers. Also,
Kima et al. (2004) studied the effects of customer satisfaction and the switching barrier on customer
loyalty in Korean mobile telecommunication services using the following factors: call quality,
customer support and value-added services.
Object Hypothesis
H1: Customer satisfaction has a direct effect on customer retention

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European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)

H2: There is a difference in the level of customer satisfaction among the three main cellular
mobile phone service providers.
4.2. Object Number Two: Relationship Duration and Customer Satisfaction
Some researchers have studied the effect of customer-supplier relationship duration and have asserted
the fact that, in most cases, the mutual relationship duration has a direct effect on customer satisfaction
(Bolton, 1998). Reinartz and Kumar (2003) reported that customer satisfaction is related positively to
customers relationship duration in terms of service subscription. At a later stage, the concept of
customer lifetime value starts to surface as a fact of customer retention. Customer equity is a novel
term that is connected to customer retention in terms of building and maintaining customers as
valuable assets (Blattberg et al., 2001). It implies that customers have ongoing worth over the time they
continue dealing with the same company, hence concentrating upon the relationship rather than the
transaction. According to Sheth and Shah (2003), a single transactional exchange is a limited
interaction that usually involves a one-time exchange between trade actors with a clear start and end
and is usually seen as short-term in nature. In contrast, a relational exchange is about numerous
exchanges over a period of time in which both economic and social bonds are included (Rao and Perry,
2002).
H3: Customer relationship duration has a direct effect on customer satisfaction
4.3. Object Number Three: Types of Services Provided and Customer Satisfaction
The competition in the mobile phone sector is high in nature in most countries, including Jordan, and it
causes great customer confusion and a high churn rate (Turnbull and Leek et al., 2000). Mobile service
providers compete with one another by providing a variety of mobile services to professionally serve
their customers, such as providing customer care before, during and after the purchase, providing good,
quick and friendly customer service and choosing and employing well-trained and knowledgeable
employees to provide high-quality services.
The reason for investigating the mobile service elements is to determine the extent to which
existing customers are happy with such services. Studying the effects of service variety will help in
ascertaining the extent to which customers are satisfied and wish to continue their relationships with
their mobile suppliers. This is because customers are usually interested mainly in the variety (bundle)
of services provided by mobile service suppliers. Kim et al. (2004) showed that mobile carriers, in
order to increase their customers satisfaction and enhance customer retention, must concentrate on
service variety and quality and provide customer-oriented services to raise customer satisfaction. It was
found that customer satisfaction changes according to the situation and the goods or services. A
customer may be satisfied with a variety of things including the product or service, the experience, the
purchase decision, the salesperson, store, service provider or even an attribute. (Rodrigo A. Padilla,
2004)
H4: The variety of mobile services provided by the service providers has a direct effect on
customer satisfaction.
4.4. Call Centre Services
As an example of different services provided by Jordanian cellular service providers, the study has
chosen the mobile phone suppliers Calling Centre to test whether mobile users are satisfied with its
services. Studying the effects of call centres and many other related issues is not an extraordinary
phenomenon but studying the relationship between call centres and mobile users satisfaction in the
Jordanian behavioural context adds important value to this study.
As shown by Feinberg et al. (2000), many firms understand the importance of establishing
different types of relationship with the customers and how these should not end at the service
organizations doors. These companies comprehend that reaching the customer after each sales
transaction adds great value to the transaction itself and to the relationship in total (Marsico, 1996).

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Some scholars such as Anton (1997), Dawson (1998) and Aksin and Harker (1999) have highlighted
the issue of promoting customer call centres as a leading strategy to increase customer satisfaction.
Call centres do not merely allow companies to build and preserve customer relationships; they also
solve and handle conflicts and settle complaints rapidly, answer questions, provide information and are
available at all times (Prahabkar et al., 1997). There are many services usually provided by call centres.
This study chose to focus on the four main ones: making time to serve the customers (not wasting
consumers time) (Townsend, 2005; Ward, 1999); ability to help (Feinberg et al., 1990; Tuten and
Neidermeyer, 2004); friendliness (Bennington et al., 2000; Rafaeli et al., 2008); and the speed of
answering service (Feinberg et al., 1990; Grandey et al., 2004; Grandey et al., 2005).
H5: Call centre service utilities have a direct effect on customer satisfaction.

5. Methodology
The planned data were collected using quantitative research methods based on former studies that
shaped the basic understanding of the study variables. Previous studies helped in designing a specific
questionnaire to collect the planned data from the sample. 500 questionnaires have been distributed.
Data for analysis have been collected from 364 Jordanian mobile phone users by using a convenience
sample. The response rate was 72.8%. The survey reliability was 83.5% and this seems suitable for
such research, as found in other similar studies. A Chi-Squire test has been used to test the study
hypotheses.

6. Data Analysis
Data analysis shows that Zain had the highest customer satisfaction level followed by Orange and then
Umnia. Zain had more satisfied customers; 84.1% of its customers were satisfied while 77.8% of
Oranges customers were satisfied. Umnia had the fewest satisfied customers at 58.6%.
Zains satisfied customers usually attributed their satisfaction to good customer service and
great variety of services. Meanwhile, Umnias customers was satisfied only with the low mobile
service pricing and complained about the services provided. In addition, many were happy to change
their current company. Regarding the relationship duration, which was measured in the number of
years the customer spent with the company, Zains customer retention was the highest followed by
Orange and then Umnia, proving that customer satisfaction indeed affects customer retention.
58% of the customers who spent only 1-2 years with the company were satisfied while 74.5%
of the customers who spent 3-4 years were also satisfied; last, but not least, 88.6% of the customers
who spent more than 5 years with the same company were satisfied with the services provided. This
shows us that satisfaction has a major effect on customer retention. Also, 88% of our satisfied
customers will not change the telecommunication company they are using. Of those, 55.9% stated that
they were satisfied with the services provided while 30.5% responded that they had been with the
company for so long they were no longer willing to change. Once again, these results prove that
customer satisfaction does indeed affect customer retention.
Table 4.1: Respondents' views of suppliers elements
No.
1234567-

Categories
Customer care
Customer service
Variety of services
Friendliness
Speed
Helpful
Not wasting time

Strongly Disagree
1.2%
5.5%
1.2%
1.2%
13.5%
2.5%
6.1%

Disagree
8.6%
11.7%
4.4%
9.8%
9.2%
8%
9.8%

Neutral
15.3%
12.8%
15.3%
11.0%
14.1%
15.3%
20.8%

Agree
43%
43%
44.1
33.8%
43.6%
46.6%
43%

Strongly Agree
31.9%
27%
35%
44.2%
19.6%
27.6%
20.3%

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European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)

Data analysis shows that the variety of service factor is the most important factor from the
customers perspective with 79.1% regarding it positively and just 5.6% regarding it negatively. Next,
behaving in a friendly manner to customers is also positively regarded with 78% finding it positive and
just 11% finding it negative. Customer care and being helpful to customers are also important to
customers with about 75% of customers regarding it positively and only about 10% regarding it
negatively. Customer service had a positive image with 70% of respondents followed by not wasting
customers time with about 64%.
6.1.1. Object Number One - A: Customer Satisfaction and Customer Retention
The relationship between satisfaction and repeat purchasing has been deeply discussed. However, this
phenomenon has rarely been investigated in the Jordanian mobile phone sector. Data analysis showed
that the Chi-Square test is significant and the p-value was found to be 0.00, which is less than 5%. This
indicates that the hypothesis is supported in its contention that customer satisfaction has a statistically
direct effect on customer retention in the Jordanian mobile phone sector. This result is in line with
similar studies such as Anderson and Sullivan (1993). Service organizations strive to enhance customer
satisfaction by enhancing various service-related issues such as service quality (Kandampully, 1998);
this in turn helps to maintain and extend customer-supplier relationships (Ravald and Grnroos, 1996).
6.1.2. Object Number One - B: Do Customers Satisfaction Levels Differ Among Mobile Phone
Service Providers?
Chi-Square tests have been used to test this hypothesis. Data analysis results show that the significant
p-value is 0.012, which is less than 5%; this indicates that the first hypothesis has been supported in its
proposal that that there is a difference in the levels of satisfaction among the three Jordanian cellular
mobile phone companies. Results showed that the average level of satisfaction among all the samples
respondents is 78.5%. Data show that Zains customers satisfaction is high and reached 84.1% while
Oranges customers satisfaction was very good with 77.8% and Umnias customers satisfaction is the
lowest with just 58.6%.
6.2. Object Number Two: Relationship Duration and Customer Satisfaction
Data analysis shows that about 18% of the study sample spent from 1 to 2 years and about 38% of the
study sample spent from 3 to 4 years with their mobile phone suppliers. A notable finding was that
about half of the study sample has had a long relationship with their mobile suppliers, with a period of
more than 5 years customer-supplier duration. To check the relationship between customer
satisfaction and customer-supplier relationship duration, a Chi-square test was used. Data analysis
results show that the p-value is 0.02 compared to 5% significance level; this indicates that the
hypotheses is accepted. Based on that, customer relationship duration has a direct effect on customer
satisfaction. Some scholars such as Bolton (1998) stressed the relationship between relationship
duration and satisfaction, mentioning that the accumulation of satisfaction is a result of increased
duration of customer-supplier relationship. As the duration increases, so does the satisfaction; on that
basis, repeat purchasing behaviour and retention probability also increase. The relationship between
relation duraton and satisfaction has not attracted much attention from scholars. Vikas and Wagner
(2001) highlight this issue by claiming that scholars have been interested in the relationship between
satisfaction rating and repurchasing behaviour as the mutual time between customer and supplier goes
by.
6.3. Object Number Three: Types of Services Provided and Customer Satisfaction
The variety of services provided by the mobile phone suppliers has not attracted as much attention
from scholars as other factors such as service quality effects. This is because the number and types of
mobile services differ from one mobile offer to another within the same time period and from one

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European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)

mobile supplier to another. Other similar service issues have been investigated; for example, the
variety of mobile device types has been investigated by Kim et al. (2004). Initially, the number of
mobile services was discussed in different terms such as service value; as services increased in terms of
types and numbers, the value perceived by mobile users increased within different behavioural contexts
(Pura, 2005). That is because, as the services provided to customers increased, the benefits gained by
the consumers increased, which increased the overall value to the customers (Brynjolfsson, 1993).
Data analysis shows that the p-value is 0.001 which is below the 5% significance level, thus
supporting the hypothesis confirming the positive relationship between the variety of services provided
and customer satisfaction. There is a dependent relationship between the perceived value of all the
services provided and customer satisfaction. This in turn helps to establish future intention to repeat the
purchasing behaviour (McDougall and Levesque, 2000). Based on that, perceived value is considered
one of the most important drivers of customer satisfaction, as confirmed by many scholars such as
Krishnan et al. (1999) and McDougall and Levesque (2000). Thus its important to tackle the main
customer satisfaction drivers and explain them within actual behaviour modules that include a variety
of services as well as other issues such as service quality.
6.4. Object Number Four: Customer Satisfaction and Call Centre Services
Data analysis shows that the p-value for the call centres effect is 0.054 which is above the 5%
significance level; this does not prove the hypothesis that suggests that call centres services have a
direct effect on customer satisfaction. In order to check the main effects of call centre services, the
analysis results show that not wasting consumers time, ability to help and friendliness factors have no
effect on consumers satisfaction, with p-values of 0.145, 0.129 and 0.116 which are all above the
significance value of 5%. However, the speed of answering factor does have a direct effect on
consumers satisfaction, with a p-value of 0.048 which is below the significance value of 5%.
Investigating such call centre services is important for caller satisfaction, especially those related to
average waiting times, particularly during peak calling times, or calls terminated during the first
contact (Feinberg et al., 2000).

7. Conclusions and Recommendations

The purpose of this study is to investigate the relationship between customer satisfaction and customer
retention in the Jordanian Mobile Market. The study focused on how consumer satisfaction led to
repeat purchasing by discussing whether customers are satisfied with various mobile
telecommunication issues such as level of satisfaction and how it differs from one mobile phone
service provider to another.
Results indicate that customer satisfaction directly affects customer retention and leads
customers to make repeat purchases; this confirms other studies such as Anderson & Sullivan (1993)
and Rust & Zahorik (1993). Also, the study explores the relationship between customer-supplier
relationship duration and customer satisfaction. Data show that mutual relationship duration has a
direct effect on satisfaction. Organizations tend to measure and compare the level of satisfaction of
their customers with the level of satisfaction of competitors customers. That is because, as long as
customer satisfaction increases, customer retention will increase. According to Russell (2001), if
customer retention increases by 5%, its impact represents about 95% net present value presented by
customers. Customers with greater satisfaction and high involvement levels will maintain their
relationships with and increase their commitment to their organizations as the period of their
association passes (Rusbult, 1983).
In order to check the association between satisfaction and relationship duration, organizations
usually increase and enhance their services to both existing customers and newcomers. Thus, another
important issue to be tested is the effect of the variety of telecommunication services provided to end
users on customer satisfaction. Results show that the variety of services does affect customer

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European Journal of Economics, Finance and Administrative Sciences - Issue 47 (2012)

satisfaction. While satisfaction is a major driver of retention, providing continuous and suitable
customer services before, during and after the encounter stage is the core of retention, especially when
mobile phone providers are competing with one another to add new services or enhance service quality
to increase the satisfaction level. The last issue is to investigate customer satisfaction with one of the
main mobile cellular services that affect the customer-supplier relationship: the call centre services.
Results showed that call centre services affect customer satisfaction in the Jordanian mobile market
and not only help organizations to stay in touch with customers but also help in solving customer
complaints and collecting feedback.
This study is essential for tackling the main customer pre-satisfaction issues which eventually
lead to customer retention. However, it is not enough to have a full picture of the satisfaction/retention
relationship among mobile users in the Jordanian mobile cellular phone sector. More investigation is
needed to study other post-satisfaction issues which indeed lead to customer retention, such as
customer benefits and punishments in terms of entering long-term relationships. Also, this study has
initially tackled the effect of call centre services on mobile phone users satisfaction. However, it is
important to take other services into consideration when investigating the main factors that affect caller
satisfaction and when studying call centres effect on the customer-supplier relationship and customer
repeat purchasing behaviour, as noted by Feinberg et al. (2000).

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