EFFECT OF SERVICE QUALITY ON CUSTOMER RETENTION OF

SAFARICOM HOME FIBRE SERVICE IN NAIROBI COUNTY

BY

JUDY NYAMBURA MWANGI

UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA

SPRING 2018

i

EFFECT OF SERVICE QUALITY ON CUSTOMER RETENTION OF

SAFARICOM HOME FIBRE SERVICE IN NAIROBI COUNTY

BY

JUDY NYAMBURA MWANGI

A Research Project Report Submitted to the Chandaria School of Business in Partial

Fulfilment of the Requirement for the Degree of Executive Master of Business

Administration (MBA)

UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA

SPRING 2018

ii

STUDENT’S DECLARATION

I, the undersigned, declare that this is my original work and has not been submitted to any

other college, institution or university other than the United States International

University - Africa in Nairobi for academic credit.

Signed: _____________________________ Date: _________________________

Judy Nyambura Mwangi

ID No: 620931

This research project report has been presented for examination with my approval as the

appointed supervisor.

Signed: ______________________ Date: _________________________

Fred O. Newa

Signed: ______________________ Date: _________________________

Dean, Chandaria School of Business

iii

COPYRIGHT

Copyright © Judy Nyambura Mwangi, 2018

All rights reserved. Compliance with copyright restrictions necessitate that no part of this

proposal may be produced or transmitted in any form or by any means, electronic,

mechanical, including photocopying, recording or any information storage without prior

written permission from the researcher except for brief citations in further researcher’s

critical reviews and articles.

iv

ABSTRACT

The general objective of the study was to investigate the effect of service quality on

customer retention of Safaricom home fibre services in Nairobi County. The study sought

to achieve the following specific objectives: to determine the effects of reliability on

customer retention of Safaricom home fibre services in Nairobi County, to determine the

effects of responsiveness to issues on customer retention of Safaricom home fibre

services in Nairobi County, and to determine the effects of assurance to customer

retention of Safaricom home fibre services in Nairobi County.

The study adopted descriptive research design. The population of the study was 9000

Safaricom home fibre customers. Simple and cluster sampling was used to select 100

respondents; 52 hailing from Nairobi East and 48 from Nairobi West. Primary data was

collected through use of close ended questions in which all items were on a five-point

Likert scale. Descriptive statistics such as mean, standard deviation, frequency and

percentage were used to analyse the collected data. Inferential analysis which includes

correlation analysis was used to measure the strength of the relationship between

reliability, responsiveness, assurance and customer retention. Moreover, regression

analysis was also used to indicate and present the nature of the existing relationship

between the dependent and independent variables.

The study showed that Safaricom Home Fibre is reliable despite of buffering in some

extent. Secondly, Safaricom seems to have intensified measures to curb customer

dissatisfaction through provision of reliable services, this will minimize possibilities of

customers attrition and increase their retention. The findings also imply that Safaricom

has invested on customer management strategies through provision of requisite employee

skills which will enhance customer retention. The company seems to have created a

strong brand image and it has strategic methods for market penetration which enhances

service delivery.

The study revealed that Safaricom Home Fibre services were responding efficiently to

customer needs services whenever they were called upon. Even though, the response time

was good and customer received help when needed, there is need for customer care team

not to express busyness in their schedules whenever customer care service was sought.

There is need to maintain the culture of continuously updating customers on progress in

v

regard to customer care service provision and inform them using alternative platforms

whenever service delivery resumed.

The study showed that there will be higher levels of customer retentions since they felt

that their safety was well taken care. Moreover, the description of employees as honest,

polite, kindness and competent enhanced assurance of quality service delivery within the

clientele of Safaricom home fibre services. This would ensure that already existing

customers would be retained and recruitment of new ones will be easy.

Safaricom limited should devise measures of improving customer retention. This will

include fulfilment of all promises, offering reliable and efficient services. There is need

for consistent operational procedures and adherence to agreed time frames.

Communication strategies should adopt both reliable and faster means to communicate

with customers. This will ensure reliable conflict management strategies. Safaricom

employees must endeavour to provide services in courteous manner consistently.

vi

TABLE OF CONTENTS

STUDENT’S DECLARATION ........................................................................................ ii

COPYRIGHT ....................................................................................................................iii

ABSTRACT ....................................................................................................................... iv

TABLE OF CONTENTS ................................................................................................. vi

LIST OF TABLES ..........................................................................................................viii

CHAPTER ONE ................................................................................................................ 1

1.0 INTRODUCTION........................................................................................................ 1

1.1 Background to the Study ................................................................................................ 1

1.2 Statement of the Problem ............................................................................................... 4

1.3 General Objective .......................................................................................................... 6

1.4 Specific Objective .......................................................................................................... 6

1.5 Importance of the Study ................................................................................................. 6

1.6 Scope of the Study ......................................................................................................... 7

1.7 Definition of Terms........................................................................................................ 8

1.8 Chapter Summary .......................................................................................................... 9

CHAPTER TWO ............................................................................................................. 10

2.0 LITERATURE REVIEW ......................................................................................... 10

2.1 Introduction .................................................................................................................. 10

2.2 Effect of Reliability on Customer Retention ............................................................... 10

2.3 Effect of Responsiveness on Customer Retention ....................................................... 17

2.4 Effects of Assurance on Customer Retention .............................................................. 21

2.5 Chapter Summary ........................................................................................................ 24

CHAPTER THREE ......................................................................................................... 25

3.0 RESEARCH METHODOLOGY ............................................................................. 25

3.1 Introduction .................................................................................................................. 25

3.2 Research Design........................................................................................................... 25

3.3 Population and Sampling Design ................................................................................. 25

3.4 Data Collection Methods ............................................................................................. 27

3.5 Research Procedures .................................................................................................... 27

3.6 Data Analysis Methods ................................................................................................ 28

3.7 Chapter Summary ........................................................................................................ 29

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CHAPTER FOUR ............................................................................................................ 30

4.0 RESULTS AND FINDINGS ..................................................................................... 30

4.1 Introduction .................................................................................................................. 30

4.2 Response Rate .............................................................................................................. 30

4.3 Background Information .............................................................................................. 30

4.4 Effects of Reliability on Customer Retention of Safaricom Home Fibre Services in

Nairobi County................................................................................................................... 32

4.5 Effects of Responsiveness to Issues on Customer Retention of Safaricom Home Fibre

Services in Nairobi County ................................................................................................ 36

4.6 Effects of Assurance to Customer Retention of Safaricom Home Fibre Services in

Nairobi County................................................................................................................... 40

4.7 Customer Retention ..................................................................................................... 43

4.8 Chapter Summary ........................................................................................................ 48

CHAPTER FIVE ............................................................................................................. 49

5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS .......................... 49

5.1 Introduction .................................................................................................................. 49

5.2 Summary of the Study ................................................................................................. 49

5.3 Discussion .................................................................................................................... 50

5.4 Conclusion ................................................................................................................... 55

5.5 Recommendations ........................................................................................................ 56

REFERENCES ................................................................................................................. 58

APPENDICIES ................................................................................................................ 64

APPENDIX I: QUESTIONNAIRE ................................................................................ 64

APPENDIX II: SAMPLE SIZE DISTRIBUTION ....................................................... 69

viii

LIST OF TABLES

Table 2.1: 22 Item Scale .................................................................................................... 13

Table 4.1 Response Rate .................................................................................................... 30

Table 4.2 Background Information .................................................................................... 31

Table 4.3 Effects of Reliability on Customer Retention of Safaricom Home Fibre Services

in Nairobi County .............................................................................................................. 33

Table 4.4 Correlation Analysis for Effects of Reliability on Customer Retention ............ 34

Table 4.5 Model Summary on the Effects of Reliability on Customer Retention ............. 35

Table 4.6 ANOVA on the Effects of Reliability on Customer Retention ......................... 35

Table 4.7 Regression Coefficient on the Effects of Reliability on Customer Retention ... 35

Table 4.8 Effects of Responsiveness to Issues on Customer Retention of Safaricom Home

Fibre Services in Nairobi County ...................................................................................... 37

Table 4.9 Correlation Analysis Effects of Responsiveness on Customer Retention ......... 38

Table 4.10 Model Summary on the Effects of Responsiveness on Customer Retention .. 39

Table 4.11 ANOVA on the Effects of Responsiveness on Customer Retention ............... 39

Table 4.12 Regression Coefficients on the Effects of Responsiveness on Customer

Retention ............................................................................................................................ 39

Table 4.13 Effects of Assurance to Customer Retention of Safaricom Home Fibre

Services in Nairobi County ................................................................................................ 41

Table 4.14 Correlation Analysis for Effects of Assurance on Customer Retention .......... 42

Table 4.15 Model Summary on Effects of Assurance on Customer Retention ................. 42

Table 4.16 ANOVA on Effects of Assurance on Customer Retention.............................. 43

Table 4.17 Regression Coefficients on Effects of Assurance on Customer Retention ...... 43

Table 4.18 Customer Retention Factors ............................................................................. 45

Table 4.19 Effect of Service Quality on Customer Retention of Safaricom Home Fibre

Services in Nairobi County Correlation Analysis .............................................................. 46

Table 4.20 Model Summary for Effect of Service Quality on Customer Retention.......... 47

Table 4.21 ANOVA for Effect of Service Quality on Customer Retention ...................... 47

Table 4.22 Regression Coefficients for Effect of Service Quality on Customer Retention

............................................................................................................................................ 48

1

CHAPTER ONE

1.0 INTRODUCTION

1.1 Background to the Study

The telecommunication industry all over the world is experiencing profound changes,

especially on its environment comprising of new and expanded market niche, new players

and even new challenges (Kituu, 2013). To adapt to these changes firms, ought to

reorganize themselves accordingly so as to achieve the desired expectations. World Bank

(2015) data shows that there are 97% connections all over the world going by the number

of the connection distributed. Among the developing countries in Africa, it is estimated

that there are 67% of the population owning mobile phones where 26.5% are reported to

be using the internet (Ojo, 2010).

Further, projections for the next five years shows that 80% of Sub-Saharan Africa will be

connected to mobile phones, thereby double the current rate of access (Groupe Spéciale

Mobile Association [GSMA] intelligence, 2016). In Kenya the penetration rate of mobile

phone users stood at 74% of the whole population as at 2015 and it is to grow by a big

proportion by 2020. This growing number of mobile connections can be attributed to the

adoption and demand of new technology such as mobile money, which is ranked number

one globally by the International Monetary Fund (IMF) (Tarus and Rabach, 2013). Fibre

subscriptions are also growing very fast in Kenya, there were 90,534 fibre subscriptions

at the end of September in comparison to the 33,269 recorded at the end of September

2016 (Communications Authority, 2017).

Going with this, the telecommunication industry has seen the fastest growth after a period

of gaining momentum. Even though the number of mobile users is skyrocketing, the rate

of acquisition of new subscribers over time has slowed with the saturated market turning

to maturity (Shafei & Tabaa, 2016). Therefore, competition in the market has grown and

new strategies to retain the customers are vital for telecommunication business given their

switching behaviour. This poses a great challenge for these businesses more so, with the

enhanced customer awareness that long term success cannot be accomplished with only

optimising price and quality hence the need to maintain customers’ long term

relationship. In as much as most of the subscriptions are on mobile phones, the data

shows that fibre subscriptions are becoming increasingly popular having grown 98.4 per

cent in the year to June 2017 (Mumo, 2017).

2

According to the report by Communications Authority (2017), The Internet penetration in

Kenya is now estimated at 112.7 per cent with the number of Kenyans accessing and

using the Internet on the rise. There is an increased uptake of broadband Internet in

particular, which has gone up by 14.3 per cent in the period ending September 2017. The

growth has now put broadband subscriptions at 17.6 million compared to 15.4 million

posted in the preceding quarter. Consequently, broadband penetration increased to 38.8

per cent during the quarter from 34.2 per cent. According to the report covering July to

September 2017, the demand for data/Internet continues to soar, with the number of

estimated data/Internet users jumping by 12.5 percent to post 51.1 million users compared

to 45.4 million users reported in the previous quarter. The other notable gains were

recorded in the fibre optic subscriptions (fibre-to-home and fibre-to-business), which

went up 65.5 per cent to stand at 90,534 during the period up from 54,700 recorded

during the previous period.

A previous study has shown that it usually costs six times more to acquire and win a new

customer as compared to retaining an existing one (Kuusik, 2007). In another study it was

found that organizations that are able to retain 5% of their customer are able to increase

their profit anywhere between 25% and 125% (Kihara & Ngugi, 2014). Since one of the

motives for companies is to succeed, the focus has now shifted to loyal customer or

subscribers by most service providers.

Kenya’s mobile telecommunication market exhibits one of the most competitive

industries in the region (Tarus & Rabach, 2013). There are many tactics being employed

by the mobile operators as competitive strategies in bid to secure and maintain the market

niche such as high cross-network charges, tariff cuts, airtime top-up discounts, free call

bonuses, switching fee waivers, added service menus for mobile cash transfer, free

internet services and so on, airtime credit facility, mobile banking, network spread,

customer support services, and striving to satisfy general customer service. Pressure from

intensified competition created by the five operators in the industry has continued to

increase the need for more enhanced strategies to retain and acquire new customers to

minimize or even eliminate business risk. Firms in telecommunication industry have to

then to decide the best strategy to maintain loyalty in their customers and for this reason

current is study conducted.

3

According to Fibre to the Home Council Europe (2016), What Fibre to the Home can do

for your community report, Fibre to the Home is the most advanced technology for

building the next generation of communications networks around the world. Already

today, fibre connections are used by more than 130 million homes. China alone expects to

have 100 million fibre subscribers by 2015. European countries such as Lithuania,

Norway, Denmark, Sweden and Latvia are approaching near universal access to fibre.

Internet services have significant importance such as Fibre access networks have lower

latency, which means no noticeable delay in exchanging information. This is important

for applications that depend on real-time communication and high resolution images, such

as online gaming and entertainment services like streaming movies.

Fibre access gives customers the bandwidth they pay for, because the optical cable does

not impose physical restrictions on the speed that can be achieved – unlike copper

telephone cables, fibre’s speed is not affected by the distance from the customer premises

back to central switching points. In comparison to wireless, subscribers do not share

limited frequencies with other users, and there is no electronic interference. End users

thus get the same speed regardless of the number of users (as opposed to mobile) or

distance from the cabinet (as opposed to copper). The report determines that fibre

subscribers have higher satisfaction rates with their service providers than other

broadband users. In Europe this is evident in the fact that FTTH customers are more

likely to be loyal to their existing service provider, and will “churn” to another provider

less frequently.

Internet is becoming a basic need in the current modern day society hence more and more

people around the world are looking for a reliable and affordable internet service

provider. Having a Wi-Fi connection in your home is an enjoyable thing since you get to

enjoy great internet on a variety of devices at the same time as compared to paying for

each device separately (Haworth, 2016).

According to Corpnews (2017), Faiba is a brand under Jamii Telecom (JTL) and Faiba

Internet mainly concentrates on businesses instead of home internet. In the recent past

Faiba has increased bandwidth for its lowest home internet package six fold to 30

megabits per second (Mbps) up from 5Mbps for the same price of Sh5,000 per month.

Subscribers on the fastest 20Mbps currently priced at Sh20,000 a month will now spike

4

up to enjoy speeds of 125Mbps at the same cost. Jamii has also increased fibre internet

speeds for business clients who will now enjoy speeds of 15Mbps for a price of Sh10,000

per month for the cheapest offer that has been set at 3Mbps. The other companies that are

offering Fibre in Kenya are Zuku which is a brand under the Wananchi Group that

provides both TV and internet at affordable prices. It has over 60% of the home internet

fibre internet market in Kenya and covers most of Nairobi and Mombasa. Speeds offered

by Zuku range from 1mbps to 60mbps with prices from Ksh 3,000 to Ksh 10,000 and

these are internet unlimited packages.The company has also passed 90,000 homes and

connected 28,000 in 20 neighbourhoods.

According to the Safaricom annual report (2017), Safaricom is a leading

telecommunication services company in Kenya that provides a comprehensive range of

integrated solutions that includes voice and data (both mobile and fixed), SMS, Internet

and financial services. The company’s shareholding is Vodafone owns 40%, Government

of Kenya 35% and 25% owned by free float that is held by local and international retail

and institutional investors. The registered users using Safaricom are currently 28 million

with a market share of 71.9%. Safaricom states that it has currently connected over

30,000 customers and around 70% of these customers are renewing their services every

month. The package that has the highest number of customers is the Bronze package that

goes at Ksh 2,500 monthly subscription and offers speeds of 5Mbps at a contention of

1:4. The key promoters of Safaricom Home Fibre have been fast, reliable and unlimited

internet access from the comfort of one’s home. Safaricom rolled out fibre to the home

services in 2014 and has primarily targeted home users using four packages that it offers

that include Bronze at Ksh 2,500, Silver at Ksh 3,499, Gold at Ksh 4,999 and Platinum at

Ksh 9,999.

1.2 Statement of the Problem

According to Wainaina (2016), all the firms operating in the telecommunication industry

in 2015 have recorded an increase in their market share in exception of Safaricom

Limited which still stands high in terms of the numbers of mobile phone subscribers.

Airtel Kenya increased by 0.1% to 19.2%, Orange market share too rose by 0.6% to

12.4% while Equitel grew by 0.8% from 2.9%, which could signal changes in customers’

loyalty and retention. The report from Communication Authority (CA) also shows a

change in the proportion of the prepay and post pay subscribers has gone down for

5

Safaricom while the other operators have gained in both ways and Equitel had the highest

jump in the number of subscribers accounting for 29% growth.

A close scrutiny of several empirical studies have revealed that a good number of studies

have been identified in the banking industry where the focus on why some banks continue

to hold on large market share has been captured exclusively (Saravanakumar &

Jayakrishnan, 2014; Ojo, 2010). With the increase number of mobile users and

penetration to the interior parts of the countries by service providers, there is a need to

study, the telecommunications industry to know what comprises satisfied and loyal

customers so that firms can capitalize in that. In addition, local studies have been skewed

towards customer’s satisfaction and loyalty and few have investigated the role of service

quality on customer’s retention. Use of the convenience sampling methods which is

subjective may have compromised the quality of data gather hence there is need to correct

this in the methodology (Turkay & Sengul, 2014; Loke, Taiwo, Salim & Towne, 2011;

Ansar & Lodhi 2015). The fact that the telecommunication industry in Kenya has been

increasingly affected by the ever changing environment, it demands for organisations to

become more effective in how they offer their services in order to have a competitive

edge.

According to Crosby (2015), quality is meeting the requirements of the customer. All

services should be aimed at meeting the customers’ requirements by eliminating non-

quality traits. Service quality from the service provider’s point of view is the degree to

which the service features conform to the organizations specifications and requirements.

Zaman, (2014) service quality can be defined as an overall judgment similar to attitude

towards the service and generally accepted as an antecedent of overall customer

satisfaction. Arslan et al. (2014) defined service quality as the ability of the organization

to meet or exceed customer expectations. It is the difference between customer

expectations of service and perceived service (Ojo, 2010). Perceived service quality

results from comparisons by customers of expectations with their perceptions of service

delivered by the suppliers (Arslam et al., 2014). If expectations are greater than

performance, then perceived quality is less than satisfactory and hence customer

dissatisfaction occurs. Although, service quality has several facets in the current study it

will have reliability, responsiveness and assurance. Servqual represents service quality as

the discrepancy between a customer’s expectations for a service offering and the

6

customer’s perceptions of the service received, requiring respondents to answer questions

about their expectations and their perceptions. The use of perceived as opposed to actual

service received makes the SERVQUAL measure an attitude measure that is related to,

but not the same as satisfaction (Parasuraman et al., 1985).

In brief both empirical and theoretical documentations have yielded mixed results on the

effect of service quality on customer’s retention, none of the studies reviewed attempted

to evaluate the joint contribution of reliability, responsiveness and assurance in the

telecommunication sector. The study therefore chose to focus of three elements of

Servqual being reliability, responsiveness and assurance as key factors that affect

customer retention among fibre users. Although, most of the studies the researcher came

across endeavoured to show the factors affecting customer retention none was carried out

solely in Kenya and most of them are skewed towards the banking sector and studies

were not skewed towards the telecommunications industry.

1.3 General Objective

The general objective of the study was to investigate the effect of service quality on

customer retention of Safaricom home fibre services in Nairobi County.

1.4 Specific Objective

The study sought to achieve the following specific objectives:

1.4.1 To determine the effects of reliability on customer retention of Safaricom home

fibre services in Nairobi County.

1.4.2 To determine the effects of responsiveness to issues on customer retention of

Safaricom home fibre services in Nairobi County.

1.4.3 To determine the effects of assurance to customer retention of Safaricom home fibre

services in Nairobi County.

1.5 Importance of the Study

This study may be valuable to the following:

7

1.5.1 Safaricom Home Fibre unit

The study can be used by the managers of Safaricom Home Fibre to make decisions on

how products may be offered and packaged for customers. The study has revealed various

determinants of customer retention which managers may be able to use when making

products for sale, in provision of service, marketing, handling customers' concerns and

queries so as to fulfil satisfaction and build trust for long lasting relationship.

1.5.2 Home Fibre Users

Recommendations from this study are hoped to be ultimately valuable to the home fibre

users as they may gain insight as to what they should look for continued service provision

by mobile phone operators. This study has estimated the associated switching cost from

different operators thus the home fibre users may be able to make wise decisions.

1.5.3 Investors

Potential investors in the telecommunication industry may find the information contained

in this study relevant as they may learn new tactics of maintaining good relationship with

their customer or clients. Apart from this, in an expanding market, operators may learn a

thing or two on how loyalty can be gained or lost in the company, its products or its

services.

1.5.4 Academician and Researchers

The study generates conclusive remarks as to what affects customer loyalty and hence can

be used in future as a reference point during literature review especially

telecommunication industry where few studies have been conducted. Researchers can use

the information to identify future gap that can be studied.

1.6 Scope of the Study

The study involved the residents of Nairobi County and its environs who were customers

of the Safaricom Home Fibre services. This study investigated the influence of reliability,

responsiveness and assurance, there are other dimensions or ways of classifying factors

that affected customer retention however this study was limited to the three dimensions of

service quality. Questionnaires were used to collect data from the customers and the time

scope of the project was from January to February 2018.

8

1.7 Definition of Terms

1.7.1 Reliability

This is defined as the ability to perform the promised service dependably and accurately.

In other words, it means doing what you say you will do. In addition, Severt et al (2012)

stated that customers have consistently stated that a company’s ability to deliver promises

is the most vital factor to providing service quality. Having a room ready upon check-in is

an example of the reliability dimension.

1.7.2 Responsiveness

According to Al-Zoubi, (2013) responsiveness is the willingness to help customers and to

provide prompt service. Customers judge a company’s responsiveness by assessing the

amount of time it takes and the attentiveness that is offered in response to their requests,

questions, complaints, and problems. Companies that use automated phone systems,

regularly put customers on hold, or consistently have long wait times or long lines tend to

be rated low on the responsiveness dimension. Responding quickly to requests or

complaints leads to a higher rating on this dimension.

1.7.3 Assurance

This is defined as employee’s knowledge and courtesy and the ability of the firm and its

employees to inspire trust and confidence. The assurance dimension is particularly

important in service industries offering high levels of credence qualities, such as auto

repair and medical services. According to Gounaris (2014) the importance of the

assurance dimension increases in proportion to the risk and the greater the inability for a

customer to evaluate the service. The expertise of an endorser or a particular service

provider for a cruise vacation may affect the level of confidence and trust a customer has

toward that service.

1.7.4 Customer Retention

This is the ability of an organization to attract and retain successive relationship with its

customer through provision of services. Through this approach all newly recruited

customers are fully met and both new and old are loyal to corporate goods and services

(Khan & Fasih, 2014).

9

1.7.5 Service Quality

An assessment of how well a delivered service conforms to the client's expectations.

Service business operators often assess the service quality provided to their customers in

order to improve their service, to quickly identify problems, and to better assess client

satisfaction (Saravanakumar & Jayakrishnan, 2014).

1.7.6 Home Fibre Services

This is a fibre optic communication delivery form where the fibre extends from a central

office to the boundary of a home living space. On reaching the home, the signal is

conveyed using coaxial cable, wireless, optical fibre or powerline communication

therefore allowing for faster connection speeds (Roostika, 2011).

1.8 Chapter Summary

The project comprises of preliminary pages and five chapters. In the preliminary pages,

declaration, acknowledgement, table of contents, list of figures, list of table, abbreviations

and acronyms, operational definition of terms and abstract are presented. Chapter one

involves background of the study, statement of the problem, purpose of the study,

objectives of the study, research questions, scope of the study, definition of terms and

importance of the study, and organization of the study. Chapter two looks at literature

review and examines the introduction; the empirical review focuses on: effect of

reliability, responsiveness and assurance. Chapter three deals with research methodology

under; introduction, research design, target population, sampling design, rationale for

sample selection, data collection instruments, questionnaires, validity of the research

instrument, reliability, data analysis and ethical considerations. Chapter four provides

statistical presentation of the results and findings whereas chapter five gives a summary

of findings, discussion, conclusions and recommendations of the study.

10

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

The chapter reviews the empirical literature related to customer retention and service

quality; that is those that tend to explain the behaviour and attitudes taken by costumers

of companies’ products or services. This chapter also discusses the argument contained

by previous studies conducted in line with dimensions deemed to have an influence on

service quality and customer retention.

2.2 Effect of Reliability on Customer Retention

2.2.1 Customer Retention

Customer retention is the ability of an organization to minimize chances of its customers

defecting to rival service providers (Saravanakumar & Jayakrishnan, 2014). The primary

purpose of all companies is to retain as many customers as possible and this can only be

achieved through brand and customer loyalty. According to Dick and Basu (2014) loyalty

is a complex construction, which comprises both psychological and behavioural

components that then form a combination of repeated purchasing and relative attitude

towards business firms. According to Ojo (2010) customer loyalty is defined based on

how customers behave, that is based on number of purchases that are made by a

customer, the frequency of purchases made and the percentage from the total spending

made by the customer of the service. Customer retention commences with an initial

contact a customer creates with a corporation and is maintained till termination of their

relationship (Khan & Fasih, 2014).

All companies have to endeavour to provide services which will maximize customer

retention chances and this can be achieved through: setting customer expectations from

the onset of his or her engagement, becoming customers trusted service provider, sharing

values and customs which can foster stronger relationships, adopt proactive service

delivery, adopt social media as platform for service provision, create personalised

attention and always go extra mile while providing services (Ojo, 2010: Sengul &

Turkay, 2014). Indeed, there are some benefits which are associated with customer

retention they include: increased purchases as the tenure because increased trust enhances

return visit and purchase of alternative products, decreases customers management costs,

11

creates an avenue for customer referrals and chances for cost differentiation and

ultimately earn premiums (Ansar & Lodhi, 2015).

The overall objective of customer retention is retaining customers. Retaining customer’s

decreases the cost of procuring new clients consequently hence enhancing benefits.

Effective customer retention begins with the initial introduction the association has and

that lasts through the whole association with the client. Customer retention results to

clients being happy with the services received (Reichheld & Kenny, 2005).

2.2.2 Service Quality

A service is considered to be an activity that one party offers to another which is

essentially intangible and through some form of exchange is able to satisfy an identified

need of the customers (Zeithaml, Bitner & Gremler, 2012). Services unlike tangible

products are produced and consumed at the same time in the presence of the customer and

the service producer. The presence of the human element during the service delivery

process greatly increases the probability of error on the part of employees and customers.

This error is due to intangible behavioural processes that cannot be easily monitored or

controlled (Dubey & Srivastava, 2016).

According to Arslan, Iftikhar and Zaman (2014), service quality can be defined as an

overall judgment similar to attitude towards the service and generally accepted as an

antecedent of overall customer satisfaction. Arslam et al., (2014) defined service quality

as the ability of the organization to meet or exceed customer expectations. It is the

difference between customer expectations of service and perceived service (Ojo, 2010).

According to Sultan and Wong (2014), service quality is a form of attitude representing a

long-run overall evaluation. Perceived service quality results from comparisons by

customers of expectations with their perceptions of service delivered by the suppliers

(Arslam et al., 2014). If expectations are greater than performance, then perceived quality

is less than satisfactory and hence customer dissatisfaction occurs.

ISO 8492 looks at quality as the totality of features and characteristics of a given product

or service that then goes ahead to satisfy the stated or the implied needs. According to

Crosby (2005), quality is the process of delivering to satisfy the customer and he adds that

12

quality is about how a consistently a product or service delivered meets or exceeds the

external and internal customers’ expectations and needs. The process of defining quality

is abstract because how one defines it is subjective because quality depends on the

perception of the recipient.

Service quality is a factor that contributes to customer satisfaction, this level of customer

satisfaction is the result of customers’ comparison of the service quality that is expected

during a service encounter, with the perceived service quality. Furthermore satisfaction or

dissatisfaction is a measure or evaluation of a product or service’s ability to meet a

customer’s need or expectations. If a customer of an organization is satisfied with the

organization’s services, the result of that will definitely lead to customer loyalty to that

organization and retention of the customer, which is positive for the organization because

it could also mean higher profits, higher market share, and increasing customer base.

Lewis et al (2015).

Service quality is looked at using many different instruments however the most popular

evaluation of service quality is SERVQUAL that was developed by Parasuraman et al,

(1985). The key attributes were tangibles, reliability, responsiveness, competency,

courtesy, assurance, credibility, security, access, and understanding. They believed that if

providers got this dimensions right, then customers will then hand over the keys of

loyalty to the provider since they will have received service excellence. It has also been

established that Tangibles are the least concern to customers and reliability was the

critical dimension that was key to customers.

13

Table 2.1: 22 Item Scale

Source: Parasuraman et al. (2006)

14

The key service quality gaps that exist are stated below:

Source: Parasuraman et al. (1985); Curry (1999); Luke and Layton (2002)

Figure 2.1: Model of Service Quality Gaps

A study to examine the impact of service quality on customer retention in airline industry

of Bhutan was put forth by Zangmo, Liampreecha and Chemsripong (2015). The study

hypothesized that service quality attributes: tangibles, reliability, responsiveness,

assurance and empathy had influence on customer satisfaction which influenced customer

retention. Results of the study revealed that there was a positive and significant

relationship between service quality and customer satisfaction. Secondly, customer

satisfaction had significant influence on customer retention. The study findings were

limited in application since they would not be concluded for any other sector apart from

airline industry. Further to that, calculation of a single attribute for service quality was not

15

appropriate instead independent attributes of services quality ought to have been

investigated.

According to the studies carried out by Zangmo, Liampreecha and Chemsripong (2015),

reliability was the most critical dimension. Responsiveness and assurance were on interest

to customers and this was followed by empathy and tangibles which were of least concern

to customers. This study will therefore focus on reliability, responsiveness and assurance.

2.2.2.1 Reliability

Reliability is the ability to perform the promised service dependably and accurately.

Reliability means that the company delivers on its promises. These are promises about

delivery, service provision, problem resolutions and pricing. According to a study

conducted in four different companies that included banks, maintenance services, credit

cards and telecommunication companies the key finding was that reliability was high in

this companies since it relates to the ability to perform the service dependably and

accurately (Parasuraman et al, 1985). Reliability has been ranked as the most important

contributor to service quality and tangibility as the least important (Zeithaml et al 1990).

Customers want to do business with companies that keep their promises, particularly their

promises about the service outcomes and core service attributes. Consistency of

performance and dependability, accuracy of records kept, performance of services at the

designated time are keep desires of all customers. All companies need to be aware of

customer expectation on reliability of their services. Therefore, the firms that do not

provide this core services that customers believe that they are buying fail their customers

in the most direct way. (Saravanakumar & Jayakrishnan, 2014). A case of service quality

determinants in the real estate agency in Nairobi was carried out by Mang’eli Anthony

Mutua (2013) to investigate the effectiveness within the real estate agencies in Nairobi.

The key findings were that service reliability ranked as a key item for customers.

2.2.2.2 Provides Services by Certain Time

A study to investigate the effect of service quality in Malaysian banking sector was

carried out by Kheng, Mahamad, Ramayah and Mosahab (2010). Results of the study

revealed positive and significant relationship between customer loyalty and reliability

though there was no significant relationship between reliability and customer satisfaction.

16

Although, some customers may not be satisfied whenever there is no alternative source of

services they will always be locked within a given organization. The study was carried

out within the banking sectors which limits applicability of findings to banking sector

only and consequently calls for an empirical examination of service seekers within the

telecommunication sector.

An Indian case of Cooperative bank to examine the effect of service quality on customer

loyalty was carried out by Saravanakumar and Jayakrishnan (2014). Results of the study

revealed that most of the respondents agreed that reliability had effect on customer

loyalty in the banking sector. There was a positive and significant relationship between

reliability and customer loyalty. The applicability of the findings was faced by small

sample size problem and similarity of the respondent’s characteristics since they were

drawn from the same district.

2.2.2.3 Performs Services Right at First Time

A Ghanian case to investigate the impact of service quality on customer retention in

cellular industry was carried out by Iddrisu, Nooni, Fianko and Mensah (2015).

Although, the main objective was to examine the nexus between service quality and

customer retention the study also investigated the mediating role of customer satisfaction.

Results of the study showed positive and significant relationship between reliability and

both customer satisfaction and loyalty.

A banking case to investigate the impact of service quality on customer satisfaction and

customer loyalty was brought forth by Khan and Fasih (2014). The main purpose of the

study was to customer satisfaction levels in both private and public banks and how this

influenced their loyalty in services provided by commercial banks. Results of the study

revealed that tangibility, reliability, responsiveness, assurance and empathy all had

positive significant relationship with customer satisfaction and customer loyalty.

Although, the study was consistent with past studies it would not be generalized for

developing economies like Kenya and cannot be applied in the telecommunication sector

which calls for examination of the effect of service quality on customer retention.

17

Kumar, Batista and Maull (2011), investigated the impact of operations performance on

customer performance. The hypothesized that customer loyalty was dependent of several

attributes amongst them waiting time, dependability, switching cost and corporate image.

It was presumed that upon receipt of customer orders, customer loyalty was dependent on

arrival time, lead time and how fast their complaints would be resolved. Results of the

study revealed negative significant relationship between customer orders and quality and

arrival on first promise while there was a positive and significant relationship between

customer orders and lead time. Thirdly there was a positive and significant relationship

between both quality and arrival on first promise and customer loyalty.

2.3 Effect of Responsiveness on Customer Retention

2.3.1 Responsiveness

Responsiveness is the willingness to help customers and provide prompt service. This

dimension emphasizes attentiveness and promptness in dealing with customer's requests,

questions, complaints and problems (Prabha, 2010). Responsiveness is communicated to

customers by length of time they have to wait for assistance, answers to questions or

attention to problems (Anantha & Huam, 2014). Responsiveness also captures the notion

of flexibility and ability to customize the service to customer needs (Ojo, 2010).

According to Johnston (1997) responsiveness is defined as quickness and timeliness of

the delivery service. This therefore consists of the operating quickness and the ability to

react immediately to the demands of the customer. More specifically, it is looked at the

desire and preparedness of workers to offer quality service. It relates to the services

timeliness (Parasuraman et al., 1985). It also consists observing the needs and demands of

customers, easy and fast processing time, taking care of customers individually by the

staff, solving problems and customers’ safety (Kumar, Mani, Mahalingam, &

Vanjikovan, 2010).

Gerpott, Rams and Schindler (2001) state customer retention as a coherence of the

business relations between the client and organization. Customer retention is "the act of

attempting to fulfil clients with the goal of growing long-haul associations with them".

Zineldin (2000) characterizes retention as a ceaseless responsibility to business with a

specific organization in a predictable way. Day (1994) fights that we ought to recognize

client needs fulfil the requirements and it will enhance customer retention. This will help

the supplier to figure methodologies and arrangements. In this study customer retention is

18

interpreted as meaning the length of client remain with a bank requesting items and

administrations as (Gerpott, Rams and Schindler, 2001).

According to a research on Service Quality in the Public Service (Prabha, 2010), the

second largest gap existed in responsiveness dimension that was resulting to negative

gaps. Amongst the four items under responsiveness was on customers not receiving

prompt service. The second gap was also found to be on information being relayed to

customers on when services will be received or performed. The third gap on

responsiveness was on the willingness of the staff to always assist customers.

2.3.1.1 Prompt Provision of Services

An assessment of the relationship between service quality and customer satisfaction in

automotive insurance industry was carried out by Anantha and Huam (2014) in Malaysia.

The study hypothesized that though it was mandatory for all cars to be insured there

needed to examine satisfaction derived from automotive insurance sectors. Results of the

study revealed positive and significant relationship between tangibility, reliability,

responsiveness, and empathy and customer satisfaction and there were high chances of

customers return visit.

An investigation on the impact of service on customer satisfaction in public and private

sectors banks in India was put forth by Selvakumar (2015). Results of the study revealed

positive and significant relationship between customer satisfaction and service quality.

Moreover, there was a significant difference between service quality and type of bank.

Indeed, private banks had superior services compared to public banks.

2.3.1.2 Willingness to Help Customers

A comparative analysis on the effect of service quality on customer satisfaction in

Pakistan was put forth by Arslan, Iftikhar and Zaman (2014). The main purpose of the

study was to establish the effect of responsiveness and empathy on customer satisfaction.

A Jordanian case was brought forth to show the effect of responsiveness on customer

retention by Al-Zoubi (2013). Results of the study revealed positive and significant

relationship between responsiveness and customer loyalty. An Indian case to investigate

the effect of responsiveness on customer loyalty in India was brought forth by Dubey and

Srivastava (2016). Results of the study revealed that there was a positive and significant

19

relationship between responsiveness and customer loyalty as well as customer

satisfaction. It was concluded that an in depth understanding of customers’ requirements

will enhance the development of long term relationship between customers’ needs and

customer loyalty.

2.3.1.3 Employees Willingness to Respond to Client Questions

A Ghanaian study to investigate the impact of service quality on customer loyalty in

telecommunication sector was put forth by Poku, Ansah and Lamptey (2014). Descriptive

statistics revealed that most of the respondents agreed that responsiveness had effect on

customer satisfaction. Moreover, both correlation and regression revealed positive and

significant relationship between responsiveness and customer loyalty.

Roostika (2011) also examined the perceived quality of service and trust on customer

loyalty on mobile internet adoption in Indonesia. Service quality was conceptualized by

seven dimensions; content quality, device quality, privacy quality, interaction quality,

connection quality, customer services and contextual quality. The results showed that

service quality had an indirect association with the loyalty of the customer.

In Malaysia, Rasheed and Abadi (2014) explored the influence of service quality on

customer loyalty in insurance, banking and telecommunication industry. Perceived

quality of service measurement was adopted from Karjaluotoo, Jayawardhena,

Leppaniemi and Pihlstrom (2012) while customer loyalty was approached from the

attitudinal, behavioural and composite point of view. The study demonstrated that there

exists a positive connection between the service quality variables and customer loyalty.

This is to mean that managers can still improve customer perceived value by emphasizing

service quality, which later gives more loyal customers.

An Asian study to investigate the impact of service quality on customer satisfaction and

customer loyalty was carried out by Sabir, Irfan, Sarwar, Sarwar and Akhtar (2013). Both

correlation and regression analysis revealed positive and significant relationship between

service quality and customer loyalty. It was concluded that customers within

telecommunication sector had attached value to service quality.

20

2.3.1.4 Careful Service Delivery and Customer Retention

Hafez and Akther (2017) investigated the determinants of customer loyalty in

telecommunication industry in Bangladesh. Results of the study revealed that service

quality, customer satisfaction, corporate image and trust had significant relationship with

customer loyalty. In contrasts switching cost had no significant influence on customer

loyalty. It was concluded that telecommunication industries must strive to provide quality

services as such to attract and retain more customers. The main limitation of the study

was adoption of non-scientific formula to calculate the sample size and fitting regression

model without carrying out diagnostic tests.

Ahmad, Hussain and Rajput (2015) investigated customer loyalty framework in Pakistan

telecommunication industry. The study sought to examine the mediating effect of

switching cost on the relationship between customer satisfaction and customer loyalty.

The study revealed positive significant relationship between customer satisfaction and

customer loyalty. Although, trust had significant moderating effect, switching cost had no

significant moderating effect. It was concluded that telecommunication companies should

address aspects of customer satisfaction so as to ultimately influence customer trust and

loyalty which will increase chances of customer retention.

2.3.1.5 Service Quality and Customer Retention

Knowing your customer is a strategy used by service firms to gain competitive advantage.

Most of the service firms serve customers directly giving them an opportunity to build a

good long-term relationship. Since they are served as individuals it’s easier to sort

customers into groups and keep a record of them. There is need for service firms to

differentiate between themselves and other firms because of the competitive environment

which is achieved through providing high quality services. Client dedication is

accomplished when a client is happy with the astounding administration (Caruana et al.,

2000; Caruana, 2002). For a service provider to be successful, it will rely on upon the

relationship the administration supplier has with the client (Panda, 2003)

Service providers can be distinguished from manufacturers. Service providers encounter

these challenges; customers participate directly, consumptions of the services are

immediate, services are provided at customers’ convenience and intangibility. Reliability,

21

assurance, tangibles, empathy and responsiveness are the service quality dimension

whereas reliability is ranked as number one.

2.4 Effects of Assurance on Customer Retention

2.4.1 Assurance

Assurance means to inspire trust and confidence. Assurance is defined as employees'

knowledge of courtesy and the ability of the firm and its employees to inspire trust and

confidence. This dimension is likely to be particularly important for the services that the

customers perceives as involving high rising and/or about which they feel uncertain about

the ability to evaluate (Fitzersimmons & Fitzersimmons, 2012). Trust and confidence

may be embodied in the person who links the customer to the company, for example, the

marketing department. Thus, employees are aware of the importance to create trust and

confidence from the customers to gain competitive advantage and for customers' loyalty

(Ansar & Lodhi, 2015).

The aspect of service quality shows how knowledgeable employees are able to render

quality service to customers. Thus, the ability of employees to instil confidence in

customers, making them feels safe in their transactions, consistently courteous towards

customers, the ability to answer customer questions appropriately (Turkay & Sengul,

2014). On this, Fitzersimmons and Fitzersimmons (2012), customers more often than not

look out for assurance from employees and expect that employees will behave confidently

and instil confidence in their clients.

2.4.1.1 Employees Competency

For centuries, management has had great difficulties in defining or describing

competency. The debate about competency is partly caused by the uncertainties in

measuring its value and estimating its useful life. Many people however agree on the

main characteristics of competency should possess, which include, knowledge and the

understanding (Hafez & Akther, 2017). According to a report of the Competencies

Workgroup (2002), competency is defined as a characteristic of an employee that

contributes to successful job performance and the achievement of organizational results.

These include knowledge, skills and abilities plus other characteristics such as values,

motivation, and initiative and self- control. Many common elements have been observed

in the various definitions of the concept of competencies. The common elements most

22

frequently mentioned on employee competencies are initiatives, innovative, interpersonal

skills, motivation, personal credibility, teamwork, technical skills, creative thinking,

ethical standards, technology, and accountability (Hafez & Akther, 2017).

Turkay and Sengul (2014) carried out comparative analysis to examine the influence of

employee’s behaviour on customer’s satisfaction. Results of the study revealed that

employee’s behaviours influenced customer’s satisfaction which ultimately affected

return visits. It would have been appropriate to use inferential statistics such as regression

and structural regression modelling rather than drawing conclusion from descriptive

statistics.

A Nigerian study was carried out by Ojo (2010) to investigate the relationship between

service quality and customer satisfaction in telecommunication. In this study descriptive

research design was adopted, simple random sampling was used to select 230

respondents. Descriptive statistics, correlation analysis and multi regression analysis were

used to analyse the data. Results of the study revealed positive and significant relationship

between service quality and customer satisfaction. It was concluded that there is need to

increase customer satisfaction levels which can be attained through service quality.

Indeed, satisfied customers will have tendencies of repeat visits and this will enhance

annual sales. Further, there is a causal link between customer retention and satisfaction.

There is need to consider customers input so as to improve their satisfaction levels,

loyalty and retention. Although, the sample size was appropriate it was not computed

scientifically thus subsequent studies ought to adopt scientific methods. Moreover, there

is need to adopt both exploratory factor analysis (EFA) and confirmatory factor analysis

(CFA) instead of regression analysis to explain the causal relationship between service

quality and customer satisfaction.

An investigation on the effect of service quality on customer satisfaction amongst

telecommunication providers was put forth by Loke, Taiwo, Salim and Towne (2011).

The study adopted cross sectional research design, and primary data was collected using a

customized service quality questionnaire. Simple random sampling was used to select 200

respondents. Data was analysed using descriptive statistics, simple t test and structural

equation modelling (SEM). Results of the study revealed that majority of the respondents

agreed that assurance had influence on customer satisfaction in telecommunication sector.

23

Secondly, there was a significant difference between perceived and expected assurance.

Further, there was a positive and significant relationship between assurance and customer

satisfaction. There is need to adopt scientific formula to calculate the sample size rather

than use subjective methods to calculate the sample size. Secondly, instead of a small

sample which is drawn from a single service provider cluster sampling ought to be

adopted to draw respondents from different service providers which make it easier to

compare the findings.

2.4.1.2 Employees Who Have Knowledge to Answer Customers’ Questions

A Pakistan study was carried out to investigate the impact of service quality on customer

satisfaction in telecommunication industry was carried out by Ansar and Lodhi (2015).

Results of the study revealed positive and significant relationship between service quality

and customer satisfaction. It would been appropriate to adopt scientific formula to

calculate the sample size rather than subjective approach. Secondly, beyond service

quality there are other variables which would have impact on customer satisfaction for

example corporate image and brand and they were excluded from the study.

An investigation to examine the effect of customer relationship management and

customer loyalty in Nigerian telecommunication sector was put forth by Toyese (2014).

Results of the study revealed that client relationship management had effect on customer

retention and whenever customers felt that there needs were adequately met then had no

chances of switching to alternative service provider. Since the telecommunication

companies may be having different sizes of the market share it would have been

appropriate to adopt stratified sampling techniques and sample size to be allocated

proportionately. Secondly, it was appropriate to use scientific method to calculate the

sample size rather than rely on subjective choice of 200. There is need to adopt inferential

data analysis techniques such as regression and correlation analysis to examine the causal

relationship between study variables.

2.4.1.3 Making Customers Feel Safe in their Transactions

Mosavi and Ghaedi (2012) investigated the relationship between trust, customer loyalty

and repeat purchase. It was recommended that all mobile service providers should strive

to win customers trusts which can be attained through shared value and faster handling of

their complaints. Although, the sample size was big it was important to adopt scientific

24

approach to calculate it since this would have allowed uniformed chance of selecting

study respondents.

Hasan, Kiong and Ainuddin (2014) investigated the effect of trust on customer loyalty

towards banks in Sabah, Malaysia. The findings demonstrated that trust had a significant

and positive effect on customer loyalty. This study is different from the current study in

the sense that it covered service provided by banking and the choice of the convenient

sampling techniques was inappropriate since this increased the chances of non-response

bias. Moreover, use of regression and correlation analysis on cross sectional data was not

appropriate and the study ought to have adopted structural equation modelling.

Further in India, Upamannyu, Maheshwari & Bhakuni (2013) studied the impact of brand

trust on customer loyalty in fast moving consumer goods (FMCG) users such as Colgate.

Customer loyalty was found to be influenced positively and significantly by the brand

trust. Going by this, companies have to approach marketing with an open mind to strength

the relationship with the customers who would go to an extent of referring these products

or service to their colleague. They observed that loyalty of customer may change with

products and locations; hence the study should be conducted in other regions of the

world.

2.5 Chapter Summary

This chapter contains discussion of the empirical reviews. Notably, there are several

studies conducted in the area of different dimensions that have influence on customer

retention. The precedence studies have been summarized from their purpose,

methodology used, findings and results, implications and the gaps that the current study

wishes to fill in them. Most of these studies, however, have focused on different sectors

such as banking and those in telecommunication have narrowed down on either customer

loyalty or customer satisfaction. Hence there are chances that they are yielding biased

results. The following chapter discusses how research was designed, the target

population, sampling frame and methods and how data was collected and analysed. It also

describes the model that was used to relate the dependent variable to the independent

variables.

25

CHAPTER THREE

3.0 RESEARCH METHODOLOGY

3.1 Introduction

In the current chapter research methodology which acts as a blue print for the study has

been elaborated. A detailed description of research design, target population, sampling

procedures and sample size, data collection, pre-test and data analysis. Moreover,

summary of the chapter has been presented.

3.2 Research Design

A step by step detailed guideline on how a research study is carried out is known as

research design (Saunders, Lewis, & Thornhill, 2014). Moreover, Kothari (2011)

perceived research design as a road map which ought to be followed by a researcher to

attain the desired results. In this study descriptive research design was adopted.

According to Saunders et al., (2014) whenever the study seeks to explain when, how and

what has been put in place in relation to the problem under investigation, then descriptive

design is the most appropriate. In addition, correlation design as stipulated by Sekaran

and Bougie (2013) was adopted to show the causal effect between service quality and

customer retention of Safaricom fibre service in Nairobi County. Indeed, a combination

of both designs was appropriate and consequently the status of Safaricom fibre service

quality was described and its effect on customer retention defined.

3.3 Population and Sampling Design

3.3.1 Population

The total set of all individuals or elements under consideration is known as the target

population (Sekaran & Bougie, 2013). Moreover, Saunders et al., (2014) purported that a

collection of groups, items or individuals who have homogeneous characteristics under

investigation is known as target population. According to Communications Authority

(CA) the population of fixed Internet customers was 90,534 in 2016. According to

Safaricom half year results 2017 Safaricom had passed 16,000 homes and connected

9,000 customers. Thus, the population of the study will consist of the 9,000 customers

that were connected to Safaricom’s Home Fibre network and was distributed as shown on

Appendix II.

26

3.3.2 Sampling Design

3.3.2.1 Sampling Frame

Sampling frame is a collation or consolidation of a list of individuals or items to be

considered in a study (Seakran & Bougie, 2013). The current study sampling frame is

composed of Safaricom home fibre customers in Nairobi County, and was obtained from

the organization’s headquarters in Nairobi County.

3.3.2.2 Sampling Technique

Whenever a study is being carried there are limitations which may inhibit carrying out of

the study in the whole population. For example in several studies there are time, budgetary

and methodological limitations, thus it is always appropriate to select a subset of the target

population. Indeed, Saunders et al., (2014) purported that it is not possible to carry out

studies in the whole population, hence there is need to select a sample which will act as true

representative. This choice of the representative from the total population can either be

probabilistic when all the elements or individuals have an equal chance of being considered

or non-probabilistic whenever there are clearly stipulated inclusion and exclusion

procedures of respondents in a given study (Sekaran & Bougie, 2013).

In this study cluster sampling and simple random sampling were adopted. Cluster sampling

is a method where the researcher divides the population into groups then simple random

samples are selected from the population. In this study cluster sampling was used due to the

fact that the samples within the regions in Nairobi County have similar characteristics. The

regions that were used in the study were Nairobi East and Nairobi West.

Simple random sampling is a method used where every member of the population has an

equal proportion in being select. This method was used in selecting the customers who took

part in the study, since all the members of the population had an equal chance of

participating in the study. The samples were obtained from the selected clusters.

3.3.2.3 Sample Size

In this study simple random sampling and cluster sampling techniques were adopted.

Kothari (2011) argued that whenever the study population can be split into different

heterogeneous groups then there is need to draw respondents proportionately. The sample

size was 99 respondents; Sample size formula by Yamane (1967) was adopted as follows:

27

n= N

(1+N* d2)

Where:

n = sample size, N= entire Population, d= Expected Error,

As such the sample for this study can be derived as follows:

n= (9000) = 99

(1+9000 *0.102)

n=99

The 99 respondents were selected as shown in Table 3.1 attached as Appendix II:

3.4 Data Collection Methods

This study was based purely on primary data. The main tool for quantitative data

collection used was a structured questionnaire. The questionnaire composed of closed

ended questions so as to hasten the process of data collection. The strength of the

questionnaire was pegged on its ability to measure social attributes with ease and without

arousing any feelings hence it increased its chances of positive response (Kothari, 2011;

Sekaran & Bougie, 2013).

The questionnaire consisted of 3 sections with the first one gathering background

information on demographics of the respondents. The second section looked at the key

elements of Service Quality of this study that include reliability, responsiveness and

assurance. The third section looked at customer retention. Apart from the background

information, the other sections were on a five-point Likert scale which were agree,

strongly agree, neutral, disagree and strongly disagree.

3.5 Research Procedures

A pre-test of the research instrument was carried out before the actual study so as to

highlight all the shortcomings associated with the research instrument. From the pre-test

study corrective measures were taken to ensure that the research objectives were attained

(Kothari, 2011). The pre-test study was carried out among 10 customers who were

randomly selected from some list Safaricom Home Fibre Internet customers. From the

pilot study both reliability and validity of the research instrument were tested.

28

Kothari (2011) perceived reliability of a research instrument as its ability to yield similar

results even after being administered in different groups. In the current study a Cronbach

Alpha was used to check the reliability of the instruments. The need to test for reliability

was to ensure scores from an instrument were stable and consistent. This was because

scores were nearly the same when the researcher administered the instrument multiple

times at different times. When an individual answers certain questions one way, the

individual should consistently answer closely related questions in the same way (Sekaran

& Bougie, 2013).

The questionnaires were administered with the help of research assistants, who were

trained prior to exercise. The researchers used the drop and pick method. This ensured

that the respondents had an ample time in filling the questionnaires. To achieve a high

response rate, respondents were assured of their anonymity. They were also informed of

the purpose of the study, which was purely academic, and thus were open and frank with

their responses.

3.6 Data Analysis Methods

Primary data was collected through questionnaires and entered in spreadsheets where data

was cleaned, ordered and organized ready for analysis to generate meaningful

information. Data was edited to remove inconsistencies, classification of information on

similarity and then tabulation followed by the variables under investigation. Quantitative

data both descriptive and inferential analysis was generated using indices and statistics

that was mean, standard deviation, percentages and frequencies.

The study’s aim was to establish the effect of three explanatory variables; reliability,

responsiveness and assurance on customer retention amongst users of home fibre services

in Nairobi County. One-way analysis of variance (ANOVA) was used to check and

determine the significance of the effect of reliability, responsiveness, assurance on

customer retention. Regression coefficients was used to show the nature of the effect of

reliability, responsiveness and assurance on customer retention. Moreover, Pearson’s

correlation coefficient was used to show the strength of the effect of reliability, assurance

and responsiveness on customer retention. Multiple regression model was used to show

the nexus between study variables:

29

Y =α +β1X1 + β2X2 + β3X3 + έ

Y= Customer Retention,

X1=Reliability,

X2= Responsiveness,

X3= Assurance

έ= error term

3.7 Chapter Summary

The preceding chapter presented the methodological approach used to answer the

research questions. Descriptive research design was used in the study. Cluster and simple

random sampling was used to sample 99 respondents. Primary data was collected through

use of close ended questions in which all items were on a five point Likert scale.

Descriptive and inferential statistics were used to analyse the data. The following chapter

will cover data analysis, interpretation and discussion, results and findings will also be

discussed.

30

CHAPTER FOUR

4.0 RESULTS AND FINDINGS

4.1 Introduction

The current chapter presents the outcomes of what has been anticipated in the last three

chapters in regard to service quality and customer retention in Safaricom Home Fibre in

Nairobi County. Empirical evidence on the effects of service quality on customer

retention was sought dependence of methodology adopted in chapter three. The chapter

reveals the effect of service quality on customer retention in Safaricom Home Fibre. The

chapter has response rate, general information on respondents, descriptive and inferential

statistics of the data collected and analysed.

4.2 Response Rate

As shown in Table 4.1 out of the 99 questionnaires that were distributed by the researcher

and research assistants only 81 were fully filled and returned. This gave a response rate of

82%, the rest were neither returned or were returned with missing information.

Table 4.1 Response Rate

Details Number of Questionnaires Percentage (%)

Fully filled and Returned 81 82

Incomplete or unreturned 18 18

Total 99 100

4.3 Background Information

The study sought background information on Safaricom Home Fibre services. Frequency

and percentages were adopted to analyse the data and study findings presented as shown

in Table 4.2. Gender distribution showed that 59.3% were male and 40.7% were female.

This showed skewed distribution of Safaricom Home Fibre towards male. The modal

highest level of education was 60.5% for degree holders followed by 27.2% master’s

degree holders. Thirdly, Safaricom Home Fibre service was a new product in the market

since 92.7% had used it for less than one year and the remaining had used for a period of

between 1 to 2 years. Further, 51.9% had used another fixed income internet service

provider prior to Safaricom of whom 44.4% had used Zuku.

31

Table 4.2 Background Information

Variable Frequency Percent

Gender Male 48 59.3

Female 33 40.7

Total 81 100

Highest Level of Education Frequency Percent

Secondary 5 6.2

Diploma 3 3.7

Degree 49 60.5

Masters 22 27.2

Doctorate 2 2.5

Total 81 100

Usage of Safaricom Fiber

Services

Frequency Percent

Less than 1 year 75 92.6

Between 1 to 2 years 6 7.4

Between 3 to 4 years 0 0

Above five years 0 0

Total 81 100

Used another Fiber Internet

Provider

Frequency Percent

Yes 42 51.9

No 39 48.1

Total 81 100

Alternate Fiber Provider Frequency Percent

Zuku 36 44.4

JTL 3 3.7

Liquid 2 2.5

Orange 1 1.2

Total 42 51.9

Not Applicable 39 48.1

Total 81 100

32

4.4 Effects of Reliability on Customer Retention of Safaricom Home Fibre Services

in Nairobi County

4.4.1 Effects of Reliability on Customer Retention of Safaricom Home Fibre Services

in Nairobi County

The first objective of the study sought to examine the effects of reliability on customer

retention of Safaricom home fibre services in Nairobi County. To achieve this, the

respondents were requested to rate the extent to which they experienced reliability on

service quality they were accorded in Safaricom Home Fibre services in Nairobi County.

As shown in Table 4.3 frequency and percentages were adopted to analyse the data.

Majority 56.8% reported that to very high extent Safaricom Home fibre offered fast

internet services with a mean of 4.4 and a standard deviation of 0.7. Secondly, the

respondents were asked whether Safaricom Home Fibre internet was buffering. The

response was 49.4% reported it to be buffering to high extent and 24.7% rated it to have

moderate buffering with a mean of 3.8 and a standard deviation of 0.9. Thirdly, the

respondents were asked whether product packaging was affordable. The response was

40.7% reported the affordability to have very high extent on reliability with a mean of 4.1

and a standard deviation of 0.9.

Further, the study sought to find out whether Safaricom Home Fibre services meet

promised response time frames during down times of services. The response was that

majority 45.7% reported that to a very high extent Safaricom met and 39.5% reported it to

high extent with a mean of 4.2 and a standard deviation of 0.9. Moreover, 54.3% reported

that to very high extent Safaricom performed customer services right at the first time with

a mean of 4.4 and a standard deviation of 0.9. This was also supported by 42% who

reported that to very high extent customer service was performed promptly with a mean

of 4.4 and a standard deviation of 0.8. In fact, 49.4% reported that to very high extent

Safaricom was sympathetic and reassured when customers had problem with their service

with a mean of 4.3 and a standard deviation of 0.9.

Regarding whether the organization had proper clients recording, 64.2% reported that to a

very high extent the company kept proper recorders of customer’s information (they knew

their accounts details) with a mean of 4.5 and a standard deviation of 0.7. Concerning

offering of quality technical service, 59.3% reported that to very high extent Safaricom

33

Home Fibre services offered high technical services with a mean of 4.5 and a standard

deviation of 0.8.

Table 4.3 Effects of Reliability on Customer Retention of Safaricom Home Fibre

Services in Nairobi County

1 2 3 4 5

n % n % N % n % n % Mean

Std.

Dev

Safaricom Home Fibre

Offers fast internet 0 0 2 2.5 6 7.4 27 33.3 46 56.8 4.4 0.7

The Safaricom Fibre

Internet Service does

not buffer 2 2.5 3 3.7 20 24.7 40 49.4 16 19.8 3.8 0.9

The Safaricom Fibre

packages offered are

affordable 1 1.2 3 3.7 13 16 31 38.3 33 40.7 4.1 0.9

Safaricom Home Fibre

meets the promised

time frames for

response during

downtimes of services 2 2.5 2 2.5 8 9.9 32 39.5 37 45.7 4.2 0.9

The company

performs the services

right at the first time 2 2.5 1 1.2 6 7.4 28 34.6 44 54.3 4.4 0.9

Customer issues are

resolved promptly 1 1.2 1 1.2 13 16 32 39.5 34 42 4.2 0.8

The organization is

sympathetic and

reassuring when you

have a problem with

your service 1 1.2 3 3.7 8 9.9 29 35.8 40 49.4 4.3 0.9

The company keeps

proper records of your

information (they

know your account

details) 2 2.5 0 0 2 2.5 22 27.2 52 64.2 4.5 0.7

The company offers

quality technical

support 1 1.2 1 1.2 4 4.9 27 33.3 48 59.3 4.5 0.8

Overall Average 4.3 0.8

*1- Very Low Extent 2-Low Extent 3-Moderate Extent 4- High Extent 5-Very High

Extent, n-Frequency, % - Percentage

34

The implication of this finding is that Safaricom Home Fibre is reliable despite of

buffering in some extent. Secondly, Safaricom seems to have intensified measures to curb

customer dissatisfaction through provision of reliable services, this will minimize

possibilities of customers attrition and increase their retention. The findings also imply

that Safaricom has invested on customer management strategies through provision of

requisite employee skills which will enhance customer retention. The company seems to

have created a strong brand image and it has strategic methods for market penetration

which enhances service delivery.

4.4.2 Effects of Reliability on Customer Retention of Safaricom Home Fibre Services

in Nairobi County Correlation Analysis

The study adopted Spearman’s rank correlation. As shown in Table 4.4, there was a

strong positive and significant relationship between customer retention and reliability of

Safaricom Home Fibre services in Nairobi County (rho = 0.714, p value <0.05).

Table 4.4 Correlation Analysis for Effects of Reliability on Customer Retention

Customer Retention Reliability

Customer

Retention Pearson Correlation 1 .714**

Sig. (2-tailed)

0.00

N 81 81

Reliability Pearson Correlation .714** 1

Sig. (2-tailed) 0.00

N 81 81

** Correlation is significant at the 0.01 level (2-tailed).

4.4.3 Effects of Reliability on Customer Retention of Safaricom Home Fibre Services

in Nairobi County Regression Analysis

Regression analysis was carried out to show the nature of the effects of service quality on

customer retention. Simple linear regression was used to show the effect of reliability on

customer retention. Multiple linear regression was applied to show the joint effect of

reliability on customer retention.

35

4.4.3.1 Effects of Reliability on Customer Retention

As shown in Table 4.5, 51% of the variations in customer retention can be explained by

reliability while the remaining percentage can be accounted for by other factors excluded

in the model.

Table 4.5 Model Summary on the Effects of Reliability on Customer Retention

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .714a 0.51 0.503 0.704695

a Predictors: (Constant), Reliability

Table 4.6 shows that reliability had significant effect on customer retention as accounted

for by F statistics of 82.097 and p value of 0.00.

Table 4.6 ANOVA on the Effects of Reliability on Customer Retention

Model Sum of Squares df Mean Square F Sig.

1 Regression 40.769 1 40.769 82.097 .000b

Residual 39.231 79 0.497

Total 80 80

a Dependent Variable: Customer Retention

b Predictors: (Constant), Reliability

As shown in Table 4.7, reliability had positive and significant effect on customer

retention on Safaricom Home Fibre (β=0.714, t = 9.061, p value <0.05).

Table 4.7 Regression Coefficient on the Effects of Reliability on Customer Retention

Model

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

1 (Constant) 1.57E-16 0.078 0.00 1

Reliability 0.714 0.079 0.714 9.061 0.00

a Dependent Variable: Customer Retention

CR= 1.57E-16 + 0.714*Reliability

36

4.5 Effects of Responsiveness to Issues on Customer Retention of Safaricom Home

Fibre Services in Nairobi County

4.5.1 Effects of Responsiveness to Issues on Customer Retention of Safaricom Home

Fibre Services in Nairobi County

The second objective of the study sought to examine the effects of responsiveness to

issues on customer retention of Safaricom Home Fibre services in Nairobi County. The

respondents were requested to rate the extent Safaricom responsiveness on a five point

Likert scale. Frequency and percentages were used to analyse the data as shown in Table

4.8.

First the study sought information on whether respondents were notified promptly on

instances of service loss. Majority (40.7%) reported that to very high extent they notified

very promptly in case of loss of Safaricom Home Fibre services loss with a mean of 3.9

and a standard deviation of 1.2. Secondly, the study sought to find out the response to

service disruption and the speed of information whenever service delivery resumed.

Majority 42% reported that to very high extent service delivery were fixed promptly on

reporting and customers were updated on completion with a mean of 4.2 and a standard

deviation of 1.0. Thirdly, the respondents rating on the extent to which easily accessed

customer service care team. The response indicated that to very high extent 48.1% easily

accessed customer care support team with a mean of 4.1 and a standard deviation of 1.1.

Further, 55.6% reported to a very high extent customer care support team was willing to

assist whenever they were contacted by Safaricom Home Fibre customers with a mean of

4.4 and a standard deviation of 0.8. Regarding whether Safaricom Home Fibre employees

were willing to help their customers, majority 59.3% reported that to very high extent

Safaricom Home Fibre employees were willing to help with a mean of 4.5 and a standard

deviation of 0.7. The study sought to find out whether Safaricom customer care team was

too busy to respond to customer requests. It was reported that 44.4% felt that Safaricom

Home Fibre employees were too busy to respond to their requests with a mean of 4.3 and

a standard deviation of 0.8

Moreover, the study asked whether Safaricom Home Fibre services informed them the

exact time when their requests will be addressed, majority 43.2% reported that there were

informed so to a very high extent with a mean of 4.3 and a standard deviation of 0.8. In

37

fact, majority 58% reported that to a very high extent Safaricom home fibre services

employees had sincere interest in solving their problems with a mean of 4.4 and a

standard deviation of 0.8. It was reported that 55.6% felt that the operating hours of

Safaricom Home Fibre employees ensured that they got the needed help with a mean of

4.4 and a standard deviation of 0.8.

Table 4.8 Effects of Responsiveness to Issues on Customer Retention of Safaricom

Home Fibre Services in Nairobi County

1 2 3 4 5

n % n % N % n % n % Mean

Std.

Dev

Customers are promptly

notified instances of loss

of service 7 8.6 2 2.5 13 16 26 32.1 33 40.7 3.9 1.2

Service disruptions are

fixed promptly on

reporting and customers

updated on completion 3 3.7 1 1.2 11 13.6 32 39.5 34 42 4.2 1.0

There is ease of access

to the customer care

support team 3 3.7 3 3.7 13 16 23 28.4 39 48.1 4.1 1.1

On contacting the

customer care team, the

team is willing to assist

you get a solution 1 1.2 2 2.5 5 6.2 28 34.6 45 55.6 4.4 0.8

Safaricom Home Fibre

employees are always

willing to help

customers 1 1.2 0 0 4 4.9 28 34.6 48 59.3 4.5 0.7

Safaricom Home Fibre

employees are never too

busy to respond to

customer requests 2 2.5 1 1.2 5 6.2 36 44.4 37 45.7 4.3 0.8

Safaricom Home Fibre

employees tell you

exactly when services

will be performed 1 1.2 1 1.2 10 12.3 34 42 35 43.2 4.3 0.8

Safaricom Home Fibre

employees show a

sincere interest in

solving your issues 1 1.2 2 2.5 3 3.7 28 34.6 47 58 4.5 0.8

The operating hours of

Safaricom Home

employees ensure that I

get help when I need it 2 2.5 1 1.2 3 3.7 30 37 45 55.6 4.4 0.8

Overall Average 4.3 0.9

*1- Very Low Extent 2-Low Extent 3-Moderate Extent 4- High Extent 5-Very High

Extent, n-Frequency, % - Percentage

38

The implications of these findings are that Safaricom Home Fibre services were

responding efficiently to customer needs services whenever they were called upon. Even

though, the response time was good and customer received help when needed, there is

need for customer care team not to express busyness in their schedules whenever

customer care service was sought. There is need to maintain the culture of continuously

updating customers on progress in regard to customer care service provision and inform

them using alternative platforms whenever service delivery resumed.

4.5.2 Effects of Responsiveness to Issues on Customer Retention of Safaricom Home

Fibre Services in Nairobi County Correlation Analysis

The study adopted Spearman’s rank correlation. As shown in Table 4.9, there was a

strong positive and significant relationship between responsiveness and customer

retention of Safaricom Home Fibre services in Nairobi County (rho = 0.681, p value

<0.05).

Table 4.9 Correlation Analysis Effects of Responsiveness on Customer Retention

Customer Retention Responsiveness

Customer

Retention Pearson Correlation 1 .681**

Sig. (2-tailed)

0.00

N 81 81

Responsiveness Pearson Correlation .681** 1

Sig. (2-tailed) 0.00

N 81 81

** Correlation is significant at the 0.01 level (2-tailed).

39

4.5.3 Effects of Responsiveness to Issues on Customer Retention of Safaricom Home

Fibre Services in Nairobi County Regression Analysis

As shown in Table 4.10, 46.4% variations in customer retention amongst Safaricom home

Fibre customers can be explained by responsiveness.

Table 4.10 Model Summary on the Effects of Responsiveness on Customer Retention

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .681a 0.464 0.458 0.736485

a Predictors: (Constant), Responsiveness

Analysis of variance results in Table 4.11 shows that responsiveness have significant

effect on customer retention on Safaricom Home Fibre services (F= 68.49, p value

<0.05).

Table 4.11 ANOVA on the Effects of Responsiveness on Customer Retention

Model Sum of Squares df Mean Square F Sig.

1 Regression 37.15 1 37.15 68.49 .000b

Residual 42.85 79 0.542

Total 80 80

a Dependent Variable: Customer Retention

b Predictors: (Constant), Responsiveness

As shown in Table 4.12 responsiveness had positive and significant effect on customer

retention in Safaricom home fibre services (β=0.681, p value <0.05).

Table 4.12 Regression Coefficients on the Effects of Responsiveness on Customer

Retention

Model

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

1 (Constant) 1.36E-16 0.082 0.00 1

Responsiveness 0.681 0.082 0.681 8.276 0.00

a Dependent Variable: Customer Retention

CR = 1.36E-16 + 0.681*Responsiveness

40

4.6 Effects of Assurance to Customer Retention of Safaricom Home Fibre Services

in Nairobi County

4.6.1 Effects of Assurance to Customer Retention of Safaricom Home Fibre Services

in Nairobi County

The third objective of the study sought the effects of assurance to customer retention of

Safaricom home fibre services in Nairobi County. The respondents were requested to

indicate the extent to which they were assured in regard to service provision on a five

point Likert scale as provided on Table 4.13.

Majority 65.4% reported that to a very high extent Safaricom Home Fibre employees

were honest with a mean of 4.5 and a standard deviation of 0.7. Secondly, majority 60.5%

reported that to very high extent Safaricom Home Fibre employees were well dressed

whenever they visited them to their houses with a mean of 4.5 and a standard deviation of

0.6. Thirdly, 74.1% reported that to very high extent Safaricom Home Fibre employees

were polite with a mean of 4.7 and a standard deviation of 0.5.

An overwhelming 72.8% of employees reported that to very high extent Safaricom Home

Fibre employees were professional whenever they handled their issues with a mean of 4.6

and a standard deviation of 0.8. Further, 58% reported that to a very high extent

Safaricom home fibre employees were empowered to perform their duties with a mean of

4.4 and a standard deviation of 0.8. Moreover, 55.6% of the respondents reported that to

very high extent Safaricom home fibre employees understood the specific needs of their

customers with a mean of 4.4 and a standard deviation of 0.8.

Moreover, 55.6% of the respondents reported that to very high extent Safaricom home

fibre employees offered personalized services with a mean of 4.4 and a standard deviation

of 0.8. Moreover, 70.4% reported that to a very high extent the behaviour of their

Safaricom employees instilled confidence in customers with a mean of 4.6 and a standard

deviation of 0.7, and 74.1% to a very high extent they were safe while dealing with

Safaricom employees with a mean of 4.7 and a standard deviation of 0.5.

41

Table 4.13 Effects of Assurance to Customer Retention of Safaricom Home Fibre

Services in Nairobi County

1 2 3 4 5

n % n % n % N % n % Mean

Std.

Dev

Safaricom Home Fibre

employees are honest 1 1.2 0 0 6 7.4 21 25.9 53 65.4 4.5 0.7

Safaricom Home Fibre

employees are well

dressed when they visit

the customer's house 0 0 0 0 6 7.4 26 32.1 49 60.5 4.5 0.6

The Safaricom Home

Fibre employees are

polite 0 0 0 0 3 3.7 18 22.2 60 74.1 4.7 0.5

Safaricom Home Fibre

employees are

professional when

handling customer

issues 1 1.2 0 0 8 9.9 13 16 59 72.8 4.6 0.8

Safaricom Home Fibre

employees are

empowered to perform

their duties 1 1.2 2 2.5 6 7.4 25 30.9 47 58 4.4 0.8

Safaricom Home Fibre

employees understand

the specific needs of the

customer 0 0 4 4.9 4 4.9 28 34.6 45 55.6 4.4 0.8

Safaricom Home Fibre

employees give

customers personalized

service 0 0 3 3.7 5 6.2 28 34.6 45 55.6 4.4 0.8

The behaviour of

employees instils

confidence in the

customer 1 1.2 0 0 3 3.7 20 24.7 57 70.4 4.6 0.7

You feel safe in the

transaction with the

employees from

Safaricom 0 0 0 0 2 2.5 19 23.5 60 74.1 4.7 0.5

Overall Average 4.6 0.7

*1- Very Low Extent 2-Low Extent 3-Moderate Extent 4- High Extent 5-Very High

Extent, n-Frequency, % - Percentage

The implications of this finding are that there will be higher levels of customer retentions

since they felt that their safety was well taken care. Moreover, the description of

employees as honest, polite, kindness and competent enhanced assurance of quality

service delivery within the clientele of Safaricom home fibre services. This would ensure

that already existing customers would be retained and recruitment of new ones will be

easy.

42

4.6.2 Effects of Assurance to Customer Retention of Safaricom Home Fibre Services

in Nairobi County Correlation Analysis

The study adopted Spearman’s rank correlation. As shown in Table 4.14, there was a

strong positive and significant relationship between assurance and customer retention in

Safaricom Home Fibre services in Nairobi County (rho = 0.613, p value= 0.04).

Table 4.14 Correlation Analysis for Effects of Assurance on Customer Retention

Customer Retention Assurance

Customer

Retention Pearson Correlation 1 .613**

Sig. (2-tailed)

0.00

N 81 81

Assurance Pearson Correlation .613** 1

Sig. (2-tailed) 0.00

N 81 81

** Correlation is significant at the 0.01 level (2-tailed).

4.6.2 Effects of Assurance to Customer Retention of Safaricom Home Fibre Services

in Nairobi County Regression Analysis

As shown in Table 4.15, 37.6% variations in customer retention on Safaricom home Fibre

services can be explained by assurance. The remaining percentage can be accounted by

other service quality attributes.

Table 4.15 Model Summary on Effects of Assurance on Customer Retention

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .613a 0.376 0.368 0.794828

a Predictors: (Constant), Assurance

43

As shown in analysis of variance, assurance had significant effect on customer retention

in Safaricom home Fibre services (F = 47.632, P value <0.05).

Table 4.16 ANOVA on Effects of Assurance on Customer Retention

Model Sum of Squares df Mean Square F Sig.

1 Regression 30.092 1 30.092 47.632 .000b

Residual 49.908 79 0.632

Total 80 80

a Dependent Variable: Customer Retention

b Predictors: (Constant), Assurance

There was a positive and significant effect of assurance and customer retention in

Safaricom home fibre services (β=0.613. t= 6.902, p value <0.05).

Table 4.17 Regression Coefficients on Effects of Assurance on Customer Retention

Model

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

1 (Constant) -7.95E-17 0.088 0.00 1

Assurance 0.613 0.089 0.613 6.902 0.00

a Dependent Variable: Customer Retention

CR= -7.95E-17 + 0.613 * Assurance

4.7 Customer Retention

4.7.1 Customer Retention Factors

In the current study customer retention was sought through different aspects. The

respondents were requested to indicate there level of agreement on a five point Likert

scale that they were willing to continue using Safaricom Home Fibre services. As shown

in Table 4.18.

44

Majority 80.2% strongly agreed that they intended to continue using fibre services from

Safaricom for a long time with a mean of 4.7 and a standard deviation of 0.9. Secondly,

71.6% strongly agreed and 22.2% agreed that they were satisfied with the Safaricom

Home Fibre services that there were receiving with a mean of 4.6 and a standard

deviation of 0.8. Thirdly, 79% strongly agreed and 13.6% agreed that they were willing to

say positive things about Safaricom home Fibre services with a mean of 4.7 and a

standard deviation of 0.8. Moreover, 69.1% strongly agreed that Safaricom home fibre

services were easy to use with a mean of 4.6 and a standard deviation of 0.8.

Further, 84% of the respondents strongly agreed that they were willing to refer friends

and family members to Safaricom Home Fibre services with a mean of 4.7 and a standard

deviation of 0.7. The level of customer satisfaction was so high since 45.7% strongly

agreed that they will continue using Safaricom Home Fibre services even when

competitors would provide lower priced services with a mean of 4.1 and a standard

deviation of 1.1. Moreover, majority 76.5% strongly agreed that Safaricom as an

organization provided the best services with a mean of 4.7 and a standard deviation of

0.5. Finally, majority 72.8% strongly agreed that they were receiving full value of internet

services they paid for with a mean of 4.6 and a standard deviation of 0.8.

This implies that there will be an increased number of customers who will be recruited

through referrals. It will be hard to lose existing numbers even to rivals who may charge

lower amounts since clients have positive perception and attitude that Safaricom has

superior capacity to provide better services. Most of the customers were satisfied with

quality of services they received and they felt full value of their money was received

45

Table 4.18 Customer Retention Factors

1 2 3 4 5

n % N % n % n % n % Mean

Std.

Dev

I intend to continue

using Fibre services

from this operator for

a long time 3 3.7 0 0 3 3.7 10 12.3 65 80.2 4.7 0.9

I am satisfied with

the Safaricom Home

Fibre services that I

am receiving 2 2.5 1 1.2 2 2.5 18 22.2 58 71.6 4.6 0.8

I am willing to say

positive things about

this operator to other

people 2 2.5 1 1.2 3 3.7 11 13.6 64 79 4.7 0.8

The Safaricom Home

Fibre services are

easy to use 1 1.2 1 1.2 6 7.4 17 21 56 69.1 4.6 0.8

I am willing to refer a

friend or family

member to Safaricom

Home Fibre services 1 1.2 2 2.5 1 1.2 9 11.1 68 84 4.7 0.7

Even if another Fibre

service provider is

lower, I will go on

using this service

provider 4 4.9 4 4.9 12 14.8 24 29.6 37 45.7 4.1 1.1

To me Safaricom

Home as an

organization is able

to provide the best

service 0 0 1 1.2 1 1.2 17 21 62 76.5 4.7 0.5

I am receiving full

value from the

Safaricom Home

Internet for the

amount that I pay 2 2.5 1 1.2 3 3.7 16 19.8 59 72.8 4.6 0.8

Overall Average 4.6 0.8

*1- Strongly Disagree 2-Disagree N-Neutral 3- Agree 4-Strongly Agree, n=Frequency

%-Percentage

4.7.2 Effect of Service Quality on Customer Retention of Safaricom Home Fibre

Services in Nairobi County Correlation Analysis

The study adopted Spearman’s rank correlation. As shown in Table 4.19, there was a

strong positive and significant relationship between customer retention and reliability of

Safaricom Home Fibre services in Nairobi County (rho = 0.714, p value <0.05).

Secondly, there was a strong positive and significant relationship between responsiveness

46

and customer retention of Safaricom Home Fibre services in Nairobi County (rho =

0.681, p value <0.05). Thirdly, there was a strong positive and significant relationship

between assurance and customer retention in Safaricom Home Fibre services in Nairobi

County (rho = 0.613, p value= 0.04).

Table 4.19 Effect of Service Quality on Customer Retention of Safaricom Home

Fibre Services in Nairobi County Correlation Analysis

Customer

Retention Reliability Responsiveness Assurance

Customer

Retention

Pearson

Correlation 1 .714** .681** .613**

Sig. (2-tailed)

0.00 0.00 0.00

N 81 81 81 81

Reliability

Pearson

Correlation .714** 1 .752** .615**

Sig. (2-tailed) 0.00

0.00 0.00

N 81 81 81 81

Responsiveness

Pearson

Correlation .681** .752** 1 .702**

Sig. (2-tailed) 0.00 0.00

0.00

N 81 81 81 81

Assurance

Pearson

Correlation .613** .615** .702** 1

Sig. (2-tailed) 0.00 0.00 0.00

N 81 81 81 81

** Correlation is significant at the 0.01 level (2-tailed).

4.7.3 Effect of Service Quality on Customer Retention of Safaricom Home Fibre

Services in Nairobi County Regression Analysis

The main purpose of the study was to examine the effects of service quality and customer

retention. To achieve this, a hypothesis model as shown in conceptual framework was

fitted. As shown in Table 4.20, an R squared of 0.576, showed that 57.6% of variations in

customer retention in Safaricom Home Fibre services can be explained by assurance,

reliability and responsiveness and the remaining percentage can be explained by other

factors which were excluded from the model.

47

Table 4.20 Model Summary for Effect of Service Quality on Customer Retention

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .759a 0.576 0.559 0.66381

a Predictors: (Constant), Assurance, Reliability , Responsiveness

Results in Table 4.21, shows the analysis of variance (ANOVA) for the regression model

that was applied. The results were significant since p value was less than 0.05 and it

implied that service quality had significant influence on customer retention on Safaricom

Home Fibre in Nairobi County (F=34.851, p value <0.05).

Table 4.21 ANOVA for Effect of Service Quality on Customer Retention

Model Sum of Squares df Mean Square F Sig.

1 Regression 46.07 3 15.357 34.851 .000b

Residual 33.93 77 0.441

Total 80 80

a Dependent Variable: Customer Retention

b Predictors: (Constant), Assurance, Reliability , Responsiveness

As shown in Table 4.22, there was a positive and significant relationship between

reliability and customer retention in Safaricom Home fibre services in Nairobi County

(β= 0.425, p value<0.05). This implies that a unit change in reliability while holding

constant responsiveness and assurance increased customer retention in Safaricom Home

Fibre services by 0.425 units.

Secondly, there was a positive and significant relationship between responsiveness and

customer retention in Safaricom home fibre services in Nairobi County (β = 0.226, p

value <0.05). This implies that a unit change in responsiveness while holding constant

reliability and assurance increased customer retention in Safaricom Home Fibre services

by 0.226 units.

Finally, there was a positive and significant relationship between assurance and customer

retention in Safaricom home fibre services in Nairobi County (β = 0.193, p value <0.05).

This implies that a unit change in responsiveness while holding constant reliability and

48

responsiveness increased customer retention in Safaricom Home Fibre services by 0.193

units.

Table 4.22 Regression Coefficients for Effect of Service Quality on Customer

Retention

Model

Unstandardized

Coefficients

Standardized

Coefficients t Sig.

B Std. Error Beta

1 (Constant) 1.01E-16 0.074 0.00 1

Reliability 0.425 0.115 0.425 3.706 0.00

Responsiveness 0.226 0.153 0.226 2.781 0.00

Assurance 0.193 0.068 0.193 2.82 0.00

a Dependent Variable: Customer Retention

CR= 1.01E-16 +0.425*Reliability +0.226*Responsiveness +0.193*Assurance

4.8 Chapter Summary

The chapter has presented the outcomes of service quality and customer retention in

Safaricom Home Fibre in Nairobi County. The chapter reveals the effect of service

quality on customer retention in Safaricom Home Fibre. The chapter has shown the

response rate, general information on respondents, descriptive and inferential statistics of

the data collected and analysed. The next chapter presents the study discussions,

conclusions, and recommendations.

49

CHAPTER FIVE

5.0 DISCUSSION, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction

The chapter presents the discussion, conclusion and recommendations of the study based

on the study objectives. The chapter is organized as follows: 5.2 summary of the study,

5.3 discussions, 5.4 conclusions, and 5.5 recommendations for improvement, and for

further studies.

5.2 Summary of the Study

The research proposed to find the effect of service quality on customer retention of

Safaricom home fibre services in Nairobi County. In order to probe this, it was necessary

to break down service quality into respective dimensions that included reliability,

responsiveness to issues and assurance hence the first specific objectives hoped to get the

effect of reliability on customer retention, second hoped to seek effectiveness of response

to issues on customer retention and lastly, effects of assurance on the customer retention.

All these were done based on homes where Safaricom had installed fibre with Nairobi

County.

The study adopted descriptive research design. Simple and cluster sampling was used to

select 100 respondents; 52 hailing from Nairobi East and 48 from Nairobi West. Primary

data was collected through use of close ended questions in which all items were on a five-

point Likert scale. Descriptive statistics such as mean, standard deviation, frequency and

percentage were used to analyse the collected data. Inferential analysis which includes

correlation analysis was used to measure the strength of the relationship between

reliability, responsiveness, assurance and customer retention. Moreover, regression

analysis was also used to indicate and present the nature of the existing relationship

between the dependent and independent variables.

The study showed that Safaricom Home Fibre is reliable despite of buffering in some

instances. Secondly, Safaricom seems to have intensified measures to curb customer

dissatisfaction through provision of reliable services, this will minimize possibilities of

customers attrition and increase their retention. The findings also imply that Safaricom

has invested on customer management strategies through provision of requisite employee

skills which will enhance customer retention. The company seems to have created a

50

strong brand image and it has strategic methods for market penetration which enhances

service delivery.

The study revealed that Safaricom Home Fibre services were responding efficiently to

customer needs whenever they were called upon. Even though, the response time was

good and customer received help when needed, there is need for customer care team not

to express busyness in their schedules whenever customer care services are sought. There

is need to maintain the culture of continuously updating customers on progress in regard

to customer care service provision and inform them using alternative platforms whenever

service delivery resumed.

The study showed that there will be higher levels of customer retentions since they felt

that their safety was well taken care. Moreover, the description of employees as honest,

polite, kindness and competent enhanced assurance of quality service delivery within the

clientele of Safaricom home fibre services. This would ensure that already existing

customers would be retained and recruitment of new ones will be easy.

5.3 Discussion

5.3.1 Effects of Reliability on Customer Retention

Safaricom Home Fiber offers fast internet. This results concurs with Reichheld and

Kenny (2005) who state that, customer retention results to clients being happy with the

services received. Khan and Fasih (2014) state that, customer retention commences with

an initial contact a customer creates with a corporation and is maintained till termination

of their relationship.

Safaricom Fiber Internet Service does not buffer. This results agrees with Ojo (2010) who

observed that, all companies have to endeavor to provide services which will maximize

customer retention chances and this can be achieved through setting customer

expectations from the onset of his or her engagement, and becoming customers trusted

service provider.

51

Safaricom Fiber packages offered are affordable. These results agree with Sengul and

Turkay (2014) who state that, all companies have to endeavor to provide services which

will maximize customer retention chances and this can be achieved through sharing

values and customs which can foster stronger relationships, and adopting proactive

service delivery.

Safaricom Home Fiber meets the promised time frames for response during downtimes of

services. This results agrees with Ojo (2010) who observed that, all companies have to

endeavor to provide services which will maximize customer retention chances and this

can be achieved through creating personalized attention and always go extra mile while

providing services.

The company performs the services right at the first time. This results concurs with

Zeithaml, Bitner and Gremler (2012) who state that, a service is considered to be an

activity that one party offers to another which is essentially intangible and through some

form of exchange is able to satisfy an identified need of the customers.

Customer issues are resolved promptly. This results agree with Arslan et al. (2014) who

observed that, perceived service quality results from comparisons by customers of

expectations with their perceptions of service delivered by the suppliers. If expectations

are greater than performance, then perceived quality is less than satisfactory and hence

customer dissatisfaction occurs.

The organization is sympathetic and reassuring when you have a problem with your

service. This results concurs with the results of Zangmo, Liampreecha and Chemsripong

(2015) study which hypothesized that service quality attributes: tangibles, reliability,

responsiveness, assurance and empathy had influence on customer satisfaction which

influenced customer retention.

The company keeps proper records of your information (they know your account details).

This results agree with Saravanakumar and Jayakrishnan (2014) who state that,

consistency of performance and dependability, accuracy of records kept, performance of

services at the designated time are keep desires of all customers. All companies need to

be aware of customer expectation on reliability of their services.

52

The company offers quality technical support. This results concur with Kumar, Batista

and Maull (2011) who investigated the impact of operations performance on customer

performance, and determined that there was a negative significant relationship between

customer orders and quality and arrival on first promise while there was a positive and

significant relationship between customer orders and lead time.

5.3.2 Effects of Responsiveness to Issues on Customer Retention

Customers are promptly notified during instances of loss of service. This results are in

agreement with Anantha and Huam (2014) who state that, responsiveness is

communicated to customers by length of time they have to wait for assistance, answers to

questions or attention to problems.

Service disruptions are fixed promptly on reporting and customers updated on

completion. These results concur with Prabha (2010) who observed that, responsiveness

is the willingness to help customers and provide prompt service. This dimension

emphasizes attentiveness and promptness in dealing with customer's requests, questions,

complaints and problems.

There is ease of access to the customer care support team. This results agree with Zineldin

(2000) who characterizes retention as a ceaseless responsibility to business with a specific

organization in a predictable way. On contacting the customer care team, the team is

willing to assist you get a solution. This results concur with those of Al-Zoubi (2013)

whose results revealed positive and significant relationship between responsiveness and

customer loyalty. Dubey and Srivastava (2016) study also showed a positive and

significant relationship between responsiveness and customer loyalty as well as customer

satisfaction.

Safaricom Home Fiber employees are always willing to help customers. This results

agree with Gerpott, Rams and Schindler (2001) who state that, customer retention as a

coherence of the business relations between the client and organization. Customer

retention is the act of attempting to fulfill clients with the goal of growing long-haul

associations with them.

53

Safaricom Home Fiber employees are never too busy to respond to customer requests.

This results concur with Poku, Ansah and Lamptey (2014) whose study revealed that

most of the respondents agreed that responsiveness had effect on customer satisfaction.

Roostika (2011) also examined the perceived quality of service and trust on customer

loyalty on mobile internet adoption in Indonesia, and their results showed that service

quality had an indirect association with the loyalty of the customer.

Safaricom Home Fiber employees tell you exactly when services will be performed. This

results agree with Karjaluotoo et al. (2012) whose study demonstrated that there exists a

positive connection between the service quality variables and customer loyalty. This is to

mean that managers can still improve customer perceived value by emphasizing service

quality, which later gives more loyal customers.

Safaricom Home Fiber employees show a sincere interest in solving your issues. This

results concurs with Ahmad, Hussain and Rajput (2015) who state that,

telecommunication companies should address aspects of customer satisfaction so as to

ultimately influence customer trust and loyalty which will increase chances of customer

retention.

The operating hours of Safaricom Home employees ensure that customers get help when

they need it. This results agree with Caruana et al. (2000) and Caruana (2002) who

observed that, client dedication is accomplished when a client is happy with the

astounding administration; and Panda (2003) who states that, for a service provider to be

successful, it will rely on upon the relationship the administration supplier has with the

client.

5.3.3 Effects of Assurance on Customer Retention

Safaricom Home Fibre employees are honest. This results agree with Fitzersimmons &

Fitzersimmons (2012) who state that, assurance as a dimension is likely to be particularly

important for the services that the customers perceives as involving high rising and/or

about which they feel uncertain about the ability to evaluate.

54

Safaricom Home Fibre employees are well dressed when they visit the customer's house.

This results concur with Ansar and Lodhi (2015) who observe that, trust and confidence

may be embodied in the person who links the customer to the company, for example, the

marketing department, thus, employees are aware of the importance to create trust and

confidence from the customers to gain competitive advantage and for customers’ loyalty.

The Safaricom Home Fibre employees are polite. This results agree with Turkay and

Sengul (2014) who state that, the aspect of service quality shows how knowledgeable

employees are able to render quality service to customers. Thus, the ability of employees

to instil confidence in customers, making them feels safe in their transactions,

consistently courteous towards customers, the ability to answer customer questions

appropriately.

Safaricom Home Fibre employees are professional when handling customer issues. These

results agree with Competencies Workgroup (2002) who defined competency as a

characteristic of an employee that contributes to successful job performance and the

achievement of organizational results. These include knowledge, skills and abilities plus

other characteristics such as values, motivation, and initiative and self- control.

Safaricom Home Fibre employees are empowered to perform their duties. These results

concur with Turkay and Sengul (2014) who carried out comparative analysis to examine

the influence of employee’s behaviour on customer’s satisfaction. Results of the study

revealed that employee’s behaviours influenced customer’s satisfaction which ultimately

affected return visits.

Safaricom Home Fibre employees understand the specific needs of the customer. This

results agree with Ojo (2010) whose study concluded that there is need to increase

customer satisfaction levels which can be attained through service quality. Indeed,

satisfied customers will have tendencies of repeat visits and this will enhance annual

sales, and that there is need to consider customers input so as to improve their satisfaction

levels, loyalty and retention.

55

Safaricom Home Fibre employees give customers personalized service. This results

concur with Toyese (2014). Results of the study revealed that client relationship

management had effect on customer retention and whenever customers felt that there

needs were adequately met then had no chances of switching to alternative service

provider.

The behaviour of employees instils confidence in the customer. This results are in

agreement with Fitzersimmons and Fitzersimmons (2012) who observed that, customers

more often than not look out for assurance from employees and expect that employees

will behave confidently and instil confidence in their clients.

You feel safe in the transaction with the employees from Safaricom. This result concurs

with Mosavi and Ghaedi (2012) who investigated the relationship between trust, customer

loyalty and repeat purchase and recommended that all mobile service providers should

strive to win customers trusts which can be attained through shared value and faster

handling of their complaints. Hasan, Kiong and Ainuddin (2014) also found that trust had

a significant and positive effect on customer loyalty.

5.4 Conclusion

5.4.1 Reliability and Customer Retention

Reliability is shown by this study to shape the repeat business by customers. Despite the

challenge presumed in assessing reliability, reliability efforts are being put in place to

ensure company service is provided as promised, focus on how customers need to be

handled, aiming to getting it right fast and ensuring error free records. Safaricom

Company limited is seen to care for need of its customers; a positive feedback has been

recognized in regard to customer retention rates. Therefore, an improvement in reliability

causes increase in the number of customer retained.

5.4.2 Responsiveness to Issues and Customer Retention

Information is power. As realized in the study, significance of information can be

underestimated. Reason being that one pillar of responding to issues affecting customer is

information. Responsiveness to issues as indicated by information, prompt service,

willingness to help and readiness to respond are cited herein as key element that drive

toward customer retention. This is shown by a direct and positive nexus between response

56

rate and customer loyalty leading to customer retention. Recognizing issues facing

customers will indicate a direct path to responding to them in a bid to safeguard their loss.

5.4.3 Assurance and Customer Retention

Trust and confidence are necessary element of integration in success market. Assurance

instils the duo among customers. Businesses transactions that are carried out safely and

courteously are likely to win interest of customers and thus guarantee repeated purchase

of the service/products. This study has demonstrated that with the knowledge to answer

customers queries, an assurance is formed that impact positive remark in the rate of

customer retention. Subsequently more assurance on the service being offered will create

informed decisions to settle for a given type of service thus winning trust of customers.

5.5 Recommendations

5.5.1 Recommendations for Improvement

5.5.1.1 Effects of Reliability on Customer Retention

The study recommends the organization to create a reliable service provision network that

will suit the customer needs. This will likely win loyalty and satisfaction that would then

lead to retention. This will also facilitate the ability of Safaricom staff to meet their

promises made to their clients.

5.5.1.2 Effects of Responsiveness to Issues and Customer Retention

The study recommends the organization to adopt feedback mechanisms as a prompt way

of handling issues from the customer. Creating platforms for getting feedback from the

customers should be encouraged, and this can be done via the social media tools that are

readily available such as WhatsApp, Facebook, Twitter, bulk short message service and

the like.

5.5.1.3 Effects of Assurance on Customer Retention

The study recommends the organization to ensure that its employees behave in manner

that instils confidence to the customer. This can be achieved if companies display

courtesy consistently when handling customer related issues as well as when customer

queries are answered appropriately. The study recommends the organization to ensure

that the platforms it creates for dealing with customer is clean and safe to create a

courteous environment for trading.

57

5.5.2 Recommendations on Further Studies

The major focus for the current study was on the effects of service quality on customer

retention on Safaricom fibre services. Although service quality has five dimensions the

current study examined only three which are reliability, responsiveness and assurance.

There is need to examine the contribution of tangibles and empathy on customer

retention. The current study adopted multiple regression analysis to examine the effect of

service quality on customer retention; there is need for subsequent studies to examine

service quality effects on customer retention through use of structural equation modelling

and confirmatory factor analysis.

58

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APPENDICIES

APPENDIX I: QUESTIONNAIRE

Serial No. …………….

Estate Name …………………………

You have been randomly selected for the study on “Effect of Service Quality on

Customer Retention on Safaricom Home Fibre Services in Nairobi County”. Kindly

complete the three sections of the questionnaire. Fill the questionnaire as honest as

possible since this information will only be used for academic purpose. For the purpose of

confidentiality, you will not be required to indicate your name.

Instructions: Mark your response with a tick (√) or mark (X) in the space provided.

Section I: Background information

A1. Indicate your gender

Male [ ] Female [ ]

A2. What is your highest level of academic qualification?

Secondary level [ ] Masters [ ]

Diploma level [ ] Doctorate [ ]

Degree [ ]

A3. How long have you used Safaricom Home Fibre services?

Less than 1 year [ ]

Between 1 and 2 years [ ]

Between 3 and 4 years [ ]

Above 5 years [ ]

A4. Have you used another Fixed Internet Provider before?

NO [ ]

If YES (Tick below)

Zuku [ ] Liquid [ ] Mawingu [ ]

JTL [ ] Others [ ]

If others, please indicate ……………………………………….

65

Section B: Reliability in Service Provision

In these parts, please indicate the level of your agreement to the following statements by

ranking responses in the boxes provided starting with first box indicating Strongly

Disagree (1), Disagree (2), Neutral (3), Agree (4) and Strongly Agree (5).

Dimension 5 4 3 2 1

Safaricom Home Fiber offers fast internet

The Safaricom Home Fiber Internet service does not buffer

The Safaricom Home Fiber packages offered are affordable

Safaricom Home Fiber meets the promised time-frames for

response during downtimes of services

The company performs services right the first time

Customer issues are resolved promptly

The organization is sympathetic and reassuring when you have

a problem with your service

The company keeps proper records of your information (they

know your account details)

The company offers quality technical support

66

Section B: Reliability in Service Provision

In these parts, please indicate the level of your agreement to the following statements by

ranking responses in the boxes provided starting with first box indicating Strongly

Disagree (1), Disagree (2), Neutral (3), Agree (4) and Strongly Agree (5).

Dimension 5 4 3 2 1

Customers are promptly notified in instances of loss of service

Service disruptions are fixed promptly on reporting and

customers updated on completion

There is ease of access to the customer care support team

On contacting the customer care team, the team is willing to

assist you get a solution

Safaricom Home Fiber employees are always willing to help the

customer

Safaricom Home Fiber employees are never too busy to respond

to customer requests

Safaricom Home Fiber employees tell you exactly when

services will be performed

Safaricom Home Fiber employees show a sincere interest in

solving your issues

The operating hours of the Safaricom Home employees ensure

that I get help when I need it

67

Section C: Assurance in Service Provision

In these parts, please indicate the level of your agreement to the following statements by

ranking responses in the boxes provided starting with first box indicating Strongly

Disagree (1), Disagree (2), Neutral (3), Agree (4) and Strongly Agree (5).

Dimension 5 4 3 2 1

Safaricom Home Fiber employees are honest

Safaricom Home Fiber employees are well dressed when they

visit the customer’s home

The Safaricom Home Fiber employees are polite

Safaricom Home Fiber employees are professional when

handling customer issues

Safaricom Home Fiber employees are empowered to perform

their services

Safaricom Home Fiber employees understand the specific needs

of the customer

Safaricom Home Fiber employees give customers personalized

service

The behavior of employees instils confidence in the customer

You feel safe in the transaction with the employees from

Safaricom

68

Section D: Customer Retention

In these parts, please indicate the level of your agreement to the following statements by

ranking responses in the boxes provided starting with first box indicating Strongly

Disagree (1), Disagree (2), Neutral (3), Agree (4) and Strongly Agree (5).

Dimension 5 4 3 2 1

I intend to continue using Fibre services from this operator for a

long time

I am satisfied with the Safaricom Home Fibre services that I am

receiving

I am willing to say positive things about this operator to other

people

The Safaricom Home Fibre services are easy to use

I am willing to refer a friend or family member to Safaricom

Home Fibre services

Even if another Fibre service provider price is lower, I will go

on using this provider.

To me, Safaricom Home as an organisation is able to provide

the best service

I am receive full value from the Safaricom Home Internet for

the amount that I pay

Thank you very much for taking time to complete this questionnaire.

THE END

69

APPENDIX II: SAMPLE SIZE DISTRIBUTION

CLUSTER ESTATE CUSTOMERS SAMPLE

NE Nyayo 1200 13

NE Delta 154 2

NE South park 89 1

NE Jacaranda 420 5

NE Bluebells 100 1

NE Greatwall Phase 3 288 3

NE Greenspan 357 4

NE Greatwall Phase 2 312 3

NE Simba Villa 272 3

NE Phenom Estate 345 4

NE Everest 241 3

NE Taj Village 72 1

NE Easy Prestige 234 3

NE Fivestar Gardens 318 3

NE Yamin 81 1

NE WestPark 595 7

NE Valley view 421 5

NE NCSHE Madaraka 600 7

NE 360 Degrees P1 397 4

NE Sidai 127 1

NE Oak Park 56 1

NE Imara Gardens 240 3

NW Fahari 18 1

NW Waterfront 127 1

NW Ngara Civil Service 623 7

NW Fourways 692 8

NW Will mary 65 1

NW Rossyln lone fairseat 37 0

NW Serene Gardens 63 1

NW Loresho 126 1

NW Executive Apartments 106 1

NW Clermount Court 24 0

NW Nyeri Close 40 0

NW Sunshine 48 1

NW Hendred Place 24 0

NW Ngolu court 32 0

NW Kita apartment 24 0

NW Taj Millenium 32 0

9000 99