BRAND EQUITY AND CUSTOMER RETENTION IN THE NIGERIA TELECOMMUNICATIONS INDUSTRY

BRAND EQUITY AND CUSTOMER RETENTION IN THE NIGERIA TELECOMMUNICATIONS INDUSTRY

ABSTRACT

The study evaluated the effect of brand equity and customer retention in the Nigeria telecommunications industry with focus on MTN, GLO and AIRTEL. With the inception of mobile telecom services in Nigeria in 2001, several service providers have emerged creating a stiff competitive market as the subscribers’ data-base rose from below 10 million to over 131 million today with high expectations of quality service delivery. The unsatisfied customers switch from one service provider to another and or engage in multiple operator usage resulting into erosion of customer-base and drop in the ultimate bottom line profit of operators. This scenario created a dire need for customer retention and in a bid to retain and acquire customers, service providers have engaged in several customer based brand equity practices (brand awareness, brand association, perceived quality and brand loyalty) which have continued to heighten their operating cost but customer switching and multiple operator usage have remained on the rise. It is against this backdrop that the study sought to: (i) determine the effect of brand-awareness on customer retention in the Nigeria mobile telephone service sector, (ii) determine the effect of brand association on customer retention in the mobile telecom sector, (iii) ascertain the effect of brand’s perceived quality on customer retention in the mobile telecomm service sector,(iv)ascertain the effect of brand image on customer retention in the mobile telecom industry. The study adopted survey design. Simple random sampling technique was used to select the respondents for the study. Who were located in Lafia, Nassarawa state and Makurdi, Benue State. A sample size of 400 was determined from a population of 131,910,228 active subscribers using Taro Yamane formula while a pilot study was carried out using a sample size of 40 , 20 each from Lafia and Makurdi. With the use of Free Association Test and Projection Technique (FATPT) structured questionnaires. Cronrbach’s Alpha was used to determine the reliability and consistency of items with a value of 0.935 which indicated a high reliability and consistency of test items. The test of hypotheses was done using correlation analysis. The result of this study revealed the followings; brand awareness campaigns have a statistically significant positive relationship with customer retention in the industry but the feed- back loop is too restricted to reflect the perceptions  of the majority subscribers, brand association has a statistically significant negative effect on customer retention drive of the mobile telecomm operators, perceived service quality has a statistically significant positive relationship with customer retention and is the most key success factor among the customer based equity elements but has been neglected. Brand image also has a statistically significant relationship with customer retention in Nigeria. The study concluded that, the customer based brand equity practices by MTN, Glo and Airtel have not been able to stem customer switching because the key success factor, brand perceived quality is poorly practiced and  industry image perception is low. This study recommended regular technology up-grades, expansion in infrastructure and easy access to customer supportive services. Government’s provision of sustainable power supply, harmonization of taxes and regulatory policies and provision of adequate security to telecom service operators’ infrastructure. Nigeria Communications Commission should consider a merger and acquisition policy to consolidate the industry and restore the lost image as was done in the Nigerian banking industry.