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International Journal of Economics & Business ISSN: 2717-3151, Volume 4, Issue 1, page 141 - 163

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Zambrut.com. Publication date: May 30, 2019.

Enoanyor, R. E. M. E. 2019. Customer Service Effectiveness an Appraisal from ................ 141

Analyzing the Effect of Customer

Service on Customer Retention (Study in Camtel South-West Region of the Republic of Cameroon)

Ruth Erang Mbu Epse Enoanyor1 & Nwahanye Emmanuel

2

1Ruth Erang Mbu Epse Enoanyor &

2Dr. Nwahanye Emmanuel

University of Buea

South-West Region, Republic of Cameroon

1. INTRODUCTION

Customer retention has long been considered an important element in achieving competitive

advantage for businesses. The increasingly turbulent economic environment has brought this again to the

forefront of many organizations (McCrory, 2013). In fact, the contemporary advancement of commerce

and emerging of markets has led to radical economical fluctuations and inflamed fierce competition

(Narteh, 2013). As a result, the consumer today has a multitude of alternatives to exceed his expectations

when making a purchasing decision, whereas, rivalry has reached its climax (Leal & Pereira, 2003).

Consequently, given the assumption that loyal customers are a vital ingredient of a sustainable business

operation, therefore, retaining these customers is no doubt an interactive catalyst that will systematically

Abstract: This paper intended to analyze the effect of customer service on customer

retention in CAMTEL, South-West Region of the Republic of Cameroon. Data used in

the study were collected through questionnaires administered to 90 customers of

CAMTEL South-West Region. Data were analyzed using both descriptive and inferential

statistics. With respect to customer service in CAMTEL, the study established that

CAMTEL customer service is not significant enough to bring about substantial and

credible customer retention. Most respondents were not satisfied with the customer

service in CAMTEL which reduced their loyalty, their level of contentment in staying

with CAMTEL rather leaking on to competitors, their trust of the services and their

desire to stay with CAMTEL. Despite the fact that the company can still boost of a

certain number of customers, it is strongly recommended that CAMTEL management

should improve its customer service, emphasizing on building a good customer

relationship management, developing information systems, training its staff to be

responsive, providing bonuses, and reviewing the pricing, to increase loyalty and

retention.

Keywords: Customer Service; Retention; CAMTEL, South-West Region.

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influence the long-term success of any enterprise in today’s service-driven economy. In this regard,

customer retention strategy signifies the vaccine that must be utilized by enterprises to diminish the risk of

substitutes (Komunda & Osarenkhoe, 2012).

Customer retention is the approach in which organisations emphasize their exertions on current

customers with the aim to carry on business with them (Mostert et al, 2009). Ramakrishnan (2006) defines

customer retention as the objective of marketing that bars customers from joining the competition.

Nevertheless, customer retention can also imply the number of clients who stay with the supplier over an

established period, like a year (Dawes, 2009). Customer retention is considered an important aspect in

shaping the accomplishment of businesses.

Customer retention is seen as an obligation by a customer to carry out business transactions with a

particular firm on a regular basis. Molapo and Mukwada (2011) ascertained that firms are all out to foil

attempts by customers to switch retailers and indirectly retain them. In addition, Erdis (2009) established

that firms direct their marketing efforts to please their current customers in order to retain them and foster

long-term relationships with them. Customers will frequently patronize firms which meet their needs and

hence, an enduring relationship will be fostered (Fill, 2005).

Customer retention has been found to be a primary goal in firms that practice relationship marketing

(Coviello et al., 2002). While the precise meaning and measurement of customer retention can vary

between industries and firms, there appears to be a general consensus that focusing on customer retention

can yield several economic benefits (Reichheld, 1996; Buttle, 2004). As customer tenure lengthens, the

volumes purchased grow and customer referrals increase. Simultaneously, relationship maintenance costs

fall as both customer and supplier learn more about each other. Because fewer customers churn, customer

replacement cost falls. The seller may incur more cost in attracting new customers through discounted

offers. Therefore, retained customers may pay higher prices than newly acquired customers because they

are less likely to receive discounted offers that are often made to acquire new customers. These conditions

combine to increase the present net value that retained customers has to sell. Lindgreen et al. (2004), for

example, compute that it can be up to ten times more expensive to win a customer than to retain a customer

and the cost of bringing a new customer to the same level of profitability as the lost one is up to sixteen

times more.

Gummesson (2002) indicated that in order to retain customer over time, professional service

providers need to place more effort on the creation of personal relationships with the clients, as it is a

strong bond tying customers to the firm. Creation of customer satisfaction and the creation of switching

barriers are the main strategies employed by firms, for retaining customers. Other factors affecting

professional service firm’s retention strategies are the firm’s ability to convey confidence, to get the

customers involved, and to be able to deliver good quality services (Gummesson, 2002).

Recent marketing activity has seen a shift in emphasis among marketers from a traditional

transactional approach, to one that seeks a more long-term relationship (Hollensen, 2003). The

differentiation, according to Grönroos (1998), is that transactional marketing is supplier-focused, whereas

relationship marketing is customer-focused. This has resulted in organisations moving away from merely

attracting business to attempting to retain and sustain it for the long-term.

For a supplier, the financial benefits of retaining existing customers as opposed to sourcing new ones

are clearly apparent. Nonetheless, customers also benefit from a close relationship in terms of

customization through improved knowledge and better understanding of business needs by the supplier.

Little and Marandi (2003) argue that quality and cost are important factors in supporting long-term

relationship. In particular, customer concerns over switching suppliers and the suitability of the product

and any associated rectification costs possibly negative potential cost savings is a key factor in supplier

retention. Customization of product and knowledge exchange between customer and supplier therefore

makes the switching cost seem higher (Gummesson, 2002).

The argument for customer retention is relatively straightforward. It is more economical to keep

customers than to acquire new ones. The costs of acquiring customers to replace those who have been lost

are high. This is because the expense of acquiring customers is incurred only in the beginning stages of the


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commercial relationship (Reichheld & Kenny, 1990). In addition, long-term customers buy more and if

satisfied, may generate positive words-of- mouth promotion for the company. Additionally, long-term

customers also take less of the company’s time and are less sensitive to price changes (Healy, 1999). These

findings highlights the opportunity for management to acquire referral business, as it is often of superior

quality and inexpensive to obtain. Thus, it is believed that reducing customer defections by as little as five

percent can double the profit.

Customer expectations are evolving and the customers are more vocal and willing to share both

when something is good and when something is bad. Customer service is also evolving, in order to keep

pace with customers. The pace of the change driven by customers, is accelerating because the social web

(commerce and network) has enabled and empowered customers. Thinking back 10-15 years ago,

customers were not able to make purchases online. They only asked friends and there were no online

reviews. When a customer needed to contact a company, when something had really happen, they might

have even sent a letter, or pick up a phone and call.

In today's competitive environment, the concept of customer service management has played

strategic roles in the improving, managing, retaining and developing customer’s loyalty (Oluseye et al.,

2014). When industries manufacturing and large cities began to grow, the service industry began to gain

ground. Due to the changing economic trend, the outlook of business activities have significantly changed

and shifted from high reliance on manufacturing companies to focus on providing timely and quality

service delivery. The age of the service company has been alive and strong for some time now.

Therefore, in order to provide quality service to customers in this present time, organisations must

have appropriate and comprehensive knowledge of who they are meant to offer services and what form of

service should be delivered. In an attempt to resolve the question on what form of service should be

rendered to customers, Davis and Heincke (2003) noted that, services are intangible and therefore more

difficult for both service providers and the customers to measure and evaluate objectively. They went on to

say that services are produced and consumed simultaneously, meaning that either the customer or a

possession of the customer is involved in the process while the service is being delivered. Aronould, Price

and Zinkhand (2004) posited that no organisation can produce essential and quality service delivered

without the requisite to understand further than the basic characteristics of services and what they value.

The concept of customer service has been defined by different people with different connotations.

However, depending on an organisation’s focus, such as retailing, industry, manufacturing or service, the

goals of providing customer service may vary. In fact, we often use the term of service industry as if it

were a separate occupational field unto itself; in reality, most organisations provide some degree of

customer service. Balaji (2009) defines customer services as the capability of well informed, consistent,

efficient, proficient and passionate employee to provide/offer products and services with a view of

identifying and satisfying the needs, demands, values and expectations of the customers (Ehigie, 2006).

Globally, in the process of achieving organisational goals and objectives, better customer services is

a very important aspect in retaining customers. Better customer service is therefore an important and

necessary activity at all time in the life of the enterprise. Every organisation, especially in the

telecommunication sectors, has to take into consideration how best to serve it potential and current

customers if it intends for such customers to retain its products or service. The development and expansion

in the telecommunication industry today has paved ways for economic development and satisfaction. The

most important development and discovery is the wireless telephone system, which comes in either in

fixed wireless telephone lines or the Global system of mobile communications (GSM) of which Cameroon

system is not left out.

The advent of GSM in 2017 marked a dramatic shift in Cameroon’s telecommunication industry.

The Cameroon telecommunication industry is one of those industries that have experiencing in more than a

decade now an increase competition. This all started in July 1998 when there was a revival of the

Cameroon telecommunication sector. This revival was to make Cameroon broke-up the long monopoly it

had in this sector since 1972. This was followed by the split up of the historical public monopoly

International Communication Company Limited (Intelcom) in 1999 into two entities: CAMTEL and


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CAMTEL Mobile. Thereafter, the first competitive private mobile license was granted to the “Societé

Camerounaise des Mobiles (SCM)”. With three telecommunication companies operating then, the

government created the Telecommunication Regulatory Agency (ART) which acts as the sector gendarme

(it guarantees and ensures the regulation, control and monitor of the activities of operators in this sector).

This new legal and regulatory framework immediately attracted foreign investors. Since then, GSM

licenses were granted to three (3) providers namely MTN, ORANGE and NEXTTEL.

Telecommunication product development are easy to emulate, and when the telecommunication

industry provide nearly identical services, they can only be distinguished based on the prices and quality.

The service failure in service industry is predictable due to the human involvement in the service delivery

process, which eventually creates vitality for service providers to obtain complaints from angry or

dissatisfied customers, in order to, retain them by provisioning of quick recovery option (Kaur & Sharma,

2015). In today’s cutthroat competitive environment, negligence in customer service or service quality can

lead to business loss, which is not affordable in terms of cost of acquiring new customers. It is important to

formulate proactive strategies to retain customers by determining the antecedents behind customer

complaining behaviour (Karatepe, 2006; Kaur & Sharma, 2015). This behaviour is developed with

experience and direct or indirect interaction with service (Meyer & Schwager, 2007). Customer experience

is a term that explains customer collective incident with service provider and it also helps to determine the

durability of relationship of that customer with service provider (Islam & Rima, 2013). Customer

experience can be enhanced only when good customer service is maintained.

Therefore, good customer services is the potential and effective tool that telecommunication industry

can use to gain a strategic advantage and survive in today’s ever-increasing telecommunication

competitive environment. The majorities of telecommunication companies have non-domestic owners, and

are not very diversified in terms of the products and services they offer (Hull, 2002). This suggest that

most organisations have reached the maturity phase of the product life cycle and has become commodities,

since telecommunication companies offers nearly the same products. This carries the danger of creating a

downward spiral of perpetual price discounting; fight for customer share (Mendzela, 1999).

One strategic focus that telecommunication companies can implement to remain competitive would

be to retain as many customers as possible. The key factors influencing customer retention in the

telecommunication industry includes the range of services, rates, fees and price charged (Abratt & Russell,

1999). Furthermore, service excellence, meeting clients’ needs, and providing innovative products are

essential to succeed in the telecommunication industry. Most private firms claim that creating and

maintaining customer relationships are important to them and they are aware of the positive values that

relationships provide (Colgate et al., 1996).

Cameroon Telecommunication (CAMTEL) was first a private telephone company known as

INTELCAM which was a branch of an American Telecommunication company. Later on it became a

parastatal, part government and part private. CAMTEL was created under decree No:98/198 on the 8th of

September 1998, with a staff strength of ( 2197) workers. CAMTEL deliver services such as OPTICAL

FIBER and CORPORATE NETWORK, which CAMTEL uses to distribute different available Network to

its competitors.

At first, CAMTEL had just the Land Line (fixed) telephone and fax, but when telecommunication

competitors came to Cameroon with mobile phones, internet and (GSM), it was like an eye opener to

CAMTEL. CAMTEL had to diversify its products, being the owner of the optical fiber CAMTEL had to

come out with more advanced communication tools in order to retain its customers. In order to retain its

customers, CAMTEL had to do everything possible to meet the expectations of the customers through

improvement in technology and marketing mix.

To accomplish this target, CAMTEL had to turn a new page and came out with the following

products: wireless fixed phone, mobile (CT) phone, pay phone, (GSM), smart phone, Wiffi, pack Mboa,

Toli, Telecopy (fax). For internet services CAMTEL has: switching telephone NETWORK, Internet

connections through CT phones, (ISDN) an internet in wireless fixed phones, internet through (ADSL) and

internet connection through dedicated lines. In addition, CAMTEL has a short-term plan and a minimum


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investment program where: CAMTEL Laid the sub-marine optical fiber cable West Africa Festoon sub-

marine Cable System(WAFS), With landing points in Kribi and Limbe, and a land extension from Limbe

to Douala. CAMTEL has put in place a reliable modern system of managing Network from the technical

and commercial standpoint with a view to ensuring rapid connection of subscribers and easy fault

recording.

Studies on customers’ service, customer loyalty and customers’ retention are no longer a new topic

in the field of customer relationship management practice and philosophies (Colgate & Norris, 2001;

Bowen & Chen, 2001; Lauren & Lin, 2003; Lee & Hwan, 2005; Lucas, 2005; Mishra, 2009). However,

after a thorough search, limited studies have been carried out regarding the effectiveness of customer

service in the retention of customers in developing economy such as Cameroon and more precisely in a

public company that had monopoly in the past and today is almost the last in the market despite urged

investments. In addition, various researches (Douglas & Connor, 2003; Wong & Sohal, 2003; Parasuraman

et al., 1988) have focused only on service quality in telecommunication sector while customer service

being the focus of this study as well as its influence on customer retention has been given limited attention.

This research therefore seeks to examine customer service (effectiveness and quality) in CAMTEL and its

influence on customer retention.

1.1 Problem Statement

Telecommunication companies continuously strive to increase their customer base. They provide

products and services to fulfill different needs of the customers. The focus is now moving from short-term

satisfaction to long-term relationship between the firm and its customers as Grönroos (2000). Finding new

customers is important for a business, but equally important is keeping the old customers since it has

resultant economic benefits to the business (Buttle, 2004). The effectiveness of customer service and the

delivery of high quality services are considered to be profitable strategy for success in today’s highly

competitive market including the telecommunication industry.

The Cameroonian telecommunication industry has shown significant growth since 1998 with the

liberalization of the sector. It was composed of a single monopoly the early days but now it is totally

dominated by four companies. It is therefore crucial for companies operating in the sector to gain better

understanding of their customers so that they are attracted as well as maintained for long period. If this is

true for leaders companies, it is more relevant to followers such as CAMTEL which need to increase its

market share. In fact, according to statistics from the Telecoms Regulatory Agency (ART in French), the

telephone sector in Cameroon had 16.8 million subscribers (out of a population of 22 million inhabitants)

as at end September 2015, against 16.6 million in 2014. This development is mainly due to the increase in

the mobile telephone penetration rate, which now reaches 80% against 71% in 2014, according to the

telecoms regulatory authority.

The couple made of the South African operator MTN and the French group Orange continues to lay

down the law on the mobile market and telephone market at large, with 93.8% of market shares for both.

In detail, MTN grabs 57.04% of the market, against 36.8% for Orange. The newest arrival on the market,

Vietnamese operator Viettel which operates under the NEXTTEL brand, takes 4.66% of market share, a

little over one year after launching its operations. At the tail end of this ranking established by ART is the

historical operator, CAMTEL, sole landline telephone operator of the country, who commands 1.4% of the

telephone market in Cameroon. However, from the telecoms authority's statistics, the number of

subscribers to the public operator, who at that time was preparing to start using its mobile license, reaches

412,000 clients, after stagnating for a long time at 22,000.

The competition in that sector has forced telecommunication companies to think of ways to generate

profit by differentiating their products and/or services from their competitors so that customers are retained

to a greater level. Nevertheless, it should be noted that, today, the differences in products or services

offered among the different telecommunications providers are relatively insignificant, even the switching

cost of customers is very low. To obtain an advantage in such a competitive environment, firms are now


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providing “value-added” service. According to Vandermerve (1993), the rationale is that the market power

is in the services, because the value is in the result; which has to do with customer retention and loyalty.

As such, in this system characterised by competition, companies want to meet up with the need of

customers. Due to the unpredictable behaviour of customers, they can only be stimulated to buy and

because of these companies are forced to better customer services to retain their customers. These

functional characteristics have brought us to develop the various ways in which companies can better

customer service and customer retention. Firstly, what is the nature of customer service in companies? And

how does it impact customer retention? What are those strategies that can be used in customer services in

other to retain its customers? Are employees satisfied, so that they can be willing to give customers the

best service? This is because when a customer receives poor service, he or she will tell up to 30 people

which will tannish the image of the company. This leads us to exposing the strategies to improve customer

services and its impact on customer retention.

This notwithstanding, Hopewell (2014) found that the service quality of many telecommunication

operators is very poor due to high number of complaints, bad customer experiences and customer

satisfaction issue. Service providers are doing service upgrades and expansions in order to meet these

market challenges. Service providers need to provide better data services and they need to upgrade

technology from 3G (3rd

Generation) to 4G (4th

Generation) mobile technology for provisioning of faster

data services. During the roll-out of network and services, lack of proper planning leads to poor customer

service to clients (Taylor, 2013). This can contribute to poor voice and data services. This is highly

evident in CAMTEL in that even after the launching of the mobile license, its situation and position in the

telecommunication sector has not change. While MTN Cameroon, ORANGE and NEXTEL are making

massive moves towards attracting and maintaining customers through an efficient customer relationship

management and increased service quality, the state-owned corporation CAMTEL which is the pioneer in

the country has over the years recorded no significant increase in its customer base when compared with

the former. Ironically, CAMTEL customers keep on switching from this sector to enjoy the quality

services offered by its competitors. This can be illustrated by a drastic decrease of CAMTEL South-West

Region revenues from 1,377,044,457 CFAF in 2013 to 244,240,941 CFAF in 2017 (see Appendix 2). In

view of the above, there is dire need to conduct a study on customer service quality in CAMTEL and how

it affects customer retention rate. In addition, it is important to consider the observations of Fluss (2010)

concerning the attitudes of competitors and the annual customer attrition in some industries and more

particularly in the telecommunication industry. He notes that competitors are always on the lookout to steal

customers through better deals. He has observed that annual customer attrition rates range from 7% in

industries that have high exit barriers such as banking and insurance, to almost 40% in the mobile phone

industry. It can therefore, be concluded that customers in the telecommunication industry keep on

switching network providers for better deals.

2. CONCEPTUAL FRAMEWORK

Nowadays customer retention is of prime importance as it is necessary to understand what an

organisation should do to retain its customers. Retention can be defined as the continuous possession, use

or control of something. The main purpose of a corporation behind practising customer retention strategy

is to reduce customer defections. Customer retention starts when an organisation has the first contact with

the client, and it continues throughout the lifetime. The goodwill of the organisation increases if the

organisation can retain and attract the customers and exceeds their expectations (Singh, 2006).

Customer retention has been defined in many ways, definitions often explain the length and breadth

of the subject area, thereby adding value in understanding the nature of the field in totality. According to

Peelen (2005), customer retention in a marketing sense means holding on to customers. If a company

becomes aware in time of those customers who demonstrate an increased likelihood of ending the

relationship, then it can take action to prevent this.

Menon and O’Connor (2007) on their part defined customer retention as holding and maintaining

customers to maximize customer life time value by creating effective relationship with the firm. To them,


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there are different variables that can influence companies’ customer retention such as communication,

customer information, empowerment, customization, loyalty programs, ethical behavior and technology of

the firm.

Ramakrishnan (2006:1) defines customer retention as the marketing goal of preventing customers

from going to the competitor. Customer retention is the way in which organisations focus their efforts on

existing customers in an effort to continue doing business with them (Mostert et al., 2009:120). However,

customer retention can also mean the number of customers who stay with the provider in the course of an

established period, such as a year (Dawes, 2009: 232). Also, customer retention is defined by Hau and Ngo

(2012), as a process or set of steps taken to reduce customer churn rate or defection.

In the light of these definitions, this study adopted customer retention as a situation where an

organisation does every things possible to quit its customers from going to competitors.

Whenever a company retains a customer, it is retaining their lifetime value, that is, the value of their

future relationship with its business. Therefore, retaining customers means retaining lifetime value of the

customers in terms of their spending power as well as their power to influence another customer who can

prove to be potential customers for the business.

Ang and Buttle (2006) described that when customers are loyal, the volumes of purchased items will

increase and reduces costs of relationship because both organisations and customers know each other

better than past, these loyal customers pay higher prices than the new ones, and are not claim for discounts

which the organisation offer to new customers in order to attract and acquire them. Therefore, to maximize

the share of these customers, all of the necessary conditions for Customer relationship management (CRM)

programs should be integrated effectively. However some organisations perform different activities that

can be associated with retaining the customers like the processes for planning, customer satisfaction

measurement, complaint handling mechanism and quality assurance processes. Generally, to be successful

in implementing this program, companies consider the related issues such as the type of customers to be

retained and the nature of product or services provided to them (Buttle, 2002).

Hau and Ngo (2012) asked the question; how do companies can retain their customers? According to

them, this is done by understanding the customer journey, that is, the lifecycle of a customer. Through this

way, a company can identify its weaknesses and strengths to deliver better services to the customers. So,

before retaining customers, it is essential for the companies to understand why their customers are exiting

to their industry peers (Hau & Ngo, 2012).

Still in this light, Smith (2006), stated that to retain customers it is vital to keep a dialog going and

keep the customers in control. Using the web, a customer with a need can complete a form. Depending on

how this form is completed, the solution finder processes the request. Depending on the mode of

communication or need a customer gets a call back, a text message, or e-mail. Customers enjoy

being in control of their relationship. With the information the customer provides, transactional

information and a set of business rules, a company can choose various methods of customer contact (like

e-mail and messaging), the timing and the message that is the most likely to connect to the customer

(Smith, 2006).

Lastly, in appreciating customer retention, the level of commitment between the customer and the

organisation is to figure out about which customers to retain. If the customer is highly committed, they will

be impervious to the appeals of competitors, and there is no need to invest so much in their retention rather

the apt approach is to give him or her a unique customer experience. However, if the organisation have

highly significant customers who are not committed, there is a need to invest considerable sums in their

retention. Reichheld (1996), stated that some companies prefer to focus their retention efforts on their

recently acquired customers. They often have greater future lifetime value potential than longer tenure

customers. There is some evidence that retention rates rise over time, so if defections can be prevented in

the early stages of a relationship, there will be a pay-off in future revenue streams.

A further justification for focusing on recently acquired customers comes from research into service

failures (Bolton, 1998). When customers experience service failure, they may be more forgiving if they

have a history of good service with the service provider. In other words, customers who have been recently


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acquired and let down are more likely to defect or reduce their spending than customers who have a

satisfactory history with the supplier.

There are several benefits attached to the adoption of customer retention strategy by companies, that is,

there are much remuneration organizations derived when customers are retained. In this view, this study

found that some of the benefits included:

• It helps in building strong relations with the customers: Serving a repeat customer is more beneficial

for the company rather than acquiring a new one. Thus, it is very important for the retailers to maintain

hormonal relations with their customers. In this regards retention strategies play an important role as

through such strategies companies can provide benefits to its customers without affecting its cash flow. If

customers get good quality products and services at competitive price, they get satisfied and remain loyal

to a particular player. Thus, retention strategies are fruitful in building a strong relation with the customers.

• It enhances the goodwill of a brand: Retention strategies involve giving extra or added benefits to the

customers at the same price. In the present business environment, companies can attract and retain its loyal

and potential customers only if they deliver something new and unique or extra to its customers as

competitive price. If the company is able to deliver such benefits to the customers.

• It identifies future needs of the customers: Several retention strategies involve collecting personal

information of the customers and their shopping patterns. For example, if a company has its loyalty cards,

it collects information of the customers and with every purchase of that particular customer they update the

profile of the customers. On the basis of this information, companies can determine the market trend and

thus can identify the future needs of the customers.

• It identifies and explores various sales opportunities: Customer retention strategy is beneficial for the

companies. It plays a huge role in increasing the sales and profits for the firms. For example, if a retailer is

able to offer various attractive strategies to its customers, it is able to attract more and more customers.

Thus, the retention strategy helps the retailers to design and explore various sales opportunities.

• It rectifies the flaws within the organisation's policies and processes: Many times it may be the case

that any strategy designed by the company is not able to achieve its purpose. In that case, retention

strategies such as club cards can help the companies to accumulate information regarding the customers

and thus can design the strategies as per their shopping behaviour.

• Through this customers can easily provide feedback to the companies: Many customer retention

strategies help the retailers to collect data regarding the shopping pattern of the customers. Companies

record the items that are frequently purchased by the customers and on that basis determine the needs and

wants of the customers. Moreover, through such strategies customers can also provide feedback to the

companies regarding their products and services.

• Organisations can increase revenue and reduce acquisition costs of the customers: It is beneficial for

the retailers to serve existing customers rather than attracting new or potential customers. Through such

scheme, companies can earn the loyalty of the customers and thus can increase their revenue streams.

Moreover, if the companies have a huge base of loyal customers, there is no need for looking new

customers and thus they can save a lot on acquisition cost (Woo & Fock, 2004).

Similarly, Parker, Nitse and Tay (2009) clearly stated the following five customer retention benefits:

It is cheaper to retain customers than to acquire them.

The costs of serving long-life customers are less than those of serving new customers.

Long-life customers improve the reputation of the company and attract new customers through word-

of-mouth advertising.

Long-life customers are less price sensitive than new customers and are therefore more willing to pay

higher prices in some cases.

Long-life customers are more likely to buy more from the company so the company can increase their

share-of-wallet through up-selling and cross-selling.

According to other publications, Ahmad and Buttle (2002) express that the overwhelming argument

for customer retention is that it is cheaper to retain than to acquire new customers. The authors claim that a


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5 percent increase in retention rate leads to an increase in the net present value of customers between 25

and 85 percent. Hennig-Thurau et al. (2002), agree and add that retaining customers opens up considerable

cost-reduction potentials that have led to a strong emphasis of customer retention.

On the other hand, Ahmad and Buttle (2002) stated that customer retention management can be

problematic if it is not defines in a way that is appropriate to the firm’s business. In some cases, suppliers

are not capable to notice hidden defections of their customers. These defections occur when firms fail to

recognize a slower growth in sales to a particular retained customer relative to the growth of the market.

The author identifies ethical problems and involuntary factors as two causes of customer switching

behaviour which providers of service are not able to have power over. The reasons for staying or leaving

with one supplier vary from one customer to another.

In view of the above, it is clear that the effective customer service brings into customer retention.

The one prominent benefit of keeping long-life customers is profit maximization to any business as

potential customers are also attracted through various factors influencing customer retention

There are many, varied factors which influence the customer retention in an organisation like

product, price, communication, distribution, customer clubs, customer cards, complaint Management, the

input procedure, the case processing procedure and information collection procedure. Customer retention

can be achieved in various ways with the quality services provided to the customers and giving more

priority to the existing profitable customers. A critical explanation to these factors is given below.

Price

Price is the key element in the reaching the customer satisfied. Price plays and important role in the

functioning of economic system. Giving discount and bonus on purchasing will attract customers towards

the products. Customers can also be made loyal by satisfaction dependent pricing systems and money back

guarantees in case of dis-satisfaction. In this case, special contracts and standard customers pay different

prices, which are graded according to purchase quantity. A potential customer, who is granted better

conditions with the growing length of the business relationship or with increased purchase quantity, will

carefully consider whether they will choose another supplier, and thereby pay with this benefit. On the

other hand, possibility consists of contracts that vary in the level of basic amounts and in price per unit

(Rowley, 2006).

The Quality of Product or Service

The quality of the product can attract customer for example through a product development process shared

by the customer and the provider. The essential fulfilment is thereby achieved in that jointly developed

product achieves the customers’ expectations. Furthermore, the customer is strongly integrated through the

development process, getting to personally know the company contact and therefore develops an emotional

connection. Therefore, quality standards, designs, and additional product services can also contribute to

customer commitment (Raab, Ajami & Gargeya, 2008).

Communication One way to retain customers through customer service is effective communication. The continuous

communication with the customer would lead to an increase in the customer’s loyalty to the company.

Classic elements include personal contacts with the customers in the form of customer’s forums, field

service, direct mailing efforts, telephone contact and complaint management system. Companies are more

active using the internet, email and voice over IP technology. For example, Raab et al. (2008) using the

case of the internet based company; stated Amozon.com has recently got success in achieving repeat

purchases by tracking not only what individual customer purchases, but also what other customers who

also purchased the same item have purchased in the past. Through email communication, customers of

CAMTEL can view similar items based on purchases made by other customers. If customer has an interest

in a certain topic, certain form of music or certain hobby reviewing items of interest as determined by

Amozon.com can be very helpful. If there is lack of such communication efforts, then customers may

choose their purchasing requirement elsewhere.


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Distribution Channel The standard modes of distribution are commerce, catalogues sales, direct delivery and subscriptions. The

sales product over the Internet is also becoming increasingly more important. The emails sent to customers

detailing similar items of interest often act as customized sales catalogues for the seller.

Customer Membership

The customer club is an organisation of the customers who are offered special services because of their

membership. Interested customers can join these clubs on a voluntary basis. Special services can include

up to date information, payment options and the entitlement to special services, attract offers and private

event. A company can at-tempt to offer a membership with extra value to suggest exclusivity or additional

benefit. Customer clubs can be divided into closed and open club groups. Open clubs are freely accessible

to everyone or to all customers whereas in closed clubs there are limitations, such as membership fees. Not

every customer can afford or want to pay these fees. Therefore, it is possible to specifically evaluate

members and target groups. The customer club service centre is the hotline of the club. This hotline caters

to the needs of the customers and, at the same time, maintains the customer databank.

Customer Cards

The success of customer cards depends on the function and services offered, which should benefit the

customer. Customer cards have over time evolved from their original function as a means of payment into

a marketing tool. Companies attempt to bind the customer to them with original service offers and systems

of discount. Whether department stores, supermarkets or gas stations, many companies are currently at-

tempting to entice with varying forms of customer cards. Whoever owns one can obtain, for example, a

special price, advantages, trust and bonus points as well as credit. Through offering special services,

companies validate the feeling of being a regular customer thus encouraging the customer to take the

companies more seriously. The consumer is personally addressed, receives offers only for cardholders and

can see himself or herself as being a valued company patron. With customer cards, the frequency of visits

increased and, on average, a rise in the quantity of purchases is observed.

Complaint Management

Customer management motto `do it right the first time` enjoy an advantaged place, complete satisfaction of

all customer wishes is not always assured and possible mistakes in the adaptation of services may not be

omitted. Effective complaint management should therefore be seen as an important tool. Customers

invariably complain when they are not satisfied with the service received or with individual elements of

the service. The motive because of all complaints is accordingly the disappointment of expectation that

have been experienced concerning a product or service. The service received does not add up the

customer’s personal wishes. Therefore, the customers look back to the company, complaints with the hope

of solving the problem that has arisen (Christianus, 2002).

Christianus (2002) mentioned that an active complaint management system should truly benefit the

company, by re-establishing customer satisfaction, through a handling of the complaint that is as

persuasive as possible. In order to assure a professional way of dealing with complaints, the following

three aspects should be considered.

Farquhar (2004) describes that, customer retention requires a clear direction from top management which

serves as the first motive for customer retention practice. Top management needs to implement more

common approach in order to make more receptive towards latest changes within the industry in serving

and satisfying their customers. Switching cost plays an important role on customer retention (Chen & Hitt,

2002; Kim, Park & Jeong 2004). It involves all costs incurred when a customer switches between different

brands of products or services and it consists of both loss and gain costs. Loss cost occurs when customers

withdraw from service providers while gain cost occurs when customers start to promise to new

service/product providers (Burhn, 2003; Hongyi & Man, 2011).

Customer retention is highly depends on customers perception towards service delivery system (Kim et al.,

2004). It is based on unique attributes of products, value added services, customer treatment, price and

convenient transactions greatly influence the customers perception towards the service provider.


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According to Kim et al. (2004), and Molapo and Mukwada (2011), retained customers tend to have higher

levels of perceived service quality which subsequently results in improving firms’ performance.

Relationship marketing is an important tool that promotes long-term relationships with all customers in

general and profitable customer in particular throughout the process of creating and maintaining effective

relationship. Interactions with customers would be effective when sustained through effective relationship

marketing, where firms can interact effectively with customers (Farquhar, 2004; Ang & Buttle, 2006).

Employees are able to provide the required products/services to their customers’ beyond their expectations

when they are empowered, well-informed and have access to customers’ information (Farquhar, 2004).

Price of firm’s offerings can affect customer satisfaction and also it influences customer retention. It is

perceived that price set is expected to enhance both post-purchase satisfaction and repurchase intention.

Firms should also match prices with value of the products or services to promote repeat purchases which in

turn influences customer acquisition and retention. Relationship allows firms to register detailed

information about the individual customers. This information will be linked to customer database, which

forms the basis for individualized marketing measures. Existence of effective information systems

facilitate record keeping of customer membership and would be helpful for the firm’s decision making

process (Farquhar, 2004).

A customer life cycle consists of different stages and can be defined through various methods. The most

common approach is that of Sterne and Cutler (2000). They proposed different ways of calculating the

customer lifetime value. The customer life cycle proposed by them is as follows

The Customer Lifecycle (Clerck, 2014)

- Reach: The first stage of the customer lifecycle is a reach. In this, companies try to attract its potential

clients from whom it has designed the products and services.

- Acquisition: In the acquisition stage, companies attract and bring the customers, into the influence

sphere of the organisation that was attracted in the previous stage (Clerck, 2014).

- Conversion: In this stage, as once the company has reached to its customers and has established a

relationship with them, the customers decided to make the ultimate decision of purchase.

- Retention: This stage comes when the customer decides to buy a product or service for the second

time from the same provider. It can be either the same product or service or cross-selling or up-selling

(Tsai, 2013)

Reach

Acquisition

Conversion

Retention

Loyalty

Abandonment

Attrition

Chun

Reactivat

ion


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- Loyalty: All companies desire to reach to this stage in the customer lifecycle. At this stage, the

customer becomes more than a customer, or in other words, it can be said that the customer becomes a

brand advocate or a loyal partner.

3. METHODOLOGY

This study intended to examine customer service of CAMTEL South-West Region and its ability to

bring about customer retention

The study made used of the descriptive survey research design. Descriptive research involved

gathering data that describe events and then organizes, tabulates, depicts, and describes the data collection

(Mugenda & Mugenda, 2003). The justification for using this design is that it has the ability to explore the

existing status of two or more variables at a given time. It is usually associated with a deductive approach

and is conducted usually in business and management research to prove or disprove certain assumed

propositions and hypothesis. As such, it was apt to employ this design to examine the effect of customer

service especially of CAMTEL on the customer retention in the company.

The population of this study constituted all the customers of CAMTEL in the South-West Region

with special focus in Buea Municipality

The sampling strategy used for the selection of a sample can either be random or purposive

(Robinson, 2014). This study adopted the purposive sampling technique given that there was not a known

size of the total population. As a consequent of this, respondents were selected based on their willingness

to participate and their availability. This enabled to target a sample size of 150 respondents. Out of the 150

targeted, just 90 finally participated to the study, giving a response percentage of 60%. Thus, the study

sample is 90 respondents who were customers of CAMTEL.

There are two sources of data collection techniques. Primary and Secondary data collection

techniques. Primary data collection uses surveys, experiments or direct observations. Secondary data

collection may be conducted by collecting information from a diverse source of documents or

electronically stored information, census and market studies are examples of a common sources of

secondary data.

Data for this study was collected mainly from the primary source using questionnaires.

Questionnaires are the most regularly used data gathering method (Saunders et al, 2007) as it is a highly

effective way in gathering empirical data from large samples within a short period of time. The

questionnaire contained a list of questions either an open-ended or close -ended for which the respondent

give answers as such this study mainly focused on the use of questionnaire for data collection

The data for the present study were personally collected by the researcher with the help of a self-

structured non disguised questionnaire and interviews. Five points Likert Scale was used in the

questionnaire which was a semi-structured questionnaire. The questionnaire framed was simple easy

comprehendible and consistent of closed ended questions. The focus of the questions were regarding the

customer service, service quality and their impact on the retention customers in the telecommunication

sector. Five points, Likert Scale was used in the questionnaires to know the responses of the customers.

The Statistical Package for Social Sciences (SPSS) version 21 was employed to analyze the data. The

collected data were first edited, coded, and checked to see whether there was any missing data. For

analyzing the quantitative data, SPSS is a widely used technique for managing data adequately and

analysis appropriately

4. FINDINGS

Before we present findings of this paper, it is very important to look at the demographic information

of our respondents

The demographic information of respondents is deemed necessary because the ability of a

respondent to give credit-worthy information on the study variable greatly depends on their background.

This section solicited data on respondents’ gender, longevity in the South-West Region, longevity as a

customer to CAMTEL and what they use CAMTEL services for. Frequencies and percentages were used


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to present the demographic profile of the respondents as seen below. Table 1 and the following figures

disclose the distributions of respondents according to the variables retained in this research.

Table 1: Distribution of Respondents by their general information

Indicators Categories n %

Gender Male 48 53.3

Female 42 46.7

Profession

Student 27 30.0

Business 25 27.8

Worker 36 40.0

Farmer 2 2.2

0-5 years 22 24.4

Longevity in the Region 6-10 years 25 27.8

More than 10 years 43 47.8

0-5 years 57 63.3

Years of loyalty with

CAMTEL 6-10 years 9 10.0

More than 10 years 24 26.7

Reasons for CAMTEL

Service use

Calls 34 37.8

Browsing 32 35.6

Both 24 26.7

N = 90

Source: Field Study, 2018

a) Gender Distribution of Respondents

Figure 3: Gender Distribution of Respondents

Source: Field Survey, 2018

As seen on Figure 3 above, more than half of the respondents 48(53.3%) were males while

42(46.7%) of them were females. This was a mere sample coincidence and could probably mean that most

CAMTEL customers in the South-West Region of Cameroon were males.


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b) Profession of Respondents

Figure 4: Profession of Respondents


As seen on Figure 4 above, majority of the respondents 36(40%) were workers, followed by 27(30%)

of them being students, 25(27.8%) being Business people and 2(2.2%) being farmers. This shows that most

CAMTEL customers in the South-West Region of Cameroon are workers.

c) Longevity in the Region

Figure 5: Respondents' Longevity in the Region


In terms of longevity in the Region, most of the respondents 43(47.8%) had been in the South-West

Region for more than 10 years, one quarter 25(27.8%) had been in the Region for about 6-10 years and

22(24.4%) were relatively new with duration of about 0-5 years.

47.8%

27.8% 24.4%


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d) Duration of Customer Loyalty

Figure 6: Duration of Customer Loyalty


More than half of the respondents 57(63.3%), have been using CAMTEL services for about 0-5

years, 24(26.7%) of them had been customers of CAMTEL for more than 10 years and 9(10%) of them

had been CAMTEL customers for about 6-10 years. By implication, most of the customers were relatively

new to these CAMTEL services.

e) Different Uses of CAMTEL Services

The last demography required respondents to indicate the various ways in which they use the

CAMTEL services; as seen on Figure 6 below.

Figure 7: Different Uses of CAMTEL Services


63.3%

10%

26.7%


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In terms of service usage, a substantial proportion of the respondents 34(37.8%) used CAMTEL

services for calls, 32(35.6%) of them were using CAMTEL services for Browsing while 24(26.7%) of

them were using for both calls and browsing.

f) Appreciation of Customer Retention in CAMTEL South-West

Table below presents the respondents’ view on the customer retention appreciation.

Table 2: Respondents’ View on the Customer Retention Appreciation

I derive satisfaction as regards to the total service rendered by Camtel

Frequency Percentage Cumulative

percentages

Cumulative

percentages

Valid

Strongly

Disagree 16 17,8 17,8 17,8

Disagree 18 20,0 20,0 37,8

Neutral 31 34,4 34,4 72,2

Agree 15 16,7 16,7 88,9

Strongly Agree 10 11,1 11,1 100,0

Total 90 100,0 100,0

I am loyal to Camtel South-West


percentages

Cumulative

percentages

Valid

Strongly

Disagree 9 10,0 10,0 10,0

Disagree 17 18,9 18,9 28,9

Neutral 32 35,6 35,6 64,4

Agree 25 27,8 27,8 92,2

Strongly Agree 7 7,8 7,8 100,0

Total 90 100,0 100,0

I will always relate to Camtel South-West as far as I will stay in the region


percentages

Cumulative

percentages

Valid

Strongly

Disagree 10 11,1 11,1 11,1

Disagree 23 25,6 25,6 36,7

Neutral 31 34,4 34,4 71,1

Agree 19 21,1 21,1 92,2


Total 90 100,0 100,0


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I am happy to repeat or renew the purchase of services rendered by Camtel

South-West


percentages

Cumulative

percentages

Valid

Strongly

Disagree 13 14,4 14,4 14,4

Disagree 18 20,0 20,0 34,4

Neutral 31 34,4 34,4 68,9

Agree 16 17,8 17,8 86,7

Strongly Agree 12 13,3 13,3 100,0

Total 90 100,0 100,0

I am solely dependent on Camtel services for both internet and calls


percentages

Cumulative

percentages

Valid

Strongly

Disagree 5 5,6 5,6 5,6

Disagree 14 15,6 15,6 21,1

Neutral 28 31,1 31,1 52,2

Agree 26 28,9 28,9 81,1

Strongly Agree 17 18,9 18,9 100,0

Total 90 100,0 100,0

I can only use Camtel for internet and other networks for calls


percentages

Cumulative

percentages

Valid

Strongly

Disagree 14 15,6 15,6 15,6

Disagree 21 23,3 23,3 38,9

Neutral 26 28,9 28,9 67,8

Agree 17 18,9 18,9 86,7

Strongly Agree 12 13,3 13,3 100,0

Total 90 100,0 100,0

I will change my Telecom provider, if communication is not smooth with

Camtel South-West


percentages

Cumulative

percentages

Valid

Strongly

Disagree 12 13,3 13,3 13,3

Disagree 24 26,7 26,7 40,0

Neutral 34 37,8 37,8 77,8

Agree 17 18,9 18,9 96,7


Total 90 100,0 100,0


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When I am disappoint with Camtel Service, I change my Telecom provider


percentages

Cumulative

percentages

Valid

Strongly

Disagree 7 7,8 7,8 7,8

Disagree 28 31,1 31,1 38,9

Neutral 31 34,4 34,4 73,3

Agree 16 17,8 17,8 91,1


Total 90 100,0 100,0

I intend to switch to another Telecom provider


percentages

Cumulative

percentages

Valid

Strongly

Disagree 5 5,6 5,6 5,6

Disagree 21 23,3 23,3 28,9

Neutral 34 37,8 37,8 66,7

Agree 20 22,2 22,2 88,9

Strongly Agree 10 11,1 11,1 100,0

Total 90 100,0 100,0

I do not feel like switching to another Telecom service provider


percentages

Cumulative

percentages

Valid

Strongly

Disagree 8 8,9 8,9 8,9

Disagree 18 20,0 20,0 28,9

Neutral 31 34,4 34,4 63,3

Agree 22 24,4 24,4 87,8

Strongly Agree 11 12,2 12,2 100,0

Total 90 100,0 100,0

My relationship with Camtel South-West is a long-term one


percentages

Cumulative

percentages

Valid

Strongly

Disagree 8 8,9 8,9 8,9

Disagree 19 21,1 21,1 30,0

Neutral 33 36,7 36,7 66,7

Agree 20 22,2 22,2 88,9

Strongly Agree 10 11,1 11,1 100,0

Total 90 100,0 100,0


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I am motivated to resist offers of Camtel South-West competitors


percentages

Cumulative

percentages

Valid

Strongly

Disagree 8 8,9 8,9 8,9

Disagree 24 26,7 26,7 35,6

Neutral 22 24,4 24,4 60,0

Agree 26 28,9 28,9 88,9

Strongly Agree 10 11,1 11,1 100,0

Total 90 100,0 100,0

I would like to pursue my relationship with Camtel South-West

Frequency Percentage Valid

Percentage

Cumulative

percentages

Valid

Strongly

Disagree 14 15,6 15,6 15,6

Disagree 20 22,2 22,2 37,8

Neutral 31 34,4 34,4 72,2

Agree 16 17,8 17,8 90,0


Total 90 100,0 100,0


Results on appreciation of customer retention of CAMTEL South-West showed that most

respondents 34(37.8%) indicated that they did not derive satisfaction on the total service rendered by

CAMTEL in the South-West Region of Cameroon. Substantial proportion of them 31(34.4%) were

indecisive on this issue; they neither agreed nor disagreed. On the positive note, some of them 25(27.8%)

expressed satisfaction with the services rendered at CAMTEL. As such, 32(35.6%) of the respondents

could actually boast that they are loyal to CAMTEL unlike 26(28.9%) of them who totally disagreed.

32(35.6%) of these respondents neither disdained nor accepted this statement.

Also, a good number of these customers 26(28.9%) attested that they would always remain loyal to

CAMTEL South-West as far as they were still in the region; 33(36.7%) castigated this while 31(34.4%)

were neutral. A good number of them 28(31.1%) were equally ready to and happy to repeat or renew their

contracts with CAMTEL; though majority were not.

Almost half of these respondents 43(47.8%) accepted that they solely depend on CAMTEL services

for both internet and calls unlike 19(21%) and 28(31.1%) who were indefinite in their responses.

29(32.2%) of these respondents patronized only CAMTEL internet services and other network companies

for calls. Nevertheless, 20(22.2%) of them indicated that they would not hesitate to change their telecom

provider, if communication is not smooth with CAMTEL South-West.

36(40%) refused this, indicating that their loyalty with CAMTEL was such that even poor

communication would not make them to change their telecom provider. More than a quarter of these

respondent 34(37.8%) were neutral on this issue. More so, 30(33.3%) of the respondents admitted that

their relationship with CAMTEL South-West was a long-term one such that they were motivated to resist

offers of CAMTEL’s competitors

5. CONCLUSION


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The study has noted that customer retention in CAMTEL showed that most respondents are not

satisfied with the customer services which reduce their loyalty, their level of contentment in staying with

CAMTEL rather leaking on to competitors, their trust of the services and their desire to stay with

CAMTEL. There is therefore an urgent need to reestablish a sustainable customer service style that will

cause customers to stay loyal to CAMTEL services.

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