The effect of loyalty programmes on sales and customer retention: a case of Zamtel mobile services.

Abstract

Organisations are affected by its competitors, customer behaviour as well as other external environmental forces. The telecommunications industry atmosphere has been extremely competitive as the industry is dynamic and faces constant Technological advancement which influences social trends. The fight to acquire and retain customers has become a challenge due to the factors associated with this vibrant industry. The aim of this research was to determine the effect of loyalty programmes on sales and customer retention. The study investigated the effect of loyalty programmes on sales and customer retention; A case of Zamtel Mobile Services. To achieve the objective of the study, a survey and interviews were conducted to collect data from the two samples. In total (60) questionnaires were distributed randomly to Zamtel customers who could be reached by the researcher, while a total of (27) Zamtel sales and marketing employees were interviewed through personal interviews, with the aid of an interview guide. The participants had different social, educational, and occupational backgrounds. The response rate was (87 %) Percent and the SPSS version 16.0, Microsoft Excel and Pearson’s correlation where used to analyse the data. The findings clearly show: there is significant evidence of the effect of loyalty programmes on sales and customer retention. Loyalty programmes had a positive effect on the Zamtel mobile service sales; this could be seen through sales revenue reports, which revealed a major increase in revenue during the loyalty programmes, representing an increase in sales. Additionally, loyalty programmes had a significant effect on customer retention which was evident from a notable growth in the customer base, increase in traffic and change in customer buying behaviour. Some of these customers that were acquired remained loyal and thereby retained. After a detailed analysis on the effect of loyalty programmes on sales and customer retention, the recommendations for Zamtel management were that they should consider other more sustainable avenues of sales growth alongside loyalty programmes such as referrals. The telecommunications company should consider aligning all Zamtel loyalty programmes to the overall business strategy and also consider focusing on building and nurturing relationships with existing customers. Finally, it was recommended that Zamtel could develop a feedback system to retrieve customer views and suggestions this can provide insight on improvement and implementation of loyalty programmes into long term organisational strategies, rather than short term acquisition goals that are no longer sustainable. Finally, Regulatory Authorities like ZICTA’s recommendation was to take a leading role in levelling the telecommunications playing field.