Assessing the Influence of Loyalty Programs on Customer Satisfaction by Mobile Phone Users in Selected Public Universities in Western Region of Kenya

A consumer is deemed to be satisfied upon the experience weighted sum total produce a feeling of enjoyment when compared with the expectation (Choi and Chu, 2001). Abstract: Customers have become more sophisticated and they are enjoying more alternative options of brands, for any organization, there is a need to understand what kind of service or products it offers, and for whom. Organizations have embraced the concept customer relationship management practices since it focuses on managing relationship between its current and prospective customer base hence helping in building long lasting relationships which consequently give the organization the joy of retained customers. The specific objective of study was to determine the effect of loyalty programs on customer satisfaction. The study was guided by the social exchange theory which focused on the fundamental principle that humans in social situations choose behaviors that maximize their likelihood of meeting self-interests in those situations. Descriptive and explanatory research designs were utilized in this study and the following networks were sampled; Safaricom, Airtel, Orange and, yuMobile A questionnaire was used to collect data from sample size of 250 respondents who were sampled from the staff of public universities in the Western region which included Moi, Masinde Muliro, Maseno, Jaramogi Oginga Odinga, University of Eldoret and Kisii University. Data collected was analyzed by use of descriptive and inferential statistics. Multiple regressions were used to establish the effect between customer relationship management practices, customer satisfaction and customer Retention. Further, Loyalty programs had significant effect on Customer satisfaction, also it was established that, Customer satisfaction was significant in predicting customer retention. The study recommends that service providers should put more emphasis on Customer Relationship Management Practices since they influence customer satisfaction and hence customer retention. The study provides new theoretical insight into factors influencing customer retention by incorporating customer satisfaction as a mediator in the relationship between Customer Relationship Management Practices and customer retention. The Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy and Barlett’s Test of Sphericity were used. The KMO measure of sampling adequacy indicated a value of (KMO=0.549) indicating that the sample size was adequate for the variables entered into analysis. The Barlett’s Test of Sphericity was significant X 2 =477.317, df=10, p<0.000, implying that the factor analysis was appropriate for the study and there was relationship among variables for the Relational Experience. The results in Table 6 show that the 5 items of Loyalty Program are sorted into two components. The results of the principal component analysis indicate that, there are two factors whose Eigenvalues exceed 1. The Eigenvalue of a factor represents the amount of total variance explained by that factor. For Loyalty Program, the first factor has Eigenvalue of 2.385 and the second factor has Eigenvalue of 1.448. The two factors explain 76.669% of the total variance. The first factor explains 47.709% of this variance, while the second variable explained 28.961% of this variance. Varimax rotation tries to maximize the variance of each of the factor, so the total amount of variance accounted for the redistribution over the extracted factor. Principal component analysis with varimax rotation is widely adopted as a reliable method of factor analysis (Sinkkonnen et al, Malhotra and Galleta, 1999).