Research Study Exploring Factors that Affect Customer Retention

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1. Abstract

Purpose: This research paper gives an insight on the factors affecting customer retention, customer retention is now known to be a key factor which can alter customer’s decision on repurchase of a particular product/ service. This research paper discusses relationship marketing, customer loyalty and customer satisfaction as basic factors affecting customer retention.

Design/ Methodology/ Approach: The data for this study was gathered through a questionnaire distributed to population in Islamabad and Rawalpindi. The results were obtained by testing the hypothesis with regression.


Research Limitations: The limitation for this paper is that data was gathered only for telecom industry. This research can further be done on apparel and FMCG sector.

Keywords: Customer retention, Customer loyalty, customer satisfaction and relationship marketing.


Customer retention is a very old phenomenon companies know that in order to generate greater revenues they need to retain the old customers, the great thing about retaining old customers was that they were loyal to the company (product, service) and would not think to switch to some other product very easily, but however with the passage of time, entry of competitors and removal of barriers for global business need was felt to gain knowledge about retaining the customers. It was well explained by the Pareto model that 80% of the business revenue was generated due to 20% retained customers and due to their re-purchase, hence proving that it is far more difficult to attain a new customer than to retain an old one.

The purpose of this paper is to examine the different factors effecting customer retention. Customer retention is ...

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