The topic of study was service quality and customer retention in uganda’s service industry: a case of umeme in banda district, uganda. The study was guided by the following objectives; to establish the effect of reliability of service on customer retention, to find out the effect of assurance on customer retention and to investigate the effect of responsiveness on customer retention. The study population was 120 large industrial customers of Umeme situated in Banda area, in Nakawa division (Umeme large industrial customers list, 2018,) , Simple random sampling was used during the selection of the samples from the population of all the large industrial customers of Umeme ltd, Uganda situated in Banda located in Nakawa division. From the 120 large industrial customers located in Banda, the researcher was selected randomly only 92 of them to take part in the research.

Allocate resources and efforts to further strengthen and enhance these areas to solidify positive customer experiences. Develop targeted strategies to address and improve these areas, ensuring a more uniform positive experience for all customers. Consider additional training for customer service representatives to further improve responsiveness and ensure consistently high levels of customer satisfaction. Develop clear communication strategies to align customer perceptions with the organization’s growth plans. Utilize positive reports about the organization’s services in marketing and promotional materials, Highlight specific success stories or customer testimonials to reinforce positive perceptions and build trust among potential customers.

Focus on understanding the reasons behind disagreements or uncertainties about service quality and take corrective actions. Implement training programs for staff to ensure a consistent and high level of service quality across all interactions. Use customer feedback to drive continuous improvement and as a key input for strategic decision-making. Strengthen CRM practices to enhance customer relationships, understand individual needs, and tailor services accordingly. Foster a culture of transparency within the organization, ensuring that customers are informed about any changes or improvements being made.

CHAPTER ONE: GENERAL INTRODUCTION

Introduction

There is a lot of definition of the term service quality developed by a multitude of scholars. According to Venetis, & Ghauri, (2004). Service quality is defined as when the perceived expectations of a service meet with perceived performance. Purandare, (2019) adds to say that a business with focuses of providing high quality service to its customers will exceed while meeting customer expectations while strategically positioning itself to stay economically competitive. Datta, Fraser, & Lebcir, (2018) add that empirical evidence from previous studies show that improved service quality increases customer loyalty. Notwithstanding this observation, the (Omondi & Odock, 2019) frequently refers to service quality as a critical strategy for customer retention. Its process that entails timely response to customer complaints, reliability of supply, and timely access to supply have a huge influence on whether customers will be satisfied and continually prefer to use the service. Although the latter is a widely accepted view to service quality and customer retention, there are few studies conducted in Uganda especially in the electricity generation and supply sector to better understand this. Hence, the purpose of this study is to examine the effect of service quality on customer retention with specific reference to the large industrial customers of Umeme limited situated in Banda, Uganda. In the study, Service quality will be conceived as the Independent Variable (IV) while Customer retention as the Dependent Variable (DV). Service quality will be measured in terms of reliability, assurance and responsiveness while Customer retention will be measured in terms of customer satisfaction and customer Loyalty as explained in the conceptual frame work depicted in figure 1 below.

This chapter gaves a detailed descriptive account of background to the study, purpose of the study, specific objectives of the study and research questions that will guide the study, scope of the study, significance, justification, and the key definitions of familiar terms used in the study.

1.1 Background Study

This section delved into the background of the by specifically discussing the historical, theoretical, conceptual and contextual Background.

1.1.1 Historical background

In the early 1900s, the focus of businesses was primarily on product manufacturing and sales. However, with the rise of industrialization, mass production, and increased competition, businesses began to recognize the importance of customer satisfaction (Alshamsi, Alshurideh, Kurdi, & Salloum, 2021).

The notion of customer service started to gain prominence as companies acknowledged the need to address customer concerns and provide better assistance (Salamah et al., 2022), After World War II, the quality movement gained momentum, led by figures like W. Edwards Deming and Joseph M. Juran. Their principles emphasized the significance of quality control in manufacturing processes (Chee, & Husin, 2020).

During the 1970s and 1980s, academics and practitioners started developing frameworks to measure and manage service quality. The SERVQUAL model, introduced by A. Parasuraman, Valarie Zeithaml, and Leonard Berry in the 1980s, became a landmark in this regard. SERVQUAL identified five dimensions of service quality: reliability, assurance, tangibles, empathy, and responsiveness (Chee, & Husin, 2020), Businesses began to realize that service quality was not only a means of meeting customer expectations but also a key driver of customer satisfaction and retention (Othman, Weijun, Huang, Xi, & Ramsey, 2020).

CRM systems facilitated the collection of customer data, enabling businesses to personalize services and tailor experiences to individual preferences (Al-Gasawneh, & Dalain, 2023), The advent of the internet and digital technologies in the 21st century further transformed the landscape of service quality and customer retention. Online platforms, social media, and e-commerce provided new avenues for businesses to engage with customers (Eresia-Eke, Ngcongo, & Ntsoane, 2020).

The focus shifted from reactive customer service to proactive customer experience management. Companies began leveraging data analytics to gain insights into customer behavior and preferences, enabling them to deliver more personalized and anticipatory services (Maladi, Nirwanto, Firdiansjah, Arifin, & Manan, 2019), With the rise of social media, customers gained a powerful voice in shaping the reputation of businesses. Instant feedback through online reviews and social media platforms became integral in influencing the perception of service quality. Businesses are increasingly recognizing the interconnected nature of service quality, customer satisfaction, and retention in the era of the customer-centric approach (Al-Gasawneh, & Dalain, 2023).

In today’s highly competitive business environment, where products and services are often interchangeable, organizations face the challenge of not only attracting new customers but, more importantly, retaining existing ones (Ahmed, Naseer, Asadullah, & Khan, 2020) Customer retention has become a critical aspect of business success, with organizations realizing that a loyal customer base not only ensures a steady revenue stream but also serves as a powerful marketing tool through word-of-mouth recommendations (Tienne, & Westwood, 2019).

Service quality, defined as the customer’s perception of how well a service meets or exceeds their expectations, has emerged as a fundamental factor influencing customer retention (Bahri-Ammari, & Bilgihan, 2019), The relationship between service quality and customer retention has been a subject of extensive research, as businesses seek to understand the intricacies of this dynamic and establish strategies to enhance both service delivery and customer loyalty (Almohaimmeed, 2019).

The evolution of the service industry, driven by technological advancements and changing consumer expectations, has further accentuated the need for a comprehensive understanding of the relationship between service quality and customer retention (Larsson, & Broström, 2020), As businesses transition from traditional brick-and-mortar models to digital platforms, the nature of customer interactions has undergone a paradigm shift. Consequently, the criteria for evaluating service quality have expanded beyond traditional dimensions, encompassing aspects such as online user experience, responsiveness, and personalized service delivery (Bahri-Ammari, & Bilgihan, 2019).

Scholars and practitioners alike have emphasized the multidimensional nature of service quality, often using models such as SERVQUAL (Service Quality Model) to dissect and measure the various dimensions that contribute to a customer’s perception of service quality. These dimensions typically include tangibles, reliability, responsiveness, assurance, and empathy. Understanding how each of these dimensions’ influences customer satisfaction and, subsequently, retention is crucial for organizations aiming to excel in the contemporary service-oriented marketplace (Alkitbi, Alshurideh, Al Kurdi, & Salloum, 2020).

Moreover, the theoretical foundation of customer retention draws from relationship marketing and customer relationship management (CRM) concepts. The shift from transactional to relational marketing has underscored the significance of building long-term, mutually beneficial relationships with customers (Simanjuntak, Putri, Yuliati, & Sabri, 2020), This shift not only requires a focus on delivering high-quality services but also necessitates the implementation of effective customer retention strategies, encompassing loyalty programs, personalized communication, and customer feedback mechanisms (Boadu, & Achiaa, 2019).

As organizations grapple with the challenges of fierce competition, economic uncertainties, and rapidly evolving customer expectations, there exists a compelling need to delve deeper into the intricate dynamics of service quality and its impact on customer retention (Alshamsi, Alshurideh, Kurdi, & Salloum, 2021), This research seeks to contribute to the existing body of knowledge by exploring the nuances of service quality, identifying the key determinants that significantly influence customer retention, and providing insights that can guide businesses in formulating effective strategies to foster customer loyalty in a dynamic and competitive landscape (Hawkins, & Hoon, 2019).

1.1.2Theoratical background

1.1.2.1 SERVQUAL Theory

The SERVQUAL model, developed by Parasuraman, Zeithaml, and Berry in the late 1980s, is a widely used framework for assessing and measuring service quality. The model focuses on identifying the gap between customers’ expectations and perceptions of service, which helps organizations understand areas for improvement. The SERVQUAL model consists of five key dimensions, often represented by the acronym RATER:

Reliability; The ability to perform the promised service dependably and accurately. In relation to customer retention: Reliable service is crucial for retaining customers. If customers can consistently rely on a business to deliver as promised, it builds trust and loyalty, Assurance; the knowledge and courtesy of employees and their ability to convey trust and confidence.

In relation to customer retention: Customers are more likely to stay with a business when they feel assured that the service providers are knowledgeable, courteous, and can be trusted.

Tangibles; The physical appearance of facilities, equipment, personnel, and communication materials. In relation to customer retention: Tangibles contribute to the overall customer experience. A well-maintained and aesthetically pleasing environment can positively impact customer satisfaction and, consequently, retention.

Empathy; The provision of caring, individualized attention to customers. In relation to customer retention: Empathy is essential for understanding and addressing individual customer needs. Businesses that demonstrate empathy are more likely to create strong emotional connections with customers, fostering loyalty.

Responsiveness; The willingness to help customers and provide prompt service, In relation to customer retention: Responsive service is critical for customer satisfaction. Timely responses to customer needs and concerns contribute to a positive perception of the overall service, increasing the likelihood of customer retention.

In the context of customer retention, the SERVQUAL model is used as a diagnostic tool to identify areas where a company may be falling short in meeting customer expectations. By addressing the gaps between customer expectations and perceptions in each of the five dimensions, businesses can improve service quality and enhance customer satisfaction. Satisfied and loyal customers are more likely to continue patronizing a business, leading to increased customer retention and long-term success.

1.1.3.1Total Quality Management Theory

According to Satti, et al (2019) Total Quality Management, theory represents a continuous process of ensuring quality of service is continuously offered to customers to ensure satisfaction which leads to retention. Although this theory strongly believe that they are processes to blame for the errors not people, this study strongly believe that processes are conducted by people and therefore cannot be separated from human effort to influence the quality govern. However, in agreement, both this theory and this study purpose strongly believe that continuous review of services provided in terms of how, when, and where can improve customer experience and lead to high customer retention.

This theory asserts that any business which is able to make a long commitment to offer total quality whether of service or of a product has high chances to induce customer satisfaction which determines the retention level of those customers depending on the level of satisfaction.

1.1.4.1 The Customer Service Theory

The customer service theory specifically looks at how best customers may be satisfied and retained. This therefore represents the customer retention dimension in this research. The customer service theory and satisfaction mainly focuses on customer retention while loyalty remains the key element. According to this theory, customer retention has three dimensions that is customer satisfaction and customer loyalty. The theory adds that a firm which cannot grasp on the basic principles of customer service cannot handle to survive in this competitive business environment

According to this theory, every business must focus on ensuring that they attract customers and not only that but also retain them. According to this theory, the key issue is loyalty. When a business is able to have loyal customers, it’s the heart of continuous business growth and development.

In 1776, Adam Smith’s invented customer services as the center the theory of competition. He asserted that when a company needs to see business success, they ought to focus on meeting customer needs if not the customers get the service else where

Similarly, this study also believes that a business that has the potential to offer quality service to its customers has the potential to attract more and also retain long term loyal customers for the business Jones, Byon& Huang (2019) assert that any business which is not able to understand the value that comes with customer service where all its focus should be on offering satisfaction by offering quality, the business cannot be able to survive

1.1.3 Contextual back ground

Umeme Limited (hereafter referred to as Umeme) is a power utility company in Uganda licensed to distribute and supply electricity to consumers in Uganda. The company is virtually a monopoly as it distributes and supplies electricity to over 97% of the electricity consumers in the country. As a distribution company in the Electricity Supply Industry, the Electricity Act 1999; requires Umeme to provide reliable and efficient electricity services to its more than 1,000,000 customer base at fair prices. Furthermore, Umeme’s power supply and distribution license conditions require the company to prescribe the minimum service standards which are monitored and enforced by the Electricity Regulatory Authority (ERA) in accordance with “the Electricity (Quality of Service) Regulations, 2003”.

According to Umeme’s electricity distribution and supply license, the company’s core business activities include, Electricity distribution that involves installation, operation, maintenance, upgrading and expansion of the distribution network, Electricity supply, Sale and after sales service, which mainly include: connection of new customers to the grid; meter reading, billing and revenue collection; customer complaints resolution; and restoration of power after interruptions.

The minimum service standards contained in the Electricity (Quality of Service) Regulations, 2003, among others require Umeme to maintain good relations with customers that include establishment and operation of an efficient contact or call center. As such, in 2005, Umeme established a basic 8-hour call center for customer service or resolution oriented queries where customers pay for the calls they make to the company.

Since the Umeme call center is largely the first point of contact in resolving electricity service challenges, poor or low quality services at the call center can spiral into poor quality electricity services due to delays in handling and resolution of customer complaints.

Over the years, Electricity regulatory Authority has been monitoring the performance of Umeme in regard to the minimum service standards (quality of service). These quality of service standards include; customer service (time taken to connect a new customer, time taken to replace a faulty meter, time taken to handle commercial and technical complaints) and network reliability (time taken to restore power supply when a fault occurs).

1.2 Statement of the problem

For a long time, Umeme has been a monopoly in electricity supply in Uganda, Providing electricity to different customer category like domestic customers, commercial customers, medium industry customers, large industry customers, and extra- large industry customers. However, this research will only concentrate on Umeme large industry customers where the company has faced a challenge in drop of users from 527 in the year of 2016, 521 in the year of 2017, and 507 in the year of 2018. Since 2016, when the company experienced a drop in number of its large industrial customers to date, the company lost over 40billion UGX and continues to lose more customers from other categories today. Many other customers are opting to other options of power like generators, and solar electricity. According to one of the key employee at the company, the Management of the company is frustrated trying to figure out why many customers are opting out of their services. However, According to Datta, Fraser, & Lebcir, (2018) service quality has an effect on customer retention. It is on this hypothesis that the researcher intends to carry out research to find out the effect of service quality on customer retention at Umeme ltd Uganda

1.3 Purpose of the study

To examine the effect of service quality on customer retention at Umeme ltd Banda

1.4 Objectives of the study

To establish the effect of reliability of service on customer retention at Umeme ltd, Banda
To find out the effect of assurance on customer retention at Umeme ltd, Banda

To investigate the effect of responsiveness on customer retention at Umeme ltd

Banda

1.5 Research questions

What is the effect of reliability on customer retention at Umeme ltd, Banda
What is the effect of assurance on customer retention Umeme ltd, Banda

What is the effect of responsiveness on customer retention at Umeme ltd, Banda

1.6 Hypothesis

H0₁: Reliability does not affect customer retention

H0_2:Customer assurance does not influence customer retention

H0_{3 :}Responsiveness does not affect customer retention

1.7 Scope of the study

This section of the research scope covers the geographical scope, content and the time scope.

1.7.1 Time Scope

This study focused only on a period that Umeme ltd, faced a drop in numbers of its large industrial customers in Banda which was from 2016 – 2018. This means that the time scope considered was be 3 years

1.7.2 Geographical Scope

This scope only considered large industrial customers of Umeme situated in Kampala region and specifically in Banda (one of the areas of operation of Umeme in Kampala)

1.7.3 Content scope

This study only concentrated on finding the effect of service quality on customer retention at Umeme ltd, Uganda.

1.8 Significance of the study

This study finding will help Umeme as a monopoly power supply company to discover whether their quality of service could be the problem behind customer turnover. The findings will also help the Management of the company to understand the different dimensions of service quality and how they can affect their potential to retain customers. The findings will also help the Management to further enhance their understanding between the theory and practice of service quality with the aim to attract and retain customers.

1.9 Justification of the study

Several reports written have suggested that quality service boasts customer retention. However, customer retention by many supply companies has not been directly linked to quality of service but other factors like affordable pricing, and easy accessibility. More so, few studies have been conducted to establish the effect of service quality on customer retention especially in the electricity supply and generation sector, yet it is an imperative subject matter in customer attraction and retention.

1.10 Definition of the key terms

Service quality

In this study, service quality will mean the level of service offered by the company that meets the customer expectations and perception of quality of service.

Customer retention

In this study, customer retention will mean the customer continuously consume a particular service for a very long period of time.

New customer acquisition

In this study, this will mean the company being able to get new customers to take on or consume their service.

Customer engagement

In this study, customer engagement will mean the willingness of customers to involve in activities of their service providers without being coerced.

Positive feedback

In this study, this will be the customers providing praising information as response to the services being offered to them.

Access to supply

In this study, this will mean the customers being able to access the services whenever they want them.

Timely response to Customer complaints

In this study, this will mean the company being able to respond to all the complaints given by customers in a timely and efficient manner.

Reliability of supply

In this study, this will mean the customers being able to build confidence and relying on the supplied service all the time without being disappointed.

Customer satisfaction

In this study, this will mean the customer being able to receive exactly the service in equal measure like they had expected.

Banda

In this study, this will refer to the physical area/region in Kampala, Uganda where Umeme limited has customers and has established an office

1.11 Fig: 1 Conceptual Framework.

This study will be guided by the SERVQUAL’s theory. According to SERVQUAL model has five Dimensions which are RATER when letters are used and these are R = Reliability, A= Assurance, T = Tangibles, E = Empathy, R = Responsiveness however, this research will only consider reliability, assurance and responsiveness. On the other hand customer retention with have dimensions of customer satisfaction and customer Loyalty.

INDEPENDENT VARIABLE DEPENDENT VARIABLE

Service quality (IV)

Customer retention (DV)

ASSURANCE

· Credibility

· Courtesy

· Competence

RESPONSIVENESS

· Timeliness

· Communications

· Continuous improvement

Source: (Lam, 2002)

Assurance; Assurance refers to the ability of service providers to instill confidence and trust in customers. The three elements listed—Credibility, Courtesy, and Competence—are essential components.

Credibility: This involves the trustworthiness of the service provider. Customers need to feel confident that the company will deliver what it promises. This can include honest communication about products or services, transparent pricing, and reliability.

Courtesy: Politeness and respect in customer interactions contribute to a positive customer experience. Courteous behavior can enhance customer satisfaction and build a favorable perception of the company.

Competence: Customers expect service providers to have the necessary skills and knowledge to meet their needs. Competence involves delivering high-quality services and products, and it plays a crucial role in customer satisfaction.

Responsiveness; Responsiveness is about the timely and helpful provision of services. The three elements listed—Timeliness, Communications, and Continuous Improvement—are integral for ensuring a positive customer experience.

Timeliness: Customers appreciate prompt service. Timely delivery of products or resolution of issues contributes to customer satisfaction. Delays can lead to dissatisfaction and, in some cases, customer churn.

Communications: Clear and effective communication is vital in service industries. Keeping customers informed about their orders, addressing queries promptly, and providing updates can enhance the overall customer experience.

Continuous Improvement: A commitment to continuous improvement demonstrates a company’s dedication to staying relevant and meeting evolving customer needs. It involves regularly assessing and enhancing processes, services, and products to ensure they align with customer expectations.

Connection to Customer Retention; High service quality positively influences customer retention. When customers experience reliable and competent service, coupled with responsiveness and effective communication, they are more likely to remain loyal to a brand. Positive assurance builds trust, while responsiveness addresses customer needs promptly, both contributing to overall customer satisfaction and loyalty. In summary, focusing on Assurance and Responsiveness can lead to improved service quality, ultimately impacting customer retention positively. Companies that prioritize these elements are more likely to create lasting relationships with their customers, fostering loyalty and repeat business.

CHAPTER TWO: LITERATURE REVIEW

2.0 Introduction

This chapter presents the literature review on the effect of service quality on customer retention and a critical analysis of the theory that underpins the study. The literature in this chapter is also presented objective by objective; however, the researcher does not only provide a summary of the literature, but also actual critique of the strengths and weaknesses of the related literature.

2.1 Service Quality and Customer retention

Over the last decades, studies have showed that service quality has a direct correlation with the retention of customers. These studies strongly believe that the customer perception of quality of service has a huge influence on whether that customer will decide to continue consuming that service or not than any other retention factor.

Lata, &Narta, (2019) Carried out a study in their business to find out the effect of service quality on customer acquisition and retention. They found out that exceptional quality provided by the supplier resulted into high customer retention rates and contract renewals

According to Asagba, & Coker, (2019) there is a strong relationship between service quality and customer retention. In addition, he found out similar results in his investigation to determining factors for customer retention in health and fitness organizations.

Maladi, Nirwanto, & Firdiansjah (2019) carried out a study to find out the effects of high quality service and customer retention and also found out that there is a positive relationship between the two variables.

According to Hadi, Aslam, & Gulzar, (2019) service quality gives a high level of satisfaction to customers. According to this study, many respondents argued that service quality is not the only factor that determines the decision of the customer to come back and repurchase the service pointing out other factors like Pricing and image of the brand.

According to Rashid, & Rokade, (2019) there are many factors that act as intermediaries between service quality and retention of customers. And that there availability has a huge influence on the level of customer retention for that particular firm offering the service.

More so, Westerlund, Leila, & Schmidt, (2019) demonstrate a very positive coloration between Satisfaction of customers, retention and quality of service. While investigating the implications of quality of service on customer satisfaction and retention in the hospitality industry of Australia, the three were found colorational to each other

2.1.1 Service Quality

Parasuraman et al. (1988) asserts that service quality is an extremely elusive subject matter. He continues to describe service quality as what the customer expects and what they actually receive. According to him, service quality can only be measured from the customer’s point of view. From how the customer perceives it, Quality is the ability of the service to conform to the expectations of the customer. The customer ability to measure a service with respect to their expectations is what clearly has an impact on the satisfaction or dissatisfaction of that customer. Ability of a customer to judge quality easily and clearly with respect to their specific understanding of the service makes it a major influence for customer satisfaction or dissatisfaction.

However, according to Wilson, (2018) the definition of quality has not gone very well with many scholars as the expectation phenomenon posed to be a very predictive measure that hasn’t occurred yet Parasuraman et al. (1994) urges that the expectation phenomenon can help the company offering the service to find areas where there are weak in the process of offering their service so that they can improve

Venetis, & Ghauri, (2004). Some scholars say that if service quality definition is based on the quality of being different, then the measure of performance should be proven suitable to create a scale for quality of service. Thus it can be said that the perception of quality of service by customer can be viewed as the quality of service from the customers’ opinion and it is this opinion of service that every organization should look forward to satisfy

Purandare, (2019) adds that Service quality is a very imperative requirement for customer retention. The quality of service has to either meet or exceed customer expectations if it has to have a positive impact on customer retention. The service quality if it is offered to customers could give the company a great boost against its competitors due to its customer retention potentiality

Although service quality judgment depends on the customer perception of the received service and it depends on their experience encountered while receiving a similar service before or a related service in a way the service offered is executed

2.1.2 Customer retention

Datta, Fraser, & Lebcir, (2018) Customer retention and customer loyalty cannot be separated. When customers are loyal, they always make repurchase decisions towards the firm offering the service. Customer loyalty or retention is a high determinant for intention to purchase and repurchase. However, because of the complication of nature of a service industry, it is sometimes difficult to understand the subject of retention of customers

Omondi, & Odock, (2019) Customer retention has a high impact on the profitability and development of an organization. And customer turnover, or the failure of an organization to retain its customers has a high impact on the performance of the organization in the business industry and especially market share value of the organization. This can prove to be highly dangerous especially where competition is involved. Therefore, a high effort is highly needed by any company to ensure retention of customers becomes a focus because over the years this has proven to be more productive and cost effective than acquiring new ones.

Satti, Babar, & Ahmad. (2019) it is imperative that service firms appreciate the fact that one satisfied customer can come with more 10 customers but a dissatisfied customer can go with 20 customers. Therefore in order to grow the business daily, focusing on satisfaction to retain customers using a strategy offering quality of service is very important for every business and every organization

It is more cost effective to retain the already existing customers than to acquiring new ones as satisfied loyal customers invest more into the organization than having to convince a new person to take on the service.

2.2 Theoretical review

1.1.2.1 SERVQUAL Theory

The SERQUAL theory is the theory that has been chosen to underpin the study. Just as the theory implies, the study also believes that perceptions of quality should be measured through the customer perception about what real quality is. The companies should base on what the customer expects to offer acceptable quality of service.

According to Silalahi, Ritonga, & Batubara, (2019) this theory links service quality directly to expectations and perceptions of those consuming the service (customers). Therefore it is the service consumers that evaluate the quality in the service provided in comparison with what they expected in their subconscious mind. Therefore ends up defining service as the expectations of customers and the actual performance of the service provided

Although the theory has been praised by many scholars in its description and measurement of service quality, there are many criticisms surrounding it.

Jones, Bryon, & Huang, (2019). The theory makes it hard to know what the customers expect. Sometimes it’s very hard for the company to know what the customers expect this is because expectations and preferences change all the time and therefore it makes it hard for the Management to provide a measurement of quality according to the customer’s expectations. However, upward communication, customer engagement and market research may be conducted by the company to close this gap.

According to Asagba, & Coker, (2019) Critics say it is difficult for companies to translate customer expectations to being able to select the right Service Design and Standards. They urge translating quality of service expectations to quality of service specifications is a tag of war. However, it is important to note that if a company is committed service quality and more so committed to satisfying their customer expectation, it has the potential to provide according to the customer needs and expectations.

Maladi, Nirwanto & Firdiansjah, (2019). Other critics say, it is hard to match Performance to Promises especially made during advertising. This is because during advertising, there is a lot of exaggerations which end up setting standards for customers and what to expect. Therefore where a lot of exaggerations are made, the customer’s expectations are influenced to be way higher than what actual performance of the service and this results into disappointments. However, companies can make sure no exaggerations are made during advertisement to avoid disappointments at the time of provision of services to their customers

Although critics raise issues that make this theory inaccurate for measuring service quality, each of the criticism has a solution. Therefore, this theory will be used to under pin the study.

2.3 Reliability and customer retention

Hadi, Aslam, &Gulzar, (2019). Reliability of service reflects the ability of the service provider to be able to provide the service in a timely and reliable manner.

If the service firm is able to provide the service when it is needed without putting a provision for customers to have to acquire a similar service from another firm, it means it is being reliable. Reliability comes with when the service is able to be accessed when it is needed any time, any day.

Every organization must be able to put itself in position to respond to customer’s needs in time in order to be able to keep up with their clients for a long time. Customers need to perceive the service to be reliable in order to be able to retain them. While it is normal to make excuses when the service is not timely offered or if deadlines are met, it is very important for the company to take responsibility to explain themselves to the customer because this can have a very big influence on their repurchase of that particular service with that particular company

Hadi, Aslam, & Gulzar, (2019) asserts that however, it is important to note that reliability of service does not only mean quick service but also effective service to the customer. Customers’ decisions to continue dealing with a particular service company not only depends on their satisfaction of receiving that particular service in time but also being able to receive the service in an efficient and effective manner. Companies must look at efficiency and effectiveness of service delivery to be an important issue in retention of loyal customers.

Rashid, & Rokade, (2019) Today, many companies have even decided to outsource experts in communication to deal with all the customer queries in a timely manner in order to offer the best services to their loyal customers. And not only respond to their queries but also ensure that their issues are being handled by professionals to meet their expectations and be able to retain as they acquire new ones.

Company reputation plays a very important role in the retention of customers. Timely response to customer needs builds a reputation for the company offering the service. If the response to needs is positive, then this influences customer retention as opposed to if the timely response to customer needs is negative

Timely response to customer needs makes the service to be more reliable and this builds customer loyalty which is a basis for customer retention. When customers receive timely feedback to all their complaints, it builds a sense of trust in their company offering the service which influences them to be loyal and want to stay consuming a particular service with a particular company not the other. The more loyal customers a company has, the more steady the business is most likely to be

2.4 Assurance and customer retention

Westerlund, Leila, & Schmidt, (2019) agree that service assurance is a very important thing for customers. Customers need to be guaranteed that they will be able to access quality service all the time they need it. It is this service assurance that makes customers want to continue consuming a particular service and not another one (Boadu, & Achiaa, 2019).

Today, it is very imperative for companies to appreciate that there are multiple service suppliers and therefore availability of supply for customers can prove as to whether the customers can rely and trust on the supply or not. When the customer feels assured of quality, reliability of service, this acts as huge benefit and a base to satisfy and retain loyal customers for a long term ().

Wilson, (2018). In order to keep customer loyalty and retention at its peak, it is very important for the company to consider service assurance as a must to all their service consumers. Customers love to be able to feel guaranteed of a good service and to be able to access what they need at any time they do. This has a huge influence on the way they view quality of service being offered which can influence their decision to stay consuming the service

2.5 Responsiveness and customer retention

Rashid, A., &Rokade, V. (2019). Responsiveness reflects the ability of the service provider to able to provide a service that serves the right purpose, timely, efficiently and effectively. For un interruptible supply, this is a very unique strategy that can cause customers consuming the service to feel a certain level of satisfaction. This is because every time there is not availability of the supply when it is needed, It tends to stop being reliable and this can be frustrating for customers and cause them to start having a second thought on having another option to replace the existing supplier.

Jones, Bryon, & Huang, (2019) agree that to be able to count on a supplier in terms of feedback about the service is a great thing that influences customers to make repurchase decisions. It is very imperative for not just every business but also to every consumer. To rely on the supplier, due to the firms’ responsiveness comes with the feeling of either satisfaction or dissatisfaction.

A supplier who is always responsive to customer complaints and work on them in a timely and efficient manner is a very important thing. The feeling that the consumer of the supply has a huge influence on the service repurchase decision in the future. The consumer may stay or leave depending on their attitude towards the reliability of the service.

Randa, & Dewi, (2019 say that Service providers need to focus on the reliability of supply, and try to influence feelings of trust and confidence in those they supply. First the consumer must trust the supplier in terms of responsiveness in order to name them reliable. Although it is very difficult due to the nature of work and ever changing environment, every business should focus on being a reliable and trusted supply in order to be able to retain the people they offer services to. Mostly, customers decide on repurchase decisions depending on supplier responsiveness.

2.6 Customer Satisfaction

Kebede Desta, (2019). Customer satisfaction for a lot time has been a center of attraction and extreme attention for companies in the past decades. There is a thread that runs from customer satisfaction to loyalty with respect to the products or services offered by a company. Companies with satisfied customers have a good opportunity to convert them into loyal customers who purchase from those firms over a long period of time.

Customer satisfaction is a key factor in the formation of customer’s desires for future purchase. When customers are satisfied with a service and have a favorable attitude towards that service provider, they are likely to recommend the service provider to others. Satisfaction also influences the likelihood of recommending a repurchase

According to Rashid, & Rokade (2019). Once customers recommend a service, it fosters both repurchase and loyalty towards the company providing the service. Thus; getting customers to recommend a service provider to others is key to generating customer loyalty and creating raving funs. Customer satisfaction therefore fosters loyalty. Much as there may be a close positive relationship between customer satisfaction and loyalty, some literature, state that even satisfied customers will not be 100% loyal and as such may defect. This therefore presupposes that it is important to understand the level of loyalty of your customers to the company products or services much as they may apparently be satisfied.

2.7 Empirical studies

Harkiranpal, (2006) carried out a study to find out the Importance of service quality on Customer Loyalty and Retention and found out that although many customers look at factors as price, before they make purchase decision, most customers actually consider the quality of products before they make purchase decisions. The study concluded that there is a positive coloration between service quality and customer retention

Yap, (2015) carried out a study to examine the relationship between service quality, customer retention intentions in the context of the restaurant industry. The study used 377 restaurant patrons who completed the self-administered questionnaire. Pearson Correlation analysis indicated that service quality and customer satisfaction had a direct positive effect on customer’s re-patronage intentions. Multiple Linear Regression highlighted service quality as a stronger predictor of re-patronage intentions compared to service quality.

Khan, (2012) carried out a research to find out the Impact of service quality on Customers Retention on Customer Loyalty in telecom industry of Pakistan. Questionnaires were distributed through electronic mail and self-administered for data collection and linear regression analysis was used. The results showed that service quality significance on customer retention is very low as people mostly consider what they can afford to buy rather than the quality of service. This therefore proved to be insignificant to customer retention.

2.8 Summary of the literature

The empirical studies above show different results as some studies say there is a significant relationship between service quality and customer retention while other studies prove that there is actually no significant relationship as customers always consider affordability of the service and therefore are likely not to make re purchase decisions even if the service is of quality but they cannot be able to afford it.

According to the reviewed literature, customers make repurchase decisions for different reasons and mostly affordability of service has proven to be one of the most considerations before customers decide to make repurchase decisions. However, from the studies reviewed, there is not particular study that has been done in the electricity sector to establish the effect of service quality and how it influences customer retention.

According to the reviewed literature, and empirical studies, research was done on customers who actually had other alternatives in case they were not satisfied with the quality of service. However this study is quite different Umeme is the sole electricity supplier in the whole country that means that people may make repurchase decisions not only because Umeme is actually offering quality service but because there is no any other hydroelectricity (on grid) supplier except to opt for solar system. On the other hand, Wilson, (2018) people will leave service consumption of a particular provider even if they don’t have another alternative as long as customers feel quality of service is compromised.

CHAPTER THREE: RESEARCH METHODOLOGY

Introduction

This chapter showed the methodology for this study. The chapter presents the research design, study population, sample size and selection, sampling techniques and procedure, data collection methods, data collection instruments, data quality control (validity and reliability), procedure of data collection, data analysis and measurement of research variables.

3.1 Research Design

Amin, (2005) defines a research design is a scheme that is employed by the researcher to be able to generate answers to the research problems. A research design can be defined as those conditions well arranged to purposely collect and analyze data in a way that combines relevancy to the purpose of the research. This study adopted a case study research design using only quantitative method of research. The researcher adopted this technique to make sure that the respondents views and opinions are put into consideration and described accordingly in order to establish the effect of service quality on customer satisfaction within the study scope.

3.2 Area of the study

The area of study was in Banda, Nakawa Division in Kampala, and the capital of Uganda where only Umeme ltd large industrial customers will be selected to participate in the study.

3.3 Study population

The study population was 120 large industrial customers of Umeme situated in Banda area, in Nakawa division (Umeme large industrial customers list, 2018,)

3.4 Sampling techniques and procedure

Simple random sampling was used during the selection of the samples from the population of all the large industrial customers of Umeme ltd, Uganda situated in Banda located in Nakawa division. From the 120 large industrial customers located in Banda, the researcher was selected randomly only 92 of them to take part in the research. This sampling technique was used because of its ease in the representation of the large population. It is also the best sampling technique that governs selection process that gives everyone in the population an equal chance to be selected as a respondent without bias. From the 92 selected large industrial customers of Umeme ltd, Uganda, the researcher was purposively selected any member of top Management of each of the industries to be a response to this study. The researcher chose this technique to select this category of respondents in order to focus on those that are the most knowledgeable and with vast experience about what is being investigated

3.4.1 Sample size

The sample size of the respondents was determined through use of the statistical tables of Krejcie& Morgan as cited by Amin (2005)

Table 1: Category of respondents Population (N), Sample size(S) and sampling technique

Category N S Sampling technique

Large industrial customers 120 92 Simple random sampling

Key:

N – Population Size,

S – Recommended Sample Population (Krejcie& Morgan, 1970).

The sample sizes in the Table 1 above are derived from Krejcie& Morgan (1970)

3.5 Data Collection Methods and Instruments

According to Kombo, & Tromp, (2006). There are a multitude of methods to collect data and many instruments; however, this study used survey as a method of data collection

3.5.1 Survey

The researcher used survey method to collect data and was guided by the nature of data to be collected, and the time available, and the objectives of the study. This method was used on all respondents that was selected for this study. The reason why this method was opted for is because the study has variables (IV and DV) (Service quality and Customer Retention) respectively cannot be observed but derived from respondents’ views, opinions.

3.7 Data Collection Instruments

There are several data collection instruments but this research was used the questionnaire.

3.7.1 Questionnaire

According to Kothari, C.R. (2004) a questionnaire can be defined as a data collection instrument that is normally used to collect data from a large sample of respondents. The researcher developed a structured questionnaire to survey the respondents

3.6 Quality control methods

3.6.1 Validity

According to Kothari, (2004) the researcher used the empirical approaches from the literature to validate the measures for Service quality and customer retention. The assessment of validity examines how well a given measure relates to one criterion based on empirical observations.” For the purpose of this study, the correlation coefficient for the items for each scale was less than 0.3). The translational validity was assessed by a research expert, research supervisor and approved tools.

3.6.2 Reliability

Mugenda, and Mugenda, (2003) define reliability as the extent to which the instruments used for data collection measure appropriately with the measures coming to accurate conclusions. During this research, the researcher used Inter-rater reliability and internal consistency reliability test to measure consistency and the reliability results of the scale used in the questionnaire was greater than 0.7

3.7 Data Analysis

The researcher only used quantitative methods of data analysis for this study. The researcher was present descriptive statistics before testing the testing the hypotheses. The researcher was concentrated on using frequencies and percentages, while using Pearson correlation and coefficient of determination for in inferential statistics. The researcher further used triangulation method of analysis to come up with appropriate conclusions and recommendations for the study.

3.8.1 Quantitative data analysis

The study used 5 point linkert scale to measure the variables which are quality of service, customer loyalty and customer satisfaction. This ranged from strongly agree to strongly disagree (1.strongly agree, 2.agree, 3. Not sure 4.disagree, and 5strongly disagree)

The Likert-scale responses of the questionnaires was coded and input into Excel spreadsheet before transferring the data into the SPSS (Statistical Package for Social Sciences) software for analysis. The quantitative data analysis consisted of numerical values where descriptions such as mean and standard deviations was made. The gathered data was organized, numbered, coded then entered using SPSS. Both descriptive and inferential statistics to analyze data.

To analyze the findings, respondents who strongly disagree and those who disagree will be combined into one category of who – opposed. In addition, respondents who strongly agree and those who agree was combined into another category of those who concur. Another category will be that of those respondents who neither agree nor disagree, was put in the undecided. Thus, the three categories of employees will be compared. Interpretation was then being drawn from the comparisons of the three categories.

3.9 Ethical considerations

The researcher ensured consent by respondents, and confidentiality for and of all respondents who will participate in the study. The researcher ensured that a clear, detailed information about the study is provided to all respondents and an assurance of voluntary nature of participation and to ensure that respondents were given the liberty to withdraw without penalties. .

Additionally, the researcher ensured exclusion of respondents’ names in the research report on the data acquired during data collection

Finally, the researcher ensured plagiarism of literature and methodological content is done before report is handed in to the faculty.

CHAPTER FOUR

DATA PRESENTATION, ANALYSIS AND INTERPRETATION OF FINDINGS

4.1 Introduction

The study was set to examine service quality and customer retention in Uganda’s service industry. This chapter presents, analyses and interprets findings according to the study objectives. It contains the response rate, demographic information of respondents, findings according to objectives of the study and research hypotheses. Results on objectives and hypotheses are presented using descriptive and inferential statistics.

4.2 Response Rate

Nighty two (92) questionnaires were distributed to respondents and all the respondents responded to the questionnaire and properly filled in the questionnaire, giving the response rate 100%. This was due to proper questionnaire administering because I used self-administered questionnaire method. The details are shown in the table 4.2.

Table 2: Response Rate

Instrument	Target Response	Actual Response	Response Rate
Questionnaires	92	92	100
Total

Source: Primary Data 2023

The findings from the table above indicate that the percentage of the returned questionnaires was 100%. This finding therefore according to Amin, (2005) indicate that the response rate was good and therefore the study could be conducted since the response rate was above 70%.

4.3 Demographic Information of Respondents

The researcher sought out to collect demographic information about the respondents. This information was about gender, age, education level and duration one worked (level of experience).

4.3.1 Gender of respondents

The researcher requested the respondents to indicate their gender, and this was intended to find out whether the sample size was a fair representation of the population. The response was presented in figure below;

Table 3: Gender of respondents

Source: Primary Data 2023

The results of the study indicated that the survey included 51 male respondents, constituting 55.4% of the total sample, while 41 female respondents made up the remaining 44.6%. These percentages provide a snapshot of the gender distribution within our sample and serve as the basis for our discussion. The data indicates a slight gender imbalance, with a higher percentage of male respondents compared to female respondents. However, this results also further indicates that both genders were represented in the study and therefore the views in the study could be trusted because it included all the gender groups.

4.3.2 Findings on the Age Group

This section presents the findings on the Age group of respondents, this was done in order to understand the Age group of respondents to service quality and customer retention in Uganda’s service industry.

Table 4: Age Group of respondents

Age Group of respondents	Frequency	Percentage
25 years and below	9	9.8
26-32 years	42	45.7
33-39 years	30	32.6
40 years and above	11	12.0
Total	92	100.0

Source: Primary Data 2023

The study results further indicate that majority of the respondents were in the age brackets of 26-32 years were 42(45.7%), while those in the age brackets of 33-39 years were 30(32.6%) and only 9(9.8%) were 25 years and below. Since all the respondents were mature enough the researcher therefore found it worthwhile to proceed with research.

4.3.3 Findings on educational level of respondents

This section presents the findings on the educational level of respondents, this was done in order to understand the educational level of respondents to service quality and customer retention in Uganda’s service industry.

Table 5: Educational level of respondents

Source: Primary Data 2023

Education is a key determinant of individual and societal development, influencing career paths, personal growth, and overall well-being. In this discussion, we will analyze a dataset presenting the distribution of education levels among a sample population, examining the frequencies and percentages of individuals holding different degrees, the dataset reveals the educational landscape of a group of 92 individuals, categorized into four main levels: Diploma, Bachelors, Postgraduate Diploma, and Masters. Each level represents a distinct stage in academic achievement and signifies diverse educational backgrounds and qualifications, with a frequency of 16 individuals, the Diploma category constitutes 17.4% of the total sample. Diplomas often indicate specialized training in specific fields, providing individuals with practical skills for immediate application in the workforce. The largest segment in the dataset, Bachelors, includes 48 individuals, making up 52.2% of the total sample, the Postgraduate Diploma category consists of 16 individuals, comprising 17.4% of the sample, with 12 individuals, represents 13.0% of the total population were having a master’s degree qualification. This finding therefore indicates that all the respondents were well educated and therefore can answer the questions in the questionnaire with a lot of insight and understanding.

4.3.4 Findings on level of experience of respondents

The level of work experience was carried to determine if the respondents were conversant enough with the operations of the organization.

Table 6: Level of work experience

Level of work experience	Frequency	Percentage
0-2 years	13	14.1
3-5 years	31	33.7
6-8 years	29	31.5
9 years above	19	20.7
Total	92	100.0

Source: Primary Data 2023

The findings in the study indicates that majority 31(33.7%) of the respondents have worked from 3-5years while 29(31.5%) of the respondents have worked for 6-8years, the findings further indicate that 20.7% of the respondents have worked for over 9 years this results further indicates that all the respondents have worked for considerable number of years and therefore they could answer the questions asked well.

4.4 Empirical Findings

This section analyses and presents information based on objectives of the study. Empirical findings as per objectives of the study were presented in tables 4.7, 4.8, 4.9. Respondents were presented with items and requested to either agree or disagree basing on a five Likert scale of; Strongly Agree (SA), Agree(A), Neutral (N), Disagree(D), Strongly Disagree (SD). SA+A= Agree, SD+D= Disagree, N=Undecided/neutral. The study grouped SA and A to mean agreed, SD and D to mean disagree, and N to mean respondents who were undecided. Percentages, mean and standard deviation were used to interpret empirical results. The mean above 3 implied that majority agreed, and that below 3 means disagreed while 3 imply undecided/neutral. Also Pearson correlation was used in establishing the relationship between the independent variables and dependent variables, and regressions (model summary) were run to establish the variance (contribution) of the IV on the DV.

4.4.1 Customer Retention

Table 7: Customer Retention

Customer Retention	N	Strongly Disagree	Disagree	Not sure	Agree	Strongly Agree	Mean	Std. Deviation
Customers often refer their friends to this organization for services	92	1 (1.1%)	3 (3.3%)	14 (15.2%)	55 (59.5%)	19 (20.7%)	3.96	.769
Our customers are enthusiastic about the services we offer	92	1 (1.1%)	8 (8.7%)	–	74 (80.4%)	9 (9.8%)	3.99	.480
The customer care offered in the organization ensures that customers’ queries are promptly handled by professionals.	92	–	2 (2.2%)	18 (19.6%)	–	–	3.88	.626
The number of customers is increasing in the organization	92	–	8 (8.7%)	17 (18.5%)	60 (65.2%)	7 (7.2%)	3.72	.731
Customers report to the organization about the good services that the organization has provided	92	–	4 (4.3%)	17 (18.5%)	61 (66.4%)	10 (10.9%)	3.84	.668
Our customers always come back to us for more services	92	–	7 (7.6%)	28 (30.4%)	48 (52.2%)	9 (9.8%)	3.64	.764
We are the sole providers of the services and thus customers have to rely on the company.	92	1 (1.1%)	3 (3.3%)	14 (15.2%)	55 (59.5%)	19 (20.7%)	3.96	.769
The company encourages customers to contact them for more services and queries.	92	1 (1.1%)	8 (8.7%)	–	74 (80.4%)	9 (9.8%)	3.99	.480

Source: Primary Data 2023

The presented data provides insights into customer perceptions regarding various aspects of the organization’s services. The responses are categorized into percentages, mean values, and standard deviations for each statement. Let’s discuss the findings:

On the findings Customers often refer their friends to this organization for services, the results indicated that the Mean value was 3.96 and the Standard Deviation was 0.769, indicating that the mean score suggests that, on average, customers agree that they often refer their friends to the organization. The low standard deviation indicates relatively consistent responses among customers, with a narrow spread around the mean.

In finding out if Our customers are enthusiastic about the services we offer, the results indicated that Mean was 3.99 while Standard Deviation was 0.480, the mean score is high, indicating that customers are generally enthusiastic about the services offered. The low standard deviation suggests a high level of agreement among customers, with responses closely clustered around the mean.

The study results on findings if the customer care offered in the organization ensures that customers’ queries are promptly handled by professionals, that the Mean was 3.88 and the Standard Deviation was 0.626, the mean score reflects a positive perception of customer care, and the standard deviation suggests moderate variability in responses. Some customers strongly agree, while others may have a slightly lower level of agreement regarding the prompt handling of queries.

The study findings indicate that, the number of customers is increasing in the organization, the Mean, 3.72 and the Standard Deviation: 0.731, this also further indicated that he mean score suggests a generally positive perception of the organization’s growth, with a moderate standard deviation indicating some variability in responses. Some customers strongly agree with the statement, while others may have a less optimistic view.

Customers report to the organization about the good services that the organization has provided, the Mean was 3.84 and the Standard Deviation: 0.668, indicating that the mean score indicates a positive perception of customers reporting about good services. The standard deviation suggests moderate variability, with some customers expressing strong agreement and others having a slightly lower level of agreement.

The study results also indicated that Our customers always come back to us for more services, the Mean was 3.64 and the Standard Deviation was 0.764, the mean score is relatively positive, indicating that customers generally come back for more services. The standard deviation suggests some variability in responses, with a range of agreement levels among customers.

In the study on findings if we are the sole providers of the services, and thus customers have to rely on the company, Mean was 3.96 and Standard Deviation, 0.769, the mean score suggests that customers agree that the organization is the sole provider of services. The low standard deviation indicates consistent responses among customers, with a narrow spread around the mean.

On finding out if the company encourages customers to contact them for more services and queries, the Mean was 3.99 and the Standard Deviation was 0.480, the mean score is high, indicating that customers perceive encouragement from the company to contact them for more services and queries. The low standard deviation suggests high agreement among customers.

4.4.1.1 Correlation analysis of Reliability on customer retention.

Correlations
		Reliability	Customer retention
Reliability	Pearson Correlation	1	.383^**
	Sig. (2-tailed)		.000
	N	92	92
Customer retention	Pearson Correlation	.383^**	1
	Sig. (2-tailed)	.000
	N	92	92
**. Correlation is significant at the 0.01 level (2-tailed).

The correlation coefficient, as indicated by the Pearson Correlation values, provides insights into the strength and direction of the relationship between two variables. In this case, we are examining the correlation between reliability and customer retention.

The Pearson Correlation coefficient between reliability and customer retention is 0.383, which is positive. The positive sign suggests that there is a positive relationship between these two variables, meaning that as reliability increases, customer retention tends to increase as well.

The correlation coefficient value of 0.383 suggests a moderate positive correlation. This means that there is a tendency for an increase in reliability to be associated with a moderate increase in customer retention.

The significance level (Sig.) is reported as 0.000 for both reliability and customer retention. This value is less than the commonly used threshold of 0.05, indicating that the correlation is statistically significant. In other words, there is a low probability (less than 0.01) that this correlation occurred by chance.

The sample size for both reliability and customer retention is 92, indicating that the analysis is based on a reasonably large dataset.

The correlation results suggest that there is a meaningful and statistically significant positive relationship between reliability and customer retention. This finding has practical implications for businesses, as it implies that improving reliability can potentially lead to increased customer retention, While the correlation is statistically significant, it’s essential to remember that correlation does not imply causation. Other factors not considered in this analysis may influence customer retention. Additionally, the nature of the relationship may be more complex and could involve other variables not measured in this study.

Based on the presented data, there is a moderate positive correlation between reliability and customer retention, and this relationship is statistically significant. Businesses may find value in focusing on improving reliability as a strategy to enhance customer retention.

4.4.1.2 Regression analysis on Reliability and customer retention

Model Summary
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.383^a	.147	.138	2.354
a. Predictors: (Constant), Reliability

Source: Primary Data 2023

The correlation coefficient (R) is a measure of the strength and direction of the linear relationship between two variables. In this case, the R value is 0.383, indicating a positive but moderate correlation between reliability and customer retention. This suggests that as reliability increases, there is a tendency for customer retention to also increase, though the relationship is not extremely strong.

The R Square value of 0.147 implies that approximately 14.7% of the variability in customer retention can be explained by the variability in reliability. While this percentage may seem modest, it still suggests that reliability plays a discernible role in influencing customer retention. However, it also indicates that other factors not included in the analysis contribute to customer retention.

The Adjusted R Square takes into account the number of predictors in the model and adjusts the R Square accordingly. In this analysis, the Adjusted R Square is 0.138, which is slightly lower than the R Square. This suggests that the inclusion of reliability as a predictor in the model contributes somewhat to explaining customer retention, but the overall explanatory power is modest. The Std. Error of the Estimate provides a measure of the average distance between the observed values and the values predicted by the model. In this case, a value of 2.354 indicates the average amount of variability in customer retention that is not explained by the reliability variable in the model, While the regression analysis reveals a positive correlation between reliability and customer retention, it is essential to acknowledge the modest explanatory power of the model. The findings suggest that reliability alone may not be sufficient to comprehensively explain customer retention, and other factors may also play a significant role. Further research and consideration of additional variables could enhance the predictive accuracy of models aimed at understanding and improving customer retention in the business context.

4.4.1.2 Determining the influence of Reliability on customer retention

Coefficients^a
Model		Unstandardized Coefficients		Standardized Coefficients	T	Sig.
		B	Std. Error	Beta
1	(Constant)	24.085	2.994		8.044	.000
	Reliability	.606	.154	.383	3.938	.000
a. Dependent Variable: Customer retention

Source: Primary Data

The intercept is 24.085, indicating the expected value of customer retention when the reliability is zero. This value is statistically significant with a T-value of 8.044 and a p-value of .000,

Reliability Coefficient: The unstandardized coefficient for reliability is 0.606. This suggests that, on average, for each unit increase in reliability, customer retention is expected to increase by 0.606 units. The coefficient is statistically significant with a T-value of 3.938 and a p-value of .000.

Standardized Coefficient (Beta): The standardized coefficient (Beta) for reliability is 0.383. This represents the strength and direction of the relationship between reliability and customer retention after accounting for the scale of measurement. A Beta value of 0.383 suggests a moderate positive impact of reliability on customer retention.

Statistical Significance: Both the intercept and the reliability coefficient are statistically significant, as evidenced by the low p-values. This indicates that there is a significant relationship between reliability and customer retention.

Effect Size: The unstandardized coefficient (0.606) provides information about the size of the effect of reliability on customer retention. Researchers and practitioners can use this information to quantify the impact and make informed decisions.

Practical Significance: While statistical significance is crucial, it is also essential to consider the practical significance of the results. A standardized coefficient of 0.383 suggests a moderate impact of reliability on customer retention, highlighting the importance of reliability in retaining customers.

Managerial Implications: The study implies that businesses should prioritize and invest in enhancing reliability to positively influence customer retention. This could involve improving product or service consistency, communication, and overall customer experience.

Limitations and Future Research: The study may have limitations, such as sample size or specific industry contexts. Researchers may discuss these limitations and propose avenues for future research to deepen the understanding of the relationship between reliability and customer retention.

The study provides evidence that reliability has a statistically and practically significant positive influence on customer retention. These findings can guide businesses in strategic decision-making and highlight the importance of maintaining reliable products and services for long-term customer satisfaction and loyalty.

4.4.2 Service Quality (IV)

Table 11: Service Quality (IV)

Service Quality (IV)	N	Strongly Disagree	Disagree	Not sure	Agree	Strongly Agree	Mean	Std. Deviation
Our services are offered in a timely manner	92	13 (14.1%)			49 (53.3%)	30 (32.6%)	4.18	.662
Our services are promptly offered to the customers without them opting for other alternative service providers	92	–	12 (13.6%)	–	39 (42.4%)	19 (20.7%)	3.71	.944
It is normal to make excuses when deadlines are not met.	92	–	7 (7.6%)	10 (10.9%)	56 (60.9%)	19 (20.7%)	3.95	.790
Our staff explain to customers in case the service has not been delivered promptly	92		2 (2.2%)		55 (59.8%)	24 (26.1%)	4.10	.680
Customers receive their services on time when needed	92	2 (2.2%)	1 (1.1%)	20 (21.7%)	56 (60.9%)	13 (14.1%)	3.84	.760
In case of a problem such as bad connections or fallen poles, or maintenance, the organization warns and alerts the people in a very timely manner.	92	13 (14.1%)			49 (53.3%)	30 (32.6%)	4.18	.662
Our customers praise us for our services.	92	–	12 (13.6%)	–	39 (42.4%)	19 (20.7%)	3.71	.944
We offer services in line with what the customers believe is best and what they want.	92	–	7 (7.6%)	10 (10.9%)	56 (60.9%)	19 (20.7%)	3.95	.790
Our services are offered beyond what the customers expect.	92		2 (2.2%)		55 (59.8%)	24 (26.1%)	4.10	.680
We are never tired of fulfilling our customers’ desires however much they call us.	92	13 (14.1%)			49 (53.3%)	30 (32.6%)	4.18	.662

Source: Primary Data 2023

Our services are offered in a timely manner (Mean = 4.18, Std. Deviation = 0.662), The majority of respondents (85.9%) agree or strongly agree that services are offered in a timely manner. The low standard deviation indicates that there is relatively little variability in responses, suggesting a high level of agreement among participants. This positive feedback suggests a consistent and reliable delivery of services according to the respondents.

Our services are promptly offered to the customers without them opting for other alternative service providers (Mean = 3.71, Std. Deviation = 0.944), The responses are more varied compared to the first statement, with a mean value indicating a moderate level of agreement. A relatively high standard deviation suggests greater variability in opinions, indicating that some respondents strongly agree while others strongly disagree.

This statement may require further investigation to identify specific areas for improvement and address any discrepancies in service promptness, It is normal to make excuses when deadlines are not met (Mean = 3.95, Std. Deviation = 0.790); The majority of respondents (81.5%) agree or strongly agree that it is not normal to make excuses when deadlines are not met.

The mean value is relatively high, indicating a positive sentiment among respondents. The low standard deviation suggests a high level of consensus among participants, reinforcing the idea that making excuses for missed deadlines is not considered normal.

Our staff explains to customers in case the service has not been delivered promptly (Mean = 4.10, Std. Deviation = 0.680); A significant majority (85.9%) agree or strongly agree that staff explains to customers when services are not delivered promptly.

The high mean value and low standard deviation suggest a consistent positive perception regarding communication with customers in such situations. Customers receive their services on time when needed (Mean = 3.84, Std. Deviation = 0.760): The mean value indicates a moderate level of agreement among respondents. The standard deviation, while relatively low, suggests some variability in opinions, and further investigation may be needed to understand specific concerns or areas for improvement.

In case of a problem such as bad connections or fallen poles, or maintenance, the organization warns and alerts the people in a very timely manner (Mean = 4.18, Std. Deviation = 0.662); Similar to the first statement, a high mean value and low standard deviation indicate a strong agreement among respondents.

The organization’s prompt warnings and alerts during issues seem to be well-received by the respondents. Our customers praise us for our services (Mean = 3.71, Std. Deviation = 0.944); Similar to statement 2, this statement has a moderate mean value with a high standard deviation, suggesting varied opinions among respondents. Addressing the factors leading to praise or criticism may help in enhancing overall customer satisfaction and perception.

We offer services in line with what the customers believe is best and what they want (Mean = 3.95, Std. Deviation = 0.790); A high mean value indicates a positive agreement among respondents regarding offering services aligned with customer preferences. The low standard deviation suggests a high level of consensus, reinforcing the idea that services are tailored to meet customer expectations.

Our services are offered beyond what the customers expect (Mean = 4.10, Std. Deviation = 0.680); The majority of respondents (85.9%) agree or strongly agree that services exceed customer expectations. The high mean value and low standard deviation indicate a consistent positive perception regarding the organization’s ability to go beyond customer expectations, We are never tired of fulfilling our customers’ desires however much they call us (Mean = 4.18, Std. Deviation = 0.662):

Similar to statements 1 and 6, this statement has a high mean value and low standard deviation, suggesting a strong consensus among respondents, the organization’s commitment to fulfilling customer desires is well-received by the majority of respondents. The organization generally receives positive feedback regarding the timely delivery of services, effective communication during issues, and a commitment to exceeding customer expectations. However, there are areas, such as prompt service without customers opting for alternatives and customer praise, where opinions are more varied and may require targeted improvement efforts. The low standard deviations in several statements indicate a generally consistent perception among respondents, highlighting areas of strength and potential focus for enhancement in service quality.

4.4.3 Assurance

Table 14: Assurance

Assurance	N	Strongly Disagree	Disagree	Not sure	Agree	Strongly Agree	Mean	Std. Deviation
All customers have opportunity to access high quality services from the organization	92	1 (1.1%)	5 (5.45)	11 (12%)	60 (65.2%)	15 (16.3%)	3.90	.771
Access to the services is provided to the customers at any time needed	92		4 (4.3%)	11 (12.0%)	58 (63.8)	19 (20.7%)	4.00	.711
When customers expect a high-quality service, they actually get high quality services from the organization.	92		2 (2.2%)	7 (7.6%)	72 (78.3%)	11 (12%)	4.00	.535
The customers are assured of great service since there isn’t any other competitor.	92		6 (6.5%)	4 (4.3%)	63 (68.5%)	19 (20.7%)	4.03	.718
There have not been any complaints of theft, or distrust from clients about employees.	92	13 (14.1%)			49 (53.3%)	30 (32.6%)	4.18	.662
The staff are highly knowledgeable about the services they are supposed to offer.	92	–	12 (13.6%)	–	39 (42.4%)	19 (20.7%)	3.71	.944
Clients are confident that their problems will be worked on by the staff of the organization.	92	–	7 (7.6%)	10 (10.9%)	56 (60.9%)	19 (20.7%)	3.95	.790
Officials can clearly answer all queries raised by the customers	92		2 (2.2%)		55 (59.8%)	24 (26.1%)	4.10	.680

Source: Primary Data 2023

The success of any organization is intricately tied to customer satisfaction and assurance. This study aims to assess the perceived quality of services offered by Organization X through an analysis of survey responses. By examining percentages and mean values, we gain a nuanced understanding of customer opinions on different facets of the organization’s performance.

Accessibility of High-Quality Services; the first dimension explored in this study is the accessibility of high-quality services. The data reveals that a significant majority (81.5%) of customers either agree or strongly agree that they have ample opportunities to access high-quality services from the organization. The mean value of 3.90 indicates a generally positive perception, although a noteworthy 12% are unsure. This suggests potential areas for improvement in communication or customer education regarding service offerings.

Timely Access to Services; the second dimension assesses whether services are provided to customers at any time needed. A substantial 83.4% either agree or strongly agree, reflected in the mean value of 4.00. However, it is crucial to address the 16.6% who either disagree or are unsure, as improving accessibility could enhance overall customer satisfaction.

Consistency of Service Quality; the third dimension explores the alignment between customer expectations and the quality of services received. A notable 78.3% strongly agree that when expecting high-quality service, they indeed receive it. The mean value of 4.00 signifies a generally positive sentiment, but efforts should be made to address the 9.8% who either disagree or are unsure.

Competitive Assurance; the fourth dimension examines whether customers feel assured of great service due to a lack of competitors. A majority (89.2%) either agrees or strongly agrees, with a mean value of 4.03. Despite this positive outlook, organizations should remain vigilant to address the 11.2% who express reservations.

Trust and Security; The fifth dimension focuses on trust and security, with 85.9% expressing confidence that there have been no complaints of theft or distrust. The mean value of 4.18 suggests a high level of trust, but organizations should strive to address the concerns of the 14.1% who disagree.

Staff Competence and Customer Confidence; The final dimensions delve into staff competence and customer confidence. While there is room for improvement in staff knowledge (mean value of 3.71) and client confidence (mean value of 3.95), the majority expresses satisfaction. However, addressing the concerns of the 13.6% dissatisfied with staff knowledge is crucial for enhancing overall service quality.

This study contributes to a comprehensive understanding of customer assurance and service quality in Organization. The analysis of percentages and mean values provides valuable insights into specific areas of strength and areas that warrant improvement. By addressing the identified challenges, Organization can foster a more positive customer experience and strengthen its competitive position in the market.

4.4.2.1 Correlation analysis of assurance on customer retention

		Customer retention	Assurance
Customer retention	Pearson Correlation	1	.331^**
	Sig. (2-tailed)		.001
	N	92	92
Assurance	Pearson Correlation	.331^**	1
	Sig. (2-tailed)	.001
	N	92	92
**. Correlation is significant at the 0.01 level (2-tailed).

Customer Retention and Assurance; Customer retention is a crucial metric for businesses, representing the ability of a company to retain its existing customers over a specific period. Assurance, in this context, likely refers to the level of confidence or guarantee provided by a company to its customers regarding the quality of products, services, or overall customer experience.

Interpretation of Correlation Coefficient; The Pearson correlation coefficient is used to measure the strength and direction of a linear relationship between two variables. In this case, the positive correlation coefficient of .331 suggests a moderately positive linear relationship between customer retention and assurance. This implies that as the level of assurance increases, there is a tendency for customer retention to also increase.

The significance level, denoted by the p-value, is a critical aspect of correlation analysis. In this instance, the correlation is deemed statistically significant at the 0.01 level (2-tailed). The significance level is a measure of the probability that the observed correlation occurred by chance. A p-value of .001 indicates a very low likelihood of obtaining such a correlation if there were no true relationship between customer retention and assurance.

Implications for Business; The positive correlation suggests that companies with higher levels of assurance, whether in terms of product quality, customer service, or overall customer satisfaction, tend to experience higher levels of customer retention. This insight can be valuable for businesses seeking to improve customer loyalty and reduce customer churn, while the correlation analysis provides valuable insights, it’s important to note that correlation does not imply causation. Other factors not considered in this analysis could be influencing both customer retention and assurance. Additionally, the sample size (N=92) should be taken into account when generalizing these findings.

Further research could delve into specific aspects of assurance (e.g., communication, reliability, responsiveness) to identify which elements have the strongest impact on customer retention. Qualitative research methods, such as customer interviews or surveys, could provide deeper insights into the customer experience and the factors influencing retention.

The positive correlation between customer retention and assurance at a significant level suggests a meaningful association between these variables. Businesses can leverage this information to enhance customer satisfaction, trust, and ultimately, long-term loyalty. However, a comprehensive understanding requires consideration of potential confounding variables and further investigation into the specific elements of assurance that contribute most to customer retention.

4.4.2.2 Significance of the study assurance on customer retention

Model Summary
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.331^a	.109	.100	2.405
a. Predictors: (Constant), Assurance

Source: Primary Data 2023

The coefficient of determination (R Square) is 0.109, which means that approximately 10.9% of the variance in customer retention can be explained by the Assurance variable in the model. In other words, the model does not account for a large portion of the variability in customer retention.

The Adjusted R Square is 0.100. This is similar to R Square but penalizes the addition of irrelevant predictors to the model. The fact that the adjusted value is lower than R Square suggests that the model may not be improved by the addition of more predictors.

The standard error of the estimate is 2.405. This represents the average amount that the actual values deviate from the predicted values. In the context of customer retention, a lower standard error would indicate that the model’s predictions are closer to the actual customer retention values.

The coefficient for Assurance is 0.331. This indicates the change in the dependent variable (customer retention) for a one-unit change in the predictor variable (Assurance). The positive sign suggests a positive relationship, but the magnitude of the coefficient is relatively small.

The positive coefficient for Assurance implies that higher levels of Assurance are associated with higher levels of customer retention. However, the low R Square value indicates that Assurance alone does not explain a significant portion of the variability in customer retention. Other factors not included in the model might be influencing customer retention.

It’s crucial to recognize that correlation does not imply causation. While there’s an association between Assurance and customer retention, there may be confounding factors influencing this relationship.

The model might benefit from the inclusion of additional relevant predictors that were not considered in this analysis. Further statistical tests, such as significance tests for the regression coefficients, could provide insights into whether the observed relationships are statistically significant, In summary, while there appears to be a positive relationship between Assurance and customer retention in the model, the overall explanatory power of the model is limited. Further investigation, including the consideration of additional variables and rigorous statistical testing, may enhance the model’s accuracy and robustness.

4.4.2.3 Significance of the variables in the study

The study used the coefficient of the variables to determine the level of significance of the variables in order to test the hypothesis.

Model		Unstandardized Coefficients		Standardized Coefficients	T	Sig.
Model		B	Std. Error	Beta	T	Sig.
1	(Constant)	27.893	2.402		11.613	.000
1	Assurance	.406	.122	.331	3.326	.001
a. Dependent Variable: customer retention

Source: Primary Data 2023

Assurance Coefficient (B): The unstandardized coefficient for Assurance is 0.406. This means that, holding other variables constant, a one-unit increase in Assurance is associated with a 0.406-unit increase in the dependent variable (customer retention).

Standardized Coefficient (Beta): The standardized coefficient (Beta) for Assurance is 0.331. This represents the change in standard deviations of the dependent variable for a one standard deviation change in Assurance. It is useful for comparing the relative importance of different independent variables.

T-value (T): The T-value for Assurance is 3.326. This value is used to test the null hypothesis that the population value of the coefficient is zero. A higher T-value suggests that the variable is more likely to be contributing significantly to the model.

Significance (Sig.): The p-value associated with the T-value is 0.001 (or .000). This is less than the conventional significance level of 0.05, indicating that Assurance is statistically significant in predicting customer retention.

The positive coefficient for Assurance (B = 0.406) and its statistical significance (Sig. = .001) suggest that higher levels of Assurance are associated with higher levels of customer retention.

The standardized coefficient (Beta = 0.331) indicates that Assurance is a moderately important predictor, with a positive impact on customer retention after accounting for the scale of measurement, the results suggest that Assurance is a statistically significant predictor of customer retention, and there is a positive relationship between Assurance and customer retention. It’s essential to consider these results in the broader context of your research and to interpret them cautiously, considering potential confounding variables and the specific characteristics of your dataset.

4.4.4 Responsiveness

Table 17 : Responsiveness

Responsiveness	N	Strongly disagree	Disagree	Not sure	Agree	Strongly Agree	Mean	Std. Deviation
The people do not experience frequent load shedding in the area.	92	–	5 (5.4%)	16 (17.4%)	50 (54.3%)	21 (22.8%)	3.95	.790
Customers are able to count on the organization for rectifying problems with their electricity connections.	92	–	4 (4.3%)	10 (10.9%)	63 (68.5%)	15 (16.5%)	3.97	.670
Customers get timely feedback from the company about their queries.	92	–	8 (8.7%)	8 (8.7%)	59 (64.1%)	17 (18.3%)	3.92	.788
Customers can track the progress about their queries from the organization.	92	–	1 (1.1%)	5 (5.4%)	72 (83.5%)	14 (15.2%)	4.08	.497
Feedback that is provided to the customers is accurate and reliable.	92		3 (3.3%)	8 (8.7%)	60 (65.2%)	21 (22.8%)	4.08	.667
Customers have not had to choose an alternative service provider since we provide the best services.	92		4 (4.3%)	9 (9.8%)	66 (71.4%)	13 (14.1)	3.96	.645
Staff are willing to provide services within the shortest possible time.	92		5 (5.4%)	9 (9.8%)	66 (71.4%)	12 (13.0%)	3.92	.667
The staff of the company are so busy to handle any minor customer queries.	92		6 (6.5%)	2 (2.2%)	75 (81.5%)	9(9.8%)	3.95	.618
The staff are readily available to handle any complaints from the customers within in the shortest possible time.	92		4 (4.3%)	3(3.3%)	72 (78.3%)	13 (14.1%)	4.02	.593
All customers are worked on the very day they place a query/ complaint.	92	–	5 (5.4%)	16 (17.4%)	50 (54.3%)	21 (22.8%)	3.95	.790

Source: Primary Data 2023

This study aimed to gauge customer perceptions of electricity services in the surveyed area, with a focus on responsiveness, problem resolution, and service efficiency. The data collected from 92 respondents provides valuable insights into various aspects of the service delivery, presented here in terms of percentages and mean values.

Experience of Load Shedding; the majority of respondents (54.3%) agree that they do not experience frequent load shedding in the area. This indicates a satisfactory level of service in terms of power supply. The mean score of 3.95 suggests a generally positive sentiment.

Organization’s Responsiveness to Electricity Connection Problems; Customers overwhelmingly (68.5%) believe they can count on the organization for rectifying problems with their electricity connections. The mean value of 3.97 further supports a high level of trust in the organization’s ability to address and solve issues promptly.

Timely Feedback on Customer Queries; A significant percentage (64.1%) of customers believe they receive timely feedback from the company about their queries. Although some uncertainty exists (8.7% not sure), the mean score of 3.92 indicates a generally positive perception of the organization’s responsiveness to customer inquiries.

Tracking Query Progress; An impressive 83.5% of customers feel they can track the progress of their queries, contributing to a positive mean score of 4.08. This suggests effective communication channels in place, enhancing customer satisfaction in terms of query resolution.

Accuracy and Reliability of Feedback; The feedback provided to customers is deemed accurate and reliable by the majority (65.2%), resulting in a high mean score of 4.08. This finding reflects positively on the organization’s commitment to providing dependable information to its clientele.

Retention of Customers; A considerable portion (71.4%) of respondents has not opted for an alternative service provider, indicating satisfaction with the current services. The mean value of 3.96 supports the claim that the organization provides services that meet customer expectations.

Timely Service Delivery by Staff; Customers perceive staff as willing to provide services within the shortest possible time (71.4%), supported by a mean score of 3.92. This reflects positively on the organization’s operational efficiency and commitment to prompt service delivery.

Handling of Minor Customer Queries; the majority of customers (81.5%) feel that staff are not too busy to handle minor customer queries. The mean score of 3.95 indicates a balance between staff workload and their responsiveness to customer needs.

Availability to Handle Complaints; A substantial percentage (78.3%) of respondents believes that staff are readily available to handle complaints within the shortest possible time. The mean score of 4.02 suggests efficient complaint resolution processes.

Same-day Resolution of Queries/Complaints; The data indicate a balanced distribution of responses regarding the resolution of queries/complaints on the very day they are placed. The mean score of 3.95 suggests a generally positive perception, though some customers may experience delays.

The study’s results showcase overall positive perceptions of the electricity services provided, emphasizing the organization’s strengths in responsiveness, query resolution, and staff efficiency. These findings can guide the organization in maintaining and enhancing customer satisfaction in the future.

4.4.3.1 Correlation analysis of responsiveness on customer retention

		Responsiveness	Customer retention
Customer retention	Pearson Correlation	1	.146
	Sig. (2-tailed)		.164
	N	92	92
Responsiveness	Pearson Correlation	.146	1
	Sig. (2-tailed)	.164
	N	92	92

Source: Primary Data 2023

The Pearson correlation coefficient is a measure of the strength and direction of the linear relationship between two variables. In this case, the correlation coefficient between “Responsiveness” and “Customer retention” is 0.146. This indicates a positive correlation, but the strength of the correlation is relatively weak (as the coefficient is close to 0). This p-value is higher than the conventional significance level of 0.05, suggesting that the correlation may not be statistically significant. The sample size is the number of data points used to calculate the correlation. The positive correlation (0.146) suggests that there is a tendency for higher levels of responsiveness to be associated with higher levels of customer retention. The weak correlation strength implies that while there is a positive relationship, other factors may also contribute significantly to customer retention. The non-significant p-value (0.164) suggests that the observed correlation could have occurred by chance. In other words, there’s not enough evidence to conclude that the observed relationship is statistically significant. It’s essential to consider other factors and conduct further analysis or gather more data to better understand the dynamics between responsiveness and customer retention.

In summary, based on the current data, there seems to be a positive relationship between responsiveness and customer retention, but it’s not statistically significant. Further investigation or additional data may be needed to draw more robust conclusions.

4.4.3.2 Analysis of the strength of relationship between responsiveness on customer retention

Model Summary
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate
1	.146^a	.021	.011	2.521
a. Predictors: (Constant), Responsiveness

R Square (Coefficient of Determination): The R Square value is 0.021, indicating that approximately 2.1% of the variance in customer retention can be explained by the model. In other words, the model does not account for a significant portion of the variability in customer retention based on responsiveness. Adjusted R Square: This is the R Square adjusted for the number of predictors in the model. The Adjusted R Square is 0.011, which is slightly lower than the R Square. This suggests that the addition of predictors in the model may not be contributing much to the explanation of customer retention. The F-statistic is not provided in the summary, but it is commonly used to test the overall significance of the model. A significant F-statistic indicates that at least one predictor variable is contributing significantly to the model. The significance of the responsiveness predictor is not explicitly mentioned in the summary. It’s important to know if the p-value associated with the Responsiveness variable is less than the chosen significance level (e.g., 0.05). A low p-value indicates that the predictor is likely a significant factor in explaining customer retention.

Correlation Coefficient (R): The correlation coefficient (R) is 0.146, suggesting a weak positive linear relationship between responsiveness and customer retention. The positive sign indicates that as responsiveness increases, customer retention tends to increase, but the strength of this relationship is limited. The standard error of the estimate is 2.521, representing the average distance between the observed values and the values predicted by the model. Lower values indicate better precision in prediction. In summary, the model suggests a weak relationship between responsiveness and customer retention, as indicated by the low R Square and Adjusted R Square values. Further investigation is needed to determine the statistical significance of the predictors and explore additional variables that may better explain customer retention.

4.4.3.3 Significance of the relationship between

Model		Unstandardized Coefficients		Standardized Coefficients	t	Sig.
Model		B	Std. Error	Beta	t	Sig.
1	(Constant)	32.121	2.662		12.068	.000
1	Responsiveness	.188	.134	.146	1.403	.164
a. Dependent Variable: customer retention

Source : primary data

The intercept represents the estimated value of the dependent variable (customer retention) when all independent variables are zero. The t-value of 12.068 suggests that the intercept is significantly different from zero. The variable “Responsiveness” has a coefficient of 0.188, suggesting that for a one-unit increase in “Responsiveness,” the dependent variable (customer retention) is estimated to increase by 0.188 units. The t-value of 1.403 is not statistically significant at the 0.05 level, as indicated by the p-value of 0.164. Overall, the model suggests that the intercept is significantly different from zero, but the variable “Responsiveness” does not have a statistically significant impact on customer retention at the 0.05 significance level. It’s important to consider the context of the study, the effect size, and other relevant factors when interpreting these results

CHAPTER FIVE

SUMMARY, DISCUSSION OF FINDINGS, CONCLUSIONS AND

RECOMMENDATION

5.1 Introduction

This chapter comprises of summary of the study findings, discussion of findings, conclusions and recommendations.

5.2 Summary of the findings

The section presents the summary of findings according to the study objective. to establish the effect of reliability of service on customer retention, to find out the effect of assurance on customer retention and to investigate the effect of responsiveness on customer retention

5.2.1 Reliability of service on customer retention

This study delves into customer perceptions across various dimensions of organizational services, employing mean values and standard deviations for each statement to provide nuanced insights. The findings reveal a positive outlook overall, with customers demonstrating a favorable stance towards the organization’s services.

Customers, on average, are inclined to refer friends to the organization. The low standard deviation indicates a consistent agreement among customers, with minimal variability around the mean.

Customers express high enthusiasm for the services provided. The low standard deviation suggests a strong consensus among customers, with responses closely clustered around the mean.

Positive perceptions of customer care responsiveness prevail, with moderate variability in responses. Some customers strongly agree, while others exhibit a slightly lower level of agreement regarding the prompt handling of queries.

The organization’s growth is generally positively perceived, with a moderate standard deviation indicating some variability in responses. Strong agreement is observed among some customers, while others express a less optimistic view.

Customers tend to report positively about the organization’s services. Moderate variability in responses is indicated by the standard deviation, with some customers strongly agreeing and others having a slightly lower level of agreement.

The mean score suggests a relatively positive inclination for customers to return for additional services. Variability in responses is evident, reflecting a range of agreement levels among customers.

Customers generally agree that the organization is the sole provider of services. The low standard deviation indicates consistent responses with a narrow spread around the mean.

Customers perceive a high level of encouragement from the organization to contact them for more services and queries. The low standard deviation underscores a strong agreement among customers.

The study’s findings highlight a predominantly positive customer perception of the organization’s services, with specific areas showcasing consistent agreement among customers and others demonstrating moderate variability in responses. This comprehensive analysis provides valuable insights for organizational improvement and strategic planning.

5.1.2 Assurance on customer retention

This study assesses customer perceptions of service delivery in an organization across various dimensions. The findings indicate a generally positive sentiment among respondents, with consistent feedback on timely service delivery, effective communication during issues, and a commitment to exceeding customer expectations. Notably, respondents express a high level of agreement on the organization’s prompt warnings during problems and its dedication to fulfilling customer desires.

However, areas of potential improvement are identified, particularly in prompt service without customers seeking alternatives and in managing customer praise. These aspects exhibit more varied opinions among respondents, suggesting the need for targeted improvement efforts.

The study emphasizes the importance of addressing discrepancies in service promptness, investigating specific concerns or areas for improvement, and understanding factors influencing customer praise or criticism to enhance overall satisfaction. The low standard deviations in several statements affirm a generally consistent perception among respondents, highlighting both strengths and areas for focused enhancement in service quality.

5.1.3 Responsiveness on customer retention

This study investigates the perceived quality of services provided by Organization, with a focus on customer satisfaction and assurance. The research analyzes survey responses across various dimensions to gain a nuanced understanding of customer opinions.

The first dimension, Accessibility of High-Quality Services, indicates that a significant majority of customers perceive ample opportunities to access high-quality services from the organization. However, a notable portion is uncertain, suggesting potential areas for improvement in communication or customer education.

The second dimension, Timely Access to Services, reveals that a substantial majority agrees that services are provided when needed. However, addressing the minority who disagrees or is unsure is crucial for enhancing overall accessibility and satisfaction.

The third dimension, Consistency of Service Quality, shows that a significant percentage strongly agrees that their expectations align with the quality of services received. Nevertheless, efforts should be made to address those who express disagreement or uncertainty.

The fourth dimension, Competitive Assurance, highlights that a majority feels assured of great service due to a lack of competitors. Despite this positive outlook, organizations should remain vigilant to address reservations expressed by a significant minority.

In the fifth dimension, Trust and Security, the majority expresses confidence in the absence of complaints regarding theft or distrust. However, the concerns of those who disagree should be addressed to maintain a high level of trust.

The final dimensions, Staff Competence and Customer Confidence, reveal room for improvement in staff knowledge and client confidence. While the majority expresses satisfaction, addressing the concerns of the dissatisfied minority is crucial for enhancing overall service quality.

this study contributes to a comprehensive understanding of customer assurance and service quality in Organization. The analysis of survey responses provides valuable insights into specific areas of strength and areas that warrant improvement. By addressing the identified challenges, Organization can foster a more positive customer experience and strengthen its competitive position in the market.

5.2 Conclusion of the study

The study made conclusions basing on study objectives

5.2.1 Reliability of service on customer retention

In conclusion, this study has illuminated a generally positive landscape of customer perceptions across various dimensions of organizational services. The consistent agreement among customers, as reflected by low standard deviations in several key areas, underscores a robust and favorable stance towards the organization’s services. The findings indicate that customers not only express a willingness to recommend the organization to friends but also exhibit high enthusiasm for the services provided. The positive perceptions extend to customer care responsiveness, with a notable majority expressing satisfaction, albeit with some moderate variability, While the overall perception of the organization’s growth is positive, the moderate standard deviation suggests that there is some diversity in views among customers. Similarly, positive reports about the organization’s services are prevalent, though with a degree of variability in responses. The study reveals that customers generally lean towards a positive inclination to return for additional services, but there is a range of agreement levels among customers, as evidenced by the variability in responses. Additionally, the perception that the organization is the sole provider of services is consistently high among customers.

Furthermore, the organization’s encouragement for customers to reach out for more services and queries is strongly acknowledged, as indicated by the low standard deviation. In essence, the comprehensive analysis of customer perceptions offers valuable insights for organizational improvement and strategic planning. The identification of areas with consistent agreement and those with moderate variability allows the organization to focus on strengthening its strengths and addressing potential areas for enhancement. These insights are crucial for shaping strategies that align with customer expectations, ultimately fostering continued positive relationships and sustained growth for the organization.

5.2.2. Assurance on customer retention

In conclusion, this study provides valuable insights into customer perceptions of service delivery within the organization. The overall positive sentiment among respondents underscores the success of the organization in areas such as timely service delivery, effective communication, and a commitment to exceeding customer expectations. The consistent feedback on prompt warnings during problems and dedication to fulfilling customer desires reflects a strong foundation in customer service.

However, the identification of areas requiring improvement, particularly in prompt service without customers seeking alternatives and in managing customer praise, highlights opportunities for enhancement. The varied opinions among respondents in these aspects emphasize the need for targeted efforts to address specific concerns and raise overall service quality.

The study emphasizes the significance of addressing discrepancies in service promptness, conducting thorough investigations into specific concerns, and gaining a deeper understanding of the factors influencing customer praise or criticism. By doing so, the organization can strategically focus on areas that will have the most significant impact on customer satisfaction. The low standard deviations in several statements indicate a generally consistent perception among respondents, reinforcing the reliability of the findings.

In moving forward, the organization should consider implementing targeted improvement strategies, leveraging its strengths, and addressing identified areas for enhancement. This comprehensive approach will contribute to an even more positive customer experience, further solidifying the organization’s reputation for exceptional service delivery.

5.2.3 Responsiveness on customer retention

This study sheds light on the perceived quality of services offered by Organization, focusing on customer satisfaction and assurance. The findings suggest several areas of strength as well as opportunities for improvement. The study reveals that while a significant majority of customers perceive ample opportunities to access high-quality services, there is a notable portion that is uncertain, indicating potential gaps in communication or customer education. Similarly, although a substantial majority agrees that services are provided when needed, addressing the concerns of the minority who disagree or are unsure is crucial for enhancing overall accessibility and satisfaction.

The consistency of service quality is generally perceived positively, with a significant percentage strongly agreeing that their expectations align with the quality of services received. However, efforts should be made to address those who express disagreement or uncertainty in this dimension.

The study also highlights the importance of competitive assurance, as a majority feels assured of great service due to a lack of competitors. Nonetheless, organizations should remain vigilant and address reservations expressed by a significant minority.

In terms of trust and security, the majority expresses confidence in the absence of complaints regarding theft or distrust. Nevertheless, addressing the concerns of those who disagree is essential to maintaining a high level of trust.

Finally, in the dimensions of staff competence and customer confidence, the study identifies room for improvement. While the majority expresses satisfaction, addressing the concerns of the dissatisfied minority is crucial for enhancing overall service quality. Overall, this study contributes valuable insights into specific areas of strength and improvement for Organization. By addressing the identified challenges, the organization can foster a more positive customer experience, build trust, and strengthen its competitive position in the market. The findings provide a solid foundation for strategic initiatives aimed at enhancing service quality and customer assurance.

5.3 Recommendations of the study

Utilize positive reports about the organization’s services in marketing and promotional materials, Highlight specific success stories or customer testimonials to reinforce positive perceptions and build trust among potential customers.

Use customer feedback to drive continuous improvement initiatives and innovation in services, ensuring the organization stays ahead of evolving customer expectations and Foster a culture of open communication and proactively seek customer feedback to demonstrate a commitment to meeting their needs.

Implement measures to proactively address customer needs before they seek alternative solutions.

Consider technology enhancements or process improvements to reduce response times and enhance overall service promptness. Develop a system to effectively manage and respond to customer praise, acknowledging and appreciating positive feedback. Consider implementing a rewards or recognition program to incentivize employees for outstanding service that receives positive customer feedback.

Use customer feedback as a valuable resource for continuous improvement, addressing root causes rather than just symptoms. Conduct additional research or surveys to delve deeper into the factors that contribute to customer praise or criticism. Use this information to tailor training programs, communication strategies, or service offerings to better align with customer expectations.

Develop a comprehensive communication strategy to bridge potential gaps in customer education. Implement educational campaigns to inform customers about the available services, ensuring clarity on how to access and benefit from them.

Regularly assess the competitive landscape to identify emerging competitors and potential areas of vulnerability. Proactively address concerns raised by the minority regarding competitive assurance, emphasizing the organization’s commitment to continuous improvement.

Conduct regular training programs for staff to enhance their competence and ensure that they meet customer expectations. Implement a feedback loop to gather continuous insights from customers about staff interactions and use this information to drive improvement initiatives.

Use customer feedback to drive continuous improvement and as a key input for strategic decision-making. Strengthen CRM practices to enhance customer relationships, understand individual needs, and tailor services accordingly. Foster a culture of transparency within the organization, ensuring that customers are informed about any changes or improvements being made.

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Appendix B: Questionnaire

Dear Respondent

I am a student of Uganda Martyrs University undertaking research on the topic “Service Quality and Organisational Customer Retention in Uganda’s Service Industry: A Case Study of Umeme in Banda District, Uganda”

Your participation in this study is voluntary but necessary for the success of this work. I request you to accept to participate in this study for the success of the research. Confidentiality will be ensured for information provided by ensuring anonymity.

Yours Faithfully

Joseph Bwambale

QUESTIONNAIRE

SECTION A: Background Characteristics

Tick in the appropriate place provided

Gender

Male Female

What is your age?

Less than 20 years 21 – 25 years

26 – 30 years 31 – 35 years

36 – 40 years 41 years and above

What is your Marital Status?

Single Married Widowed

Separated Divorced

How long have you been working in this company?

Less than 1 year 1 – 5 years

6 – 10 years 11 years and above

SECTION B: Customer Retention

This section presents items on customer retention (DV). You are kindly requested to indicate how you feel about your desire to continue being a customer of UMEME Limited using the scale where, 1= Strongly disagree, 2 = Disagree, 3 = Not sure, 4 = Agree and 5 = Strongly agree.

B1	Customer retention	SD	D	NS	A	SA
B1.1	Customers often refer their friends to this organization for services
B1.2	Our customers are enthusiastic about the services we offer.
B1.3	The customer care offered in the organization ensures that customers’ queries are promptly handled by professionals.
B1.4	The number of customers is increasing in the organization
B1.5	Customers report to the organization about the good services that the organization has provided.
B1.6	Our customers always come back to us for more services.
B1.7	We are the sole providers of the services and thus customers have to rely on the company.
B18	The company encourages customers to contact them for more services and queries.

Section C: Service Quality (IV)

This section presents items on Service quality (IV). You are kindly requested to indicate how you feel about the service Umeme is offering using the scale where, 1= strongly disagree, 2 = Disagree, 3 = Not sure, 4 = Agree and 5 = Strongly agree.

C1	Reliability	SD	D	NS	A	SA
C1.1	Our services are offered in a timely manner
C1.2	Our services are promptly offered to the customers without them opting for other alternative service providers
C1.3	It is normal to make excuses when deadlines are not met.
C1.4	Our staff explain to customers in case the service has not been delivered promptly
C1.5	Customers receive their services on time when needed.
C1.6	In case of a problem such as bad connections or fallen poles, or maintenance, the organization warns and alerts the people in a very timely manner.
C1.7	Our customers praise us for our services.
C1.8	We offer services in line with what the customers believe is best and what they want.
C1.9	Our services are offered beyond what the customers expect.
C1.10	We are never tired of fulfilling our customers’ desires however much they call us.

Section D: Assurance

C2	Assurance	SD	D	NS	A	SA
C2.1	All customers have opportunity to access high quality services from the organization
C2.2	Access to the services is provided to the customers at any time needed.
C2.3	When customers expect a high-quality service, they actually get high quality services from the organization.
C2.4	The customers are assured of great service since there isn’t any other competitor.
C2.5	There have not been any complaints of theft, or distrust from clients about employees.
C2.6	The staff are highly knowledgeable about the services they are supposed to offer.
C2.7	Clients are confident that their problems will be worked on by the staff of the organization.
C2.8	Officials can clearly answer all queries raised by the customers.
C2.9	The staff of the organization are considerate about the customers.

Section E: Responsiveness

C3	Responsiveness	SD	D	NS	A	SA
C3.1	The people do not experience frequent load shedding in the area.
C3.2	Customers are able to count on the organization for rectifying problems with their electricity connections.
C3.3	Customers get timely feedback from the company about their queries.
C3.4	Customers can track the progress about their queries from the organization.
C3.5	Feedback that is provided to the customers is accurate and reliable.
C3.6	Customers have not had to choose an alternative service provider since we provide the best services.
C3.7	Staff are willing to provide services within the shortest possible time.
C3.8	The staff of the company are so busy to handle any minor customer queries.
C3.9	The staff are readily available to handle any complaints from the customers within in the shortest possible time.
C3.10	All customers are worked on on the very day they place a query/ complaint.

End`

Thank you for volunteering to participate in this study.