How Important Is Customer Satisfaction? Quantitative Evidence from Mobile Telecommunication Market

Abstract

To investigates the importance of customer satisfaction in Pakistani mobile telecommunication market. This study explores whether customer satisfaction affects the relationship between customer loyalty and service quality, and also between customer loyalty and perceived value. The study found the coefficient of determination (R 2) for the overall model to be considerable. The role of customer satisfaction was significant in assessing the contribution of exogenous constructs to the R 2 value of endogenous constructs ( f 2 0.35). All exogenous constructs in the model had good predictive relevance for endogenous constructs, as Q 2 value was above the threshold (0.156 for customer satisfaction, and 0.467 for customer loyalty). The q 2 effect size of customer satisfaction on customer loyalty is large ( q 2 = 0.448). VAF accounted for more than 80% of both indirect effects, indicating the importance of customer satisfaction on the relationship between service quality and customer loyalty, and between perceived value and customer loyalty.