Service Quality Effects on Customer Loyalty among the Jordanian Telecom Sector " Empirical Study "

The challenging questions that face telecom managers are: How customers perceive and judge service quality in mobile telecom industry? Also, how can they build loyalty by choice? The prime objective of this study is to analyze the Service Quality Effects on Customer Loyalty in the Jordanian Telecom Sector. The population of this study is IT and MIS university students. The prime criterions behind it are that these students are a target market for the telecom organizations and more attracted to advertisement and promotional activities. The study used descriptive analysis, one way ANOVA, Pearson Correlation, and finally stepwise regression analysis was calculated to assess the impact of SERVQUAL factors on customer loyalty. The statistical results of Pearson correlation (0.626) indicate a strong and positive correlation between SERVQUAL and customer loyalty in the Jordanian telecom market. Also, the Study found that SERVQUAL had a significant impact at level (P≤ 0.05) on customer loyalty in the Jordanian telecom market. In addition, the study showed that Durbin-Watson value forthe SERVQUAL was (1.901).


Introduction
The services sector has witnessed significant improvement and development during the past decades especially in the field of telecommunications services, causing fierce competition within the sector.This ongoing changes and dramatic improvements in the market increased awareness among customers about the quality and level of services provided to them, which led to the increased size of the pressure on the organizations to meet customers' expectations.Successful organizations are working to meet customer's expectations and bridging the gap between the service provided and customer expectations to create satisfied, happy and loyal customers.In the Telecom industry, a key element of organization success is the nature of the relationship between the customer and the service provider in term of SERVQUAL elements, which will lead to customers' loyalty.Thus such elements are greatly noted as a critical prerequisite for retaining and satisfying valued customers.

Problem Statement and Study Objectives
Telecom organizations strive for long lasting success through building long and solid relationship with their customers.Meet customers' expectations are a challenging task for Jordanian Telecom companies; Jordanian Market is characterized as a highly competitive and regulated sector.Therefore, it is highly required that Telecom companies reevaluate the level of SERVQUAL which offered to customers and understand the critical service quality factors that most effect customer loyalty to accomplish greater benefits and big returns.This complicated picture needs ongoing studies by the telecom sector to obtain quantitative results as an outputs; such results is expected to clarify the real picture of the Jordanian Telecom market and should lead to an appropriate decisions.Based on the problem statement the prime objectives of this study are: to analyze the Service Quality Effects on Customer Loyalty in Jordanian Telecom Sector.The secondary objectives are:  To analyze the relationship effect between SERVQUAL elements and customer loyalty in the Jordanian market.
 To draw the actual relationship between Jordanian customers and Telecom service providers in the Jordanian market.

Significance of the Study
Basically, the intense competition in the Jordanian Telecom market has put continuous pursuers on organizations to improve service quality.The significance of this study stems from the fact that appropriate decision making process relies on appropriate analytical studies, which expected to create a solid base to stay in touch with customer expectations on one side and holding strongly competitive strength over rivals on the other side.The appropriate decisions and solutions should lead to improve service quality to create loyal customers, since management leaders closely focus on service quality as a critical success factor for organizations.
Meanwhile, it is very vital and important for organizations to prove its capabilities and competencies in exploiting the huge benefits of utilizing such model like SERVQUAL on Telecom sector.This study should indeed help decision makers review their plans and see the real picture of the Jordan Telecom Market within its components.Moreover, the scarcity of analytical studies on Telecom Sector in Jordan may contribute more to the significant of this undertaking study.

Proposed Conceptual Framework
Based on the problem statement and study objectives, the study determined the SERVQUAL factors as independent variables as follow: Appearance, Empathy, Reliability, Responsiveness, and Assurance (Parasuraman et al., 1985;1988& Iwaarden et al, 2003)).Also, Customer loyalty was considered as dependent variable in this study.The following graphical model (figure 1) has used to clarify the research design: Figure 1.Model of the study source: Model prepared by the researcher

The Main Hypothesis of the Study
There is a significant effect of SERVQUAL on customer loyalty in the Jordanian Telecom market.The hypothesis is broken in to five minor hypotheses: There is a significant effect of Physical Appearance on customer loyalty in the Jordanian Telecom market.
There is a significant effect of Empathy on customer loyalty in the Jordanian Telecom market.
There is a significant effect of Reliability on customer loyalty in the Jordanian Telecom market.
There is a significant effect of Responsiveness on customer loyalty in the Jordanian Telecom market.
There is a significant effect of Assurance on customer loyalty in the Jordanian Telecom market.

Literature Review
Service quality is a concept related to competitiveness that has aroused considerable interest and debate in the literature because of the difficulties and barriers in both defining it and measuring it with no overall consensus emerging on either (Wisniewski, 2001).It is regarded as an impression to the superiority or inferiority of the service provider (Tsoukatos and Rand, 2006).Scholars and researchers had concerned about what is meant by service quality?
One common definition considers it as: the extent to which a service meets customers' needs or expectations (Lewis and Mitchell, 1990;Dotchin & Oakland, 1994;Asubonteng et al., 1996;Wisniewski and Donnelly, 1996).It is crucial and critical for management to keep close to market changes and its dimensions.If

Physical Appearance Empathy Reliability Responsiveness Assurance
Customer loyalty expectations of customers are greater than performance, then perceived quality is less than satisfactory and hence customer dissatisfaction occurs (Parasuraman et al., 1985;Lewis & Mitchell, 1990).
Variety of models exist that assist and measure service quality, including the well-known and mostly used SERVQUAL instrument (Parasuraman et al., 1988;Ladhari, 2009), which rely on the assumption that "perceived service quality derives from the consumer's comparison of expected service and actual service performance" (Gronroos, 1984;Parasuraman et al., 1988).Accordingly, SERVQUAL measures five dimensions:  "Tangible elements" (appearance of equipment, physical facilities, and personnel). "Reliability" (ability to perform the promised service accurately and dependably). "Responsiveness" (willingness to help customers and provide prompt service). "Assurance" (courteous and knowledgeable employees who can inspire confidence and trust). "Empathy" (personalized attention and care). There are two major approaches (Models) to measure service quality in order to reach the state ofcustomer satisfaction and loyalty:  Directional approach: It is a business marketing concept which is embodied with customer satisfaction but not equivalent to it.The concept is connected to the customers' perceptions of the real performance of the service provided by the organization.This Model supports the fact that "Customer satisfaction is a psychological state prior to giving judgment on the service quality provided" (Joseph, et. al., 1992).


Gap Approach, or 'SERVQUAL' model.This Model development is based on the customers' expectations of the service level and their Perceptions of the actual service performance level.Therefore the axis of this model is represented by (7 Gaps) range between customers' perceptions of the real service performance level and customer expectations of the service quality.This gap, in turn, depends on the nature, design and provision of this service (Parasuraman, et al. 1988).
The relationship between customers' expectations, management perceptions, communications, and teamwork, etc. was analyzed in term of gaps in the service quality concept.Seven major gaps in the service quality concept were a focus of this model and must be considered by management when delivering the service (Parasuraman et al., 1985(Parasuraman et al., , 1988;;ASI Quality Systems, 1992;Curry, 1999;Luk & Layton, 2002).Gap 1: Customers' expectations versus management perceptions.
Gap 2: Management perceptions versus service specifications.
Gap 3: Service specifications versus service delivery.
Gap 4: Service delivery versus external communication.
Gap 5: The discrepancy between customer expectations and their perceptions of the service delivered.
Gap 6: The discrepancy between customer expectations and employees' perceptions.
Gap 7: The discrepancy between employee's perceptions and management perceptions.
Accordingly, the seven key discrepancies or gaps are relating directly to managerial perceptions of service quality in organizations, and major tasks associated with service delivery to customers.Gap (1, 2, 3, 4, 6, 7) are identified as functions of the way in which service is delivered, while (Gap 5) pertains to the customer and considered to be the true measure of service quality.
The prime objective of 'SERVQUAL' model is to clarify and analyzed the series of gaps which affect the beneficiary's perception of service quality; that is, the seven previously mentioned gaps which appear in the administrative aspect.
Business leadership and researchers have mentioned that there is a strong link between customer loyalty and organizational profitability (Reichheld, 1996).This has a direct impact on reducing cost of retaining a customer and achieving a zero defection of profitable customers.Meanwhile, retention concept and technique should not be taken for loyalty.Loyalty is valid when customers have many options to choose from in the market.Such service providers should understand why customers choose to stay in doing business and should not assume that it is a positive conscious choice (Colgate et al. 1996); customers may be lured away by attractive deals and offers made by competitors when they experience dissatisfying incidents (Jones &Farquhar, 2003).
Customer loyalty is the result of an organization's creating a benefit for customers so that they will maintain and increasingly repeat business with the organization (Anderson, & Jacobsen, 2000).It is a deeply held commitment of customers to prefer brand, products or services of a certain organization in future regardless of any situational constraints or marketing promotions to cause the switching behavior.Moreover true customer loyalty is created when customers become advocate of an organization without any incentive (Oliver, 1997).
The failure to formally develop the micro foundations of the relationship between exit and voice has led to confusion on such basic questions as when exit and voice function as substitutes, and when as complements (Hirschman, 1993).Oliver (1997) mentioned that retention and switching are short-term consequences of satisfaction, while loyalty is a long-term consequence.Meanwhile, Hirschman (1970) proposed that individuals in commercial and institutional relationships have two response options if faced with low quality services, either to exit or leave the business relationship or to speak up by displeasure to the firm.Later, Hirschman added a third response by focusing on loyal customers whom are expected to make a decision to stay rather than to exit or voice.
The challenging question to telecom managers is: How customers perceive and judge service quality in mobile telecom industry?Also, how can they build loyalty by choice?The answer to such a crucial question like this can be noted in a study by Boohene & Agyapong (2011) who state: "due to the fact that telecom firms do not provide tangible products, their service quality is usually assessed by measure of the service provider's relationship with customers.Thus, telecom service management should pay attention to staff skill profession and offering fast and efficient services".Kandampully (1998) states that the firms with loyalty to offer services to their customers yield returns in the shape of satisfied customers who are willing to stay with the organization.Cavana et al. (2007) reported that service quality dimensions (tangibles, responsiveness, empathy, assurance and reliability) should be considered in order to see its impact on customers of the service provider.Lovelock (1996) found that functional quality significantly and positively affected satisfaction.Also Technical quality does affect customer loyalty in the high contact service.The impact of service quality on customer satisfaction and loyalty was confirmed by Omotayo and Joachim study ( 2011), the study conducted on 148 subscribers of major telecom companies in Nigeria.It was founded that service quality has a positive impact on satisfaction and loyalty.Caruana (2002) evaluated and analyzed service loyalty over 1200 retail banking customers in state of Malta.Study results showed that customer satisfaction had a mediating role in the effect of service quality on service loyalty.Henkel et al. (2006) have discussed in their findings that satisfied customers in the telecom sector have high future intentions to stay with the company and future repurchase intentions.Mittal and Lassar (1998) utilized the Technical and Functional Quality perspectives in order to compare the concepts of customer loyalty with satisfaction.The study found that, in a high contact service where a customer's direct contact with the service provider was relatively intense.Turel et al. (2007) found that customers' adoption decision of the service provider depends on the quality offered and the price of the service provided.Richard and All away study (1993) revealed that both technical and functional dimensions explained more of the variation in customer choice behavior than functional measures alone; though, the technical factor is easy to evaluate for a pizza delivery service.
Abratt and Russell (1999) have proved that price followed by trust; service quality and if the organizations have been available at a time of crisis, this is the most important criteria in the selection of a private bank.In contrast, Riggall (1980) confirmed that the most important factor to build loyal customers for banks is convenience factor followed by colleagues or friends suggestions then low charges.Lewis (1991) indicated that "recommendations and convenience by family members' friends were the most decisive bank selection criteria for building customer loyalty.

Population and Sampling
The population of this study is(IT and MIS) university students.The prime criteria behind it is that these students (Youths) are a target market for the telecom organizations, more attracted to advertisement and promotional activities and more vigilant towards the changes in Telecom market due to their academics' specializations.Official sources of ministry of Higher education indicated that there are 26 universities across Jordan, 10 universities are public while 16 of them are private.A sample of (5) universities were chosen randomly (Yarmouk University, Alisra University, The world Islamic sciences and education university, Jadara university and Albalqa applied university).The unit of analysis for the study was the IT and MIS students in the Jordanian universities.(300) questioners were distributed among students, (16) questioners were rejected from the statistical analysis leaving (284) questioners fit for the analysis.

Data Collection
The study collected a qualitative data through a self-designed questioner and been analyzed to fully investigate and analyze the Service Quality Effects on Customer Loyalty in Jordanian Telecom Sector.The questioner had two parts.Part one provided some information about the respondents in the selected field as shown in (Table 10).
Part two as shown provided (5) SERVQUAL factors representing (20) questions: Physical appearance (4 questions), Empathy (4 questions), Reliability (4 questions), Responsiveness (4 questions), and Assurance (4 questions).Also the Customer loyalty as a dependent variable had been represented by (10 questions).The study was adopted Likert scale (strongly agree, agree, moderate, disagree, and strongly disagree) in formatting the questionnaire.The final format of the questionnaire was developed, trailed, modified, and then distributed to IT and MIS students.The documentation process used APA, 2010 for references indications.

Validity of Data Collected
The study ensured the face validity of the instrument through a pilot study, 10 questionnaires were given to customer service experts working in the telecom sector, displayed comments and suggestions were fully considered.

Reliability of Collected Data
The reliability of each question was tested based on Gronbach Alpha statistical formula as shown in table (1), the reliability coefficient test of each SERVQUAL independent factor was: Physical appearance (78%), Empathy(89%), Reliability (82%), Responsiveness (84%), and Assurance(87 %).The reliability coefficient of Customer loyalty as a whole was (90%), while the whole instrument (30) questions reached a reliability coefficient of (85%).The reliability test was conducted to check the inter-item correlation in each of the factors in the questionnaire."Whichexceeded the acceptable limit" (Sekaran, 2003).

Data Analysis
The study hypothesis were tested by implementing the following tools: descriptive analysis: frequencies, means, standard deviation, one way ANOVA was used to measure the differences between groups, Pearson Correlation and finally stepwise regression analysis was implemented to assess the impact of SERVQUAL factors on customer loyalty.

Demographic Profile
Table (2) showed that questionnaires were distributed among students (male and female) having the percentage of (46.7%) and (53.3%) respectively.According to the collected data, the respondents have different level of Microsoft and internet skills, only (34%) of the students are working while they are studying.Most of the respondents (49.5%) are benefiting from internet and celli our phone services.The questionnaire results showed that (61.7%) of the respondents were from private universities while (38.3%) are studying at public ones.

Descriptive Statistics
The findings indicated as shown in table ( 3) that (MIS and IT) students were satisfied with SERVQUAL dimensions as a whole with (M=3.7).Also the respondents expressed a high degree of acceptance as loyal customers with (M=3.69).This positive attitude from the respondents may reflect the hyper competition taking place in the Jordanian telecom market among the three major telecom companies: Zain, Orange, and Umnia.

The Main Hypothesis of the Study
"There is a significant effect of SERVQUAL on customer loyalty in the Jordanian Telecom market".The major hypothesis is broken in to five minor hypotheses: a) There is a significant effect of Physical Appearance on customer loyalty in the Jordanian Telecom market.
b) There is a significant effect of Empathy on customer loyalty in the Jordanian Telecom market.
c) There is a significant effect of Reliability on customer loyalty in the Jordanian Telecom market.
d) There is a significant effect of Responsiveness on customer loyalty in the Jordanian Telecom market.
e) There is a significant effect of Assurance on customer loyalty in the Jordanian Telecom market.

Test the Major Hypothesis
"There is a significant effect of SERVQUAL on customer loyalty in the Jordanian Telecom market".
The major hypothesis of this study used the Person Correlation to test the relationship between the independent variables and dependent variable.Also, enter regression was used as well to test the possible effect of all variables in the independent variables (SERVQUAL) on the dependent variable (Loyalty) as stated in the major hypothesis.Tables (9a) depict the model.Based on Pearson Correlation statistical output, it was found the following: "There is a positive and strong correlation between SERVQUAL and customer loyalty (0.626).In order to test the effect of the independent variable on dependent variable, the study used enter regression as showed in table (9b, 9c).Yet, (t1, t2, t3, t4, t5) in the statistical models are representing the following independent variables respectively: Physical Appearance, Empathy, Reliability, Responsiveness and Assurance.
The regression test revealed that the value of (R 2 = 0.467), this means that SERVEQUAL dimensions were able to explain (46.7%) of the variance in the customer loyalty variable.it also shows that F value is (f=18.354)significant at (P≤ 0.05), and Durbin-Watson indicator was (1.901) which is very close to (2.00).Based on the result we accept the major hypothesis that states the following "There is a significant effect of SERVQUAL on customer loyalty in the Jordanian Telecom market at level of (P≤ 0.05)".

Test the Minor Hypothesises
The study carried out the stepwise regression to test the minor hypothesises (a, b, c, d, e).Tables (9.d, 9.e) depict the model.The statistical results revealed that (R 2 ) for the variables are: (Responsiveness is 0.354, Empathy is 0.424 and Reliability is 0.467) respectively.This indicates that only three variables of five whom tested SERVEQUAL dimensions were able to explain together (46%) of the variance in the customer loyalty variable; Physical appearance and Assurance had no effects on the dependent factor.It also shows that F value is (f=30.120) is significant at (P≤ 0.05), in addition the value of Beta is (β=0.243,P≤ 0.05), and Durbin-Watson indicator was (1.922) which is very close to (2.00).
Based on these statistical results the study accepts the following hypothesises:  There is a significant effect of Empathy on customer loyalty in the Jordanian Telecom marketat level of (P≤ 0.05).


There is a significant effect of Reliability on customer loyalty in the Jordanian Telecom market at level of (P≤ 0.05).


There is a significant effect of Responsiveness on customer loyalty in the Jordanian Telecom market at level of (P≤ 0.05).Meanwhile, based on the statistical results in table (9d, 9e), the study reject the following hypothesises and accept the alternative hypotheses as follow:  There is a significant effect of Physical Appearance on customer loyalty in the Jordanian Telecom market at level of (P≤ 0.05).And accept the alternative hypothesis which states that: There is no significant effect of Physical Appearance on customer loyalty in the Jordanian Telecom market at level of (P≤ 0.05).


There is a significant effect of Assurance on customer loyalty in the Jordanian Telecom market at level of (P≤ 0.05).And accept the alternative hypothesis which states that: There is no significant effect of Assurance on customer loyalty in the Jordanian Telecom market at level of (P≤ 0.05).


The demographic analysis indicates that (34.1%) of the MIS and IT students are working during their study, and most of the respondents (49.5%) are having internet and celli our service in the same time.


The study revealed that the degree of acceptance by respondents to the telecom services provided in the Jordanian market had a mean of (3.75) which is relatively high.This indicates that Jordanian customers are loyal to their telecom services providers; meanwhile the mean of loyalty factor achieved was (3.69).


The statistical results of Pearson correlation (0.626) indicate a strong and positive correlation between SERVQUAL and customer loyalty in the Jordanian telecom market.These results support the existing relationship between the SERVQUAL and customer loyalty in the telecom market in Jordan.


The Study revealed that SERVQUAL had a significant impact at level (P≤0.05) on customer loyalty in the Jordanian telecom market; In addition, the study showed thatDurbin-Watson value for the SERVQUAL was (1.901) and it is significant at level (P≤ 0.05).


The study revealed that (R 2 ) for (Responsiveness is 0.354, Empathy is 0.424 and Reliability is 0.467) respectively which indicates a significant impact at level (P≤ 0.05) on customer loyalty in the Jordanian telecom market; In addition, the study showed that Durbin-Watson value for the variables was (1.922) and it is significant at level (P≤ 0.05).


The study found that Physical Appearance and assurance have no significant impact at level (P≤ 0.05) on customer loyalty in the Jordanian Telecom market.
10.1 Based on the Empirical Study Findings, the Author Recommend the Following Remarks  The telecom companies are invited to make more research to improve the loyalty in the Jordanian market, since this market is characterised as highly competitive and regulated, therefore all dimensions of telecom service quality should be focused on in depth to keep improving the overall organisational performance; that would lead to better perceived service quality and customer loyalty. Two variables out of five of the SERVQUAL model are found unaffected to customers responds, therefore telecom companies are urged to improve services related to these variables taking in considerations."Gap approach model".


Telecom management should focus on improving customer relationships through continuous improving in quality service as a competitive policy in the Jordanian telecom market.

Limitations and Suggestions for Further Research
It is obvious and recognised by mangers the highly importance of enhancing the telecom service quality culture inside the telecom organisations.Further research should taking place to address more variables and different populations' studies, as well different cultures with a larger sample size to have a deep analysis to customers' expectations.These important studies should be supported and funded by the telecommunications companies in the Jordanian market.Telecom Staff treat clients with respect and appreciations; also understand the expectations of the customer.
6 Telecom staffs are Fulfilling various services to customers by successfully communicating telecommunications advice appropriately within schedule.

7
I feel that staffs are very cooperative to provide the requested service.
8 I feel always that am a focus of attention of the employee.9 Telecom companies inform customers about services provided to customers accurately concerning starting and finishing service or any important information.
10 Telecom companies maintain accurate records of information on the services provided to the consumer.

11
Service and contract terms are performed carefully and in good faith.
12 The company's response to customer inquiries quickly and credibility.
13 Services provided by the telecom company satisfy your needs and desires.
14 I feel that the staffs are working to translate the concept of "customer response" to reality and tangibility.
15 Company responds to consumer expectations consistently.

16
The company offers services that vowed within specific programs, clear and easy to use.17 Staff's positive behavior enhances customer's confidence when they deal with the company.
18 I feel safe when I deal with the telecom company.

19
Employees have sufficient knowledge to answer customers' questions.

20
I am confident that the answers, information and instructions i get from the staff are constructive and value.

21
I feel relieved when I look at a telecom company because it has a set of qualified personnel with specific expertise.

22
Telecommunications company is working to provide high professional staff to receive complaints of customers and provide appropriate solutions.

23
I feel that the telecom company is keen on social participation and assistance to the local community.

24
The company works to provide a range of value-added offers for the customers to enable them to choose what suits them.

25
The company works to build loyalty among customers by giving discounts and value offers.

26
Company considers my suggestions and observations in order to develop the services provided to me.

27
I refer to my friends and relatives of some of the company's services that meet their needs because I appreciate their contributions to the community.

28
I have loyalty to the telecom company because it is characterized by its name and trade mark.

29
I defend the telecom company when someone criticizes it.

30
The name of the company which is providing me the service is a focus of my concern and appreciations.

Table 1 .
The statistical results of reliability analysis

Table 2 .
Personal characteristics

Table 3 .
Degree of acceptance based on respondent's attitude