Factors Impacting Customer Retention on Services Marketing – Evidence from Balkan Countries

Proceedings of The 7th International Conference on Research in Business, Management and Economics

Year: 2023

DOI: https://www.doi.org/10.33422/7th.icrbme.2023.07.100


Factors Impacting Customer Retention on Services Marketing – Evidence from Balkan Countries

Fitore Jashari Mani




With easier access to information, customers are exposed to many different service providers, making it easier for them to switch from one provider to another. Due to this, businesses are investing more on customer retention (CR) strategies. For the last decades customer retention got the attention of many researchers who have developed different models explaining. Yet there is a gap in the transition economies literature, like Balkan countries, regarding this issue. Considering this, our research aims to provide a model identifying factors that positively impact customer retention as a core component of customer relationship marketing. Data was collected from 674 service customers of Balkan countries (Kosovo, North Macedonia, Albania and Montenegro). Research model consists of four variables: customer retention (CR) as a dependent variable and customer satisfaction (CS), perceived value of loyalty program (PVLP) and switching costs (SC) as independent variables, while SC is also tested as a mediator. To test the research model and hypotheses we used Confirmatory Factor Analysis (CFA) and Structural Equation Model (SEM). Findings indicate a positive impact of CS, PVLP and SC on CR. Additionally, results show that SC partially mediates the PVLP – CR relationship. Study implies practical and theoretical contributions, as findings can be used by businesses to improve CR and transition economies’ literature of customer management can be enriched with a new model of CR.

keywords: customer retention, Balkan countries, customer satisfaction, loyalty program, switching costs