Minimization Of Customer Churn in Mobile Telecommunication Industry in Zambia - A Case of MTN Zambia

Abstract

The study aimed to explore the minimization of customer churn in the mobile telecommunications industry in Zambia, focusing specifically on MTN Zambia. To achieve this, four specific objectives were established: identifying the factors contributing to customer churn, assessing the impact of churn on the company's revenue and profitability, evaluating the effectiveness of customer retention strategies employed by MTN Zambia, and identifying areas for improvement in these strategies. The methodology employed a mixed-methods approach, incorporating qualitative and quantitative techniques, and involved a sample size of 85 respondents. The research used a stratified random sampling process to capture insights from both current and former customers, supplemented by purposive sampling to include key stakeholders from MTN’s customer churn and marketing departments. Quantitative data was analysed using descriptive statistics such as mean, mode, frequencies and sum, and inferential statistics using multiple regression analysis while qualitative data was analysed thematically. The findings revealed that quality of network coverage is a major factor in customer churn, with 29.41% of respondents rating it as average and 29.41% as below average. Furthermore, pricing posed a challenge, as 35.29% of customers indicated dissatisfaction, while only a minority, 23.53%, expressed high satisfaction levels. Service disruptions were significantly noticed, with 47.06% experiencing frequent interruptions. The impact of churn on MTN Zambia's revenue was evident, with only 11.76% of customers spending less than ZMW 100 monthly, while a notable 52.94% indicated a tendency to switch for better offers. The effectiveness of retention strategies was highlighted, as 76.5% of customers received promotional offers; however, only a portion found them appealing (58.8%). Areas for improvement were identified, primarily focusing on network coverage (29.4%) and enhancing customer service quality (35.3%). The regression analysis for MTN Zambia reveals that service quality (-0.45) and customer service experience (-0.40) significantly increase churn (P<0.005), while price competitiveness (+0.25) reduces it, as it was not significant (P>0.005). In conclusion, the study underscores the pressing need for MTN Zambia to enhance its network quality and customer service while revising its pricing strategy to minimize churn. To fortify customer loyalty, MTN should consider optimizing engagement through targeted communication and refining promotional offers.