Service innovation practices and customer loyalty in the telecommunication industry

by Ernest Awuku, Paul Mensah Agyei, Eric Gonu

The study sought to assess differences in innovation practices in the telecommunication industry, customer perception of service innovations, and how service innovation practices influence the loyalty of mobile subscribers. A quantitative research approach was adopted to study 250 samples from active subscribers of the leading mobile telecommunication companies in Ghana. Descriptive and regression analytical approaches were used to analyze the study’s objectives. The result indicates service innovation practices significantly influence loyalty. Innovative service concepts, innovative service processes, and new technologies significantly influence customer loyalty with the latter having the strongest influence. The study contributes to the scanty literature on the mentioned subject within the Ghanaian context. Additionally, this study focused on the service sector. Despite the sector’s contribution to the world’s Gross Domestic Product (GDP), previous studies have largely focused on the manufacturing sector. Based on the findings, the study recommends that the management of MTN, Vodafone, and Airtel-Tigo in collaboration with R&D and Marketing departments must invest financial and cognitive resources to develop innovative technologies, processes, and services to address the service convenience, efficiency, and effectiveness needs of customers. The study further recommends that financial and cognitive investment should be based on market and consumer research, and customer interaction. This study recommends similar studies using qualitative research methods in other industries such as banking and insurance.