The Effect of Customer Loyalty Programs on Customer Satisfaction in the Mobile Telecommunications Sector in Botswana

The research sought to evaluate the effect of customer loyalty programs on customer satisfaction in the mobile telecommunications sector in Botswana. Particular focus of the study was on establishing customer familiarity with the loyalty programs being employed by the Mobile Network Operators (MNOs), Mascom Wireless, Orange Botswana and be Mobile. Descriptive research design was deployed. The research study used descriptive research designs to gather the data. Hence a questionnaire containing both closed and open questions was drawn and distributed to individual mobile subscribers selected through probability and non-probability sampling methods. The sample size consisted of 160 prepaid mobile subscribers selected from the three MNOs, in Gaborone, capital city of Botswana. The research findings were that not all customers are familiar with the loyalty programs that are being employed by the MNOs, which are, economic reward and the redemption option. Despite customer familiarity with programs, participation level in the programs is low. With regard to customer response towards discontinuation of both types of loyalty programs, findings revealed that loyalty programs have a weak effect on customer behavior. Pertaining customer perception, customers highly regard other factors such as corporate image and unwillingness to change mobile number as their main reasons for using a particular service provider. Finally, customers are somewhat satisfied with loyalty program rewards. The study also revealed that MNOs should differentiate loyalty programs from promotional incentives to enhance customer familiarity. MNOs should also improve loyalty programs to encourage customer participation. However it is recommended, that area for further research should focus on the observational method that allows customer behavioral changes to be watched and monitored during the implementation and eventually on the withdrawal of loyalty program over a period of time.