Service Quality, Customer Loyalty and Customer Retention among Private Health Care Services in Mbarara City ()
1. Introduction
Companies boost their profits through various means, including acquiring new customers, increasing the volume of one-time purchases from existing customers, and prolonging customer retention ( Ali et al., 2010 ). In an intensely competitive business landscape, customer retention is vital to a company’s continued existence. This is because the loss of a customer equates to relinquishing the potential future revenue generated by the customer’s lifelong purchases. Furthermore, customer retention brings several advantages, including enhanced employee retention, higher job satisfaction, improved service quality, reduced costs, decreased price sensitivity, and increased productivity, among other benefits ( Aydin & Özer, 2006 ). It is important to highlight that acquiring new customers comes with considerably higher costs than retaining existing customers ( Osarenkhoe et al., 2017 ). The more extended a customer maintains their relationship with a company, the greater the company’s advantages ( Shashikala & Ashwini, 2015 ). This result is shaped by various factors and aligns with the idea that the expenses associated with acquiring and enticing new customers are substantial. The expense associated with attracting new customers is five times higher than that of retaining existing ones ( Rust & Zahorik, 1993 ). In agreement, Tao (2014) asserted that attracting and retaining profitable customers is important in businesses today.
Globally, many firms face challenges in retaining their customer base. For example, in the mobile phone industry, customer attrition rates frequently surpass 30% despite the implementation of various strategies aimed at retaining customers. Well-known UK mobile network providers Orange, T-Mobile, O2, and Vodafone have lost more than one-third of their younger customers to rival companies ( Andic, 2006 ). This scenario is not unlike the situation in the Ugandan telecom sector, where, as reported in the Business Market International Report (2017), MTN Uganda maintains a customer base of 11.2 million subscribers, representing 55 per cent of its market share. Nevertheless, there has been a noticeable increase in the number of inactive prepaid users, with mobile customers periodically opting to abandon some of their SIM cards.
Service companies place a significant emphasis on service quality as a critical tool for customer retention. In the financial services sector such as banks, competition varies in the market using differentiated products. These services are regarded as competitive tool ( Nsiah & Mensah, 2014 ). In other words, the banking sector attracts customers by offering high-quality services. Similarly, within the healthcare sector, service quality encompasses the provision of what patients desire (patient quality) and what they require (professional quality) while optimizing resource utilization and minimizing errors to ensure their ongoing patronage ( Mosadeghrad, 2014 ). Previous studies have confirmed the connection between service quality and customer retention ( Althonayan et al., 2015 ; Nsiah & Mensah, 2014 ; Saeed et al., 2005 ; Uslu & Eren, 2020 ).
Furthermore, a great deal of research has examined the connection between client retention and loyalty ( Oliver, 1999 ). When faced with situational influences and marketing campaigns that may tempt one to switch, customers who exhibit loyalty will repeatedly purchase the same brand or product within the same category. This deep commitment to repurchasing a preferred product or service in the future is what defines customer loyalty. Thomas and Tobe (2012) advocate that “loyalty is more profitable,” since it is significantly more expensive to acquire new customers than it is to keep existing ones. In addition to sticking with a company, devoted consumers act as brand ambassadors, encouraging others to buy from it and make thoughtful choices before looking at other options. Customer loyalty can be cultivated over time through multiple transactions ( Khadka & Maharjan, 2017 ).
Private healthcare providers are viewed as more competitive than public healthcare providers because they have qualified and competent healthcare providers. Being the closest to community members, they are the main source of health care, thus extending health care services including required medicines closer to Ugandans ( Martini et al., 2007 ), and filling gaps where little or no public health care is available. Nevertheless, these private healthcare providers have struggled to maintain their customer base, as customers appear to be transitioning from one healthcare facility to another in search of improved services.
Customer retention is crucial for businesses, including private healthcare providers in Mbarara City, where most customers are new and repeat ( Ali et al., 2010 ). This trend, evidenced by the closure and relocation of health centres such as the Rwebikona Clinic and Rubindi Pharmacy in 2020, could lead to more closures if not addressed ( Ali et al., 2010 ; Shashikala & Ashwini, 2015 ). Previous studies on customer retention have focused on different sectors and developed countries, leaving a knowledge gap in developing countries, such as Uganda. This study aims to fill this gap by exploring the relationship between service quality, customer loyalty, and customer retention in Mbarara’s private health care sector.
2. Literature Review
2.1. Customer Retention
According to Hume et al. (2007) , customer retention is characterized by customers’ willingness to partake in future interactions with a service provider, encompassing the particular nature of these forthcoming interactions. Hume et al. (2007) also posit that customer retention is a direct result of consumer attitudes and behaviors in response to the services they receive. Essentially, it can be concluded that the desire to repurchase is rooted in consumers’ willingness to make repeat purchases or return to the same organization.
A company’s customer retention rate is determined by dividing the total number of active customers by the proportion of the remaining customers at the start of the fiscal year ( Ali et al., 2010 ). Oliver (2014) characterizes customer retention as a robust and long-lasting pledge to regularly repurchase a favoured good or service in the future. It encompasses actions taken by a selling organization to mitigate customer defects. Successful customer retention efforts commence from the initial interaction a company has with a customer and persist throughout the entire duration of the customer relationship. Essentially, customer retention focuses on maintaining a business relationship between a supplier and a customer ( Duffy, 2003 ).
Moreover, the customer retention rate is defined by Buchanan and Gillies (1990) as the percentage of consumers who were part of the customer base at the beginning of a specific term, such as a year, and who continue to be customers after that same period. This metric offers a quantitative measure of a business’s ability to retain customers over a specific timeframe. This definition aligns with Motiwala (2005) , which emphasizes that customer retention entails maintaining the current customer base by cultivating positive relationships with individuals who purchase a small business’s products or services. The primary goal of customer retention is to minimize the loss of profitable customers, aiming for zero defects, as outlined by Richards (1996) . This signifies sustained commitment from both the customer and firm to preserve the relationship. Customer retention focuses on recurring patronage, which is closely associated with repeat purchasing behaviour and brand loyalty ( Osarenkhoe et al., 2017 ). Komunda et al. (2015) assert that retained customers are individuals who persistently remain loyal to the company. Customer retention dimensions include repeated purchases and referrals to other buyers, where repeated purchases are the continuous purchase of a product or service from the same seller. Referral to other buyers is the act of the existing customer to encourage others to buy from where they buy.
2.2. Service Quality
Service quality, as defined by Bitner (2018) , represents a consumer’s holistic judgment of the relative excellence or inferiority of an organization and its services. Service quality, as well as quality in a broader sense, is defined as the value of a service from the customer’s perspective. The shared elements of service quality—reliability, responsiveness, empathy, personalization, competence, diligence, consistency, safety, security, environmental variables, and user interfaces—are in line with this viewpoint ( Ali, 2021 ; Ali & Anwar, 2021 ; Faraj et al., 2021 ).
Recognizing the imperative of achieving customer satisfaction and loyalty through the delivery of higher-quality services, Ali et al. (2021) , Rajeswari et al. (2017) , and Shava (2021) emphasize the continuous efforts of service providers. Highlighting the significance of addressing individual customer needs to enhance satisfaction, Bolton and Drew (1991) stress the importance of customized services. In various service industries such as telecommunications, the focus is increasingly on providing exceptional customer service to maximize satisfaction, as noted by Sharma and Jhamb (2017) .
Within the domain of customer service quality, Karatepe (2011) utilized a modified SERVQUAL framework and identified network efficiency as the most influential factor, whereas staff responsiveness had room for enhancement because it had the least impact. Al-Aali et al. (2011) added network quality and competitive advantage to the SERVQUAL framework, extending it. However, Kadasah (2016) evaluated the service quality of several telecom companies using SERVQUAL and found that Mobily was the best in all areas of service provision. When Bora et al. (2015) included network quality in SERVQUAL in an Indian setting, they found a significant and positive correlation between all aspects and customer satisfaction. Furthermore, gender differences were observed in the evaluation of empathy, responsiveness, and dependability among Indian telecom service users. Similarly, SERVQUAL was used by Suguanthi and Shanthi (2017) and Sharma and Jhamb (2017) to examine the relationship between customer happiness and service quality in India.
Similarly, Ali et al. (2021) emphasized that concerning service quality, five critical dimensions profoundly influence customer satisfaction. Tangibility is significant among these dimensions. This is because there exists a connection between customers and tangibility, where the tangible aspects of a service draw customers’ attention to service quality by aligning the tangible elements associated with the service provided. Tangibility involves physical presence, hardware, staff, and communication materials, all of which contribute to perceptions of service quality.
Reliability involves the consistent and accurate delivery of promised services. Customers prefer to interact with businesses or companies that are dependable and true of their commitments, particularly concerning service guarantees and essential support elements. Customers value and prioritize reliability in any business environment ( Ali et al., 2021 ). Responsiveness is another crucial aspect that directly impacts customer experience. This dimension relates to the willingness to promptly assist and provide customers with fast service ( Ali et al., 2021 ). Assurance pertains to confidence and trust in customers. This implies that any business or market entity must possess the necessary capabilities to inspire customers with a strong sense of confidence and trust ( Suguanthi & Shanthi, 2017 ).
Empathy represents another dimension characterized by two vital components: trust and attentive care. Empathy is closely tied to customer attention and serves to reassure customers that a particular market or business entity is best suited to satisfy their needs and foster strong customer loyalty through trust ( Ali et al., 2021 ). Essentially, it reflects the customer’s desire for quality products and services and underscores the responsibility of businesses to cultivate a sense of comfort, trust, and loyalty.
In the context of healthcare, service quality is a broad term that includes all the characteristics and elements of a good or service that affect its ability to meet explicit or implicit demands. The quality of health care services encompasses meeting the needs of both patients and professionals (professional quality); optimizing resource utilization; minimizing errors, delays, and inefficiencies; and complying with overarching regulations (management quality) ( Korwar, 1997 ; Suguanthi & Shanthi, 2017 ).
2.3. Customer Loyalty
Pearson (1996) defined customer loyalty as the mindset of customers who hold favourable attitudes towards a company, commit to repurchasing the company’s products or services, and recommend them to others. Similarly, Oliver (1999) defines loyalty as “a deeply held commitment to consistently repurchase a preferred product or service in the future, even in the face of situational influences and marketing efforts that may encourage switching behaviours.” Customer loyalty is recognized as a long-term asset and a crucial business outcome ( Abu-Alhaija et al., 2018 ). Many companies consider having loyal customers as an essential strategy, given its significant role in establishing sustainable competitive advantages. Achieving customer loyalty involves identifying, managing, and meeting customer needs ( Komunda et al., 2015 ). Companies can cultivate loyalty among their customers by providing superior value, exceptional services, and high-quality products ( Rahman et al., 2012 ; Uslu & Eren, 2020 ). Remarkably, achieving customer loyalty in business organizations is heavily influenced by service quality and customer satisfaction ( Ehigie, 2006 ).
In the contemporary rapidly evolving market, the task of establishing and sustaining customer loyalty has grown more complex, largely owing to technological progress and the prevalent use of the Internet. To foster loyalty, businesses must place strong emphasis on the value of their products and services, showing a sincere commitment to fulfilling customer needs and cultivating robust customer relationships ( Uslu & Eren, 2020 ). Building a strong relationship with customers is a critical element in fostering customer loyalty, which often requires companies to function within a broader framework that goes beyond their primary expertise because no single company can excel in every facet ( McDonald & Keen, 2000 ).
2.4. Service Quality and Customer Loyalty.
Rajeswari et al. (2017) illustrate that when service providers enhance the quality of their services, customer loyalty tends to increase. Similarly, in a study conducted by Boohene and Agyapong (2011) , which investigated the determinants of customer loyalty in Ghana, the importance of prioritizing service quality within telecommunication management was highlighted. They emphasized that given the intangible nature of services, service quality is commonly evaluated through the relationships between service providers and customers.
The study conducted by Parasuraman et al. (1988) underscores the positive and significant relationship between service quality and customer loyalty. It is important to note that service quality, with factors such as cost, assurance, responsiveness, and reliability following in that order, plays a central role in this context, which aligns with the findings of Parasuraman et al. (1994) . Additionally, Nsiah and Mensah (2014) observed that satisfaction with product offerings (quality) is a primary driver of overall customer loyalty. In summary, a positive association exists between service quality and customer loyalty, and consistent research findings demonstrate the substantial impact of service quality on organizational outcomes, particularly fostering customer loyalty ( Ehigie, 2006 ). Moreover, service quality influences customer loyalty through repurchase intentions ( Levesque & McDougall, 1996 ). The success of a service provider is closely tied to the quality of the customer relationship, which in turn affects customer loyalty ( Komunda et al., 2015 ). It is widely acknowledged that high service quality significantly leads to customer satisfaction and, consequently, customer loyalty ( Duffy, 2003 ; Osarenkhoe et al., 2017 ).
Research conducted by Uslu and Eren (2020) establishes a positive relationship between customer loyalty and customer satisfaction. When customers perceive that their overall experience, encompassing service quality, ambience, and value for money, exceeds their expectations, they experience satisfaction, which in turn fosters customer loyalty and intentions to revisit. Factors contributing to customer loyalty include the quality of food, interpersonal relationships, social bonds, a pleasing environment, variety-seeking, dining experience, perceived value, switching costs, and price-value ratios. Similarly, Zhong and Moon (2020) illustrated that having dependable and trustworthy service personnel can create a welcoming and pleasurable dining environment, which, in turn, encourages patron loyalty in quick-service restaurants. Providing services on time, being dependable, accurately charging customers, and other aspects all help foster a loyal customer base. Oliver (1980) highlights that each service interaction presents an opportunity to deliver exceptional service quality and sets the company apart from its competitors in the quest for customer loyalty. The product, its attributes, performance, reliability, sales processes, and customer support all represent the vital components necessary to meet or surpass customer satisfaction. Satisfied customers typically return for repeat businesses and serve as advocates by sharing their positive experiences with potential customers ( Komunda et al., 2015 ).
Customers frequently look for value in the entirety of the service, necessitating internal cooperation among various departments responsible for different facets of the offering, which may include the core product (goods or services), product delivery, product documentation, etc. Therefore, companies must strive to gain a deeper understanding of their customers than they typically do. Building trust with customers is essential for facilitating feedback collection from customers ( Parasuraman et al., 1994 ). Several key factors come into play in customer loyalty, with quality, reliability, empathy, responsiveness, and assurance being the primary influencers. To foster customer loyalty, both Oliver (2014) and Osarenkhoe et al. (2017) emphasize that every service encounter presents a chance to deliver exceptional service quality, setting the company apart from its competitors. The relationship between service quality and customer loyalty has not been carefully studied or solidly proven, even though customer loyalty is crucial to a business’s ability to survive ( Ramzi & Mohamed, 2010 ).
2.5. Service Quality and Customer Retention
Numerous scholars ( Ennew & Binks, 2005 ; Oliver, 1999 ; Ranaweera & Prabhu, 2003 ; Venetis & Ghauri, 2004 ) have investigated the relationship between service quality and client retention. The results of their investigations regularly showed a direct correlation between client retention and service excellence. In particular, their results emphasize that reliability, responsiveness, empathy, and security significantly impact customer retention ( Murugiah & Akgam, 2015 ). Furthermore, these studies reveal that empathy is particularly significant in customer retention, as customers tend to gravitate towards private healthcare services that genuinely prioritize their best interests. Customer retention is influenced by various factors, with service quality being the key driver in the purchase process. This process is expected to yield customer satisfaction and commitment, leading to repeat purchases ( Sari et al., 2018 ). Similarly, in multiple studies ( Ranaweera & Prabhu, 2003 ; Saeed et al., 2005 ), service quality consistently emerged as a pivotal factor in retaining customers. These results indicate that service quality has a positive and significant relationship with customer retention.
Reichheld and Kenny (1990) were among the first to draw attention to the observable advantages of a business’s dedication to keeping consumers, asserting that a higher retention rate translates into a higher net present value for customers. Within the service marketing domain, retaining customers is considered a way to improve the calibration of customer care. In today’s competitive market, long-term survival depends on maintaining profitable long-term client relationships and consistently providing quality customer services. According to Wilson (1995) , customer retention refers to a consistent effort on the client side and the business to maintain the relationship. Better service quality encourages good behavioural intentions, which in turn helps customer retention ( Nsiah & Mensah, 2014 ).
Evidently, the effectiveness of customer service levels enhances customer retention, reduces customer switching between service providers, and provides a competitive advantage over other competitors. In the past, customer retention strategies were often overshadowed by the primary focus on attracting new customers, with marketing professionals downplaying their significance. However, companies that continually acquire new customers without retaining them are unlikely to achieve positive outcomes, emphasizing the vital role of customer retention in the current business landscape. The relationship between customers and banks appears to be influenced by two distinct factors: social bonds, representing relational components that foster direct relationships, and structural bonds, which provide insights into the structural components of the parties involved. As noted by Patterson et al. (1997) , the service market is becoming progressively competitive, characterized by heightened price competition and the readiness of customers to change their loyalties.
Service quality is linked to customer loyalty through repurchase intentions ( Levesque & McDougall, 1996 ; Parasuraman et al., 1988 ). Enhancing customer retention not only benefits the retention of existing customers but also aids in acquiring new ones. Loyal customers are more likely to engage in word-of-mouth advertising because of their positive attitude towards their current provider. Reichheld and Kenny (1990) discovered that between 20% and 40% of new customers select a bank based on the referrals. van Riel et al. (2001) categorized services into five distinct elements: user interface, auxiliary services, supporting services, core services, and complementary services. This finding highlights the fact that service quality is mostly determined by perceptions. This underscores the need for businesses to proactively assess how they deliver high-quality services that not only fulfil but also surpass customer expectations through direct input. The dominant view in the field of service quality suggests a positive relationship between customer loyalty and repeat purchases ( Storbacka et al., 1994 ). Furthermore, research by Gounaris (2005) showed a strong correlation between customer trust and service quality in terms of attracting and retaining new customers. Additionally, because clients know that they can rely on a reputable company, trust reduces uncertainty in a situation where they feel exposed ( Aydin & Özer, 2006 ). Under the influence of trust, one is willing to repurchase from a company ( Jarvenpaa et al., 2000 ).
2.6. Customer Loyalty and Customer Retention
Seth et al. (2005) highlighted the interchangeable use of the terms “customer loyalty” and “customer retention,” while ( Gerpott et al., 2001 ) argued that these concepts are distinct. In today’s service business landscape, success hinges on retention and long-term focus on existing customers, particularly since a select few brands manage to cultivate loyalty at high levels ( Jarvis & Goodman, 2005 ).
Ulaga and Eggert (2006) propose that loyalty is contingent upon certain incentives offered by companies to their customers. Consequently, extensive research has explored the impact of customer loyalty on firms, given its positive influence on repeat purchases ( Oliver, 1999 ; Ulaga & Eggert, 2006 ). Loyalty can manifest through behavioural patterns, such as frequent purchases of specific products or brands, as well as attitudinal aspects, including emerging consumer attitudes and preferences. Hence, loyalty programs have been thoroughly examined by both researchers and industry professionals because of their potential to generate positive impacts on repeat purchases from the same service provider ( Craft, 2007 ). These loyalty programs empower firms to enhance customer retention and encourage customer recommendations ( Ha, 2007 ).
Dick and Basu (1994) research revealed that highly loyal customers tend to reduce their motivation to seek new brands, leading to a diminished inclination to choose other brands and reduced effort in the decision-making process. Research has consistently shown that positive consumption experiences and accumulation of trust strongly influence repeat purchase intentions among loyal customers. Additionally, the diffusion of trust in specific firms tends to reduce perceived risk when purchasing other services from the same company, thus increasing repeat purchases of the same brand.
Another crucial aspect of loyal customers is their consistent and frequent purchase of preferred services or products. Thomas and Tobe (2012) highlighted the notion that “loyalty is more profitable.” Gaining a new customer is significantly more expensive than maintaining an existing customer. Loyal consumers not only persuade others to buy from you but also carefully analyze their options before thinking about switching to other businesses. Customer loyalty is developed through thoughtful sourcing and design choices, not through happenstance. Adopting customer-centric strategies that consider the requirements and preferences of the service recipient is necessary for cultivating client loyalty. Customer loyalty develops over time in multiple transactions. Osarenkhoe et al. (2017) highlighted that serving a loyal customer costs five to six times less than acquiring a new customer, highlighting the importance of customer loyalty. Walsh et al. (2012) emphasize the prudence of prioritizing existing customers before pursuing new ones. Furthermore, customer retention represents the future inclination of customers to remain faithful and loyal to the use of goods or services ( Ranaweera & Prabhu, 2003 ).
According to Agyei and Kilika (2013) and Komunda et al. (2015) , loyal customers exhibit greater tolerance for negative customer experiences and greater willingness to purchase other products. Customer retention is a strategy used to transform customer behaviour, shifting it from defection to loyalty or fostering a strong, long-term relationship with the company ( Hasan et al., 2013 ). This transformation is often based on trust built in the products and services offered by a particular organization. However, Aspinall et al. (2001) argue that customer acquisition is not as crucial as client retention. The study conducted by Payne and Frow (2018) revealed that in UK enterprises, client retention accounts for only 23% of the marketing budget. To have a competitive edge in the market—a crucial component of any business’s survival—many companies have also implemented client retention tactics ( Komunda et al., 2015 ). Hanks (2007) also pointed out that a 5% improvement in client retention might provide a massive 75% boost in profitability. However, not all businesses place the same emphasis on establishing and sustaining strong relationships with every client because not all relationships and customers are profitable or consistent ( Chen & Popovich, 2003 ). Reichheld and Kenny (1990) have also observed that many firms concentrate on current-period revenues and costs, often overlooking the potential cash flows generated over their customers’ lifetimes.
2.7. Conceptual Framework
The conceptual model that guided this study was largely influenced by the studies of Parasuraman et al. (1988) and Ranaweera and Prabhu (2003) . This study focuses on the potential of service quality and customer loyalty as predictors of customer retention among healthcare providers in Mbarara City, as shown in Figure 1.
When private healthcare providers implement strategies that ensure quality services, such as tangibles, responsiveness, empathy, and assurance, customers’ behaviour, emotions, and love for the business change and grow, allowing them to make repeat purchases and recommend the business to others. Additionally, improved service quality through tangibles, reliability, and assurance also improves the effectiveness and positive attitudes towards the company’s products and services. Furthermore, customers are more likely to make repeat purchases and recommend the business’s services and goods to others when they grow to have a favourable attitude and enthusiasm for what the company has to offer. Finally, improved service quality and customer loyalty lead to repeated purchases and referrals of other customers to the company’s services and products.
It can be realized from the above extant literature that service quality, customer loyalty and customer retention are correlated. The literature on service quality identifies traits such as tangibles, empathy, responsiveness, assurance, and reliability as the major factors that influence customer retention because they enable customers to hang on to the organization. The literature on customer loyalty identifies honesty, trust, and integrity as the determinants of customer retention. Customer retention can be enhanced by optimizing these indicators. Nevertheless, uncertainty remains regarding the specific variables that can act as proxies for customer retention. Therefore, this study is necessary to bridge this gap in the literature. Moreover, prior research has primarily examined the independent and dependent variables separately, whereas there is a lack of literature on all three variables combined. This study aims to rectify this gap
by exploring the relationship between service quality, customer loyalty, and customer retention among private healthcare providers in Mbarara City.
3. Methods
3.1. Research Design
According to Amin (2005) , a research design is an all-inclusive plan or approach used to conduct research. This study used a cross-sectional design, which involved gathering data at a particular moment in time. This design was mostly selected using a questionnaire survey because it is economical, efficient, and simple to apply. The cross-sectional design makes it possible to gather important data in a comparatively short amount of time ( Sedgwick, 2014 ).
3.2. The Study Population
The study population for this research study included the thirty-eight (38) active private healthcare providers in Mbarara City ( Ministry of Health, 2018 ). Private healthcare centres were selected because they are accessed by all people, but many have failed to retain customers. The unit of analysis was the private health centres in Mbarara and patients over the years as a unit of inquiry since they are adults and have good reasons for visiting a particular health centre.
3.3. Sample Size and Selection Procedure
The sample size for this study, which included 36 private health centres, was determined using the Krejcie and Morgan (1970) table for sample size determination. The sample was selected using simple random sampling. Specifically, a lottery method was employed whereby a list of health centres was first obtained, followed by the allocation of a unique number to each health centre, writing the numbers and names on individual pieces of paper, and placing them in a box. The pieces of paper were then picked without replacement until a total of 36 health centres were established. As health centres are the unit of analysis, they cannot answer questionnaires by themselves. Four (4) patients from each of the 36 health centres were requested to complete the questionnaires.
3.4. Source of Data and Data Collection Instrument
The main source of data was primary data collected through self-administered questionnaires distributed to the patients. These questionnaires encompassed various aspects, including information related to respondents’ demographics and the specific characteristics of the healthcare centres. The questionnaire also included questions on customer loyalty, customer retention, and service quality. Responses to continuous variables were recorded on a 5-point Likert scale. The questionnaire design was aligned with the guidelines provided by scholars, such as Sekaran and Bougie (2016) . To ensure the tool’s reliability and validity, a preliminary version was pretested before the final survey was conducted. The items used to measure the study variables were adapted from previous scholarly work.
3.5. Validity Tests
Validity refers to whether an instrument measures what it was designed to measure, and is one way of trying to ensure that the measurement error is kept to a minimum ( Field, 2013 ). A content validity test was used in this study to assess the degree to which individual items in the questionnaire represented the constructs being measured ( Field, 2013 ). Experts, experienced researchers, and academics were asked to rate the relevance of the items in the instrument. The content validity index (CVI) for each variable 0.7 is the recommended cut-off point ( Field, 2013 ).
3.6. Reliability Tests
According to Field (2013) , a measure’s reliability is its capacity to yield consistent outcomes when applied to the same circumstances. In this study, the internal consistency of the scales was assessed using Cronbach’s alpha (α), a widely used and trustworthy reliability metric. According to the criteria established by Nunnally (1978) and De Vellis (2003) , an alpha coefficient cutoff point of 0.7 provides adequate evidence that the item scales are both consistent and reliable, thus allowing us to infer that the instrument demonstrated reliability. The instrument was pilot tested among health centres in Kabale Municipality, and the reliability results are shown in Table 1.
3.7. Data Processing and Analysis
Data from the field were cleaned to ensure completeness. This is followed by testing the regression assumptions. Next, the relationships between variables were tested using correlation and regression analyses. This is detailed as follows:
3.7.1. Data Cleaning
The collected data were edited first to identify and eliminate errors, the information was categorized according to its different nature and then well coded, and responses were entered into the Statistical Package for Social Scientists (SPSS) Version 21. An outlier check was conducted using minimum and maximum frequency counts, means, and scatter plots. Outliers are values outside the range of the measurement scale ( Field, 2013 ). Based on this analysis, a few identified outliers were due to data entry errors and were deleted. Parametric assumption
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Table 1. Validity and reliability results.
tests were also performed. This was necessary, given the conceptualization of the study. Conceptualization required the use of parametric analyses, such as correlation and regression. However, these analyses depend on parametric assumptions. The researcher tested for normal data distribution, variance homogeneity, data linearity, and the absence of multicollinearity, which are critical for further statistical analyses. These tests were conducted according to the recommendations of Hair et al. (1987) . Evaluation of these assumptions is essential because the validity of the findings drawn from statistical analyses relies on the soundness of these assumptions. Parametric tests were performed to confirm that the sample met the criteria for the parametric data. Subsequently, correlation and regression analyses were conducted to explore the relationships among the study variables.
3.7.2. Data Analysis
Data analysis involved descriptive statistics, correlations, and regressions. Pearson’s correlation coefficient was used to evaluate the association between the study variables. Ordinary least squares regression was used to assess the predictive power of the conceptualized model. The results are then presented in the following section.
3.8. Ethical Considerations
The participants were made aware, to protect their privacy, that the study did not require their names ( Mugenda & Mugenda, 2003a , 2003b ). The respondents were also informed that any information they submitted would only be used for academic purposes, and that any information about personal matters would be handled with the highest discretion to ensure anonymity ( Amin, 2005 ). Before conducting the study, the researcher made all efforts to obtain approval from the Mbarara City Health Office (CHO) and health care providers. The researcher acknowledges and credits the work of other researchers.
4. Results
4.1. Demographic Characteristics of the Respondents
The following details about the respondents’ demographic profiles were requested: sex, age range, educational attainment, and marital status.
The results in Table 2 indicate that most of the respondents were female (68.1%) and the males were 31.9%. This implies that women tend to visit health centres more often than men. In addition, women tended to take children to private health care services compared to men, which h is why they were more in the study.
The results in Table 2 indicate that most of the respondents were between 31 - 40 years (43.5%), followed by those between 21 - 30 years (23.9%). These findings imply that most of the individuals who go for healthcare services are mature and responsible parents who are normally above 25 years of age, and these provided true information about the study variables.
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Table 2. Gender of the respondents.
Source: Primary data.
The results in Table 2 indicate that most of the respondents were degree holders and above (44.2%), followed by diploma holders (28.3%), and the least group had primary-level certificates (5.1%). These findings imply that most of the individuals who access private health care are the elite class who do not want to waste a lot of time waiting for government services, and these gave a clear picture of the status of private health centres.
The results in Table 2 indicate that most of the respondents were married (63.0%), followed by singles (31.9%), and the least divorced (5.1%). These results imply that most married people have health-related problems because they typically have young children who are prone to diseases.
The results in Table 2 indicate that customers had spent 2-5 years (35.5%), followed by those who had spent less than 1 year (33.3%), and the least group had spent more than 10 years (6.5%). These findings imply that most of the customers provided information that was relevant to the study subject since they had spent more than two years providing health care services in private health centres. Those customers who had spent one year also had information about where they had left where they were getting their services before, and this provided valid information to make a recommendable conclusion about customer retention.
4.2. Correlation Analysis
A zero-order correlation analysis was conducted to establish the association between the independent variables (service quality and customer loyalty) and dependent variable (customer retention). The results are presented in Table 3.
The results in Table 3 show a significant positive relationship between service quality and customer retention among private healthcare providers in Mbarara City (r = .557**, p < .01). This means that any positive change in service quality results in a positive change in customer retention. Additionally, the results further imply that any improvement in tangibility, reliability, responsiveness, assurance, and empathy would result in a positive change in customer retention among private healthcare providers in Mbarara City.
The results in Table 3 show that there is a significant positive relationship between service quality and customer loyalty among private healthcare providers in Mbarara City (r = .660**, p < .01). This means that any positive change in service quality results in a positive change in customer loyalty. In addition, the results imply that any improvement in tangibility, reliability, responsiveness, assurance, and empathy would result in a positive change in customer loyalty among private healthcare providers in Mbarara City.
The results in Table 3 show a significant positive relationship between customer loyalty and customer retention among private healthcare providers in
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Table 3. Zero-order correlation results.
Source: Primary data.
Mbarara City (r = .760**, p < .01). This means that any positive change in customer loyalty results in a positive change in customer retention. In addition, the results further imply that any improvement in behaviour, affective, and cognitive among customers would result in a positive change in customer retention among private healthcare providers in Mbarara City.
4.3. Ordinary Least Square Regression
Regression analysis was used to confirm the relationship between service quality, customer loyalty, and customer retention, as they are three variables. The results are presented in Table 4.
The results in Table 4 indicate that service quality was found to be an insignificant predictor of customer retention among private health centres in Mbarara City, as indicated by a probability value below the 95% level of confidence (Beta = .098, p < .05). This implies that a positive change in service quality may not necessarily improve customer retention. The results further indicated that customer loyalty was a significant predictor of customer retention, as indicated by a significance level of above 95% level of confidence (Beta = .695, p < .01). This implies that a unit increase in customer loyalty results in a .695 unit increase in customer retention.
Finally, the results indicate that 57.7% (Adjusted R Square = .557) of the variations in customer retention were a result of changes in service quality and customer loyalty. This also implies that 44.3% of the changes in customer retention were due to other factors not considered in this study, such as customers’ level of income and customer awareness of private services in Mbarara city.
5. Discussion
The correlation findings indicated a significant relationship between service quality and customer retention; however, the regression results demonstrated that service quality does not serve as a significant predictor of customer retention among private healthcare providers. The findings indicate that improvements in
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Table 4. Ordinary least square regression.
aDependent Variable: Customer Retention.
service quality in terms of tangibility, reliability, responsiveness, assurance, and empathy may not necessarily improve customer retention among private healthcare providers in Mbarara City.
This can be attributed to the nature and conduct of the people in the western region of Uganda. Anecdotal evidence shows that most Westerners are arrogant, not empathetic, have the “I don’t care” attitude, and customer care is next to impossible. As such, there is evidence that most health centres lack food for their patients; if it is there, it is of poor quality; there is the issue of opening late, staff not minding the emergencies, staff taking their time, the places are not that tidy, it is rare for patients to get apologies for the inconveniences caused, etc. In short, patients rarely obtain the value of the money they expect.
These results contrast with the findings of Oliver (1999) and Ranaweera and Prabhu (2003) which indicated a direct relationship between service quality and customer retention. Their studies demonstrated that attributes such as reliability, responsiveness, empathy, and security have a substantial impact on customer retention ( Komunda et al., 2015 ). Furthermore, their findings point to a significant connection between empathy and customer retention, suggesting that individuals Favor private healthcare services that genuinely prioritize their well-being. Customer retention appears to be influenced by multiple factors, with service quality being a crucial element shaping the dynamics of a purchase transaction.
Correlation analysis revealed a strong relationship between customer loyalty and service excellence. Nonetheless, the findings of the regression analysis indicated that, among private healthcare providers, client loyalty may not be significantly predicted by service quality. These results suggest that improving client loyalty within the private healthcare sector in Mbarara City may not always follow improving components of service quality, such as tangibility, reliability, responsiveness, assurance, and empathy.
This implies that the improvement of tangible equipment in terms of having updated machines, a clean environment of the health facility, having enough rooms in the health centre, and having properly qualified nurses will result in an improvement in customer loyalty. In addition, when the services of the health facility are reliable in terms of staff doing the right thing at the right time, the health centre is well located in the most accessible place and keeps the patients’ records properly for easy accessibility, which will result in an improvement in customer loyalty.
Furthermore, when activities related to responsiveness to the client’s needs are focused on, in terms of patients receiving prompt services from the health centre, staff giving clear explanations to the customers and employees at the health centre being able to help every patient, this will lead to improved customer loyalty. Finally, when activities related to assurance and empathy for customers are improved, customer loyalty will improve.
These results are consistent with those of the study conducted by Suguanthi and Shanthi (2017) , which similarly highlighted the positive correlation between service quality and customer loyalty. Similarly, in an analysis by Boohene and Agyapong (2011) regarding customer loyalty in the context of telecommunication management in Ghana, they emphasized the significance of quality. They highlighted that service firms that often lack tangible products are typically evaluated based on interactions between the service provider and customers.
This study found a strong positive correlation between service quality and customer loyalty. However, service quality is not a significant predictor of customer loyalty among private healthcare providers because service quality dimensions such as tangibles, which include healthcare infrastructure and reliability like location, do not change the patient’s perception and feeling about the health centre services since they are mostly convinced when they heal other than where they are treated.
The correlation and regression findings confirm that customer loyalty has a positive and significant relationship with customer loyalty and customer retention. This implies that any improvement in activities related to the behaviour of health workers is improved in terms of decreasing the charges of health care, improving the services at the health unit, and ensuring that the services offered are the best choice will result in customer retention. In addition, improvement in activities related to affect in terms of clients having a positive emotional relation to the health centre they have chosen, and customers considering themselves as loyal patrons of the health centre will result in improvement in customer retention. Finally, when customers are cognitive in terms of looking at the health centre as being different from others, saying positive things about the health centre, and being committed to the health centre, this will result in improvement in customer retention among private health care providers.
These results are in line with Seth et al. (2005) , who pointed out that historically, the terms customer loyalty and customer retention have often been used interchangeably, although Gerpott et al. (2001) argued that they represent distinct concepts. According to Jarvis and Goodman (2005) , a small number of brands can foster high levels of client loyalty; therefore, the secret to success in the current environment of service organizations is to focus on long-term customer retention. Diller (2000) posited that loyalty may be contingent on the incentives provided by companies to their customers. Consequently, substantial research has explored the impact of customer loyalty on firms, given its positive influence on repeat purchases ( Oliver, 1999 ).
5.1. Conclusion
It can be concluded that service quality, measured in terms of tangibility, reliability, responsiveness, assurance, and empathy, may not necessarily improve customer retention among private healthcare providers in Mbarara City. Therefore, activities related to service quality may work in other cities that aim to improve customer retention, but not Mbarara, implying that emphasis may be placed on managerial issues of activities related to customer satisfaction to improve customer retention among the private health centres in Mbarara City.
Service quality is very important in improving customer loyalty, and according to the results, there is a confirmed positive significant relationship between the two variables, which means that when one variable improves, the other also improves. In addition, customer loyalty can be improved by increasing the equipment, reliability of the staff, and all the services needed and responsiveness of health workers.
Customer loyalty was also found to have a significant positive relationship with customer retention among private healthcare centres in Mbarara City. This also suggests that when customers exhibit positive behaviors towards services, effectiveness, and cognitive thinking, it will lead to an enhancement in customer retention among private health centres.
Given these results, private health centres should consider all variables as dependable indicators of customer retention. The outcomes of the regression model demonstrated the statistical significance of the overall model. Nevertheless, it is crucial to emphasize that a stronger emphasis should be placed on customer loyalty, as it explains a larger proportion of the variation in customer retention than in service quality.
5.2. Recommendations
There is a need for private healthcare centre management to focus on service quality as it will improve customer loyalty. This means that activities related to the reliability of the health staff, positive responsiveness of the doctors and other employees in the health centres, ensuring that the patients are assured of quality service, and equipping the health facility with the right machines that can test and treat any form of the disease will help improve customer loyalty.
There is also a need to increase customer loyalty in terms of making customers feel as if there is no other better place where they can obtain better services, ensuring that customers can inform other clients about the services provided by the same health facility, which will result in improvement in customer retention among private health centres.
Finally, the predictor variables in this study accounted for 57.7% of the customer retention. This covers both predictor variables of the study. However, the remaining percentage may be attributed to factors other than those in this study. This is because customer retention is affected by factors that differ from one private healthcare provider to another. Thus, it is important to consider a variety of factors rather than focusing only on the predictor variables in this study.
5.3. Limitations and Areas of Further Research
This study employed a cross-sectional research design and collected data from a single point in time. As cross-sectional studies provide insights limited to the current period, future research endeavours could contribute to the field’s knowledge by employing a longitudinal research design. This would allow for an examination of changes and developments over an extended period.
This study used a predominantly quantitative approach. Incorporating qualitative elements into this research would enrich the study by providing a deeper understanding of the subject matter.