A Study on Retaining Existing Customers in the Korean High-Speed Internet Service Market

Telco´s business circumstances have been deteriorating owing to the diversity of customer needs and fierce competition in the market. As such, telcos must concentrate not only on obtaining new customers and retaining their existing customers, but also on improving customer satisfaction and loyalty. Firstly, in order to heighten customer satisfaction, it is essential to understand the causes of dissatisfaction and either minimize or eliminate them. In this paper, the causes of customer complaints are first determined by conducting a focus group interview with Korean users of the ultra-high speed Internet services. Then, a questionnaire is formulated drawing on the results of the interview, and a phone survey is conducted with 104 service users. Secondly, the casual relationship between service quality, customer satisfaction, and customer loyalty is demonstrated using an SEM (structural equation model) based on the results of the survey. Finally, we set out to determine the key elements that exercise an influence on customer satisfaction and loyalty, and suggest which of these elements Telcos should manage above all others so as to improve customer loyalty