The indirect effect of perceived value for the assessment of mobile service quality on customer loyalty

The question of why do mobile subscribers continue subscribing to their existing service providers or switch to other providers is a challenge facing the global mobile industry. This study’s purpose is to assess how service quality, brand image, and perceived value impact the levels of satisfaction and loyalty toward mobile providers, thus affecting the churn rate. We collected 626 valid questionnaires as data samples and analyzed them via structural equation modeling (SEM). Empirical research shows that satisfaction does mediate the relationships of service quality, brand image, and perceived value on loyalty. In terms of direct effects, high perceived value leads to high satisfaction, which has a greater impact than that of service quality and brand image. The indirect effect of a single perceived value on loyalty is less than that of service quality and brand image. But when high perceived value is combined with high customer satisfaction, it produces the greatest mediation effect for spurring high loyalty. Brand image is the single biggest indirect effect on loyalty, but a good satisfaction level does not exist, then it has a weak impact on customer loyalty. Our findings offer a suggestion for management of mobile service providers to focus on enhancing perceived value in order to minimize customer churn and thus maintain long-term loyalty. © 2019, Chinese Society for Quality. All rights reserved.