Service quality, customer satisfaction and loyalty among industrial customers of a public electricity utility in Malawi

Purpose - The purpose of this paper is to assess the relationship between service quality, customer satisfaction and customer loyalty among industrial customers of the public electricity utility organisation in Malawi using correlation and regression analyses. Design/methodology/approach - A cross-sectional survey was used with a sample of 92 respondents drawn from a population of 286 industrial customers of the public electricity utility in the Southern Region of Malawi. Data were collected using a pre-tested questionnaire based on SERVQUAL and multi-item scales to measure customer satisfaction and loyalty. Findings - The findings suggest that the service quality is poor irrespective of demographic characteristics of the industrial customers. Furthermore, the findings show that the public electricity utility industrial customers are dissatisfied with the service offered and are disloyal to the public electricity utility. However, the level of loyalty is moderated by level of consumption. Large consumers are less disloyal than small consumers. Finally, the findings suggest that there is a strong relationship between service quality, customer satisfaction and customer loyalty among the public electricity utility's industrial customers and that the relationship between service quality and customer loyalty is partially mediated by customer satisfaction. Research limitations/implications - The study focused on functional quality offered by the public electricity utility to its industrial customers within Southern Region of Malawi limiting its generalisability. Additionally, it used the original SERVQUAL scale and some items may not be relevant to electricity utility organisation. Practical implications - The paper has a significant diagnostic value in the sense that it identifies areas where the public electricity utility must direct its resources in order to satisfy its industrial customers. Originality/value - The paper extends the examination of the relationship between service quality, customer satisfaction and customer loyalty into public sectors of a predominantly associative culture in developing countries. Specifically, it extends the research into electricity utility organisations that operates in a monopolistic market.