Identifying factors affecting customer loyalty of small and medium enterprises (SME) in Iran's software industry

Master's Thesis of Marketing Orientation MBA

According to the environment of global competition and changes and transformations that occur rapidly in today's world, in order to keep their customers, organizations must take measures that create the conditions to make organizational performance more effective. Maintaining and strengthening customer loyalty in line with a company's products or services is generally the main and central point of marketing activities. Customer loyalty can lead to lower marketing costs and attract more customers.

The purpose of this research is to investigate the factors affecting customer loyalty of small and medium enterprises in Iran's software industry. Identifying these factors and their effect on customer loyalty helps the owners of this industry to formulate appropriate solutions and strategies with the aim of increasing customer loyalty and keeping them. This research is descriptive and correlational, which is a non-experimental type of research, and the data was collected through a survey method. Based on the results of this research, customer satisfaction, switching costs and organizational image have an effect on the loyalty of small and medium companies. Also, customer satisfaction affects the organizational image. Service quality has an effect on customer satisfaction, service quality has an effect on perceived value, but perceived value has no effect on customer satisfaction. Key words: customer loyalty, small and medium enterprises (SME), customer satisfaction, organizational image, switching cost, perceived value, service quality. and Bosso [1], 1994). Customer loyalty can lead to lower marketing costs, attract more customers, and be effective on the transaction (Aker [2], 1997). Managers with knowledge of the factors that shape customer loyalty will be able to formulate customer loyalty programs and consequently reduce recovery costs and increase the organization's profitability with a clearer vision and guide companies forward in this direction. In this regard, in this research, it has been tried to examine the concept along with the factors affecting it.

1-2- Statement of the problem

Regarding the necessity of customer loyalty programs and its impact on the profitability of the organization, it is necessary to know what factors affect customer loyalty.

At present (and undoubtedly in the future) due to the similarity of the services and products offered by other competing companies, it is difficult to satisfy the customer by providing a complete service. Badi surprised in the long term because the most innovative services are quickly imitated by competitors and put on the market, therefore investing in customer loyalty is an effective and profitable investment for organizations. Loyalty through reducing the cost of acquiring new customers, reducing the customer's sensitivity to the price and reducing the costs of familiarizing the customer with the methods of doing work in the company. It leads to an increase in profitability, so in this sense, customer loyalty becomes a strategic issue from the point of view of managers.

In this research, we are trying to examine this concept in the context of communication between Iranian organizations and customers by presenting a customer loyalty model for the organization. In fact, the main problem of this research is to design a customer loyalty model in Iran's software industry, so we are looking to identify the factors affecting customer loyalty for the organization and we want to examine the impact of concepts such as customer satisfaction, service quality, perceived value, organizational image and switching costs on customer loyalty.

Research questions:

The extent of the impact of customer satisfaction on the loyalty of small and medium enterprises [3] in the Iranian software industry

The extent of the impact of organizational image on the loyalty of small and medium enterprises in the Iranian software industry

The extent of the impact of relocation costs on the loyalty of small and medium enterprises in the Iranian software industry

The extent of the impact of customer satisfaction on the organizational image of enterprises Small and medium in the Iranian software industry

The extent of the impact of service quality on the satisfaction of customers of small and medium enterprises in the Iranian software industry

Does the perceived value affect the satisfaction of the customers of small and medium enterprises in the Iranian software industry?

Does the quality of services affect the perceived value of the customers of small and medium enterprises in the Iranian software industry?

1-3- Importance and necessity of the issue

In the opinion of many suppliers Service, customer loyalty is considered as one of the most important sources of competitive advantage (Woodruff[4] 1997 cited by Wang[5] 2010)

Increasing customer loyalty in service companies will lead to more profitability. In this regard, a lot of research has been done focusing on investigating and testing the relationship between customer loyalty and its antecedents.

Also, due to the importance of small and medium-sized companies and their role in the economy, the loyalty factors in these companies that will be profitable for them doubles the necessity of increasing loyalty in these companies. is It seems logical that the first priority among the strategic principles of the organization's policy is to determine appropriate policies in order to maintain and maintain current customers, strengthen their loyalty, and determine appropriate solutions for the continuation of long-term relationships with customers. But it should always be noted that the only way to retain customers is to meet their needs, desires and expectations, and in a word, to satisfy them and provide value to them (Shahin and Timuri, 2017).

Retaining and providing service to loyal customers requires improving quality in order to meet the constantly growing expectations of loyal customers and at the same time, creating more value for them. It should also be considered that competitive pressures and customer expectations are often necessary and lead to higher costs. Without such recognition, service institutions may choose incorrect indicators to measure customer loyalty, be unable to relate customer loyalty to performance indicators, and make mistakes in designing loyalty programs and recognizing the right behaviors of customers. (Shahin and Timuri, 1387, 10).

The performance of any business depends on the success in retaining customers. Customer satisfaction increases profitability, customer retention, increases market share and excels in the field of competition within the industry.

Jamal and Anastasiado [6] (2009) have concluded in their studies that customer satisfaction has an effect on customer loyalty and experience as a control variable of the satisfaction effect. It affects customer loyalty. Also, many studies have addressed the relationship between service quality and customer satisfaction, and they generally believe that a high level of service quality results in a high level of customer satisfaction Customer loyalty is the perceived service quality, but it alone cannot cause customer loyalty, and other factors must be considered for the development of customer loyalty strategies. According to Trasoras [9] and colleagues, quality, service, image, and price are each directly related to customer retention. Customers consider more weight for service quality and service provider's reputation. Value, satisfaction and loyalty play the main role in customer retention.

Perceived value is one of the other factors that can be mentioned. The customer's perception of the value he receives from the service provider is the benefit that the customer gets for the cost paid. (Skildsen and Christensen, 2008)

The existence of intense competition and consumer diversity, as well as the possibility of more choices for them, have put conditions in front of companies so that they struggle and pay more attention to the behavior of consumers and the factors that influence them.

The above points confirm that in the existing competitive environment, customer satisfaction and loyalty are among the key factors that create important competitive advantages for organizations. shows But satisfying customers and bringing them to the stage of loyalty is not provided by itself and requires proper management of communication with customers. Therefore, it is necessary to investigate the factors affecting customer loyalty in different industries and to determine the effectiveness of each of them and to be used by managers to determine strategies, goals and plans.