Promoting perceived service quality and organisational performance through customer retention strategies: the moderating role of ICT

2.1 Customer retention strategies

Maladi et al. (2019) defines customer retention as an all-encompassing marketing strategy and actions aimed at retaining both new and existing customers by developing, maintaining and maximising long-term gains that deepen and broaden the joint relationship of two parties. Subrahmanyan and Arif (2022) claim that this further emphasises that customer retention is not only about giving customers what they expect in order to retain them but also about exceeding their desires. Customer retention, according to Artha et al. (2022), is the tendency of customers to stick with their service suppliers. The current study defines customer retention as purchasing the same product or service many times, leading to economic benefit and gaining a competitive advantage in the market. Moreover, the current study understands that customer retention is influenced by managerial strategies that involve fair pricing of products and services, online marketing of commodities and frequent communication between the business and the customer.

The competitive environment forces businesses to adopt innovative customer retention strategies in order to maintain their business position in comparison to competitors (Hashem, 2022). Commerce-mates emphasised the scope in which customer retention is promoted through customer centricity, economic consistency, building a strong image, and, ultimately, higher profits. This shows that customer retention has a competitive advantage in attaining a long-term competitive advantage and allowing the organisation to enjoy long-term profits, which is every company's objective. Customer satisfaction contributes to customer retention (Adzhigalieva et al., 2021). This suggests that poor customer satisfaction can be caused by poor service quality and a low degree of complaint management, which lowers customer retention.

Furthermore, Zietsman et al. (2019) emphasise that the primary goal of a firm is to satisfy the client while building a long-lasting and valuable relationship. As a result, by looking at dull purchases, holding clients were generally submitted and given to a firm. Rehash-buy is bestowed as an outstanding commitment to ceaselessly buy and repurchase a service later on (Alshamsi et al., 2020). Recurring purchases also demonstrate that customers are satisfied with the affiliations' responsibilities. Rehash clients were, in a general sense, expected to purchase something similar or different from their previous purchases during their subsequent visits without contemplating different retailers (Chikazhe et al., 2022a, b). This client was thus endorsing their social occasions for allies to purchase and continue purchasing from a specific firm and expanding the association's introduction levels (Ferraris et al., 2019). All things considered, it is understandable that clients who have a negative attitude towards a company would begin to spread positive information about the company to their social contacts (Zietsman et al., 2019).

2.2 Fair pricing

A fair price is a selling price that considers factors including performance, supply, timing and payment choices (Caiati et al., 2020). It is calculated at a level that is fair for both sides. The seller gains some margin, which is not excessively high (Victor et al., 2018). Therefore, both sides of the transaction should be happy with that price. A fair price also increases purchasing intentions and may increase customer loyalty, thereby sustaining the business in the future (Fan et al., 2020). A commercial firm can contribute to sustainable development by offering fair prices to its customers while also being socially responsible. Pricing is the process of determining how much money a manufacturer will receive in exchange for services and goods. The pricing method is used to adjust the cost of the producer's offerings to make them more appealing to both the manufacturer and the customer (Mwandifura et al., 2022a, b). An effective pricing strategy accurately connects the value of your service with the willingness of your target customer to pay. It might be challenging to determine a fair price in some situations. Particularly problematic is when trading is conducted through an intermediary (Chikwere et al., 2022). The price of the product in third-world countries can be extremely low, as there are very low labour costs (Jing et al., 2020).

2.3 Online marketing

It is an assortment of technologies and techniques that are used in online marketing to advertise goods and services online (Shokeen et al., 2022). Akpomi et al. (2022) proclaim that, due to the additional channels and marketing tools made available by the Internet, online marketing encompasses a larger range of marketing components than traditional corporate marketing. Additionally, Christina et al. (2019) defined marketing as the organisational function that can stay in continual contact with the company's customers, anticipating their requirements, designing products that address those needs and creating a communication system to explain those purposes. Online marketing, which is also referred to as digital or Internet marketing, means doing the usual selling of the products, but unlike in ordinary marketing, this is done over a computer-mediated network (Krizanova et al., 2019). Online marketing is the deliberate application of digital networks and technological platforms to the promotion of commercial endeavours. Online marketing, in this sense, employs a range of digital, online and electronic channels to communicate with both present and potential clients of the company.

Usually, online marketing messages are designed as images, text, or video and distributed through such media as social media, emails, newsletters and websites (Bala and Verma, 2018). By promoting and offering goods and services through the use of a digital and virtual environment, online marketing has not only made doing business low-cost but also been effective in drawing clients 24/7 (Denner et al., 2022). By its nature, online marketing presupposes that businesses are already online, but when adopted, it benefits every business immensely as it is a great way to reach people everywhere as long as they are online (Chikazhe and Makanyeza, 2022). As a result, marketers must understand the marketing environment, particularly who the potential clients are, what items they are interested in (Rodrigues et al., 2016) and how to establish an online relationship with them.

2.4 Frequent communication

Marketing communications are the messages and platforms that businesses employ to reach out to their target audiences (Mashapure et al., 2022a, b). Marketing communications include, but are not limited to, traditional advertising, direct marketing, social media marketing, presentations and sponsorships. Marketing relies on communication to keep everyone on the same page (Chikazhe et al., 2022a, b). Thus, the current study understands frequent communication as the facilitation of the transfer of information on products, services and ideas from the business to the customer, as well as the development and maintenance of relationships with customers, prospects and other key stakeholders within the organisation.

Communication is of paramount importance between retail businesses and their customers (Ferraris et al., 2019). Employees and management must interact effectively with customers (Noorbehbahani et al., 2019) in order to achieve organisational goals and be more aligned with core company values (Jing et al., 2020). Its primary goal is to improve organisational performance through the elimination of silos, keeping customers informed and reducing customer complaints (Chikwere et al., 2022).

2.5 Perceived service quality

Chikazhe et al. (2022a, b) described service quality as meeting customers' expectations. By examining how effectively a company satisfies client expectations, one can ascertain the quality of its services (Jing et al., 2020; Victor et al., 2018). Thus, any business can grow if it can find a way to improve the calibre of its offerings (Paul and Rosenbaum, 2020). Customers purchase services to meet specific needs (Fan et al., 2020). Canh et al. (2019) claim that the process of ensuring that the customer obtains services that live up to his expectations is known as service quality management. In essence, it assesses a service's effectiveness in order to improve its quality going forward (Huotari and Hamari, 2011), identify problems and fix them to increase client satisfaction (Jing et al., 2020).

2.6 Organisational performance

The ability of an organisation to achieve its goals and optimise results is referred to as organisational performance (Khin and Ho, 2018). Organisational performance in today's workforce can be defined as a company's ability to achieve goals in an environment of constant change (Otto et al., 2020). Organisational performance analysis is the capacity to implement the strategies, tactics and resources utilised to assess programme and organisational performance and provide crucial performance data that is used to guide choices, actions, communications and accountability systems (Krekel et al., 2019).

Businesses require effective performance management (Cardão-Pito et al., 2021). Through both official and informal methods, it helps them match their systems, resources and personnel with their strategic objectives (Canh et al., 2019). How well a company achieves its stated goals is one of the most common ways to assess organisational effectiveness and performance (Ferraris et al., 2019; Mwandifura et al., 2022a, b). This method would assess factors such as how well an organisation meets its objectives. Likewise, Khin and Ho (2018) claim that organisational effectiveness relates to how an organisation has attained complete self-awareness as a result of, amongst other things, executives articulating clear objectives for workers and outlining strategies for effectively achieving those objectives.

2.7 Information and communication technology (ICT)

Information and communication technologies refer to a broad range of technological resources and techniques that are used to create, transfer, store, share and exchange information (Denner et al., 2022). According to Akpomi et al. (2022), information and communication technology (ICT) is a broad, extensible and communication equipment that obtains, manipulates, transmits and stores information electronically in a digital form, such as radio, television, cell phones, computers, network hardware, software, systems and services. ICTs provide customers access to information through telecommunication systems (Aparicio et al., 2021); they also provide manipulation and communication services (Souiden et al., 2019). Through newly emerging channels, customers and businesses are connecting to exchange information all across the world (Bhattacharyya and Abdel-Raheem, 2022). ICTs and information technologies (IT) are interchangeably used, but the most ideal term to use in the 21st century and beyond is “ICTs,” which is more encompassing. The current study understands ICT as the use of digital technology by firms as they collect, store and analyse customer data as well as digitally communication with customers.

ICT is the most critical contemporary business resource that is so dynamic that it changes the business landscape for the better (Costa et al., 2017; Salamova et al., 2021). This presents opportunities presented to businesses by ICTs (Ferraris et al., 2019). It is every business' wish to spread its tentacles globally, developing new markets for new and existing products and services and opening new remote business offices, leading to huge profits. The new and ever-evolving ICT-driven business initiatives require more robust communication lines, infrastructure and service assurance to ensure customer satisfaction, retention and eventual business success (Denner et al., 2022). The burning question in research is: in what way do ICTs enable customer retention in businesses of the 21st century and beyond? Chief amongst the strategic ICT implementations, it enables satisfaction, loyalty and retention through a good customer digital experience and meeting the individual's needs (Shokeen et al., 2022). Akpomi et al. (2022) allude to the fact that ICT is the biggest business game changer in customer retention through easing transactions and the red tape characteristic of manual and semi-automated processes in placing, paying, collecting and delivering business orders. ICTs enable brand presence on any mobile gadget through voice, audio, short message service and video capabilities in mobile media devices.

3.1 The effect of customer retention strategies on organisational performance

Literature confirms that prices empower firms to create the expense and extra pay for the worth dedicated to the merchandise and enterprises to easily meet the expense of creation and assurance some degree of supportability of the business (Faith, 2018; Feng et al., 2022; Haripersad and Sookdeo, 2018; Li et al., 2019; Subrahmanyan and Arif, 2022). Haripersad and Sookdeo (2018) investigated the competitiveness of the banking sector as determined by factors including cost containment and fair pricing. The study concluded that management out to consider fair pricing of commodities in order to retain customers. The impact of pricing tactics on the purchasing of consumer goods was also studied by Faith (2018). The results imply that consumers' perceptions of value are mirrored in the costs of goods sold by businesses. Also, Li et al. (2019) studied aggressive pricing plans in a pure duopoly where two platforms have products with high dependency. According to the study findings, a platform's pricing strategy is important not only for branding but also for capturing customers' willingness-to-pay. Feng et al. (2022) investigated how customers will react to short-term price changes during a disruption.

It was determined that using a fixed pricing strategy to completely eliminate customer order variability is not recommended, and that adjusting the price to match supply with demand is required to improve profit. It is on this note that the examination conjectures that:

Digital marketing helps firms perform better by integrating technology with their customers and business operations to achieve profitable growth (Bala and Verma, 2018; Kovalenko and Kuzmenko, 2020; Oktavianna et al., 2019). Kovalenko and Kuzmenko (2020) investigated the phenomenon of Internet website visibility from the standpoint of marketing information flows in small business activities. The findings indicate that there is a link between the number of Internet marketing methods used and the visibility of small business websites in search engines. In a related study, Bala and Verma (2018) investigated current and future marketing trends. The study determined that, in comparison to old or conventional techniques, consumers are exploring and searching more on the Internet to discover the greatest bargain from merchants. In an almost similar study, Oktavianna et al. (2019) discovered that fish farmer organisations used online platforms like Facebook, Instagram and other social media to market directly to consumers, which increased sales for the company. Thus, it can be hypothesised that:

Singh et al. (2019) looked into how information and communication technology applications could help SMEs in the Indian food sector grow sustainably. According to the findings, communication is essential for business expansion. Another study by Krizanova et al. (2019) concentrated on a methodology for putting into practice an indicator suitable for assessing the efficacy of online communication activities in the Slovak hotel industry. According to the study's findings, hotels in Slovakia consider online marketing communications to be important regardless of their size, number of years in business, spending capacity or class. Hence it can be proposed that:

3.2 The effect of customer retention strategies on retail service quality

As mediators between price fairness and perceived value in service encounters between micro-enterprises and their banks, perceived price and service quality were tested in a study by Zietsman et al. (2019). The results showed that the relationship between business banking customers' perceptions of price fairness and the value of service provided is influenced by perceived price and service quality. Equally, in the context of halal-certified restaurants, Abdullah et al. (2018) investigated the impact of food quality and price fairness on restaurant re-patronage intention service quality. The findings indicated that customer satisfaction and service quality are influenced by food quality and price fairness. The goal of the study by Vallery et al. (2020) was to examine and analyse how price and advertising affected the calibre of the service and customer satisfaction for online transportation services. The results of the study show that price and promotion have a favourable and considerable influence on customers' satisfaction levels and the calibre of online transportation services. Therefore, it can be hypothesised that:

Literature confirms a positive relationship between online marketing and service quality (Akhmadi and Pratolo, 2021; Djakasaputra et al., 2021; Veluchamy et al., 2020). Djakasaputra et al. (2021) analysed the relationship between digital marketing and quality service amongst small and medium. The study results indicate that digital marketing has a significant effect on quality service. Likewise, Veluchamy et al. (2020) examined the effectiveness of online marketing and its determinants. The study settled the level of service quality is influenced by online marketing. Akhmadi and Pratolo (2021) explored the extent of online food product marketing practices in a marketplace. The study's findings indicate that service quality was included as a value proposition with the consumer to consumer e-commerce model as well as other important business model components. Thus, it can be proposed that:

Frequent communication with customers improves service quality within a modern business setup (Ratheeswari, 2018; Garcia-Sanchez et al., 2020; Seric et al., 2020). In a study by Garcia-Sanchez et al. (2020) to examine the effect of business communication strategies in business performance, it was concluded that proper communicating with customers impacts positively on service quality and business performance. Likewise, Seric et al. (2020) looked at the results of customer-brand relationships and perceived consistency in marketing communications. Results show that brand trust, service quality and brand loyalty are strongly impacted by consistent communication. Hence it can be hypothesised that:

The quality of service offered by the business has an influence on its growth (Kayapınar and Lorcu, 2020; Chikazhe and Nyakunuwa, 2022; Feng et al., 2021). Kayapınar and Lorcu (2020) looked at how employee empowerment and training affected how customers perceived the quality of the services. The study's findings support the idea that employee empowerment and training have a positive impact on how well services are perceived, which has a positive knock-on effect on business expansion. Also, Chikazhe and Nyakunuwa (2022) looked at how employee empowerment and training affected how customers perceived the quality of the services. The study's findings support the idea that employee empowerment and training have a positive impact on how well services are perceived, which has a positive knock-on effect on business expansion. In a related study focussing on the connection between service innovation and firm performance, Feng et al. (2021) found out that service innovation significantly improves firm performance. Thus, it is hypothesised that:

Evidence from literature show that there are direct relationships amongst customer retention, service quality and firm performance (Kayapınar and Lorcu, 2020; Chikazhe and Nyakunuwa, 2022; Feng et al., 2021). A study by Chikazhe and Nyakunuwa (2022) indicated that service quality has a positive influence on firm performance. Calvo-Porral and Nieto-Mengotti (2019) examined whether consumer use of ICT has a moderating effect on customer behaviour in mobile services. Results demonstrate that customer interaction with ICT affects how they behave when using mobile services. The purpose of a study by Chaudhary et al. (2020) was to establish the effect of ICT orientation on university's brand performance. It was found out that ICT has a significant effect on the quality of university's brand performance. Studies by (Feng et al., 2021; Li et al., 2019; Kovalenko and Kuzmenko, 2020; Seric et al., 2020; Veluchamy et al., 2020; Zietsman et al., 2019) confirm direct relationships amongst customer retention, service quality and firm performance. Therefore, it can be hypothesised that:

The conceptual framework (Figure 1) shows how the selected customer retention strategies (fair pricing, online marketing and frequent communication) influence service quality and business performance within the retail sector. Also, the conceptual framework indicates the moderating role of ICT on the effect of customer retention on service quality and organisational performance.

4.1 Questionnaire design and measures

A structured questionnaire with seven sections to cater for all variables under study was designed and used to collect data from 280 retail sector employees in Chinhoyi, Zimbabwe. Chinhoyi town was chosen because of many retail firms found in nearly all cities in Zimbabwe. The seven sections which formed the questionnaire were; fair pricing (FAP), online marketing (ONM), frequent communication (FRM), organisational performance (ORP), ICT and perceived service quality (PSQ) and demographics. The items used in the questionnaire design were borrowed from related studies as indicated in Table 1 and they were refined to suit the requirements of the current study. All items under each construct were measured using a Likert scale which ranged from 1 (Strongly disagree) to 5 (Strongly agree). A pilot test was conducted before the actual data collection exercise. This allowed the researchers to refine the instrument before it was subjected to the actual data collection exercise. Table 1 below shows items and sources used for the current study.

4.2 Sampling and data collection

The study used a quantitative research methodology primarily to examine the relationships between customer retention, perceived service quality, firm performance and ICT. A quantitative research approach is the most suitable in common social research situations, such as those that call for the identification of variables that influence an outcome. The quantitative research method also makes it possible to comprehend the study frameworks and hypotheses better. The design of the survey was cross-sectional.

Respondents who participated in the study were selected using the simple random sampling technique. The population of the study comprised 280 employees randomly selected from the retail sector organisations. A RAOSOFT sample calculator was used to calculate the sample size. The researcher ensured that there would be no bias through randomly selecting respondents from various organisations that include Pick and Pay, OK Store, N'Richards, Metro Peach, Farm and City, Edgars' Stores, Jet Stores amongst others. The high number of retail employees was considered to accommodate employees from various retail shops in Chinhoyi and also to ensure that the sample was a representation of the total population. The study made use of retail employee perception in assessing customer retention strategies, service quality and organisational performance. Questionnaires were physically distributed to employees in selected retail firms with the aid of trained research assistants. A maximum of five working days was allowed to respondents to complete the questionnaires before they were collected and coded. Out of the 280 questionnaires which were distributed, 225 (80%) useable questionnaires were returned within the stipulated time. Table 2 below shows the results for respondents' profile.

The results in Table 2 show that the majority (70.2%) of retail employees who participated in this study were aged between 30 and 49 years. Male respondents constituted the majority (67.6%) of retail employees. Employees who were engaged on permanent basis formed the bulk (73.3%) of participants. Thus, data were gathered from employees who had a better understanding of the retail sector. Moreover, the majority (85.3%) of employees were employed for a period of more than 5 years. The data which was used in the current study came from employees engaged in various departments, a sign that ideas came from various experts within the retail sector. The bigger part (58.7%)) of retail employees who participated in this study were holders of diplomas in specialised areas.

5.1 Exploratory factor analysis

Data were validated through convergent validity, discriminant validity and exploratory factor analysis before hypotheses were tested. SPSS V26 and AMOS V6 were used for exploratory factor analysis and the data analysis exercise. Sampling adequacy was carried out through Kaiser-Meyer Olkin (KMO) measure and Bartlett's Test of Sphericity. The results obtained (KMO = 0.521, Approx. Chi-square = 4,924.321, Degrees of freedom [DF] = 397; p < 0.001) indicate that minimum conditions for sampling adequacy were achieved and this gave way for exploratory factor analysis to be conducted.

5.2 Convergent validity

Convergent validity was evaluated through measurement model fit indices, reliability, standardised factor loadings, critical ratios (CR) and average variance extracted (AVE). Results for convergent validity were satisfactory. The measurement model showed a good fit (CMIN/DF = 1.967; GFI = 0.869; AGFI = 0.897; NFI = 0.930; TLI = 0.912; CFI = 0.893; RMSEA = 0.046). Reisinger and Mavondo (2007) recommended that a satisfactory model ought to show a χ²/DF that ranges between the scale of 0–5 with lesser values indicating a better fit. Moreover, values of GFI, AGFI, NFI, TLI and CFI show a good fit when close to 1, and RMSEA should fall between 0.05 and 0.10 for it to be satisfactory (Field et al., 2012).

All constructs had Cronbach's alpha (a) reliabilities and composite reliabilities (CRel) greater than 0.6 as commended by Hair et al. (2013). Moreover, all items had standardised factor loadings greater than 0.6, a cut-off point recommended by (Field, 2009). All critical ratios were satisfactorily large and significant at p < 0.001. Reliabilities of each individual item exceeded the predicted minimum coefficient of 0.4 (Field, 2009). These findings demonstrate that the conditions for convergent validity were met.

5.3 Discriminant validity test results

To evaluate the discriminant validity, average extracted variance was compared to squared inter-construct correlations. Table 3 presents results for discriminant test results.

Since average extracted variances were higher than 0.5 and higher than corresponding squared inter-construct correlations, the results in Table 3 suggest that discriminant validity was obtained (Byrne, 2013). Thus, preliminary test results satisfied minimum conditions and allowed hypotheses testing to be performed.

6.1 Hypotheses test results for H1, H2 and H3

Through structural equation modelling, H1, H2 and H3 were tested. Customer retention was treated as a second order construct. The model indices results indicated satisfactory fit (CMIN/DF = 2.147; GFI = 0.908; AGFI = 0.895; NFI = 0.901; TLI = 0.940; CFI = 0.857; RMSEA = 0.048). Table 4 shows hypotheses test results for H1, H2 and H3. Results in Table 4 show that customer retention influences both perceived service quality and organisational performance. Therefore, both H1 and H2 were supported. Results also indicate that perceived service quality positively influence organisational performance. Hence H3 was supported.

6.2 Hypotheses test results for H1a–c and H2a–c

Likewise, structural equation modelling was performed to test H1a-c and H2a-c. The model indicates a satisfactory fit (CMIN/DF = 2.234; GFI = 0.876; AGFI = 0.932; NFI = 0.893; TLI = 0.875; CFI = 0.937; RMSEA = 0.041). Table 5 results show that all dimensions for customer retention (frequent communication, online marketing and fair pricing) positively influence both organisational performance and service quality. Thus, H1a-c and H2a-c were all supported.

6.3 Moderated regression results

H4 and H5 were tested using moderated regression analysis. Table 6 summarises results which indicate that coefficients for the interaction terms (Frequent Communication x ICT, Online Marketing x ICT and Fair Pricing x ICT) were significant (p > 0.000). This suggests that ICT moderate the effect of customer retention on organisational performance and perceived service quality. Therefore, H3 and H4 were supported.