Moses L. Singgih and YB Handaru Purnasakti
Abstract
As a tight competition between internet services provider causes a number of customers to churn. PT Telkom needs to design relationship marketing strategy that is focused to the improvement of customer loyalty. Moreover, relationship marketing strategy is evaluated in the framework of service profit chain. Integration between good service, customer loyalty, and growth in service profit chain framework is the booster of profitability. These problems motivate the writers to evaluate service profit chain whose objective is to test the causal model of customer loyalty and identify the performance indicator of customer loyalty management using customer lifetime value (LTV) in the implementation of relationship marketing strategy by Customer Care department of PT TelkomKandatel Surabaya Barat. Test the causal model between retention program and customer service quality to customer loyalty is using SEM (structural equation modelling) method. After that, calculate the customer lifetime value of Telkom Speedy customer. The result shows that customer service quality has positive and significant effect to customer loyalty as 0,75 with t-value=3,36 (α= 0,05). While, retention programme has positive but not significant to customer loyalty as 0,29 with t-value=1,7 (α= 0,05). LTV which is the performance indicator of loyalty management by PT Telkom in service profit chain framework, outcomes IDR 508.147,00.
Keywords: Service Profit Chain; Customer Loyalty; Retention Program; Customer Service; Structural Equation Modelling; Customer Lifetime Value.