Vol. 9, Issue 12 (2020)

Author(s):
Chenlep Yakha Konyak and VK Vidyarthi

Abstract:
Customer retention has become vital for pharmacies' profitability and operational stability as the healthcare sector evolves. This study investigates the impact of service quality on customer retention in pharmacies using the Service Quality (SERVQUAL) model and Ordinary Least Squares (OLS) Regression model. The SERVQUAL dimensions—tangibles, reliability, responsiveness, assurance, and empathy—were mapped to specific dataset features for a comprehensive evaluation. The analysis revealed a mean service quality score of 0.358650 with a standard deviation of 0.078922, indicating moderate service quality with notable variability. Regression analysis demonstrated a strong relationship between service quality and customer retention rates, with an R-squared value of 0.785, explaining 78.5% of the variability in customer retention. Consultation services substantially positively impacted customer retention, with a significant coefficient of 0.6900, underscoring the importance of professional and empathetic interactions in retaining customers. While factors such as Customer Satisfaction Score, Prescription Volume, and Medication Adherence Rate showed less significant individual impacts, overall service quality remains crucial for customer retention.