Service Innovation and Quality's Impact on Customer Retention: Automotive Industry Amid Economic Turbulence

Abstract

This study analyses the role of service innovation and quality in enhancing customer retention within Zimbabwe's automotive industry amidst economic turbulence. The primary objective is to evaluate how service innovation, quality, and customer experience impact customer retention. A cross-sectional survey design and Structural Equation Modelling (SEM) were used to assess interactions between variables, with data collected from 200 respondents. Findings indicated that service innovation positively impacts service quality and customer experience but has a marginal direct effect on retention. Quality perception is related to garage location, infrastructure, and equipment, indirectly affecting retention. Service innovation enhances delivery, but operational excellence, quality improvement, and customer orientation are crucial for retention. Investments in infrastructure, digital innovations, and employee training are recommended. These findings emphasise the need for integrating innovative technologies and robust practices to boost customer loyalty. Future research should examine economic conditions, technological advancements, and competitive dynamics as moderating factors.