Effects of Customer Satisfaction on Water Utility Business Performance: A Case Study of Mbinga Urban Water Supply and Sanitation Authority

Abstract

Customer satisfaction is critical in determining why businesses succeed or fail, as well as why they perform at different levels. Yet, the performance of at Mbinga Urban Water Supply and Sanitation Authority (MBIUWASA) for such a long time became very poor due to different problems such as dissatisfaction of customers making them delay paying their bills on time in lieu of unreliable services. This study analysed the effects of customer satisfaction on water utility business performance at Mbinga Urban Water Supply and Sanitation Authority (MBIUWASA). Specifically, the study aimed at examining the influence of customer satisfaction on return on asset (RoA), the relationship between customer satisfaction and return on equity (RoE) and the impact of customer satisfaction on return of investment (RoI). Case study research design was used along with mixed approach. A sample size of 50 customers and MBIUWASA staff was utilized. Simple random sampling was used to select respondents as to get views from them. Tools used included questionnaire, in-depth interview and documentary review. Quantitative and qualitative data were analysed descriptively along with the use of content analysis. Moreover, regression analysis was used to capture the relationship between variables. The study revealed that MBIUWASA customers are not satisfied with the service provided leading to poor performance. The regression analysis indicates that the coefficient of correlation R was 0.840 an indication of positive relationship between variables. Coefficient of adjusted determination R2 was 0.706 which changes to 70.6% an indication of changes of dependent variable (RoA, RoE and RoI) that can be explained by customer satisfaction. The residual of 29.4% can be explained by other variables beyond the scope of the current study. The study concluded that MBIUWASA needs to find out ways of investing much on water sources to be able to supply water to the large number of customers while adhering to quality service provision.