Effect of Dynamic Pricing Strategies on Customer Retention in the Nigerian Power Sector: Implications for Stakeholders’ Engagement

Abstract

This study examined the effect of dynamic pricing strategies on customer retention in the Nigerian power sector, focusing on stakeholder experiences, behavioral responses, and communication mechanisms. A qualitative research design was employed to explore the perspectives of electricity consumers, customer service representatives and regulatory officials across six electricity distribution zones in Nigeria. Using purposive sampling, a total of six (6) participants were selected based on their direct involvement with electricity pricing, consumption, and stakeholder engagement. Data were collected through semi-structured interviews and analyzed thematically. Findings revealed that a lack of pricing transparency, inadequate communication, and limited consumer engagement significantly impact customer trust and retention. While some users adjust their consumption patterns in response to tariff changes, others disengage or express dissatisfaction, especially in contexts where service quality is poor or tariff explanations are unclear. The study concludes that improving transparency, strengthening communication, and institutionalizing stakeholder engagement are critical to sustaining customer loyalty in Nigeria’s evolving power sector. It is therefore recommended that to enhance customer retention in Nigeria's power sector, it is recommended that electricity distribution companies implement structured communication strategies that prioritize transparency in pricing and service quality. This could involve regular updates on tariff changes and their justifications, as well as initiatives to actively engage consumers in decision-making processes.