The study sought to explore the relationship between service quality and customer retention in small and medium sized companies, with specific focus on Sebbi Medical Centre. Its main objectives were to establish the relationship between reliability and customer retention, evaluate the relationship between assurance and customer retention and find out the relationship between tangibles and customer retention. The objectives were informed by thescholarly work of Parasuraman, Zeithaml and Barry (2006). Using questionnaires and semi-structured interviews, the study collected data from a sample of 351 respondents drawn from a population of 4000.
The study results show that service reliability has a strong positive correlation (0.762) with customer retention in Sebbi Medical Centre, assurance has a strong positive correlation (0.865), tangibles have a strong positive Pearson correlation value of 0.802. This implies that service quality has a strong positive correlation with customer retention in Sebbi Medical Centre, because there exists a very significant positive relationship between reliability and customer retention, assurance and customer retention and tangibles and customer retention in Sebbi Medical Centre.The study concludes that there is a strong positive and very significant relationship between service quality and customer retention. It is recommended that Sebbi Medical Centre and similar businessesshould improve their service quality by recruiting more qualified and experienced staff, who should be retrained regularly and given modern equipment in order to increase customer retention.