Relationship intention as a prerequisite for relationship marketing : an application on short-term insurance clients

Abstract

As we are entering the information age, markets are becoming more mature, competition is greater than ever and services are looking all the more like commodities. These changes have resulted in companies looking more to their existing client base for future survival and growth. This renewed focus on the client has also made companies more aware of relationship marketing as a strategic tool in retaining their clients and making them more profitable. This is because, when properly implemented, relationship marketing will aid the business in building solid, long-term relationships with its clients, thereby increasing their clients' spending over time and increasing the business' long-term success. However, companies should keep in mind that the strategy of relationship marketing cannot be applied to a business' entire client base. The development of a strong company-client relationship depends on the input of both parties involved and not all clients are willing to invest in building long-term business relationships. Therefore, in order to ensure the successful implementation of relationship marketing strategies, companies need to identify and target those clients who intend to build long-term relationships with the business, i.e. those with a high relationship intention. The goal of this study was to measure the relationship intention of clients in the short-term insurance industry. A literature review was undertaken to investigate the concepts of relationship marketing, market segmentation and relationship intention, which are all related to this study. A questionnaire was designed which measured clients in terms of five relationship intention constructs, namely involvement, expectations, forgiveness, feedback and fear of relationship loss. The questionnaire also identified the demographic details of the respondents, which aided in the development of a consumer profile for those clients with a higher relationship intention. The questionnaire was distributed to clients of a short-term insurance company by means of a convenience sampling method. A total of 114 respondents took part in the survey. Conclusions were made regarding the results of the empirical investigation and these conclusions were then compared with the findings in the literature review. This, in turn, led to the development of recommendations related to the relationship intention of different demographic groups.