Customer attachment: A mediated model for wealth management in South Africa

Abstract

The need to establish profitable long-term customer relationships intensifies as South African wealth managers compete for a share in the market. To establish and maintain customer relationships, wealth managers and marketing researchers alike have been focusing on the concept of customer attachment as part of their relationship marketing strategies, as it solidifies the bond between wealth managers and their customers, which is a prerequisite for building mutually beneficial long-term relationships. Despite the significance of attachment in customer-wealth management relationships, existing research on this topic is limited. To address this gap, this research study draws from the relationship marketing view and synthesizes important relationship constructs with the aim of developing a mediated attachment model for wealth managers in South Africa. To gather the necessary data for model testing, this study used a quantitative descriptive research design to collect data from 1 230 respondents residing across South Africa. Cronbach's alpha coefficients and confirmatory factor analysis were conducted to determine the reliability and validity of the measures respectively, and a structural equation modelling (SEM) was conducted for the mediation analysis. The empirical data analysis revealed that respondents' satisfaction and trust levels significantly influenced their attachment, and their attachment levels significantly influenced their intention to return to and remain in a relationship with their wealth manager (i.e. retention). Moreover, the indirect effect of attachment on the relationship between customer satisfaction and retention and the relationship between customer trust and retention was found to be significant. Wealth managers are accordingly advised that attachment plays a significant role in both direct and indirect relationships with key relationship marketing constructs. The importance of attachment in building customer-wealth management relationships should therefore not be ignored, and wealth managers are encouraged to invest in their relationships with their customers with the aim of establishing attachment. To reap the benefits of customer attachment, wealth managers must employ strategies that would promote customer satisfaction and trust. Wealth managers in South Africa were also advised to identify or develop secure attachments with their customers as it will motivate them to return to and remain in a business relationship with their wealth manager (i.e. retention). They should also emphasise the importance of attachment in the relationship between customer satisfaction and retention and between customer trust and retention. Moreover, South African wealth managers are encouraged to implement the mediated attachment model developed in this study as part of their marketing strategies to retain customers and improve their and their organisation's overall success. This study makes theoretical and practical recommendations and contributions that are aimed at improving marketing researchers' and managers' understanding of relationship development in the wealth management context by extending the customer attachment concept to a wealth management environment. This study also contributes to the growing body of research on customer attachment. This research study is one of a limited number of studies that address the abovementioned concepts (i.e. customer satisfaction, trust and retention) in relation to customer attachment within the South African wealth management industry.