The interrelationship between selected customer relationship management initiatives, customer satisfaction and behavioural intention
Mackay, Nedia, 1980-
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South African short-term insurers are finding it increasingly more difficult to maintain their market value amidst unpredictable and erratic economic conditions. In addition, the short-term insurance industry is faced with two major challenges: the growing number of direct short-term insurers entering the industry, and the significant decline in customer retention rates. Based on the literature review, it was found that these challenges present short-term insurers with a strategic imperative – they need to adopt a CRM approach, incorporating an integrated customer focus aimed at developing long-term relationships with customers. If they want to succeed in this pursuit, short-term insurers need to understand their customers' perceptions of the service offering, their existing relationship with the insurer, their levels of satisfaction, and their behavioural intentions towards the insurer. The primary objective of this study was to determine the influence of both direct and indirect short-term insurers' service quality and benefits derived from being in a relationship with the insurer, specifically on their customers' levels of satisfaction, their loyalty, and positive word- of-mouth intentions. In this vein, the study also sheds light on how short-term insurers can adapt their marketing strategies in order to develop and maintain successful long-term relationships with their customers. The study followed a descriptive research design. Convenience sampling was used to select suitable respondents, and data was collected by means of mall-intercept, person-administered surveys from individuals residing in the Gauteng Province of South Africa and who currently have short-term insurance. A sample size of 891 responses was realised. The results from the study indicate that respondents’perceptions of their insurers’ service quality offering do not differ significantly from their expectations. In other words, respondents seem to be satisfied with their insurers’ services. Results furthermore showed that quality services and additional relational benefits positively influence respondents’ levels of satisfaction with their short-term insurers, which in turn influence their intentions to remain loyal to their insurers or to communicate positively about them. In addition, no significant differences were observed between direct and indirect short-term insurance respondents with regard to service quality, relational benefits, customer satisfaction, or behavioural intention. Based on the results, this study proposes a model that sets out to demonstrate how South African short-term insurers can utilise service quality and relational benefits to realise and improve customer satisfaction, in order to encourage positive behavioural intentions among their customers. It is recommended that, in order to differentiate themselves, short-term insurers (both direct and indirect) should ensure that their service quality offerings are superior to those of their competitors’. Short-term insurers can attain high quality service offerings by paying special attention to their reliability, responsiveness, assurance and empathy. It is also recommended that short-term insurers should attempt to provide the same levels of relational benefits to all of their customers, independent of demographic differences, as a way to improve the overall morale and satisfaction of their customers. Since no significant differences were found in terms of different groups of respondents, it is further recommended that short-term insurers should differentiate themselves by customising their target market(s), through focusing their service and relational offerings on specific demographic, geographic, and psychographic segments. Finally, it is recommended that short-term insurers should use the model developed in this study with a view to improve the overall effectiveness of their CRM efforts. Recommendations for future research include extending this study to other South African provinces, in order to determine whether differences exist between respondents from different geographic locations. Future research can include representative numbers of respondents from each individual short-term insurer with a view to attain more accurate and representative information regarding specific insurers. A similar study can also be conducted among long-term insurers in order to determine whether the insurance industry in its entirety can benefit from the findings from this study. Finally, future research can test the CRM model presented in this study in the context of other service industries to determine its relevance and applicability.