Falah Butt Stayers & Switchers

8/8/2019 Falah Butt Stayers & Switchers

http://slidepdf.com/reader/full/falah-butt-stayers-switchers 1/18

Exploring the Difference Exploring the Differencebetween Stayers andbetween Stayers and

Switchers as CorporateSwitchers as CorporateCustomers for Life InsuranceCustomers for Life Insurance

Companies in SindhCompanies in Sindh

Researchers:

Falah-ud-Din Butt,

Niaz Ahmed Bhutto &

Ghulam Abbas



1)1) STAYERS:STAYERS:The first time adopters.The first time adopters.

2)2) SWITCHERS:SWITCHERS:

ii) SATISFIED SWITCHERS:) SATISFIED SWITCHERS:

Corporate customers who switched in for anyCorporate customers who switched in for anyreason other than dissatisfaction from thereason other than dissatisfaction from theprevious life insurance company.previous life insurance company.

ii) DISSATISFIED SWITCHERS:ii) DISSATISFIED SWITCHERS:Corporate customers who switched in due toCorporate customers who switched in due todissatisfaction from the previous life insurancedissatisfaction from the previous life insurancecompany.company.



OBJECTIVES OF THE STUDYOBJECTIVES OF THE STUDY

To examine whether the three groups differ inTo examine whether the three groups differ intheir overall satisfaction with the service providedtheir overall satisfaction with the service providedby their existing/current life insurance company.by their existing/current life insurance company.

To investigate the role of satisfaction with theTo investigate the role of satisfaction with thevarious attributes of the service in differentiatingvarious attributes of the service in differentiatingamong the groups.among the groups.

To examine whether the three groups differ inTo examine whether the three groups differ intheir loyalty behavior toward the service.their loyalty behavior toward the service.



PROBLEM STATEMENTPROBLEM STATEMENT

To find the difference between Stayers andTo find the difference between Stayers andSwitchers as corporate customers in relationSwitchers as corporate customers in relation

to satisfaction and loyalty towards theto satisfaction and loyalty towards theservice provided by the existing/current lifeservice provided by the existing/current lifeinsurance company in Sindh?insurance company in Sindh?



RESEARCH METHODOLOGYRESEARCH METHODOLOGY

ANO VA ANO VA

AND AND

MULTIPLEMULTIPLEDISCRIMINANTDISCRIMINANT

ANALYSIS ANALYSIS

CONVENIENCECONVENIENCESAMPLINGSAMPLING

Selected Sample

Sat is f ied

Swi tc hers , 25

St ayers , 25

Dissatisf ied

Swi tc hers , 25



REVIEW OF LITERATUREREVIEW OF LITERATURE

A number of studies have shown that A number of studies have shown that Switchers base their satisfactionSwitchers base their satisfaction

judgments on different factors than judgments on different factors than

Stayers (Mittal and Katrichis, 2000), that Stayers (Mittal and Katrichis, 2000), that overall satisfaction and loyalty differoverall satisfaction and loyalty differamong the two groups (Ganesh et al.,among the two groups (Ganesh et al.,2000) and that satisfaction has a stronger2000) and that satisfaction has a stronger

effect on the duration of the customereffect on the duration of the customerrelationship for longrelationship for long--term customers thanterm customers thanfor recent recruits (Bolton, 1998)for recent recruits (Bolton, 1998)



REVIEW OF LITERATUREREVIEW OF LITERATURE

TheThe loyaltyloyalty of of thethe customerscustomers isismultidimensionalmultidimensional andand includesincludes not not onlyonly repeat repeat buyingbuying behavior,behavior, but but alsoalso otherother aspectsaspects that that

areare gearedgeared towardstowards thethe support support of of aa provider,provider,suchsuch asas repurchasingrepurchasing oror resistanceresistance towardstowardspriceprice increasesincreases (Dick(Dick andand Basu,Basu, 19941994))..

In light of mature markets and increasingIn light of mature markets and increasing

competitive pressure, retaining the existingcompetitive pressure, retaining the existingcustomer base becomes crucial for the futurecustomer base becomes crucial for the futuresuccess of a firm (Boehm, 2008).success of a firm (Boehm, 2008).



THE VARIABLESTHE VARIABLES

Customer SatisfactionCustomer Satisfaction1.1. ProfessionalismProfessionalism

2.2. Prompt PaymentsPrompt Payments

3.3. PremiumPremium

4.4. CommissionCommission

Customer LoyaltyCustomer Loyalty

1.1. RecommendationRecommendation

2.2. Future Intention to SwitchFuture Intention to Switch

3.3. Raised PricesRaised Prices

4.4. Competitive RatesCompetitive Rates



DATA ANALYSIS AND RESULTSDATA ANALYSIS AND RESULTS

Overall Satisfaction Measure: Difference between Group MeansOverall Satisfaction Measure: Difference between Group Means

MeasureMeasure GroupsGroups Mean ScoresMean Scores Difference b/w MeansDifference b/w Means**

Overall, howOverall, how

much satisfiedmuch satisfied

your firm is withyour firm is with

the current lifethe current life

InsuranceInsurance

company?company?

StayersStayers

(n = 25)(n = 25)4.24004.2400

Stayers versus SatisfiedStayers versus Satisfied

SwitchersSwitchers

0.32000.3200

SatisfiedSatisfiedSwitchersSwitchers

(n = 25)(n = 25)

3.92003.9200Stayers versus DissatisfiedStayers versus Dissatisfied

SwitchersSwitchers

-- 0.28000.2800

DissatisfiedDissatisfied

SwitchersSwitchers

(n = 25)(n = 25)

4.52004.5200Satisfied Switchers versusSatisfied Switchers versus

Dissatisfied SwitchersDissatisfied Switchers

-- 0.60000.6000* The difference between group means were significant at the p = 0.05 level.

H1:H1: Dissatisfied Switchers are more satisfied with theirDissatisfied Switchers are more satisfied with their

existing/current life insurance company in comparison toexisting/current life insurance company in comparison toSatisfied Switchers and Stayers.Satisfied Switchers and Stayers.

H2:H2: Satisfied Switchers are less satisfied with theirSatisfied Switchers are less satisfied with theirexisting/current life insurance company in comparison to Stayers.existing/current life insurance company in comparison to Stayers.



WilkasWilkas (U(U--statistic) and Univariate F ratiostatistic) and Univariate F ratiowith 2 and 72 degrees of freedom.with 2 and 72 degrees of freedom.

Wilks'Wilks'LambdaLambda

FF df1df1 df2df2 Sig.Sig.

Profess.Profess. .659.659 18.59218.592 22 7272 .000.000

Pmpt.PmtPmpt.Pmt .924.924 2.9752.975 22 7272 .057.057

PremiumPremium .859.859 5.9195.919 22 7272 .004.004

CommComm .961.961 1.4741.474 22 7272 .236.236

R ecomdR ecomd .975.975 .925.925 22 7272 .401.401

F. SwitchF. Switch .957.957 1.6251.625 22 7272 .204.204

PricePrice .855.855 6.1236.123 22 7272 .004.004

C. R atesC. R ates .860.860 5.8605.860 22 7272 .004.004

H3:H3: Satisfaction with the people factor of the service isSatisfaction with the people factor of the service is

stronger discriminant of the three groups of customersstronger discriminant of the three groups of customers

than satisfaction with the other aspects of the servicethan satisfaction with the other aspects of the service..



GROUP MEANSGROUP MEANS

GroupGroup ProfessProfess Pmpt.Pmpt.PmtPmt

PremPrem CommComm R ecomdR ecomd F.SwhF.Swh Price.Price. C.C.R atesR ates

StayersStayers 4.08004.0800 4.04004.0400 4.24004.2400 3.48003.4800 4.20004.2000 4.12004.1200 3.52003.5200 4.32004.3200

SatisfiedSatisfiedSwitchersSwitchers

3.52003.5200 3.84003.8400 3.96003.9600 3.36003.3600 4.04004.0400 4.04004.0400 2.88002.8800 3.84003.8400

Dissatisfied Dissatisfied

SwitchersSwitchers

4.52004.5200 4.28004.2800 4.44004.4400 3.72003.7200 4.32004.3200 4.32004.3200 3.84003.8400 4.44004.4400

TotalTotal 4.04004.0400 4.05334.0533 4.21334.2133 3.52003.5200 4.18674.1867 4.16004.1600 3.41333.4133 4.20004.2000

H4:H4: Dissatisfied Switchers are more loyal to theirDissatisfied Switchers are more loyal to theirexisting/current life insurance company in comparison toexisting/current life insurance company in comparison toboth Satisfied Switchers and Stayers.both Satisfied Switchers and Stayers.

H5:H5: Satisfied Switchers are less loyal to their existing/currentSatisfied Switchers are less loyal to their existing/currentlife insurance company in comparison to Stayers.life insurance company in comparison to Stayers.



EigenvaluesEigenvalues

FunctionFunction EigenvalueEigenvalue % of% of Variance Variance

Cumulative %Cumulative % CanonicalCanonicalCorrelationCorrelation

11 .904a.904a 96.996.9 96.996.9 .689.689

22 .029a.029a 3.13.1 100.0100.0 .167.167

Wilks' Lambda

Test ofTest of

Function(s)Function(s)

WilksWilks

LambdaLambda

ChiChi--

squaresquare

dfdf Sig.Sig.

1 through 21 through 2 .511.511 46.03846.038 1616 .000.000

22 .972.972 1.9391.939 77 .963.963



Standardized Canonical Discriminant FunctionStandardized Canonical Discriminant FunctionCoefficientsCoefficients

FunctionFunction

11

FunctionFunction22

Professional EmployeesProfessional Employees .899.899 .064.064

Prompt PaymentsPrompt Payments --.343.343 .573.573

PremiumPremium .211.211 .226.226

CommissionCommission --.058.058 .287.287

R ecommendationR ecommendation --.169.169 --.268.268

Future intention to SwitchFuture intention to Switch --.131.131 .624.624

R aised PricesR aised Prices .437.437 --.321.321

Competitive R atesCompetitive R ates .507.507 --.748.748



Structure MatrixStructure Matrix

FunctionFunction

11

FunctionFunction

22

Professional EmployeesProfessional Employees .752*.752* .449.449

Raised PricesRaised Prices .434*.434* --.036.036

PremiumPremium .425*.425* .190.190

Competitive RatesCompetitive Rates .419*.419* --.375.375

RecommendationRecommendation .168*.168* .088.088Future intention toFuture intention toSwitchSwitch

.204.204 .509*.509*

CommissionCommission .199.199 .427*.427*

Prompt PaymentsPrompt Payments .295.295 .383*.383*



CONCLUSIONCONCLUSION

Dissatisfied Switchers are more satisfied than the other two groups.Dissatisfied Switchers are more satisfied than the other two groups.

Satisfied Switchers are significantly less satisfied than the Stayers.Satisfied Switchers are significantly less satisfied than the Stayers.

Hypotheses 1 and 2 are accepted very strongly as the differenceHypotheses 1 and 2 are accepted very strongly as the difference

between groups are significant at thebetween groups are significant at the pp = 0.05 level.= 0.05 level.

professionalism is the variable that strongly discriminating the threeprofessionalism is the variable that strongly discriminating the threegroups, and strongly supporting H3.groups, and strongly supporting H3.

Dissatisfied Switchers are exhibiting stronger commitment than StayersDissatisfied Switchers are exhibiting stronger commitment than Stayers

and Satisfied Switchers. strongly supporting H4and Satisfied Switchers. strongly supporting H4

Satisfied Switchers are less loyal to their current life insurance companySatisfied Switchers are less loyal to their current life insurance companyin comparison to Stayers strongly supporting H5..in comparison to Stayers strongly supporting H5..



RECOMMENDATIONSRECOMMENDATIONS

The insurance companies should treat these groupsThe insurance companies should treat these groupsdifferently with regard to potential investment strategy.differently with regard to potential investment strategy.

Prime focus should be on professional employees ratherPrime focus should be on professional employees ratherthan other aspects of satisfaction.than other aspects of satisfaction.

Insurance companies should invest in training andInsurance companies should invest in training anddevelopment of employees. Specifically in front linedevelopment of employees. Specifically in front lineemployees.employees.

Insurance companies should avoid over investment andInsurance companies should avoid over investment andheavy dependency on Dissatisfied Switchers.heavy dependency on Dissatisfied Switchers.



RECOMMENDATIONSRECOMMENDATIONS

The insurance companies should treat these groupsThe insurance companies should treat these groupsdifferently with regard to potential investment strategy.differently with regard to potential investment strategy.

Should more focus on professionalism rather than otherShould more focus on professionalism rather than otheraspects of satisfaction.aspects of satisfaction.

Should invest more in training and development of Should invest more in training and development of

employees. Specifically in front line employees.employees. Specifically in front line employees.

Insurance companies should avoid over investment andInsurance companies should avoid over investment andheavy dependency on Satisfied Switchers.heavy dependency on Satisfied Switchers.



Future Research DirectionsFuture Research Directions

These results are confined to the life insurance industryThese results are confined to the life insurance industryonly, and further research is needed to validate andonly, and further research is needed to validate andgeneralize these results to broader settings.generalize these results to broader settings.

However despite this caveat, the study findings could beHowever despite this caveat, the study findings could begeneralized to services that share some commongeneralized to services that share some commoncharacteristics with the life insurance industry like:characteristics with the life insurance industry like:Legal services, accounting, banking, leasingLegal services, accounting, banking, leasing

servicesservices share some of these traits with life insuranceshare some of these traits with life insuranceindustry.industry.

Similar research is required in above said industries toSimilar research is required in above said industries to

validate the results of Insurance

Industry.validate the results of

Insurance

Industry.

Falah Butt Stayers & Switchers

Documents

Transcript of Falah Butt Stayers & Switchers