Academic journal article Asian Social Science

Exploring the Difference between Stayers and Switchers as Corporate Customers for Life Insurance Companies in Sindh

Academic journal article Asian Social Science

Exploring the Difference between Stayers and Switchers as Corporate Customers for Life Insurance Companies in Sindh

Article excerpt

Abstract

Purpose - Competitiveness plays crucial role retaining the old customers. This lays importance on understanding the factors that influence and drive customers' retention. Basing on the above, the Purpose of this paper to investigate and examine whether the Stayers, Satisfied Switchers, and Dissatisfied Switchers of corporate customers differ in their overall satisfaction with the service provided by their existing/current life insurance company.

Methodology - This study has used survey via questionnaires for data collection. 75 corporate customers on the basis of convenience sampling were examined by using ANOVA and Discriminant Analysis techniques.

Findings - The results show that Dissatisfied Switchers (who switched -in) are the most satisfied, and Satisfied Switchers are the least satisfied customers. Similar sort of results were found for customer's loyalty. These three groups were found to be strongly discriminated by the people factor (specifically the professional insurance employees).

Research limitations - The data is gathered from some big cities of Sindh through convenience sampling technique. There are many other cities where access of information is not possible due to cost and time management. Further research can be made on the same just by extending the sample size by considering more cities of Sindh.

Practical implications - As the findings of this study reveal that the Dissatisfied Switchers are of the primary concern for life insurance companies. Keeping in view the results the life insurance companies should treat these groups differently with regard to potential investment strategy.

Originality/value - This study has not been done before in Sindh. Although some studies are found in European countries but this has been done first time in Sindh and Pakistan.

Keywords: stayers & switchers, life insurance companies, Sindh

1. Introduction

Modern dynamic economies have created many new challenges and opportunities for the firms. The most important point is that the modern economies assuredly place the customer more firmly in the driver's seat for decisions on her/his product and service choices (customization and customerization). Each consumer either as an individual or as a group is unique and this uniqueness is reflected in the consumption pattern and process of purchase. The study of consumer behavior provides us with reasons why consumers differ from one another in consuming products and services. The satisfaction of buyers' needs is at the heart of a market economy, and is the core theme of marketing.

Customers view a product as a 'bundle of satisfaction' and not merely the physical object, and give importance to both the tangible and intangible attributes of a product. Intangibles provide psychological and social benefits for the buyer. If product attributes don't benefit a customer, they have no significance for them. Today's customers are becoming harder to please. They are smarter, more price conscious, more demanding, less forgiving, and they are approached by many more competitors with equal or better offers. Therefore the real challenge is to produce delighted and loyal customers. For that purpose should all the customers be targeted by retention and loyalty programs or not, and what is the guarantee that the delighted and loyal customer will not switch due to a reason that might be uncontrollable for both the firm and the customer itself.

It is interesting to note that no two customers are exactly alike; customer differs on many dimensions, such as intelligence, personality, interests, hobbies, opinions, and preferences. In a similar manner firms (corporate customers) are different in their nature and have different need for insurance policies. If the Life Insurance Companies are really interested in comprehending the customer insight for more appropriate customer acquisition and retention strategies, it is important to understand the difference between different groups of corporate customers on the basis of behavior (SBP, 2005). …

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