Abstract
The primary objective of this study is to investigate the influence of selected independent variables, two-way communication and conflict handling on intentional customer loyalty via Customer Relationship Management (CRM) as the intervening variable within the South African long-term insurance environment. Primary data were gathered using a questionnaire, with items referring to Customer Relationship Management, customer loyalty, two-way communication and conflict handling. The sample consisted of 254 customers in four customer walk-in centres of a long-term insurance provider in South Africa. Data were factor-analysed. One independent variable, conflict handling, exerted a statistically significant positive influence on the intervening variable (CRM), whilst two-way communication exerted a statistically significant negative influence on the intervening variable. This variable (CRM) positively influenced the dependent variable (customer loyalty). If long-term insurance organisations communicate timeously and accurately, and are skilled in conflict handling, greater loyalty will be created amongst customers. The study revealed that the majority of customers (51.53%) strongly agree that two-way communication is an important dimension that underpins Customer Relationship Management and their relationship with a long-term insurance organisation. The empirical results indicate a negative relationship between the perceived two-way communication by a long-term insurance organisation and CRM at the insurance provider in South Africa. In terms of conflict handling, the study revealed that the majority of customers (45.69%) strongly agree that conflict handling is an important dimension that underpins Customer Relationship Management and their relationship with a long-term insurance organisation. The empirical results indicate a positive relationship between perceived conflict handling by a long-term insurance provider and CRM at the organisation in South Africa. Finally, the empirical results indicate a positive relationship between Customer Relationship Management and intentional customer loyalty at a long-term insurance provider in South Africa.
Highlights
Over the past 20 years, the importance of the service industries to the world economy has grown tremendously
The primary objective of this article is to investigate the influence of the independent variables, two-way communication and conflict handling on intentional customer loyalty via Customer Relationship Management (CRM) as the intervening variable at a long-term insurance organisation in South Africa
The questionnaire consisted of 7-point Likert-type scale statements measuring twoway communication, conflict handling, CRM and customer loyalty
Summary
Over the past 20 years, the importance of the service industries to the world economy has grown tremendously. In the South African economy the contribution of the service sector to the country’s Gross Domestic Product (GDP) has increased from 45.6% (1980) to 65.9% (2000), to a very high percentage of 75.6% in 2010 (Datamonitor 2011a; Rootman 2011:1). In South Africa, the service sector is expected to continue its growth at an accelerated rate in the future (Rootman 2011:1). The South African insurance market generated total gross written premiums of $24.2 billion in 2007, which increased to $26.9 billion in 2010. This growth represents a compound annual growth rate (CAGR) of 8.99% for the period spanning 2007–2010. The performance of the market is forecast to accelerate, with an anticipated CAGR of 9.7% for the fiveyear period from 2007–2012, which is expected to drive the market to a value of approximately $30 billion by the end of 2012 (Datamonitor 2011b)
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