The benefits of proactive CRM for the insurance sector “It is an aggregator of all things customer-related and should be the one-stop-shop for. In order to maintain customer relationship, life insurance companies should provide proper . Premium related services rendered by CRM. Life insurance . Visit for more related articles at Business and Economics Journal Customer relationship management; Customer retention; Value creation; Insurance However, the Nigeria's insurance industry has demonstrated the ability to survive in the.
It has recently become more significant compared to customer acquisition. According to research conducted by Maxham [ 45 ], customer retention had been measured by four dimensions, that is, overall firm satisfaction; positive words of mouth; repeat purchase intentions; and loyalty to the firm. In a recent study by Lin and Wu [ 46 ], it has been proved that there exists a statistically significant relationship between quality commitment, trust and satisfaction and customer retention and future use of product.
In an earlier study, it has been found that trust and commitment lead directly to cooperative behaviour that are conducive to relationship marketing success; and important in the establishment and maintenance of long term relationships with customers [ 22 ].
Customer retention is the strategic objective of striving to maintain long term relationships with customers. Customer retention is the mirror image of customer defection. A high retention rate is equivalent to a low defection rate. An effective Customer Retention CR strategy not only retains the customer but promotes the sales of additional products to that customer as needs arise. Four proactive elements as suggested by Navigant financial services are at the core of a successful program [ 47 ].
Some studies in the past had identified the benefits that customer retention delivers to an organization and thus, noted that the longer a customer stays with an organization, the more satisfaction than seeking new customers [ 4950 ]. In recent study, many factors had been noted to affect the loyalty of customers and the period that customers remain with the organization; amongst these factors are: Creating customer value creation has been a vital source of competitive advantage.
However, the process of value creation is a key component of CRM as it transforms firm and customer strategies into specific statements of what value is to render to customers, and consequently what value is to render to the supplier organization. The value creation process has three essential components [ 52 ], which are: To the customers, the concern is value proposition and assessment; while the concern is economics of customer acquisition and retention to the organization.
However, there are normally costs associated with the derivation of benefits such that a general model of value would identify the worth of the worth of the benefits received for the price paid [ 54 ]. Therefore, value is relative to customer expectations and experience of competitive offerings within a category and can be derived from sources other than products, such as the relationships between buyers and sellers [ 55 ].
With the study of Ryssel et al. While the creation of customer value is being based on three principles, which are: Methodology The research design employed in this study was a cross-sectional survey design. The use of survey design is justified because it has its advantages of predicting behavior [ 59 ]; and thus, identifying attributes of a large population from a small group of individuals, the economy of the design and the rapid approach in collection of data [ 6061 ].
The data were collected through the survey among insurance companies in Nigeria.
The major instrument employed in gathering data was a structured questionnaire. The use of structured questionnaire was because of its appropriateness to survey research [ 62 ]. The questionnaire consisted of two parts, part A and B. While part A consisted of personal data of respondents, part B contained statement related to constructs understudied.
The sample population, therefore, was drawn from Lagos, the commercial base of Nigeria, which houses the largest number of insurance companies in Nigeria. A total of 70 copies of the questionnaire were sent. The choice of the sampling units was informed by the peculiarity of the technical nature of insurance services in Nigeria.
To ensure the genuiness of responses, regular telephone calls and visits were options in order for clarification purposes and to facilitate prompt filling, handling and returning of the questionnaire. On the reliability and validity of the study, a pilot study was thus carried out to test the reliability of measures.
The Cronbach alpha on questionnaire administration is 0. On the validity of the study, both theoretical and content validity were explored. The theoretical validity was sought for by developing the measures of the constructs under study from well-grounded and extant literature from other previous studies.
These experts went through the items on the instrument and made necessary suggestions which enable the researchers to present the items within the linguistic understanding of the respondents.
Test of hypotheses The researchers formulated 2 hypotheses that serve to provide a clear direction for the conduct of this research and these were tested.
A hypothesis test is a statistical method that uses sample data to evaluate a hypothesis about a population parameter [ 64 ]. The hypotheses testing techniques used were simple regression for testing hypothesis 1 and kolmogorov-smirnov test for testing hypothesis 2. The simple regression establishes whether or not any relationships exist between the two variables Y and X [ 65 ]. The Kolmogorov- Smirnov test is appropriate because it is a non parametric tool used to test the goodness of fit of an ordinal data and calls for a comparison of an observed sample distribution with a theoretical distribution [ 66 ].
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The test focuses on the largest value of the deviation among observed and theoretical proportions. The kolmogorov-smirnov is given as: The procedure is as follows: Customer relationship management CRM does help create values for insuring public in Nigeria While the Ho represents the null hypothesis, the Hi represents the alternative hypothesis. The null hypothesis is set up to be the logical counterpart of the alternative hypothesis such that if the null hypothesis is false, the alternative hypothesis must be true [ 67 ].
Results and Discussion Personal details of respondents The demographic characteristics of the respondents covered are sex, age, highest educational qualification and length of time with the organization.
Meaning of customization of marketing is that, the firm or organization adapt and change its services or products based on presenting a different and unique product or services for each customer. With the purpose of ensuring that customer needs and requirements are met Customization is used by the organization. Companies can put investment in information from customers and then customize their products or services to maintain customer interests.
Multichannel integration shows the point of co creation of customer value in CRM. On the other hand, a company's skill to perform multichannel integration successfully, is heavily dependent on the organization's ability getting together customer information from all channels and incorporate it with other related information.
CRM will let companies to interact with customers more frequently, by personalized message and communication way which can be produced rapidly and matched on a timely basis, and finally they can better understand their customers and therefore look forward to their needs.
Firms can make and improve products and services through the information from tracking e. The firm heavily invests in screening potential cardholders. They implement CRM by marketing the right products to the right customers.
Customer-relationship management - Wikipedia
The firm implemented personal greetings, collaborative filtering, and more for the customer. Consumer behaviourBiology and consumer behaviourand Buying decision Customer or consumer profiles are the essence of the data that is collected alongside core data name, address, company and processed through customer analytics methods, essentially a type of profiling.
A customer is abstracted to information that sums up consumption habits so far and projects them into the future so that they can be grouped for marketing and advertising purposes. One research study analyzed relationships between consumers in China, Germany, Spain, and the United States, with over brands in 11 industries including airlines, cars and media. This information is valuable as it provides demographic, behavioral, and value-based customer segmentation. These types of relationships can be both positive and negative.
Some customers view themselves as friends of the brands, while others as enemies, and some are mixed with a love-hate relationship with the brand.
Some relationships are distant, intimate or anything in between. Companies can collect this information by using surveysinterviews, and more, with current customers. For example, Frito-Lay conducted many ethnographic interviews with customers to try and understand the relationships they wanted with the companies and the brands.
They found that most customers were adults who used the product to feel more playful. They may have enjoyed the company's bright orange color, messiness and shape. These days, companies store and receive huge amounts of data through emailsonline chat sessions, phone calls, and more.
All of these are signs of what types of relationships the customer wants with the firm, and therefore companies may consider investing more time and effort in building out their relational intelligence. Social media such as Facebook, Twitter, blogsetc.
Understanding the customer and capturing this data allows companies to convert customer's signals into information and knowledge that the firm can use to understand a potential customer's desired relations with a brand. This helps convert data into profits for the firm. Stronger bonds contribute to building market share.
By managing different portfolios for different segments of the customer base, the firm can achieve strategic goals. For example, Harley Davidson sent its employees on the road with customers, who were motorcycle enthusiasts, to help solidify relationships. Other employees have also been trained in social psychology and the social sciences to help bolster strong customer relationships.
Customer service representatives must be educated to value customer relationships, and trained to understand existing customer profiles.