The First International Conference on Iran The First International Conference on Iran Insurance Industry, Challenges and Opportunities Insurance Industry, Challenges and Opportunities "Factors Affecting Customer "Factors Affecting Customer Perceived Value of B-t-B Perceived Value of B-t-B Insurance Services and Its Insurance Services and Its Outcomes" Outcomes" By: By: Azar Kaffashpor, PhD Azar Kaffashpor, PhD Behzad Hassannezhad Kashani, Behzad Hassannezhad Kashani, MBA MBA
Transcript
The First International Conference on Iran Insurance Industry, Challenges The First International Conference on Iran Insurance Industry, Challenges and Opportunitiesand Opportunities
"Factors Affecting Customer Perceived "Factors Affecting Customer Perceived Value of B-t-B Insurance Services and Its Value of B-t-B Insurance Services and Its
Outcomes"Outcomes"
By:By:Azar Kaffashpor, PhDAzar Kaffashpor, PhD
Behzad Hassannezhad Kashani, MBABehzad Hassannezhad Kashani, MBA
Problem statement
According to intangibility of services and customers’ attempts to perceive their economic value, the question is how they do this when the quality or merits of intrinsic attributes are hard to assess.
Research necessity
1 .Customer perceived value(CPV) has especially become the focus of marketing strategies in recent years because it is recognized as a source of competitive advantage but it has not been addressed to research in Iran.
2 .Clarifying various aspects of consumer behavior such as purchase intentions
Purpose of the study
1 .understanding drivers of customers’ perceptions of value
2 .assessing the consequences of value perceptions among industrial customers of insurance services in Iran
Research HypothesesH1. Corporate reputation has a positive effect on CPV.
H2. Information sharing has a positive effect on CPV.
H3. Distributive fairness has a positive effect on CPV.
H4. Flexibility has a positive effect on CPV.
H5. Customer involvement has a positive effect on CPV.
H6. CPV has a positive effect on word-of-mouth.
H7. CPV has a negative effect on search for alternatives.
Conceptual model
Definition of terms
Customer perceived valueCPV is a function of the total sum of benefits (B) received divided by the total sum of sacrifices (S) made by the customer to receive the benefits
Definition of terms
Corporate reputationperceptual representation of the firm's overall appeal when compared with other rivals. In this way, corporate reputation is a sort of market validated information
Information sharingthe extent to which the service firm informs its customers about features relevant for the
relationship
Definition of terms
Distributive fairnesscustomer's perception of whether the gains and
losses are fairly distributed within the relationship
Flexibilitysupplier's ability to adapt to situations where
the customer has needs and wants that deviates from the norm or existing standards
Definition of termsCustomer involvementThe extent to which the customer is engaged as
a participant in business operations. It can be defined also as the time and effort spent on receiving a product or service
behavioural intentionsa construct that occurs when consumers plan to
consume specific services again ( Positive word-of-mouth and negative search for alternatives
between customers it is argued that customers who find their supplier to deliver satisfactory levels of value will recommend their partner to others to a much larger extent than if the relationship is less valuable
Definition of terms
Search for alternatives customers who perceive lower value will search
for alternative suppliers more actively than customers who perceive higher value
Research methodology
Measurement toolLikert 7-point scale questionnairePopulationIndustrial customers of Iran insurance company
in Toos Industrial Estate, Mashhad, IranSampling methodCluster sampling
Research methodologySample size = 36 (Phase 1)Measures (Hansen et al., 2008)Self-constructedConstruct measurement modelconfirmatory factor analysis, with covariance
matrix as the input, was conducted using LISREL (first six hypotheses)
Simple regression analysis using SPSS (last hypothesis)
• Based on the acceptance of hypothesis one and the positive impact of corporate reputation on CPV, we recommend insurance providers to:
• Satisfy all stakeholders and thus prove their social responsibility.
• Standardize their activities and work actions.• Extend their formal and informal communications with
their customers.• Convince insurance buyers about their superiority
compared to the other insurance providers by more advertisements and presenting reasonable evidences.
Continued
• Produce more innovations in their insurance products and introduce these innovations to the current and potential customers.
• Create a physical image in customer’s mind by using tangible clues involving premises, brochures, catalogues, annual reports, advertising, promotional items such as mugs, shirts, diaries and etc, furnishings, uniforms, point-of-sale material.
Recommendations for insurance providers
• Since, the positive effect of distributive fairness on CPV was supported in the third assumption we suggest insurance providers to:
• Set premiums corresponding to the coverage offered, in a way that low and high premiums are charged for low and high probable claims.
• Elucidate this fact for customer that not only the company gains profit out of premiums but also the customer can profit from peace of mind provided against premium payment and he can focus more on his business activity. This can be possible by presenting statistical documents and evidences as well as TV shows, newspapers, advertising, annual reports or attracting the potential customers’ attention to losses happened for others.
Continued• Persuade customers regularly to evaluate
insurance purchase reasons and to assure them respectively that they would be supported in the event of any loss and emphasize that continuous communication with current insurance provider would be to their favour.
• Assure that the offered service equals or exceeds the customer’s expectations which can be feasible through applying feedback mechanisms.
Recommendations for insurance providers
• By acceptance of hypothesis four and positive effect of flexibility on CPV we propound to insurance providers to:
• Adapt themselves with reasonable customers’ needs and demands and set out to identify and satisfy the new changes in their needs by running continuous market research.
• Apply customized marketing techniques if possible.• Use bilateral communications for information sharing
which can be done by Critical Incidence Technique (ICT) and Customer Relationship Management (CRM).
Continued• Show commitments to their promises in service delivering. • Delegate authority to staffs contacting with customers. By
doing so, they will be able to act independently without any need to receive permission from their supervisors. This action increases their responsiveness speed.
• Make use of motivational systems such as rewarding for personnel excellence performance.
• Reduce complexity of service offering processes and make the insurance. purchase and claims settlement easier.
• Recede from bureaucratic structures and use more organic ones.
