Duru, C.E. 2006, The Impact of Leadership Roles in Relation to Customer Retention an Analysis of the Relationship Between Insurance Agency Customers and Insurance Agency Management,

THE IMPACT OF LEADERSHIP ROLES IN RELATION TO CUSTOMER RETENTION:

AN ANALYSIS OF THE RELATIONSHIP BETWEEN

INSURANCE AGENCY CUSTOMERS AND INSURANCE AGENCY MANAGEMENT

by

Chika Ebenezer Duru

A Dissertation Presented in Partial Fulfillment

Of the Requirements for the Degree

Doctor of Philosophy

Capella University

August 2006

UMI Number: 3226799

32267992006

Copyright 2006 byDuru, Chika Ebenezer

UMI MicroformCopyright

All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code.

ProQuest Information and Learning Company 300 North Zeeb Road

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by ProQuest Information and Learning Company.

© Chika Ebenezer Duru, 2006

Abstract

This research study offers an understanding of the relationships that exist in insurance

agency settings such as the Ebbs Insurance Brokerage Corporation. The study objective includes

analyzing the key factors that influence the levels of customer satisfaction and examining the

levels of relationships between agency customers and the Ebbs Insurance organization. The

study reveals the agency management’s performance and how this influences customer

satisfaction, the goal of which is to ensure a high level of customer retention. The researcher

conducted a qualitative survey that focused on agency customers and which included insurance

industry professionals in order to better address management concerns which to a great extent are

focused on customer retention. Drawing from a survey data of 108 survey respondents (48%

males and 52% females), and using descriptive statistical analysis, the research findings revealed

that a total of 49% of Ebbs Insurance Agency customers are satisfied whereas 51% of these

customers expressed they are dissatisfied with Ebbs Agency products and services. The research

findings therefore confirmed that there is inadequacy of products and services offered by the

Ebbs Insurance Agency which impacts on the degree of customer retention.

iii

Dedication

This dissertation is dedicated to my late parents Mr. Eugene Ohajunwa Duru and Mrs.

Selina Duru. While they took early exits to eternity and are not here on earth to see the real

impact they have had on my life, we have constantly communicated spiritually. They have had a

deep influence in the choices I have made, the education I have chosen, and the person I strive to

be. I deeply respect and admire their pursuit of truth and knowledge and their relationships with

friends, colleagues and loved ones. My late parents were my best friends and my teachers, a

cornerstone in my decision to pursue my dream. The ways in which they have blessed us and

others with their love will never be forgotten. Never.

iv

Acknowledgments

First, I want to thank God Almighty for His infinite mercy and blessings. To everyone

who contributed in their own unique way to make this research study possible, thanks a million.

It was your assistance, words of encouragement and support that were the guiding force

throughout this academic journey.

I would especially like to thank the Catholic nuns, particularly the Congregation of the

Daughters of Mary Mother of Mercy (DMMM) of which Rev. Sr. Joseph Therese Iwenofu

(Nnenne) was the foundation of my spiritual life and the beginning of my mission life.

Special thanks go to Rev. Mother Paul Offiah for her words of encouragement in every

step I take in my life. Rev. Mother Paul, as my spiritual mother, has celebrated each milestone I

have reached and is constantly reminding me that every little step was a success not to be

forgotten.

To my brother, Mr. Davidson I. Duru, for believing in me and making sure that success is

ours. I truly love you. To my late baby brother, Onubuogo Gabriel Duru, whose light got too

bright too early and he suddenly passed into eternity. You were there for me when I needed you.

Thank you so very much and may your soul continue to rest in the Lord.

To my only baby sister, Rev. Sr. Sonia Norah Duru, Thank you for all your endless

support.

My special appreciation goes to my loving wife Lady Ijeoma (IJ) Duru. I have missed

from so many family activities yet she stood strong through the most trying of times during this

v

academic journey. To my children Chukwuzimuzo (Zim) Chika Duru, Adanna Nneamaka Duru,

and Kaobinname (Koby) Onubuogo Duru. I love you all for all your encouragement and support

of my ongoing academic pursuits.

I would like to acknowledge the efforts and advice provided by my dissertation

committee. Special thanks to Dr. Raj K. Singh, my faculty chair and mentor, who made this

research study struggle a great success. It is a high honor for me to complete this study under his

professional guidance.

My special thanks to Dr. Jonathan Nwomonoh, my visiting professor and committee

member. Thank you for your great support, encouragement and recommendations during this

academic pursuit. Dr. Jonathan Nwomonoh provided insight into additional areas for study and

issues of concern throughout this doctoral research process.

I am also very grateful to Dr. James T. Poindexter for all his great support throughout this

research project. Dr. Poindexter provided tremendously valuable comments and insights into the

areas of study and scholarly writing.

A great deal of thanks goes to Dr. David E. Balch for his support during my doctoral

research study.

My appreciation goes also to Ms. Rosa Osuoha who provided support as peer learner

committee member of this research study. I am very grateful to all of you.

vi

Table of Contents

Acknowledgments iv

List of Tables x

List of Figures xi

CHAPTER 1: RESEARCH PROBLEM 1

Introduction 1

Background of the Study 2

Statement of the Problem 3

Purpose of the Research Study 5

Research Questions 5

Nature of the Study 7

Significance of the Study 7

Definition of Terms 8

Assumptions and Limitations 9

Organization of the Remaining Chapters 10

CHAPTER 2: LITERATURE REVIEW 12

Introduction 12

Rationale of the Research 12

Theoretical Framework 13

The Customer/Organization Relationship 15

vii

Customer Relationships and Retention 21

Rational Systems Views 22

Natural Systems Views 23

Open Systems Views 24

General Systems Views 25

Customer Loyalty and Expectations 26

Managing Employee Motivation and Loyalty 43

The Theory of Expectancy 47

Scientific Management Theory 48

Incentives Vs. Satisfaction 50

Synopsis of Literatures Reviewed 51

CHAPTER 3: METHODOLOGY 54

Introduction 54

Research Study Focus 57

Researcher’s Philosophy 57

Description of Methodology 57

Theoretical Framework 61

Research Hypotheses 63

Sample Design 65

Full Disclosure Statement 66

Instrument 67

viii

Survey Design Strategy 67

Validity and Reliability 67

Qualitative Data Analysis 68

Dependent Research Variables 68

Independent Research Variables 69

Data Collection Procedures 69

Pilot Testing 71

Data Analysis 72

Coding, Multiple Sources, and Corroboration 74

Limitations and Strategies for Minimizing Impacts 75

Expected Findings 76

Ethics and Institutional Review Board Policies 77

Timelines for Each Research Activity 77

Summary 78

CHAPTER 4: DATA COLLECTION AND ANALYSIS 79

Introduction 79

Description of the Study Sample 79

Findings From the Descriptive Analysis 90

Overall Tests of Hypotheses 97

Interviews 104

Summary 105

ix

CHAPTER 5: RESULTS, CONCLUSIONS, AND RECOMMENDATIONS 106

Introduction 106

Summary of Results 107

Age Demographics 107

Gender Demographics 108

Education Demographics 108

Addressing the Research Questions 108

Conclusion 111

Recommendations 112

Suggestions for Future Research 112

REFERENCES 114

APPENDIX A: REQUEST FOR PARTICIPATION 122

APPENDIX B: CONSENT FORM 123

APPENDIX C: PARTICIPATION ACCEPTANCE 125

APPENDIX D: SURVEY INSTRUMENTS 126

APPENDIX E: INSTITUTIONAL REVIEW BOARD APPLICATION 130

x

List of Tables

Table 1. Analysis of Variance (ANOVA) by Level of Education 80

Table 2. Descriptive Statistics (DS) Age Range Distribution 93

Table 3. Correlation Significance: Correlations Between Customer Satisfaction and Management/Leadership Styles Within the Ebbs Insurance Agency (N = 108 respondents) 99

xi

List of Figures

Figure 1. The relationship cycle in the Ebbs insurance organization model of relationship. An adopted view from Cunningham (1997) and Motowildo (1982). 62

Figure 2. Robson’s Data Collection Process Model. A model of the survey data collection process. Adopted from Robson (2002, p. 242). 71

Figure 3. Age range distribution. 81

Figure 4. Insurance policy purchase distribution. 82

Figure 5. Driving record distribution. 83

Figure 6. Organization’s first contract distribution. 84

Figure 7. Atmospheric condition distribution. 85

Figure 8. Agents’ rating distribution. 86

Figure 9. Reasons why unsatisfied. 88

Figure 10. Expected service standard distribution. 89

Figure 11. Frequency distribution of gender. 91

Figure 12. Age demographics. 92

Figure 13. Pie-chart of age ranges. 93

Figure 14. Customer rating on agents. 101

Figure 15. Customer satisfaction level distribution. 103

CHAPTER 1: RESEARCH PROBLEM

Introduction

Over the past 2 decades, Ebbs Insurance Agency organization has been losing customers

for one reason or another. The average person would wonder if the customers were satisfied or

dissatisfied or whether the decrease in the number of customers was a result of economic reasons

such as unemployment or a lack of financial means. In an effort to get to the bottom of the

problem, insurance agents have begun to focus on customer retention issues in the insurance

industry. In effect, this research study was intended to determine the level of relationships

between customers and the entire Ebbs Insurance management team. This study was also

expected to determine the influence of those in leadership roles within the Ebbs Insurance

organization.

Relationship is literally defined as the state or quality of being related or connected

(Kerfoot, 2001). For the purposes of this study, relationship is the definition given to the kind

and quality of associations between people and organizations. This research study focused on the

levels of relationships and their components utilizing a research study approach. The

organization’s management research study hierarchy outlined the management dilemma, creating

areas of focus that in turn required management inquiry as well as a series of research questions

in the areas of concern.

Customer Retention 2

Background of the Study

All business plans, strategies, marketing and similar efforts focus 100% on acquisitions

and a high level of customer retention in order to ensure a high level of productivity as well as to

maximize profit. It does not take a business guru to understand that customers are the reason

most, if not all, business ventures exist (Johnson, Ragins, & Greco, 2003). The majority of

insurance agency employees are concerned with the stability level of their relationship with

customers. In a general business operation marketing business products, the operators have in

mind the continuous acquisition of new customers. At the same time they are strategizing and

implementing new measures by which to maintain the new as well as the old customers in order

to maximize profit. Johnson et al. (2003) found that to ensure continuous customer retention,

especially in product marketing, a rigorous implementation of strategy is required to keep

customers satisfied on a continual basis. This was extremely crucial to almost all insurance

agents and it remained one of their chief concerns that needed to be addressed in this study to

ensure a high percentage of customer retention in their business; thus a high level of customer

retention would amplify the strength of the agents in profit maximization. This aspect of concern

no doubt also amplifies the role leadership plays. De Pree (2004) theorized that the operational

facet of a business establishes the strength of the relationship between customers and

organizations that parallels the insurance agent and broker business operation detailed in this

study. Customer retention is what every business owner wishes for; however, achieving it can be

difficult depending on the level of the relationship between the customer and the organization

they patronize. For example, the Advisory Board (2000) has stated that the intensity of work

done in organizational settings in an attempt to make customers happy is a retention factor by


itself, especially in the healthcare industry. There are some successful leaders who realize that

the greatest opportunity is building jobs for professional nurses which will eventually create

retention and cost efficiencies (Advisory Board, 2000, p. 105). Without the proper human effort,

the best strategic and tactical plans are doomed to failure. With this business attitude in mind,

customer retention is nonetheless one of the greatest concerns of business owners today. The

acquisition and retention of customers is one of the most important facets of a leader’s quality

and responsibility (Cappelli, 2000, p. 100).

Cappelli (2000, p. 104-05) further suggests the importance of customizing jobs for

satisfied customers because one size job does not fit all. There is no joy as great as when one

finds happiness in doing what one enjoys. When people work together the projects on which they

work as teams create the bonding that glues individuals together, especially in the workplace.

This is very common in the healthcare industry. When employees are happily bonded with

fellow employees they work together as a team; this improves the level of loyalty that

management (in the form of employees) has in relation to customers; this in turn increases

customer retention levels (Cappelli, 2000).

Statement of the Problem

If not all, then the majority of businesses, whether large or small organizations, have the

same goal. This goal centers on acquiring new customers and at the same time strategizing how

to best serve both old and new customers in order to increase customer levels of satisfaction.

A series of previous studies have considered the constant analysis and evaluation of the

relationship between insurance consumers and insurance agency managing employees; however,


the levels of relationships undoubtedly have relative impacts on the levels of satisfactions. It can

easily be analyzed in both ways that customers can be at a satisfaction level but managing

employees, as the servicing agents, can be on a dissatisfaction level at the same time. The

satisfaction levels also can be turned around the other way. At this point it may be rather difficult

to ensure a high level of customer retention.

The many factors which can be analyzed in assessing the influence on customer

satisfaction include: customers’ tenure of relationship; managing employees’ (agents) job

performance; education level; employees’ performance rating; skill level; job training; job

responsibility; and on-the-job mental and physical efforts.

Despite the overwhelming number of studies on organizational relationships, the

literature review reveals that few researchers have investigated agency managing employees’

preferences for criteria used in wage compensations in the analysis of relationships that exist in

every organization (Lawler, 2000). To support this theory, Dean (2004) and Van Dam (2005)

have explored the similarities and differences when employees have reached the satisfaction

level as well as comparing their attitudes toward customers, insurance companies and industry

leaders.

The literature review revealed that Lawler (2000) theorized that managing employees’

satisfaction can be partially based on their performance, especially when benefits, salary or

compensation are related to performance. A significant feature of this study is that it will explore

Aminu Mamman’s conclusions which have been drawn outside of the United States; however, it

will more specifically be focused on the U. S. and, to some extent, Europe (Dean, 2004; Van

Dam, 2005).


Purpose of the Research Study

The objective of this research study was to analyze the key factors that influence levels of

customer satisfaction in every business operation. It is imperative that the levels of relationships

between Ebbs Insurance customers and the Ebbs Insurance management team were examined

thoroughly in order to determine how agency managing employees are handling their business

operations. This research study further analyzed how agency operators treat their customers;

indeed the determination of what styles of management and leadership are in play is one of the

key concerns of the researcher. As a general question, this study asks if the agency managing

employees value customers as their main source of livelihood? For a proper evaluation of their

existing relationships, this question was addressed in all its facets.

Research Questions

Defining the research questions was one of the most crucial aspects of the research

process. Robson (2002) has indicated that good research questions are those that are clear,

specific, answerable, interconnected and substantively relevant. The research process for this

study was more efficient and of more value due to research questions which meet the criteria set

forth by Cooper & Schindler (2003).

The analysis of the research issue encompassed in this study reveals that insurance

consumer expectations may be directly attributed from long-term relationships with the Ebbs

Insurance Agency; this is the primary reason for management’s concern regarding the most

effective means of achieving continuous customer retention. Laurie (2000) believes that to lead

any organization to success would require holding everyone responsible and that leaders must


encourage people to give the work back to the people who need to participate in organizational

change to ensure stability and success. Cavouras (2000) also recommends that an entire

organization develop a resume of all units that concisely puts in one place the advantages of

individual units. This gives the ability to keep track of every customer’s strengths and areas of

opportunity for possible retention and growth within the organization. Laurie (2000) further

asserts that customer retention is everybody’s business even though leaders have to play positive

roles to ensure maximum success for the organizations’ goal. In plain language, the question

comes down to what can a company offer a customer after many years of a business relationship

with a ”claims free” status? This was the main customer expectation which can be reasonably

factored into customer levels of satisfaction as well as for determining customer retention rates.

Management concerns have further prompted an additional series of research questions such as

the following:

1. What are the Ebbs Insurance Agency customer expectations after 10 years of the customer/company relationship?

2. Are the agency customers’ levels of satisfaction attributed from the management and leadership styles in the Ebbs Insurance Agency under study?

3. Are the agency managing employees’ levels of satisfaction an attribute to customers’ levels of satisfaction?

4. Are highly motivated agency managing employees necessary in the effort to achieve successful customer retention?

5. Are Ebbs Insurance customers’ levels of satisfaction a factor in determining the degree of customer retention?

These questions formed the basis for the data that was to be collected and analyzed. The

focus of this research was centered on these research questions. Any shred of evidence derived


from these factors assisted the researcher in analyzing the influence of weak or strong

relationships in achieving customer retention.

Nature of the Study

This research study was conducted using a qualitative methodology approach including

surveying randomly selected Ebbs Insurance customers and selected insurance industry leaders.

This chosen research study method met the requirements set forth in the description of the

research concerns by revealing the nature of certain situations, settings, processes, relationships,

systems and/or people (Leedy & Ormrod, 2001). The qualitative research method had the

interpretative ability to enable the researcher to gain insights into the nature of a particular

phenomenon in order to develop new concepts or theoretical perspectives about the phenomenon

as well as providing the ability to discover any problems that might exist within the

phenomenon.

The qualitative research method also had the advantage of verification which allowed the

researcher to test the validity of certain assumptions, claims, theories, or generalizations within

real-world contexts. This method included the process of evaluation which provides a means

through which a researcher may judge the effectiveness of particular policies, practices, or

innovations (p.148-149).

Significance of the Study

This research study significantly contributes to the research and investigation related to

how the strength of relationships ensure a high level of customer retention in every organization


and the characteristics that influence the successful formation and maintenance of relationships

in every business organization. Additionally, this study may be used as an extended reference

guide for all insurance agency management teams as well as agency employees to learn more

approaches that will assist in mitigating their level of business issues and concerns.

The successful completion of this research study included the informative value its

findings will have for all potential business owners and operators, in particular with regard to

offering appropriate tools for success that others have used to create and sustain successful

relationships in all types of business organizations.

Definition of Terms

The following terms were defined generally and for the purpose of this study:

Agency managing employees. Agency managing employees, as used in this study,

operate solely as insurance underwriters. They are the direct employee underwriters of the Ebbs

Insurance Agency who are authorized to make decisions on behalf of the agency.

Agents. As used in this study, agents represent Ebbs Insurance employees. They are the

direct employees of the Ebbs Agency who are also empowered to supervise customer retention

processes.

Compensation. This term as used in this study is all-inclusive, embodying both the

intrinsic and extrinsic rewards of employment; although not true in all cases, compensation can

be based on performance. Compensation includes salary, bonuses, and fringe benefits.

Customer retention. This is the term used when customers are retained in the book of

business. It is the goal of every business to maintain customers in their book of business for a


very long period of time. For example, in the insurance industry customers are expected to

remain as insurance customers and to continuously renew their insurance policies.

Education level. The term education level as used in this study includes the level of job

training and certifications, the knowledge acquired on the job, the number of full years of college

as well as degrees completed. For the purpose of this study, the degree range includes the

Associates, Bachelors, Masters, and Doctorate levels.

Job responsibilities. As used in this study, this term refers to the level of importance of an

employee’s (agent’s) position which often correlates with the degree of risk involved with

decisions at that level.

Performance. This term as used in this study refers to employee output. Performance

measurement in service-oriented industries such as the insurance industry is usually based on

output appraisals. The output product in service industries is both intangible and invisible.

Skills. This is defined as the specialized abilities an employee has that differentiate him or

her from other employees.

Tenure of relationship. This is the length of the customer and agency employee

relationship. This term is used to represent the time frame in which agency employees have been

servicing customers; the length of time of service is usually expressed in years for the purpose of

this study.

Assumptions and Limitations

This research study assumes that the sample of customers is a true sample which is

representative of the Ebbs organization. These individuals have expressed either satisfaction


and/or dissatisfaction in regard to their relationship with the Ebbs Agency. This survey assumes

limitation to the selected sample of Ebbs Agency customers and a few industry leaders who are

truly representative of the insurance industry population as regards their concerns over customer

retention. The researcher assumes also that the survey instrument used in chapter 3 presents an

accurate response from survey participants who will answer the questionnaire truthfully with no

fear of reprisal. This was due to each participant being assured that all answers would be kept

confidential and their email addresses promptly scrubbed from all research records.

Organization of the Remaining Chapters

For the general purpose of this research study, which is to determine the level of

relationships between Ebbs Agency customers and the agency management team, the remaining

portions of the study are presented in four additional chapters as exemplified by the following:

Chapter 2 focuses on the relevant literature regarding the analysis of relationships that

exist in typical organizations as well as the mitigating factors that the researcher identifies as

contributors to positive relationships geared toward a high level of customer retention as a result

of satisfactory or excellent relationships.

Chapter 2 begins with an introduction followed by the literature which discusses the

nature of relationships within organizations, particularly in insurance organizations. This chapter

discusses how the levels of relationships between Ebbs customers and the Ebbs management

team affect the retention level of customers, a matter of great concern to Ebbs Agency

management.


Chapter 3 discusses the research methodology that has been used to investigate the levels

and the degree of relationships that exist in the Ebbs organization. This chapter further discusses

the researcher’s study philosophy, the research design strategy, sampling, data collection and

analysis procedures, limitations of the study, the expected findings, ethical issues and the

research timelines.

Chapter 4 presents and analyzes the data collected using the methodology described in

chapter 3. This chapter analysis includes findings, the demographics of the sample, and

interpretations of the findings.

Chapter 5 concludes this research study. This chapter includes the summary and

conclusions and is comprised of a summation of the findings, conclusions, and recommendations

for future research.

CHAPTER 2: LITERATURE REVIEW

Introduction

The literature review provides a comprehensive framework for understanding the critical

nature of strong relationships in all business operations, one that will translate to a high degree of

customer retention. The most common crisis in the business world today is the hue and cry for

customer retention. “Where are the customers?” or “Where have all the customers gone?” are

commonly asked questions in all business marketing ventures. Indeed, customer retention is the

goal of every business or organization but one that often proves difficult. Because of the energy

expended in acquiring customers, great effort must be made in exploring and vesting every

means available to achieve customer retention (Cappelli, 2000, p.103-107). With this business

attitude in mind, customer retention becomes the greatest concern of business owners in today’s

business world.

In this study project, the literature review was designed to provide an understanding of

the existing relationships in organizations, especially in the insurance industry. It also revealed

how the existing relationships determine the degree of customer retention in this industry. The

literature review thoroughly examined many facets of the relationships that exist in

organizations; each of these facets could have an effect on the level of customer satisfaction.

Rationale of the Research

Assessing how important customers are is the same as questioning how basic monthly

bills are paid, especially in the United States. It is the customers whose decisions determine


whether or not one’s bills are paid from month to month. Any business that does not maintain a

high level of customer retention faces the danger of losing customers to competitors; such a

business will not remain in operation for very long before being forced to close down. What does

that say to businesses and their management teams? It unfailingly reminds business owners of

how important and valuable their customers are. Customers are the life, the core and the center of

every business operation. Most literatures reviewed espoused the simple notion that relationships

in organizations could be factored into the retention of customers (Cappelli, 2000). This research

study is therefore premised on the rationale that the customer relationship has the most direct

impact on the percentage of customers retained in every organization. The essence or rationale

behind this research study is to determine if there is a correlation between organizational

experiences in which customer relations with organizational representatives have had an impact

on customer behaviors with respect to continuing as the clients of a particular organization. The

researcher’s inquiry includes determining whether the managing employee level of satisfaction

influences the customer retention rate. The findings of this study will perhaps lead to some

evolutionary transformation as regards the relationships between customers and insurance

agency management personnel in the insurance industry.

Theoretical Framework

In the critical aspects, the theoretical perspectives in this study guide the premise in the

continuum. The researcher theorizes that the relationship factor in customer levels of satisfaction

is a key determining factor for the level of customer retention. Furthermore, the researcher


contends that the existing levels of relationships in organizations influence both customer

behaviors as well as the management and the subordinates (employees) behaviors.

Further investigation of the existing relationships in organizations is evidenced by the

literature review which reveals that today businesses, governmental agencies and organizations

are using the Delphi Technique methods to predict or forecast future events and relationships

between organizations and customers in order to make appropriate and reasonable plans or

change to current customer retention strategies based on the expected levels of customer

retention. De’Ath (2002) has explained that the Delphi Technique method is rooted in the

“Hegelian Principle” of achieving a goal through three steps including thesis, antithesis, and

synthesis.

To explain further, the thesis step allows the flow of information from everyone to

establish their opinion or views as well as the opposing (antithesis) views on a given subject.

In the final step, synthesis, the opposite views are allowed to come together to form a

new thesis as well as supporting it. It is in this manner that the views of all participants are

challenged in order to reach acceptance and alignment of their different views within the new

thesis. In a continuous evolution, a uniform and agreeable mindset will theoretically occur.

In an attempt to identify and amplify those indicators that will portray the specialized

nature of a service as exemplified in the insurance industry, this paper introduces those

identifiable elements of leadership styles that would appear to be called for within that

environment. This will enable researchers to precisely define the relationship between the

leadership in the insurance industry and insurance consumers. The application of the classic

Hegelian Principle to achieve organizational goals will reveal the exact leadership styles that are


seen as the best fit for the insurance industry. These factors are specified and thoroughly

explained in this research project.

The Customer/Organization Relationship

The majority of literature reviews have supported the notion that a good number of

business organizations as well as governmental agencies have adopted the highly popular Delphi

Technique methods as the most favorable approach or model when predicting or forecasting

future events and relationships between customers and organizations, especially when making

appropriate and reasonable plans or changes to current retention levels. Authors such as Dawson

and Brucker (2001, p.120-126) have continued to support the view that the Delphi Technique

method is intended to structure and expand information in order to achieve an informed

judgment and lucid decision making. The Delphi Technique method is widely adopted and

accepted as a preeminent tool for reaching judgments in problem solving and assisting in

drawing together a wide reserve of knowledge, experience and expertise in a systematic manner

(De’Ath, 2002).

In this study the researcher introduces in detail the identifiable elements of leadership

styles that are called for within particular environments to identify and amplify those indicators

that portray their specialized nature. The findings will then enable researchers to define precisely

the relationship between leadership in the insurance industry and insurance consumers. This is a

worthwhile effort to identify as well as amplify those indicators that will reveal their specialized

nature and enable researchers to precisely define the relationship between leadership in the

insurance industry and insurance consumers. The application of the well-respected Hegelian


Principle as the most favored measure in achieving organizational goals reveals the leadership

styles that are the best fit for the industry. These methods and processes are thoroughly specified

and explained within this paper.

Extensive literature reviews have indicated that leadership is a critical element in the

success of every organization. Indeed, leadership plays an important role in all business

operations depending on the nature of the environment in which insurance business operations

are performed (Corbin, 2000). As an important factor in organizational success, leadership has

been constantly portrayed within particular segments of academia as a “series of behaviors”

(Maxwell, 2002)

Further evaluation of the relationship between customers and insurance agencies is

crucial when analyzing relationships with a set of common terms and a greater understanding of

the theories being adopted. This understanding of the theories should allow them to remain true

when making a study of the non-management staff as a key element in creating a successful

organization.

Further research into relationships includes evaluation of the length of the business

relationship between customers and insurance agencies in order to better create a successful

insurance organization (Maxwell, 2002).

These theories are therefore formed and based on relevant citations in the literature of

organizational development that address the need for improving the values pertinent to the

relationship between insurance consumers and the insurance industry as a whole. The hypothesis

test in this study assists the research process when it is usable within crucial daily insurance

business operations; this test has been found very effective.


Hersey, Blanchard, and Johnson (2000) have the opinion that a focus on the ultimate

reader’s mind is important in creating an understanding of general business operations. The

research study has been pivotal in the mind of the researcher, and in this case is centered on

insurance business operations. The development of a case study for leadership training within the

insurance business environment requires that the reader understand its unique organizational

aspects and that it is relevant to the manner in which the insurance industry operates in today’s

business world.

Further, it is important to note that there are great changes in insurance business

operations today that are directly attributable to constant changes in legislation. Russell and

Taylor (2003) have supported the notion that the implementation of change as a whole has been

influenced by diverse leadership styles. The leadership style explored here is the type capable of

mirroring the required level of management that will assist in stabilizing a solid long-term

relationship between the customer and the organization (Cunningham, 1997; Hammer, 2001).

The assessment of the success or failure of the existing relationships between insurance

consumers and agencies is imperative and demands as a starting point the redefining of the

applicable mission/vision statements.

As viewed by Guiliani (2002), the term “mission statement” is defined as both a clear

understanding of what the organization is and a focused recognition of what it is meant to

accomplish. The definition of mission statement further lays the groundwork for establishing the

parameters of what success may look like. In other words, it facilitates the processes involved in

accomplishing the organizations’ goals. However, to be successful using mission statements

demands that organizational leaders make a personal commitment to excellence and to victory,


even though the ultimate victory can never be completely won (Lombardi, 2001). Once the

operational parameter of achieving goals is accomplished it becomes less of a burden and an

easier task for the leaders and staff members to operate at the same level and tone in order to

achieve organizational goals. One important issue to be kept in mind when setting the

operational parameters should be customer satisfaction. This factor requires a great deal of

consideration because customers are the main source of achieving success in organizations.

Leadership plays a significant role in all organizational quests to achieve goals.

The leaders who make things happen in every organization are often called the “retention

specialists” (Kerfoot, 2001). Although it is by no means an easy task to lead organizations to

success, it takes good leadership to accomplish goals. Good leadership entails listening to

subordinates more often, showing concern, and taking the time to find out what their needs are in

order to produce and maximize profit. Good leadership quality is the ability to truly listen and

really hear what subordinates say on a regular basis (Hersey et al., 2000). This is a result of the

belief that many ostensible leaders have that is in fact a fatal flaw. This flawed reasoning that

leaders often exhibit comes as a result of their not truly believing that subordinates on the front

lines can have profound ideas necessary for the future of the organization (Bertels, 2003).

Supporting this view is Wakelyn (2002) who believes that leaders should listen to subordinates

effectively and that this is the only means by which all leaders can prove they have what it takes

to lead organizations to success (Hersey et al., 2000).

The leadership role comes as the main facilitating factor in improving the level of

customer satisfaction as well as playing a major part in achieving the organization’s goals.

According to Hammer (2001), a project’s success or failure depends on leadership and its style.


In all aspects of organizational assessment, this element is the same whether it is in the security,

healthcare, legal, or insurance industry. Compobasso and Hosking (2004, p.221) assert that

getting started in every new project is a difficult task with new challenges. The moment that the

strategy and vision have been conceived, the next step is to assemble a team; this entails the

involvement of internal and external members as well as organizing an end-to-end process which

is addressed within this study project.

In an effort to maintain a high level of customer retention, insurance agents and industry

employees have the burden of keeping customers satisfied. Without constantly keeping

customers happy it is more than likely that they will start taking their business to an

organization’s competitors (Joby, 2003; Laurie, 2000). Loyalty in every aspect of life is a matter

of give and take. In this study of relationships between customers and organizations, it is the

utmost responsibility of the organization to retain customers by introducing strategic measures to

stabilize their relationship with them (Levine, Locke, Searls, & Weinberger, 2000). As the

burden lies on the organization, Applebaum (2004) also supports the view that one of the biggest

marketing challenges facing corporations today is determining how to convince customers that

they genuinely care about their needs in an effort to make them happy. Applebaum (2004);

Hamburg and Furst (2005); Claycomb, Lengpack-Hall, and Inks (2001); and Cohen (2003) have

related that customer satisfaction is the key goal in every organization, hence the majority of

organizations, for example Starbucks, may send out apologetic letters with coupons for free

coffee or drinks whenever corporate headquarters receives a letter about ineffectual service at

any of their chain’s many locations. These authors also relate that the insurance industry,

pharmaceutical firms, credit card companies, major airlines, wireless providers and cable


operators are well-known for their high level of loyalty to customers (Applebaum, 2004; Dean,

2004). A great number of corporations have attracted customers due to their high level of loyalty

to customers which leads to an increasingly high level of customer retention so long as these

corporations continue to show that they care for their customers’ needs (Applebaum, 2004).

Most financial institutions such as banks have been strategizing their marketing

approaches by offering substantial compensations to their long-term customers in an effort to

maintain a continuous retention of their relationship as well as ensuring the stability of their

banking business. Lane (2004, p.3) discusses how banks have rediscovered the virtue of knowing

their customers; this is in reference particularly to commercial banks, securities and commodity

exchanges, and international financing. Most banks, particularly commercial banks, are mostly

concerned with knowing customers’ wants and needs with an emphasis on the expectations of

customers. These concerns in business operations should be applicable to all business

organizations that expect continuous growth for their business. However, this remains a big

challenge in the service-oriented industries such as the insurance industry. In these industries

efforts to ensure a high level of customer retention for a very long period of time only become

easier when organizations have a unique strategy for knowing consumers; that means

establishing better methods of offering services in order to meet customer needs

(Ledingham, 2000).

Karake-Shalhoub (2002) relates that most of the largest banks have shown an interest in

rediscovering the values of the “personal touch,” i.e., they are looking into old-fashioned ways of

conducting business. Although today’s banks have established modern banking technologies

such as internet banking, telephone banking, and ATM machines for their customers’


convenience, many bankers have extended “retail banking” in order to be certain their

customers’ needs and expectations are being met (Lane, 2004).

Customer Relationships and Retention

Relationships are deeply involved in every step that organizations take toward achieving

their goals. Under the “Policies of Network Management” (PNM), team effort is used to build a

strong and diverse network of relationships that will be able to withstand all change/competitive

forces in the business world (Harvard Business Review, 2001). To successfully achieve goals,

organizations must create and maintain good relationships with both customers and the

organizations’ managing employees. This relationship reveals the customer level of satisfaction

which by extension determines customer retention rates.

By definition, success is acceptable in general terms as a favorable course; success is

often said to occur when the end results of anything attempted has reached a favorable

termination. Without exception, every business operation or organizational goal is geared to

success in all business ventures. Business organizations thus pay close attention to the level of

relationships that exist within the organization. Success comes as the end result of great

organizational relationships and is achievable depending on the zeal exhibited for the pursuit of

success (Bennis & Goldsmith, 2003; Maxwell, 2002). The proverb which says that “Beauty is in

the eye of the beholder” can be paraphrased in the business world to “Success is in the eyes of

the beholders and contingent upon the situation.” Success does not come from one brilliant idea

but rather from many small decisions. Success depends on the importance that the assessor

places on a particular aspect at a particular time (Maxwell, 2002).


Scott (2003) has crystallized the primary difficulty in assessing organizational success; he

finds that there is no such thing as a “good organization” in any absolute sense. Rather it is

always relative, and an organization that is good in one context or under one criterion may be

bad in another when assessing the strength of the relationships that exist therein. This paradox

surfaced after contingency theorists argued that certain types of structures were better suited to

certain jobs or situations. Achieving goals involves keeping the organization open to new

experiences and information as well as by having the ability to hear one’s own voice and clearly

see one’s own actions, all while following the models of good relationships (Bennis &

Goldsmith, 2003). The process of achieving goals calls for dynamic and talented persons to

actually lead by establishing positive relationships within the organization. As the concerns for

customer retention exist, it is the relationships in the organization that will improve the customer

levels of satisfaction; this will lead the organization to success which is the favorable end result

of effective leadership (DuBrin, 2000). Various authors have discussed the question of

organizational success only in terms of criteria that are important to specialized constituencies

and the impact this has had on organizations. However, when organizational competencies are

discussed from the rational, natural, and open systems perspectives, interesting insights with

different definitions emerge.

Rational Systems Views

The rationalists view institutionalized relationships in organizations as instruments for the

attainment of goals. The criteria emphasized by them for assessing organizational effectiveness

therefore focuses on the specific goals of the organization. The criteria chosen by those who hold


this perspective often center on the number and quality of outputs and the economies realized in

transforming inputs into outputs.

According to Hammer (2001), this perspective is often the dominant one when assessing

organizational effectiveness. He further contends that “The results of this exploratory study

appear to confirm that perceptions and evaluations of organizational successes are strongly

influenced by the goals and motives of the perceiver and/or stakeholders.” Even rationalists who

believe that they remain objective let themselves be caught in the trap of assessing success by the

goals they think an organizations should have (Cunningham, 1997).

Natural Systems Views

The natural systems model expands on the rational perspective by viewing organizations

as collectives that are capable of achieving specified goals but are also attentive to other

activities required to maintain themselves as a viable social unit. The naturalists insist on adding

good relationships in every organization as a set of support goals for the output goals emphasized

by the rational system model. Some authors hold a somewhat extreme view of the importance of

individualism in organizations. According to Russell and Taylor (2003) an effective organization

is one in which the greatest percentage of participants perceive themselves as free to use the

organization and its subsystems as instruments for their own benefit. This view is dependent on

the level of relationships that exists among the participants within the organization and may not

be applicable in every organization. Scott (2003) supported this view as a common situation,

especially in organizations that allow participants to become political.


Russell and Taylor (2003) took a more inclusive view of organizational competencies by

defining self-managing work team success as dependent on both high performance and employee

quality of life; these authors view their finding as a corollary to leadership styles and levels of

satisfaction. Tsui and Wu (2005) discuss the multiple constituency approach as a viable

alternative to the goal and systems approaches for studying and measuring organizational

effectiveness. This theory underlies many recent organizational effectiveness studies. Supporting

this view, Cameron (2001) related that it is necessary for the organization to prioritize its

multiple constituents with strategic choices for assuring itself both resources and survival. The

criterion for effectiveness then becomes conformation to the effectiveness criteria of the most

important stakeholders. Thus conformity to the leadership style of stakeholders is in line with

good relationships; this is therefore directly connected to the finding that employee and customer

satisfaction assures high customer retention.

Open Systems Views

Scott (2003) reported that the open systems perspective views organizations as being

highly interdependent with their environments and engaged in building a structure-system that is

responsive to the environment and effective at insuring organizational survival. The question

then becomes what is the dependent factor for customer satisfaction and the criteria for

effectiveness in this organization’s view. Scott (2003) further relates that information acquisition

and processing are viewed as especially critical since an organization's long-term survival is

dependent on its ability to continuously satisfy their customers; this results in customer retention

as well as their ability to detect and respond to subtle changes in its environment. Such an


internal change could be a change in customer or employee behavior due to their levels of

satisfaction. Open systems views maintain that there is a correlation between organizational

relationships, customer satisfaction, employee satisfaction and customer retention, all of which

are ingredients in reaching organizational goals.

Scott (2003) also relates that the contingency theory, as a product of the open systems

perspective of organizations, brings a strong focus on organizational effectiveness to

organizational theory. Adaptation to possible changes within the operating environment is all-

important for proponents of the open systems theory. They believe that organizations whose

internal features best fit the demands of their technologies or task environments are expected to

be most effective because they will be the organizations that garner the most resources from the

environment and survive the longest. The adequacy of such models is dependent on the quality

of the ideas concerning appropriate relationships between tasks and environmental demands.

These tasks are those gearing toward customer and employee satisfaction. The open systems

theorists admit that subjectivity determines the criteria for the customer retention-based

effectiveness of the organization.

General Systems Views

The differing perspectives of the rational, natural and open systems of organizational

effectiveness are without question enlightening; however, it is at the same time disappointing to

learn that many authors view them as mutually exclusive. This is the mindset that Scott (2003)

finds is responsible for the multiple approaches to the analysis of relationships between

customers and insurance agents. The agents are considered to be the organization’s team players


and their work provides the benchmarks of organizational success. Although several summaries

for differentiating among these concepts have been proposed, Scott (2003) suggests that the

rational, natural and open systems perspectives account for much of the variance in measures of

organizational effectiveness based on existing relationships. Fortunately, some authors see a

glimmer of hope for a universality of perspectives.

It is, nevertheless, important to consider that for some organizations survival, growth and

demise all occur within one perspective or another. Depending on the situation, some

organizations may fall almost totally within one perspective to the exclusion of the other. The

general systems view is that customer satisfaction, an attribute of customer loyalty as discussed

below, is a dependent factor for customer retention. Because both of these concepts are attributes

of improved organizational relationships, the general systems view of organizational

effectiveness will at times be more appropriate. However, the general systems view accepts that

there are multiple approaches to the evaluation of organizational success. Thus to say that

success either could be or is genuine, in a sense accepting both views at the same time, could be

considered a superficial approach.

Customer Loyalty and Expectations

The literary definition of customer loyalty is “the tie that binds customers to something

(goods and services) to which they are loyal or faithful in allegiance to a cause, ideas or customs,

which are inversely connected to the goods and services” (Tanner, 2004, p.65). Loyalty here is

an attribute of the customer/organizational long-term relationship. The customer level of loyalty

tends to be a measurable factor of the customer level of satisfaction. Tanner (2004) finds that the


continuous patronage of customers for goods and services, achieved by product marketing

promotions, amplifies to loyalty itself.

Riley, Wood, Clark, Wilkie, and Szivas (2000) have supported the notion that customer

satisfaction comes from the degree to which customer expectations of a product or service are

met or exceeded. For example, corporate and individual customers may have widely varying

reasons for continued patronage that translate to loyalty. However, because they are different

types of customers with differing reasons for purchasing a product or service, it is reasonable to

assert that any measurement of satisfaction will need to be able to measure such differences. It is

from the level of customer service, as the most important factor, that customers might expect to

encounter more efficiency, more help, more reliability, and more confidence in the

organization’s employees. When all these criteria are met then one can infer that customers’

expectations are met. Most of the internet-based business-to-business solutions providers for the

healthcare industry (such as Claimsnet) give an example of customer loyalty since beginning to

work in conjunction with New England-based MCO. Respected authors such as Kerfoot (2001)

and Blanchard and Waghorn (1997) in their research highlight the most successful tactics to

effectively win the hearts and minds of clinical investigators. These findings are painstakingly

drawn from benchmarking survey results and exclusive interviews with investigators as well as

pharmaceutical and contract research organization executives. Nevertheless, many executives are

moving toward processes that work to build long-term relationships and loyalty with clinical

investigators (Crosbie, 2004, p. 269). Customer loyalty as well as their expectations seem to be

bound together in what is often referred to as a give and take situation. It is a common tendency

that when customers feel loyal to a particular organization’s products and services they expect


some form of reciprocal loyalty in return. There are numerous hypothetical tests in this study that

will determine actual customer expectations by examining the level of relationships between

customers and insurance organizations; these include tests of customer loyalty levels.

Scott (2003) supports the fact that in the global business world, for example, products and

services mean more customers and more intense competition. Generally, any business that is not

strongly positioned will eventually yield to competitors; this axiom may be viewed as the degree

to which any business can produce goods and services that meet the test of the international

market demand while simultaneously maintaining or expanding the real incomes of its

employees (Russell & Taylor, 2003). Generally speaking, it is appropriate for insurance agents to

be more concerned with customers’ level of satisfaction because of the risk of losing customers

to their competitors. Customer retention involves the same processes in every level of business

venture whether domestic or international. Consumer expectations in lieu of their level of

satisfaction should be seriously factored in as the primary ingredient for customer retention.

White and Drucker (2001), Tsui and Wu (2005), and Roehling et al. (2001) have

discussed how a firm’s service employees develop the emotional connections with customers

that lead to exceptional service and the ability to exceed customer expectations. The authors

postulated that offering loyal service gives an organization the advantage not only to be able to

fulfill present customer needs but also the ability to anticipate their future needs. It is maintained

that this ability to anticipate gives the firm the opportunity to amaze and please customers on a

consistent basis; for the customers this anticipation reinforces the firm’s service loyalty and

creates a responsive and sustained patronage thereafter.


It is believed that the major challenges organizations are compelled to confront are increasing

competition, the perpetual increase in customer expectation, and customers’ subsequent demands

as service ameliorates (Cameron, 2001). Some scholars have asserted that customers are

becoming more critical of the quality of service they experience (Albrecht & Zemke,1985). The

increase in customer demands and competition are compelling firms to deviate from the

conventional customer satisfaction model and to embrace very effectual operations which will

help them take command in the marketplace.

The idea of quality and quality management is a more recent plan that is considered

exciting. According to Berry et al. (1988) service quality has become a great differentiator and

the most powerful competitive weapon that a service organization can possess.

Service business successes have been linked with the ability to transmit superior service

(Gale, 1990; Rudie & Winsley, 1984). Some scholars assert that delivering excellent service by

maintaining superior quality is a requirement for success (Parasuraman et al., 1988). Therefore

major service organizations today make a relentless effort to preserve a superior quality of

service in an effort to acquire customer loyalty (Zeithmal & Bitner, 1996). It is thus clear that a

service organization’s durable success in a market is primarily ascertained by its ability to both

expatiate and sustain a relatively large and loyal customer base.

It has been asserted by some researchers that an extraordinary service organization may

in some instances be measured by its returning customer ratio, in other words the loyal customer

base. Evaluating the impact of service quality through customer retention will help companies

gauge the financial impact of service quality (Zeithaml & Bitner, 1996).


Service organizations strive to acquire customer loyalty while customers wish to

encourage an organization to commit to offering exceptionally good service both for the present

and a long period of future time. Ledingham (2000) supports this view and has postulated the

concept of earning loyalty by being loyal. Moreover, White and Drucker (2001) have initiated

the development of a conceptual model for “service loyalty” and to ascertain strategies that will

assist companies in retaining their customers. In this treatise it is affirmed that service loyalty

antecedes customary loyalty and it is thus mandatory that service organizations persuade their

customers that they are committed to a superior quality of service presently and in the future. It is

apparent that the model for future success will be established by an organization’s ability to

advance loyalty, fill their customers’ present needs, predict anticipated customer needs and

ameliorate a continuous relationship. The researcher asserts that “loyalty” should be considered a

verb rather than a noun; “customer loyalty” is time specific and therefore not permanent. The

researcher further maintains that organizations must perpetually endeavor to expand customer

loyalty or risk losing it to one of their competitors.

The primary working method of the service provider is similar to that of the tactile goods

producer, i.e., to develop and render products that fulfill customer needs and thus secure

financial survival. In order to attain this goal service providers are compelled to comprehend

how customers critique the quality of their service offerings, how they select one organization in

preference to another, and on what foundation they determine to remain as customers.

Service quality is one of the most significant themes of research among service providers

(Berry, 2004). In its early years, service quality research founded its foresight on consumer

behavior and the confirmation/disconfirmation paradigm (Narayandas, 2005).


Narayandas (2005), referring to this model, states that as customers consume a product

they compare the quality they have experienced to that of prior expectations which is conducive

to an emotional reaction manifested in the satisfaction/dissatisfaction with the products or

services purchased.

In lieu of using quality concepts from manufacturing, service provider marketing

researchers base their work on developing a service quality concept on models from consumer

behavior (Brown et al., 1992). Following extensive research on the so-called perceived service

quality model, it has been recognized that customers evaluate service quality by comparing what

they perceive to be the actual performance of service providers with what they believe to be the

“expected” service performance in their service-purchasing experience (Narayandas, 2005).

According to Lewis and Booms (1983), service quality is a measure of the degree to

which delivered service matches customer expectations. Delivering quality service means

conforming to customer expectations on a consistent basis. Several researchers have proposed

the notion that service quality can be measured (Parasuraman, 1995) using the SERVIEQUAL

instrument and managed using expectations—the performance gap model (Zeithaml & Bitner,

1996). Despite criticism of the general applicability of the perceived service quality model (the

SERVIEQUAL instrument) by Cronin and Taylor (1994), this instrument is a concise multiple-

item scale with good reliability; it has been widely accepted as a valid instrument in the

measurement of service quality.

Success in providing superior quality service has been perceived as one of the most

effective means of establishing that a company is offering a service of superior quality to a

myriad of similar competitive offerings (Reichheld, 2001). Furthermore, success represents a


weapon many leading organizations possess (Berry, 2004). Numerous scholars have done studies

pertaining to these issues that have confirmed the systemized expedience of superior quality in

contributing to profit and market share (Reichheld, 2001; Joby, 2003).

The customer’s concept of quality of service is contingent upon the degree of congruence

between expectations and experience. In some instances where the congruence is obvious, the

customer is considered to be satisfied; in other cases, however, this is not sufficient to produce a

competitive advantage. There is an increasing need to offer superior service (Parasuraman,

1995), exceed customer expectations, and delight customers as opposed to just fulfilling their

needs (Berry, 2004).

Customers will remain loyal to a service organization if the value of what they receive is

perceived to be at least somewhat greater than that anticipated from the competitors (Zeithaml &

Bitner, 1996).

While service quality has proven to be a necessary ingredient in convincing customers to

choose one service organization over another, several organizations are cognizant of the fact that

maintaining excellence on a consistent basis is essential if they are to acquire customer loyalty.

This long-term perspective has created a strong shift in orienting service strategy toward a

service promise (Albrecht & Zemke, 1985; Hart, 1990). Moreover, if one takes into account the

high value of a lifetime customer in the present competitive setting (Zeithaml & Bitner, 1996),

then developing long-term customer relationships is paramount (Gronroos et al., 2000; Peters,

1988) to an organization’s survival.

Customers commonly desire personalized and close relationships with service providers

(Parasuraman et al., 1991); nevertheless, customers appreciate the benefits of maintaining the


relationship (Zeithaml & Bitner, 1996). It has become increasingly important for service

organizations to conceptualize the service concept beyond the short-term financial goal to the

long-term “relational value.” The relational value model has become more significant than ever

according to most researchers. These relations include those between customer and employee;

customer and service organization; employee and service organization; and service provider and

service intermediaries.

It is surprising to learn that some scholars assert that customer satisfaction is no longer

the conventional standard for success; they contend that it has been replaced by customer

exuberance (Brown et al., 1992). It has been suggested that in today’s highly competitive

business surroundings, customer expectations and technological innovation demand that service

leaders differentiate themselves from their rivals by truly enthralling the customer

(Kandampully, 1997). According to Timmers and Van Der Wiele (1990), satisfying the customer

is not enough; there is a compelling need to delight the customer if a competitive advantage is to

be achieved. In order to provide exceptional service that actually gratifies the customer it is

essential that organizations conduct service innovation. Service innovation is considered to be

the process involved with transforming an organization’s dormant assets (service elements

including technology, service processes, environment and people) into something of substantially

greater value to both the customer and the organization (White & Drucker, 2001).

contend that the customers’ concept of superior service is frequently linked with the

personal interactions of the employees (Kandampully, 1993; Oliver, 2000). The significance of

the human element in the delivery of superior service has been well-documented in the services

management literature (Crosby & Stephens, 1987). Continuous service innovation plays a


significant role in the delivery of excellent service. In fact it has been revealed by some scholars

that technology attainment and subsequent changes in the service process have been conducive

to the amelioration of employee-customer interactions.

It has been indicated that quality was presented to numerous fields of industry as an

element created to have an impact on attaining the competitive edge (Ledingham, 2000). It can

therefore be assumed that quality was devised as a value-adding but peripheral component of a

service. Nevertheless, it is maintained by some scholars that quality services have now moved

from the peripheral area to the center. Thus service managers are required to recreate the services

they offer since the position of quality within the service package has changed (Oliver, 2000).

It is believed that in today’s service economy relationships are more significant than

physical products (Albrecht & Zemke, 1985) in both our business and personal lives. Business is

a relationship (McCormick, 1988) and within service industries this relationship is an interactive

process (Booms & Bitner, 1981).

Therefore investigators assert that services are in many instances created to help serve or

fulfill customers’ personal needs; in response customers will generally endeavor to establish and

maintain a relationship with the service provider (Parasuraman, 1995). Customer satisfaction and

the subsequent desire to develop a relationship emanates from an emotional connection to the

service provider (Stauss, 1996). In numerous services, emotion is an element of the service

delivery process (Kandampully, 1993) and plays a significant part in formulating a customer’s

cognizance of service quality. The emotional component of the service process is definitely that

which establishes the development of the significant relationship. This emotional bond leads the


customer to purchase repeatedly or exclusively from that service provider (Butz & Goodstein,

1996).

While it is important for a business to attain success, it is equally important to maintain a

positive relationship status. Business scholars have suggested that if this is an organization’s

goal, its principal interest should be not only to attract customers but to acquire their loyalty and

their fosterage. This is desirable not only for the present but for a long period of time and

indicates that loyalty is the final result of a continuous durable relationship. These relationships

are based on an organization’s ability to maintain and extend relationships with customers

(Gummesson, 2002). Both Narayandas (2005) and Kandampully (1993) support this view and

contend that the buyer-seller interaction is similar to marriage; however, they find that the

quality and duration of the relationship depends predominantly on the efficacy with which the

organization manages the relationship.

Customer-supplier relationships are central to exceeding customer expectations

(Gustafsson et al., 2005). Thus, according to investigators, it is a progressive and responsive

relationship with the customer that manifests itself in “service loyalty” and

eventually gives an organization service superiority.

Research has shown that the majority of business organizations may be considered as

relationships between the firm and the customer; the ability to continue this durable relationship

is a definite indicator of the success of a company. Nevertheless, long lasting relationships in

most business matters between the service provider and the customer are not the norm. It is not

surprising that most of these relationships are ephemeral. Suspecting that they may lose a

percentage of customers, firms appeal to more customers than those with whom they normally


expect to form a relationship. Investigators indicate that by using this procedure firms formulate

a system, one leading to the subsequent result that approximately 50% of their customers are

successful in receiving services comparable to their expectations. Not unexpectedly, less

triumphal customers become dissatisfied and eventually leave.

Customers pursuing a business interplay on the implicit comprehension that they will

receive the service they need; they neither want nor anticipate receiving inadequate services or

experiencing dissatisfaction. The investigators assert that customers are instinctively loyal and

they therefore pursue a loyal relationship.

Thus when customers pursue service they in most instances are attempting to formulate a

relationship. Claycomb et al. (2001) asserts that customers have a greater need to maintain a

relationship with the service firm because of the unique features inherent in services; these

features include intangibility, inseparability of production and consumption, heterogeneity, and

perishability. Claycomb et al. further indicate that the customer’s desire for a long lasting

relationship is thus based on the implicit understanding that this will offer a guarantee of service

reliability and fulfill not only the customer’s present but also future needs.

is a truism that customers cannot experiment with services; they purchase a service prior

to experiencing it and must trust the firm to deliver the perceived service. Although service firms

appeal to their customers through their promise, the customer’s decision to make the purchase is

based on the trust that the firm will fulfill customer needs. Moreover, the human interaction

present during the service delivery process normally reinforces customer trust (Evans & Crosby,

1988) and effectively strengthens the relationship (McKenna, 2000). Johnson, Ragins and Greco


(2003) are of the view that customers are loyal to service providers who trust them. This research

finds that it is essentially a case of one half of a partnership reaching out to the other half.

It is assumed by some researchers that customers acknowledge and reward such

partnerships by manifesting allegiance: transient sampling evolves into long-term relationships.

They maintain that once customers receive confirmation that trust is warranted they desire and

seek to maintain that relationship loyalty.

Johnson, Regins, and Greco (2003) have identified two dimensions of relational quality

in the service interface. The authors have identified these as professional and social relations.

While professional relationships are based on competence, the social relationship is based on the

efficacy of the service provider’s social interaction with the customer.

Researchers such as Iwasaki and Havitz (2004) studied many aspects of relationship

quality and perceive it to be a buyer’s trust in a salesperson and satisfaction in the relationship.

Additionally, research performed by Bejou et al. (1996) asserts that the quality of the customer-

salesperson relationship is an important prerequisite to a successful long-term relationship.

In some instances consumers change service providers (which run the gamut from

hairdressers to physicians) because they do not fulfill their promises. Although most consumers

would like to formulate an emotional link with them, the desire for a change becomes apparent

when service providers do not fulfill their promise. According to Berry (2004), breaking the

service promise is the single most important way in which service companies fail their

customers.

Gummesson (2002) expresses the view that there has been a change in marketing focus;

transactional marketing emphasizes the individual sale whereas relationship marketing is


designed to affect an ongoing long-term relationship. However, Gronroos et al. (2000) argue that

developing and maintaining long-term relationships is of paramount importance to a firm’s

competitiveness. Gronroos et al. further propose that fulfillment of the service promise may

inspire a long-term relationship which will positively affect long-term customer loyalty and

retention, thereby reducing the likelihood of customer defection. Gummesson (2002) finds that,

in principle, relationship marketing encourages retention marketing first and attraction marketing

(designed to attract new customers) second. The author further relates that companies that focus

extensively on attracting new customers may fail to understand the changing needs and

expectations of their existing customers (Gummesson, 2002).

Kandampully (1998) maintains that from a customer’s perspective a strong relationship

with the supplier is largely defined by the service firm’s accessibility in the event of something

going wrong. He asserts that in professional services such as the medical and legal fields this

emotional bond is frequently more strongly held by the customer than by the service itself. In

various business situations this emotional bond is produced via personal interaction with the

service provider (in the form of its employee) and constitutes a primary and effective marketing

medium. In some instances a firm’s customers appear more loyal to the individual service

provider than to the firm itself and conversely, according to Parkington and Schneider (1979),

front-line employees are sometimes more loyal to their customers than to their management.

Parkington and Schneider’s findings confirm the fact that loyalty is induced and developed

between the service provider and the customer.

Hirschman (2004) asserts that the presence of loyalty makes departure less likely; he

finds that when exit is possible one of the principle elements determining a readiness to continue


the relationship is clearly the special attachment, including a customer’s “voice,” which is

responsible for continued loyalty to the firm. He adds that even with a given estimate of one’s

influence, the likelihood of voice increases with the degree of loyalty. A customer with an

intense link to an organization will frequently pursue ways to become more authoritative,

especially when the firm moves in the wrong direction. Investigators believe that this constitutes

the true purpose of the firm’s customer feedback system, market research and other

communication channels.

Some scholars contend that numerous firms have been unable to comprehend the general

development of the loyalty relationship. In their eagerness to ameliorate the efficiency of the

relationship they have overly emphasized measurement of the relationship in terms of customer

satisfaction and perceived quality. Stauss (1996) proposes a qualitative satisfaction model which

would result in five different qualitative satisfaction types comprised of differing patterns of

emotions, cognitions and intentions. He offers various examples and contends that a global

satisfaction score fails to constitute the only valid indicator for customer loyalty.

Research has clearly established that the most successful service companies emphasize

the personal attention of employees as the preeminent factor for service delivery (Berry, 2004). It

is maintained that a firm’s relationship with its customers is initiated and formulated by the

service personnel who associate with the customer on a continuous basis. It is assumed that the

service personnel’s dedication to consistent and excellent service permits the firm to formulate a

durable and loyal relationship with the customer in which personal interaction takes center stage.

Gummesson (2002) is of the opinion that contributions to relationship quality are created by

means of direct contact with the customer; in most cases this occurs with service personnel. Thus


direct contact with the customer, on a personal level, empowers employees to develop the

emotional link through which they are able to comprehend and foresee the expressed needs of

the customer.

White and Drucker (2001) and Gummesson (1996) contend that while customer services

strive to satisfy the expressed needs of the customer, service loyalty on the other hand allows the

firm to comprehend and frequently predict customers’ expressed and unexpressed needs.

Ledingham (2000) believes that effective anticipation requires that service providers consistently

remain one step ahead of customer needs. This indicates that products and services should be

provisioned before the need has been detected by the customer; services cannot be deemed

superior if they become obvious only upon petition.

White and Drucker (2001) propose that a truly loyal relationship between a firm and its

customer is created by the organization’s ability to connect emotionally and forge a long-term

bond with the customer. They maintain that a customer’s loyalty and trust is gained by the

service personnel’s commitment to seamless, consistent and superior service which manifests

itself to the customer as “service loyalty.” Therefore these researchers contend that service

loyalty precedes customer loyalty.

Divett et al. (2000) conducted a study pertaining to influencing customer loyalty. This

study examines an alternative manner of influencing consumer loyalty and subsequent purchase

behavior. The effect of increasing perceived approachability and responsiveness on subsequent

levels of loyalty and purchase behavior within an experimental field is examined. The authors

discuss the theories of numerous investigators relating to this important subject.


Narayandas (2005) relates that those consumers who demonstrate the greatest levels of

loyalty toward the product or service activity tend to repurchase more often and spend more

money. A significant amount of research attention has emphasized the identification of effective

methods which actively enhance loyalty, including loyalty programs such as point reward

schemes (Lach, 2000). Loyalty programs “create a reluctance to defect” by rewarding the

customer for repurchasing from the organization (Duffy, 1998, p.441). Unfortunately, the

effectiveness of such programs has failed to fulfill expectations (Dugan, 2000; Saba, 2000). One

example (Jardine, 2000, p. 19) maintains that recent research has shown that “loyalty” cards are a

misnomer; they simply do not make customers “more loyal.”

Surprisingly, some researchers contend that “customer loyalty can be increased by

encouraging consumers to complain” (Hersey et al., 2000). Previous consumer and

organizational research highlights perceived approachability and responsiveness as two key

determinants of complaints (Russell & Taylor, 2003; Saba, 2000). Schonberger (2001) has the

view that responsiveness consisted of two dimensions: “a willingness to provide a remedy for the

dissatisfaction should a consumer complain” (responsiveness), and the extent to which the

retailer makes the complaint-handling mechanism available (approachability).

Within an organizational setting, Saunders et al. (1992) find the same two elements as

necessary for encouraging direct communication. According to the scholars, the term

approachability encompasses how open to voice the recipient is perceived to be while

responsiveness refers to the extent to which the recipient effectively reacts to direct

communication. Basing their study on the earlier work of Hirschman (2004), Saunders et al.


(1992) also examined the relationship between the perceived approachability and responsiveness

of supervisors and the subsequent levels of employee commitment to the organization.

Although these researchers did not explicitly examine loyalty, previous organizational

research points to loyalty as the affective component of organizational commitment.

The literature review indicates that the lack of association between approachability,

responsiveness and commitment may be due to methodological influences. The effect of

approachability and responsiveness on loyalty within the study could have been influenced by

the measurement of commitment rather than loyalty (Saunders et al., 1992). Commitment is said

to consist of three components: involvement, identification and loyalty (Gustafsson, Johnson, &

Roos, 2005). Within the Saunders et al. (1992) study, the other two components of commitment

may have masked the effect of approachability and responsiveness on the loyalty component. In

contrast to Saunders et al. (1992), theoretical support for a direct effect of approachability and

responsiveness on consumer loyalty can be found within research considering the complaint-

handling process.

Most of the previous research is cognizant of effective complaint handling on subsequent

consumer loyalty and behavior (Stewart, 1994). Some researchers have indicated that if

complaints are handled effectively it will have a tremendously positive impact on customer

retention rates (Tax, Brown, & Chandrashekaran, 1998). Conversely, Oliver (2000) and Heskett,

Sasser, and Hart (1990) find that approximately 50% of complainants feel even stronger negative

attitudes toward the organization after they experienced the service’s complaint-handling

process.


Divett et al. (2000) in their study examined the effect of increasing perceived

approachability and responsiveness on subsequent levels of loyalty and purchase behavior within

a field experiment. The possible effect of pre-test sensitization was reduced by using a Solomon

Four-Group Design (Walton, Braver & Braver, 1988) to test the efficacy of intervention. The

researchers indicate that the Solomon Four-Group can determine the effect of pre-test

sensitization on post-test levels and thus provide a level of control over threats to validity

(Walton, Braver & Braver, 1988). Four separate research groups are required when investigators

use the Solomon Four-Group Design; the selection is randomized.

The research samples for this study included subscription patrons of a regional theatre

located in Canberra, Australia. In the study it was assumed that encouraging consumer

complaints intensely increases loyalty. In order to test this assumption the investigators

examined the effect of manipulating perceived approachability and responsiveness on subsequent

levels of consumer loyalty and subsequent purchase behavior.

It was revealed that intervention increased levels of perceived approachability and

responsiveness to customer voice (Divett et al., 2000). The results of this study asserted that

superior perceived approachability and responsiveness are conducive to greater loyalty toward

the theater and increased purchase behavior.

Managing Employee Motivation and Loyalty

Employee motivation as a factor in assuring a high level of productivity, which may have

a correlation with customer satisfaction, may be factored into management concerns regarding


customer retention. The researcher is therefore motivated to channel part of this study toward

relevant theories further addressed below.

The literature reviewed asserts that Wragg (2004) has cited Frederick Herzberg’s

controversial Two-factors theory, which designates job factors as either satisfiers or dissatisfiers.

The satisfiers under the Herzberg theory are said to revolve around the intrinsic aspects of the

actual job itself and serve as “motivating factors” while the dissatisfiers revolve around the

extrinsic or environmental aspects of the job and serve as “hygiene factors.”

While motivation is a factor for employee satisfaction, the absence of a hygiene factor

such as wage incentives may not be a factor (Wragg, 2004). The author further asserts that the

money incentive is only a factor in that employees are negatively motivated when paid

insufficiently; however, Herzberg found no correlation with positive motivation. Lawler (2000)

supports this view, citing Abraham Maslow’s “hierarchy of needs” which downgraded money

incentives (wages) to the level of merely satisfying basic needs.

The controversial Two-factors theory attracted Maddock (2000) who also explored the

theory of motivation and maintains that the money incentive is not the sole factor of employee

motivation, claiming instead that many intrinsic factors such as responsibility and autonomy

motivated workers in addition to wages and other extrinsic factors. The employees formerly

portrayed as financially motivated were beginning to be seen as complex creatures influenced by

many internal and external factors. In other words, the factored intrinsic-extrinsic approaches

look at only one aspect of the behavior-reward relationship while ignoring the perceptions and

expectations of rewards which are critical to work motivation (Maddock, 2000).


Lawler (2000) has done a research study on performance-contingent wages as a means

for inducing high productivity, a view which is contrary to Herzberg’s Two-factors theory.

Edward Lawler’s view is interpreted as being that wages should in most cases be rated highly

important because of their assumed ability to satisfy a large variety of needs (Lawler, 2000).

A former legal secretary who became a business scholar has conducted a study pertaining

to employee motivation and satisfaction in law firms. The primary purpose of the study was to

determine the quality of the relationship between lawyers and their staff members as well as to

ascertain what features of the workplace would have a positive effect on employee motivation

and loyalty (Neff, 2002). She hypothesized that the lawyers would not have strong relationships

with their staff members. Additionally, she assumed that the lawyers and staff members surveyed

would have different concepts as to what workplace benefits and conditions would augment

employee satisfaction and motivation. Her survey design included separate questionnaires for

lawyers, paralegals and secretaries.

The results of her study assert that the lawyers’ conceptions of staff member satisfaction

levels were precise in some areas and imprecise in other areas. The findings showed that the

lawyers’ conceptions were precise in personal compatibility, parities in work ethic mutual

respect, and staff member expressed benefits. The principal differences were seen in the

identification of particular factors pertaining to comprehensive motivation and job satisfaction

and in the area of positive firm and lawyer recognition of staff members’ work (Maddock, 2000).

Neff (2000) hypothesized that the lawyers and staff members who participated in the

survey would have different opinions of what workplace benefits and conditions would be

conducive to higher levels of employee motivation and satisfaction. Her hypothesis was precise


as regards some subjects surveyed while in other subject areas it was not substantiated by the

data. The vast majority of the lawyers who participated in the survey emphasized the importance

of monetary benefits to the staff including salary and medical benefits. The staff members who

participated in the survey asserted that positive recognition from the lawyers was almost as

significant to them as salary and retirement benefits.

Surprisingly, some scholars assert that while salary and other monetary benefits are

mandatory they do not motivate employees long-term. In some companies tenured employees are

resigning; many of these employees indicate a lack of recognition as a primary reason for

leaving (Wiscombe, 2002).

Mak and Sockel (2001) explored the underlying dimensions of the motivation and

retention constructs. They state that because motivation and retention were not directly

observable, they instead used a maximum likelihood confirmatory factor analysis to estimate and

test measurement models incorporating indicator variables for these two latent constructs. In this

study the investigators conducted confirmatory analysis to determine how job satisfaction,

perception of management on career development, loyalty, burnout and turnover intent become

indicator variables to the latent constructs of motivation and retention. Additionally, they

examined the relationship between motivation and retention. The participants in this study were

information system employees.

The confirmatory factor analysis asserted that job satisfaction and perception of

management on career development were the two significant indicators for the motivation

construct. It was found that the motivation construct was associated with the retention construct.


It is not surprising that this study revealed that job satisfaction is a significant motivator.

The findings of this study also indicate the significance of perception of management policies on

career development as a motivator affecting information system employees. Mak and Sockel

(2001) assert that information system professionals are solicitous regarding their career

development expectations. The sample is this study includes information system employees

responsible for development, enhancement and general support. In most instances these

employees contemplate career development as a major motivational tool. The authors suggest

that once employees are certain about career development opportunities they will be dedicated to

their job and the company’s retention rate will ameliorate. It is contended that in order to

increase retention of information system employees the company should formulate proper career

development plans including organizing training workshops and seminars or offering

inducements for learning new technology.

The Theory of Expectancy

Expectancy is defined as a momentary belief concerning the likelihood that a particular

act will be followed by a particular outcome (Gustafsson et al., 2005; Oliver, 2000). The theory

of expectancy appears to provide a simple and convincing rationale for why as an incentive

wages based on employee performance plans could enhance employee performance efforts.

Victor Vroom’s theory of expectancy attempts to predict choices that individuals tend to make

when forced to choose among several tasks. The decision to put forth effort is supposedly the

result of two variables including the valence which is the perceived value of the outcomes and

the expectancy that the behavior will result in obtaining the desired outcomes.


Podolske et al. (2002) have predicted that employee motivation will increase wages based

on performance plans provided that certain conditions are met. The first required condition is

that the employees have to understand the performance plan’s goals and to then view them as

reasonable; employees also have to believe that they have the necessary skills or ability to

perform at the required level or no reward will work.

The second condition is that there is a clear link between performance and wage increases

so that a specified level of performance is a precondition for receiving the reward. The third is

constant communication and follow-through. The fourth is that employees value the reward and

view it as meaningful. The fifth is that the reward must be uppermost in the minds of the

employees (Marshall, 1998; Wragg, 2004).

Motowildo (1982) supports the notion that the majority of people prejudge how

effectively they can perform their jobs; in part this is according to their sense of self-competence

as well as self-esteem. Most individuals who think highly of themselves may inaccurately

believe that they are high performers and are likely to feel less satisfied with their wages

(Maddock 2000).

Scientific Management Theory

The scientific use of money as a motivator in an industrial setting became popular over a

century ago and was initiated by Frederick Taylor; this usage has grown in popularity in recent

years. However, the modern literature review relates that Roehling et al. (2001) and Van Dam

(2005) refer to Frederick Taylor as the “Father of Scientific Management” and report that Taylor

proposed a system in which management paid men and not positions. Two elements that are


fundamental to incentive plans are defining the standard unit of work and setting the rate of

payment per unit. On the other hand, when rates are perceived to be haphazard or inappropriate,

employees believe that increased productivity, which includes loyalty to customers, results in a

corresponding rate cut, hence rate setting has to appear to be objective.

Taylor’s theories have apparently aided in the transformation of blue-collar and white-

collar environments to places where employees are paid for their skill or performance based on

their loyalty to customers. Respected experts such as Roehling et al. (2001) and Van Dam (2005)

have a theory regarding the concept of a large daily bonus in order to motivate workers to

perform quickly as directed by management. These authors state that in most cases employees

want money most, but other authors such as Tsui and Wu (2005) and Manurat, Hale, and Singhai

(2005) support the view that workers should be paid higher wages for regularly attaining skills in

the designed tasks and for learning to do assigned jobs according to scientific management

principles.

The scientific management theory supports the notion that workers perform at a higher

level in order to receive monetary rewards that are contingent upon their performance (Sundby,

Dickinson, & Michael, 1996). The Scientific Management principles were originally based on

the belief that workers were interchangeable with machines which means that workers had little

to contribute beyond a strong back and arms. Risher (1997) relates that the purpose of early wage

programs in every organization was to buy an employee’s time by the hour; this process

provided no incentives for workers to put forth extra effort.


Incentives Vs. Satisfaction

The researcher’s study goal includes determining a correlation between customer

retention which can be influenced by customer levels of satisfaction and managing employee

levels of satisfaction. With this in mind, Martocchio (2002) and Coughlin (2005) have suggested

that it is imperative to examine the relationship between wage incentives and satisfaction in order

to be able to define the attribution of wages as an incentive in managing employee satisfaction.

The question here is whether worker wages as an incentive induce job satisfaction.

The influence of wages on managing agents/employees is being studied by both

advocates and opponents of the Roehling et al. (2001) and Van Dam (2005) views. Authors

including Aaron Cohen have disclosed that management teams in every organization and across

industries have tried a series of wage incentive structures over many years in an attempt to

determine the most optimal pay structure that will induce the greatest productivity. Moreover, an

often overlooked key factor is that the success of any pay plan depends on the perception of the

employee as to how his or her pay is determined (Cohen, 2003). Joseph Martocchio reports also

that some employees who saw the greatest connection between pay and performance were found

to be the best performers (Martocchio, 2002; Bridges, 2003).

Studies conducted in the 1950s and 1960s revealed the belief that wage incentives were

not an effective motivator and instead that wages were more likely to aggravate employees than

to increase their motivation. Today few organizations still give this view credibility. It is

considered contrary to the belief of those employees who see compensation as a potentially

valuable tool for influencing employee performance (Risher, 1997).


A follow-up related in Joseph Martocchio’s study finds that some experts have

underestimated the importance of linking wage systems to meeting organizational goals

(Martocchio, 2002). However, the rationale when deciding for or against pay plans is that

employees opt out of binding offers which may result in commitment behaviors. Studies reveal,

however, that a handful of highly-skilled employees would prefer their wages to be determined

by performance; this finding can be factored into the employee levels of satisfaction.

Synopsis of Literatures Reviewed

The researcher has accessed a broad range of views from authors over the past 20 years

and compared these views to the work of more recent authors within the past 5 years. It is

extremely important for the researcher to have a broader knowledge with a better understanding

of the various perceptions of relationships and how they are attributed to customer retention in

modern business operations.

CHAPTER 3: METHODOLOGY

Introduction

The definition of research merely connotes finding information or the gathering of data

which will eventually translate to a meaningful statement of information. From the scholarly

standpoint research denotes a variety of activities but to Leedy and Ormrod (2001) it simply

means finding an item of information or making notes and then writing a documentation paper.

To many individuals “research” means a definitive gathering of data that is as good as

information. To some individuals there is often a misconception in the use of the word research.

However, there is one common element of research for every researcher and that is the need to

gather data. Cooper and Schindler (2003, p.5) view research as a systematic inquiry whose

objective is to provide information to use in solving a certain problem, whereas Leedy and

Ormrod (2001, p. 4) find research to be the systematic process of collecting and analyzing

information (data) in order to increase understanding of the phenomenon about which one is

concerned or interested. It does not matter what interpretation is given to it as it centers around

the gathering of information. This indeed is the most important goal for researchers. In most

definitions research can be performed in various ways but these essentially come down to three

research approaches. These include the qualitative, the quantitative, and the mixed method

approaches.

The qualitative approach involves an inductive reasoning research design. It further

allows the researcher to theorize about how things are (Ber, 2003). The use of the quantitative


research design involves deductive reasoning while the mixed method research design uses

elements of each in the construct of its design (Creswell, 2003, p. 144).

The selection of the method to be used in a research project depends on what kind of

information is needed from what source and under what circumstances. Considering that the

research questions have been formulated, setting the parameters by which the study should be

conducted is then imperative in order to best select the methods by which the information needed

can be gathered (Robson, 2002).

A qualitative research approach is deemed the most appropriate for this study as

explicitly discussed in chapter 1 and in the paragraphs above. Since the main objective of this

research study is to investigate the relationships that exist between customers and organizations

with emphasis on the impact of leadership styles within the organization, it is deemed necessary

to apply Delphi Technique methods within the study in order to be able to predict or forecast

future events and the relationships within organizations

The literature reviewed has related that the Delphi Technique methods are widely used in

many businesses and organizations as well as government agencies (De’Ath, 2002). Moreover,

in the analysis of relationships between customers, employees and leadership styles in

organizations, De’Ath (2002) relates that Delphi Technique methods are suitable for such

evaluation and that the Delphi survey approach is based on the “Hegelian Principle” of achieving

organizational goals by means of thesis, which enables the flow of information from different

opinions and then by using antithesis is able to encompass opposing subjective views; thus

antithesis opposes the thesis opinion and then synthesis allows these opposite views to come

together to form a new thesis which all parties are able to support.


Using this method, the continued evolution and tensions in thinking lead to a uniform

agreement; a meeting of minds is thus reached within a reasonable period of time. The findings

of Hasson, Keeney, and McKenna (2000) support the view that the Delphi Technique methods

are needed in this study to make appropriate inferences as to the strength of the relationships

between organizational customers, agency management teams and leadership. The literature

review reveals that the Delphi Technique applications involve the creative and reliable

exploration of ideas and the production of suitable information needed for decision-making.

Hasson, Keeney and McKenna (2000) have further found that the Delphi Technique methods not

only help in the enhancement of effectiveness in decision-making in health and social care, they

also serve as a group facilitation technique which is described as a multistage process designed

to transform opinion into group consensus. One of the advantages of the Delphi Technique

application is the opportunity to seek the experience of people who have proven their expertise

within their fields; this further allows them to be recognized by their peers as experts in their

field.

The research study conducted by these authors further described the Delphi Technique

methods used in the study; these methods included both the case study and its phenomenology as

it relates to the research. The phenomenological study refers in this case to a person’s perception

of the meaning of an event as opposed to the event as it is externally regarded by that person

(Leedy and Ormrod, 2001).

This study’s aim was not only to achieve an understanding of the preparation, action

steps and difficulties that are inherent within Delphi Technique applications, it also addressed

general academic research concerns. The current research study encompasses these applications


in order to introduce those identifiable elements of leadership style which may have a direct or

indirect influence on both management team and staff performance in every organization.

Research Study Focus

The research study focus is the evaluation of customer levels of satisfactions in order to

ensure high customer retention. With this in mind, the researcher has limited the study survey

questionnaire and interviews primarily to current customers of the Ebbs Insurance agency.

Researcher’s Philosophy

As a Ph.D. candidate, the researcher has personally undergone transformation and is able

to fully comprehend how the strength of relationships can lead to customer satisfaction in all

business operations. A study of relationships, in this case between leaders and their subordinates

within the insurance industry, demands further analysis. The researcher has found it imperative

to analyze the impact of existing relationships on the level of loyalty of the managing

agents/employees and to then introduce a common terminology with an understanding of the

theories being advanced. This understanding should hold true with a study of the role of

leadership, the element without which there can be no successful organization.

Description of Methodology

Leedy & Ormrod (2001) have the view that research is the systematic process of

collecting and analyzing information in order to increase an understanding of the phenomenon

relating to the researcher’s interest. Supporting this is Bouma (2000) who has similar views of

what research is all about. Firsthand knowledge about a common use of the systematic approach


indicates that it is frequently used when information is collected and interpreted for solving the

problems of daily life. Research study involves profound thinking, analysis, and the validity of

the collected data (Leedy & Ormrod, 2001, p. 4). When it comes to research studies, researchers

do not skim across the surface of the research project but rather search far beneath this depth in

order to gain a complete understanding of the phenomena involved in the study. The typical

thorough research work is done by collecting numerous forms of data and examining them

closely to enable the researcher to construct a rich and meaningful picture of a complex,

multifaceted situation (Leedy & Ormrod, 2001). The current research study used as its approach

the flexible design qualitative research method.

Qualitative research reports, using their specific organizational format, are found to be

less predictable (p.297). Creswell (2003) holds the view that qualitative research study serves to

provide fuller descriptions of research topics. Bouma (2000) and Peshkin (1993) similarly

support Creswell (2003), adding that qualitative research approaches descriptively focus on

phenomena that occur in natural settings. In other words, such studies can reveal the nature of

certain situations, settings, processes, relationships, systems or people. The steps in this approach

include (a) interpretation, in which the researcher gains insights into the nature of the particular

phenomenon and has the ability to develop new concepts or theoretical perspectives about the

particular phenomenon; (b) verification, the point at which the researcher has the ability to test

the validity of his assumptions, claims, theories, and/or generalizations within real-world

contexts; and (c) evaluation, a process through which the researcher can judge the effectiveness

of particular practices, policies, or innovations (Peshkin, 1993). The author further reports that


the qualitative research study approach has the ability to use specific methods that are ultimately

limited only by the researcher’s imagination (p.49).

The literature review revealed numerous views that convenience sampling would not be

the best or the preferable means of obtaining a representative sample, even though there are

many cases where it is the best solution (Robson, 2002). Riley et al. (2000) support this view by

relating that the sampling could be convenient because it is by definition at the core of research

concerns or because it meets the general parameter of a research study's objectives.

Davis (2003), writing on ethical issues and practice, reports that the data collection

process involves obtaining accurate information on which moral controversies have been debated

and agreed on. Regardless of the nature of the data to be collected, the author suggests that it is

better to keep in mind that data collection in qualitative approaches takes time; this view

demands that enough time be allowed for the expected feedback (Davis, 2003, p.137).

In most definitions, research can be performed in various ways. As discussed above,

these can generally be seen as three different research approaches including the qualitative,

quantitative and mixed method approaches. The qualitative approach involves an inductive

reasoning research design. It further allows the researcher to theorize about how things are (Ber,

2003). The use of the quantitative research design, conversely, involves deductive reasoning

while the mixed method research design uses the elements of both above designs in the construct

of its designs (Creswell, 2003, p. 144).

The selection of a research method in every research project depends on what kind of

information is needed, from whom and under what circumstances. Given that the research

questions have been formulated and the parameters set by which the study needs to be


conducted, it is then imperative to select methods in which the needed information can be

gathered (Robson, 2002).

A qualitative research method approach was found to be more appropriate for this

research study as explicitly discussed in chapter 1 and in the paragraphs above. However, when

data has been qualitatively collected, it will to a minimal degree be analyzed using the

quantitative method.

Because the main objective of this research study was to investigate the relationships that

exist between customers and organizations, with an emphasis on the impact of leadership styles

within organizations, it was therefore imperative to use the Delphi Technique to predict or

forecast future events and the relationships within organizations. The literature review revealed

that Delphi Technique methods are widely used throughout businesses and organizations; even

governmental agencies are known to use these methods (De’Ath, 2002). To further analyze the

relationships between an insurance agency’s management and the leadership styles in

organizations, De’Ath (2002) has related that the Delphi Technique method is suitable for such

evaluation and that the Delphi survey approach is based on the “Hegelian Principle” of achieving

organizational goals. This is accomplished first through the principle of thesis which enables the

flow of information from different opinions followed by antithesis which opposes the thesis

views; synthesis then allows these opposing views to come together to form a new thesis which

has now been built on a firm foundation (p.56-57).


Theoretical Framework

Referring to the framework in Figure 1, the researcher finds that a study of relationships

is of great benefit in evaluating the role of leadership and its influence on the levels of

performance among the staff members of a given insurance organization. The merits of higher

performance levels may be attributed to customer satisfaction. The main thrust of the

researcher’s reasoning is that retaining customers in an organization’s book of business demands

a high level of customer satisfaction. Although economic constraints can cause unhappiness,

customers may still consider themselves satisfied with the services offered by any given

organization. The economic influence could be unemployment or no financial power to purchase

insurance policies. All of these factors may lead to very low customer retention as referred to in

the framework in Figure 1.


Figure 1. The relationship cycle in the Ebbs insurance organization model of relationship. An adopted view from Cunningham (1997) and Motowildo (1982).

Ebbs Insurance Organization

Low Customer Retention/ Low Profit

Leadership

Roles/ Styles

Management

Team/ Employees/

Agents Satisfaction

Management

Team/ Employees/

Agents Dissatisfaction

Great Performance

and Productivity

Customer Satisfaction

Very Low Production/

Low Performance

Customer Dissatisfaction

But Unhappy Due to Economic Reasons

Such as Unemployment/

Low Income

Very High Retention Rate/New Customers

From Referrals/ Low Claims Rate

High Customer Retention/ High Profit

Cancellations/Nonrenewals/ Excessive Claims/

No Referrals = No New Customers


The researcher has studied the philosophy of every type of business operation and their

profit expectations from both the introspective and critical reflection perspectives as well as the

development of humanistic aspects of business operations. Some of the research questions which

are at the core of this research study derive from the theoretical assumption that customer

retention can be factored from the strength of leadership styles in the insurance industry. From

these underlying factors, the following research questions as listed in chapter 1 have been

developed:

What are the Ebbs Insurance Agency customer expectations after 10 years of the

customer/company relationship?

Are the agency customer levels of satisfaction attributable from the management and

leadership styles found within the Ebbs Insurance Agency?

Are the agency managing employee levels of satisfaction a factor in customer levels of

satisfaction?

Are highly motivated agency managing employee necessary for successful customer

retention efforts?

Are the Ebbs Insurance customer levels of satisfaction a factor in determining the degree

of customer retention?

Research Hypotheses

Quantitatively, each of these research questions has a testable hypothesis as exemplified

following:

1. H1: Ebbs Insurance Agency customers have many expectations after 10 years of the customer/agency relationship.


a. Ho: Ebbs Insurance Agency customers do not have many expectations after 10 years of their relationship.

2. H1: The agency customer levels of satisfaction are attributable from the management and leadership styles within the agency. a. Ho: The agency customer levels of satisfaction are not attributable from the

management and leadership styles within the agency.

3. H1: The agency managing employees’ level of satisfaction is an attribute of customer levels of satisfaction. a. Ho: The agency managing employees’ level of satisfaction is not an attribute of

customer levels of satisfaction.

4. H1: The agency managing employees’ motivation is necessary for successful customer retention efforts. a. Ho: The agency managing employees’ motivation is not necessary for successful

customer retention efforts.

5. H1: The Ebbs Insurance customer levels of satisfaction are a factor in determining the degree of customer retention. a. Ho: The Ebbs Insurance customer levels of satisfaction are not a factor in

determining the degree of customer retention.

Quantitatively, the five research questions stem from the researcher’s experience as one

of the leaders in the insurance industry who has firsthand knowledge of the impact of

management and leadership styles on all facets of customer retention efforts.

The Delphi Technique method as discussed in chapter 2 was widely adopted and

accepted as a reputable tool in making judgments and problem-solving as well as in assisting

researchers in drawing from a wide reserve of knowledge, experience and expertise in a

systematic manner (De’Ath, 2002). The literature review discovered that Dawson and Brucker

(2001, p.126) support the view that the Delphi Technique method is intended to structure and


expand information for which there is some evidence; this method makes it possible to achieve

an informed judgment and consequently the proper tools for decision-making. Theories in this

research study project have been formed based upon relevant citations in the literature of

organizational development that speak to the need for improving values which are pertinent to

the role of leadership styles. Either directly or indirectly, these values influence insurance

industry employee performance which is, in turn, an attribute of positive changes in

customer behavior.

The role of the leadership style investigated here is one that will be able to assist in

solidifying long-term relationships between customers and insurance agency management; useful

leadership styles are based on a variety of approaches found in successful

organizations (Maxwell, 1999).

The researcher expected that the best time for his hypothesis to be tested in this

relationship analysis was during actual daily insurance business operations; this method of

testing has been found to be very effective. From the standpoint of the reader it is critical to

create an understanding of the role of agency management in insurance business operations. The

development of the case for leadership training within the insurance business environment

requires that readers understand the unique organizational aspects of this business.

Sample Design

The researcher’s sample design was created from the theoretical population of current

customers in the Ebbs Insurance organization. The intended study sample population will be the


current customers of the 19-year-old Ebbs Insurance Corporation located in the city of Long

Beach in Southern California.

The sampling population consisted of 220 current customers of the Ebbs Insurance

organization.

The survey questionnaire was sent to the selected sample survey participants through

either the United States Postal Service or via email. The researcher also interviewed two

professional insurance managers from the Alpha Plus Insurance and Financial Agency. The

interviews with an outside agency gave an insight into cross-agency concerns in relation to

customer retention.

The subjects were randomly selected by the use of cluster sampling. The selected group

of samples from a large population provided an accurate representation of these insurance

industry organizations.

Full Disclosure Statement

The researcher fully discloses that the Alpha Plus Insurance and Financial Agency is by

no means related to the researcher and is not related to or affiliated with the Ebbs Insurance

Brokers Organization. The researcher came in contact with the Alpha Plus Agency management

at insurance conventions where they had discussed insurance-related issues such as insurance

products markets, acquisitions of new customers and continuous maintenance of old customers

in order to ensure a high degree of customer retention.


Instrument

This research study’s primary data was gathered using a survey instrument in the form of

a questionnaire. A copy of this questionnaire is located in Appendix D.

Survey Design Strategy

The survey questionnaires were designed especially for this research study project. The

questionnaires were completed by a randomly selected sample of current insurance consumers.

Designed in three sections, the first section of the questionnaire is comprised of insurance

consumer backgrounds and includes demographic variables such as age, gender and level of

education as well as skills and experience. The second section evaluates the quality of services

offered by the Ebbs Insurance organization. The third section of this survey instrument was

designed to evaluate the perceptions of current insurance consumers regarding the existing

relationships within the Ebbs Insurance Agency.

The completion of this questionnaire took approximately 10 to 15 minutes for each

participant.

Validity and Reliability

The validity of the researcher’s questionnaire was successfully measured and tested

through the use of pretest validity assessments and some assistance from peer reviews.

Additionally, assistance was received from a few insurance industry professionals and leaders.

These individuals assisted in determining whether or not the researcher had accurately worded

the survey questions from all technical standpoints. Leedy and Ormrod (2001, p.106) cite


Creswell (2003) who suggests that any and all pertinent documents and questionnaires in

qualitative research work measure and test for credibility, dependability, confirm-ability,

verification, and transferability.

Qualitative Data Analysis

In the qualitative data analysis the researcher utilized SPSS computer software where

needed to calculate the qualitative variable results of data collected. Creswell (2003) reports that

the single constant factor in qualitative research studies generate and represent great amounts of

raw data. Robson (2002) supports Creswell’s report by asserting that the single constant factor

reported by qualitative researchers is that their studies generate very large amounts of raw data.

An application of SPSS computer software for the purpose of verifying document reliability is

deemed appropriate. Document reliability was measured to ensure its repeatability through the

use of Cronbach Alpha found in SPSS; its reliability was found to be relatively high with a

Cronbach Alpha of .74.

Dependent Research Variables

The dependent variables in this study are the insurance consumer and the Ebbs Insurance

Agency managing employee parameters regarding the level of satisfaction derived from and

within the insurance industry. These were factored into the following categories:

The education level that is useful in measuring the level of consumer skills, knowledge,

experience and understanding of the ongoing relationship; the level of education also measures

the job skills and experience of industry employees.


The length of time customers have made purchases within the insurance industry

measures the level of the relationship that exists between the customers and the given

organization in the insurance industry.

Independent Research Variables

The independent variables are the actual responses to questions pertinent to the

background data and which refer to age and levels of education.

Data Collection Procedures

The primary collection of data was accomplished by the survey questionnaire and

administered by the research investigator. Each of the subjects was instructed verbally and asked

to anonymously complete the survey for immediate collection. The survey participants were duly

informed of the purpose of the research study in order to minimize any bias that is associated

with customer satisfaction surveys; this conformed to the doctrine of informed consent rules and

policies (Leedy & Ormrod, 2001, p.107). In an effort to observe the rules of informed consent,

any intended participant who wished not to participate in the study was asked to return the blank

survey to the investigator.

The researcher obtained secondary data from interviews with selected insurance

organization leaders; these knowledgeable individuals were able to offer meaningful

commentary on relationships that exist within the insurance industry and on managing employee

levels of satisfaction. Various authors including Creswell (2003) and Silverman (1993) have

shared interviewing tips that have eased the process as follows:


1. The interviewees must be representatives of the group, the insurance industry, as it relates to this study; researchers should choose people who are willing to give typical perceptions and perspectives rather than extremists.

2. Get written permission to interview.

3. Find a suitable location, making sure that the interview is conducted in a location or environment in which the participant will be willing to talk.

4. Take a few minutes to establish a rapport.

5. Keep your reactions to yourself.

6. Focus on the actual issue of study.

7. Record responses verbatim without skipping some statements.

8. Do not put words in people’s mouths.

9. Always remember that you are not necessarily getting the facts.

Figure 2 shows the processes involved in data collection. It establishes the

interrelationships of researcher, interviewer, participant and/or survey participant.


Researcher/ Analyst

Interviewer

Participant

Figure 2. Robson’s Data Collection Process Model. A model of the survey data collection process. Adopted from Robson (2002, p. 242).

The analysis and processing of the adopted data collection was available for easy access

by the use of affirmed descriptive qualitative questions. Robson (2002) asserts that flexible

design (qualitative) methodology is used for data collection; this has enabled the research study

to avoid any research method that will slow the pace of the data collection process and could

cause unnecessary difficulties in establishing the validity and reliability of the collected data.

Pilot Testing

The survey questionnaire was administered to all participants during a pilot phase of this

study. The purpose of this questionnaire was to gather a firsthand understanding of customer

levels of satisfaction from the survey participants.

Researcher specifies subject of question, analytic use of questions, and respondent task.

Researcher analyzes response.

Participant gives answer.

Interviewer administers question. Interviewer records answer.

Participant comprehends question (interprets subject and task).

Interviewer/ coder enters data into data set.

Participant recalls information and forms judgment.


Using the questionnaire assessment in the pilot phase assisted the researcher in

determining if all participants have a baseline understanding of the existing relationships in the

Ebbs Insurance Corporation.

Data Analysis

Referring to a similar study project, Leedy & Ormrod (2001) relate that the collection of

data in the qualitative research method approach was based on direct observation, interviews,

written documents in the form of a survey questionnaire, audiovisual materials, objects and any

other helpful measures that could assist the researchers in answering the research questions.

These authors also believe that the potential sources of data in qualitative research are limited

only by the researcher’s open-mindedness and creativity (Leedy & Ormrod, 2001).

The researcher conducted some interviews using random questions that were presented to

a selected sampling from the large population of potential samples. These interviews included

both formal and informal discussions with participants in order to learn more about how

organizations may process collected data and related standards (Leedy & Ormrod, 2001). Most

of the data collection was done through face-to-face interviews. Interviews can yield a great deal

of useful information insofar as the researcher’s questions are related to facts, people’s beliefs

about the facts, feelings, motives, present and past behaviors, standards for behaviors and/or

conscious reasons for actions or feelings (De’Ath, 2002).

Most insurance professionals have the view that a head start using personal and informal

interviews with insurance consumers at the point of renewing their insurance policy contracts is

the best way to find reliable participants with accurate responses. Additionally, Cooper and


Schindler (2003) have called for making the questionnaire one that is administered through a

laptop computer with a research assistant nearby to assist respondents upon request. Following

are some of the advantages of using the recommended Cooper and Schindler approach (2003):

1. There may be more interest in answering the questionnaire if a computer is used on the spot which guarantees some confidentiality of any classification of questions.

2. The participants will enter the data, making the collection and tabulation much easier.

3. This reduces the cost of administering the survey questionnaire.

The administrative aspects of the questionnaire were automatically entered into the

system before anyone answered any questions. The research assistants ensured that the

respondent was one of the key decision makers in their immediate family and that the survey

was limited to persons 18 years and older who were able to participate in answering the

questions.

This research study used grounded theory research methodology and provided the

opportunity to perform a clear qualitative data analysis. Upon consideration of several completed

research reports similar in nature to this one, it became more obvious which analysis and display

techniques work well and the researcher was thus able to identify the weaknesses of both data

collection techniques.

Cooper and Schindler (2003) have repeatedly suggested that researchers need to prove to

readers that procedures have been sincerely and faithfully monitored in order to maintain ethical

practices in a qualitative study. There are other related questions regarding which type of

research approach to use when expecting descriptive statistical results, especially in a situation

where the researcher is interested in finding out who, what, when and where the data collection is

taking place; the research cost analysis is also considerable (Cooper and Schindler, 2003).


Concerns about “why” call for how one variable produces change in another variable. A

descriptive statistical analysis is more concerned with in-depth data analysis due to its intent to

capture population characteristics. In so doing, inferences may be drawn from sample

characteristics (Cooper & Schindler, 2003).

The study analysis was determined by identifying trends using descriptive statistics,

patterns with graphical displays and other potential means of analyzing the driving factors

involved when insurance consumers maintain their customer status with insurance organizations.

Although dependent on the outcome of the research report, this study project recommended

keeping it as simple as possible in terms of choices on the questionnaire and choices of the items

to be rated. The researcher looked for a relationship between the policyholders and leadership

style, including the determination of agency managing employees’ levels of loyalty.

Coding, Multiple Sources, and Corroboration

The survey questionnaire instruments were numbered and matched with specific codes by

sections that made it possible for the researcher to identify each questionnaire section as follows:

In Section 1, the background and age demographic was coded as 001. This means that

whenever the researcher saw the code 001 it revealed that the data related to background

demographics. Section 2 concerned the quality of service in the Ebbs Insurance Agency. It was

centered on the relationships found within the agency. This section was coded 002. Section 3,

coded 003, represented the overall rating of the relationships within the Ebbs organization.

There were other multiple sources of gathering data; for example, qualitative research

data can be gathered by asking for and collecting information from college students in


educational settings using data that is posted on boards in every corner of their college cafeteria.

Eisner (1998) has endorsed this particular method of data collection.

Another measure by which data can be collected is by asking a group of participants to

keep daily journals, hold discussions on content and meaning, photographs, art objects and so on

in relation to ethnography or phenomenological studies (Creswell, 1998). Leedy & Ormrod

(2001) have attempted to define the term phenomenological study which deals with a person’s

perception of the meaning of an event as opposed to the event as it exists externally before a

person’s eyes. In other words, a phenomenological study is a study that attempts to understand

people’s perceptions, perspectives and understanding of a particular situation (p.153).

The corroboration methods used ensured that all data collected was confirmable as valid

for the purpose of this research study.

Limitations and Strategies for Minimizing Impacts

This research study was limited to a selected number of current customers of the Ebbs

Insurance Corporation; each of these were asked to participate in the survey questionnaire.

Because most of the questionnaire used in this study was confirmed as appropriate and had been

used in the Ebbs Insurance Agency for over 10 years, it was believed that the questions related

strongly to the intentions and expected outcome of this research. Portions of the questionnaire

originally proposed within this study assessment were field-tested for reliability and validity

measures regarding relationship characteristics in the insurance industry environment. This

research study was limited to one selected organization’s current customers; the researcher was

thus not expected to involve participants other than from the Ebbs Insurance organization.


Although a 2-week journal entry may not have sufficiently recorded the thoughts,

behaviors and performances of the participants, nevertheless the information gathered over a 2-

week period was then probed further during the interview sessions with participants.

All survey participants were asked to respond to the questionnaires, journal entries, and

interviews in their natural settings; as a result the study findings could not be manipulated. The

participants were asked to respond to the questionnaire as honestly as possible and to make

truthful entries in their journals for the requested 2-week period. The researcher maintained

periodic telephone and electronic messaging conversations with the participants throughout the

data collection period.

Expected Findings

The theory behind this study was that the degree of customer retention in every business,

whether it is a for-profit or non-profit organization, is directly influenced by the levels of

customer satisfaction in conjunction with the relationships that exist within that organization.

Following from this theory, the research study found that these factors mitigate the customer

retention rate in every business environment. Customer as well as agency managing employee

motivation were identified as the necessary factor for achieving a high level of customer

retention. This research also found that journal entries from participants indicated that the

motivation of customers and employees contributes greatly to customer retention; this factor was

the main concern of this research study.


Ethics and Institutional Review Board Policies

In the consideration of ethical principles, Leedy and Ormrod (2001, p.107) have

recommended that research participants should be told of the nature of the study to be conducted

and given the choice of either participating or not participating. The researcher ascertained that

the survey method used within this study either informed or conveyed to the selected sample of

employees of the Ebbs Insurance organization the precise nature of the study. Subsequently, they

were asked if they were willing to participate in the survey; this process is often called “informed

consent.” In addition to the doctrine of informed consent, the literature review suggested that the

collected data should not be traceable back to participants in an attempt to maintain their “right

to privacy” (Leedy & Ormrod, 2001, p.108; Davis, 2003). According to Leedy and Ormrod

(2001), under no prevailing condition or circumstances should any research report or

information, either oral or written, be shared with another research survey participant under the

right to privacy doctrine (p.108).

Timelines for Each Research Activity

The researcher anticipated that this research study would take about 9 weeks. For each

research activity, the projected timeline was as follows:

Week 1. Survey questionnaire is administered (pilot testing).

Week 2. Survey questionnaire data analysis begins; selected participants begin journal

entries.

Week 3. Journal entry continues; survey questionnaire analysis concludes.

Week 4. Journal entry concludes; entry analysis begins.


Week 5. Entry analysis concludes; interviews begin.

Week 6. Interviews conclude; draft writing of findings begins.

Week 7. Draft writing of findings concludes.

Week 8. Submission of findings to Mentor and Dissertation Committee.

Summary

This chapter has centered on the methodology for the research study which determined

the relationships that exist between customers and an insurance agency’s management team

(managing employees) as well as the leadership styles that drive the levels of satisfaction in all

insurance agencies. Chapter 5 has also explained the researcher’s philosophy, theoretical

framework, the instrument, the research survey design, the sampling design, data collection and

data collection analysis. It included a description of the sampling population. The next chapter,

chapter 4, presents the research results and analysis of this study.

CHAPTER 4: DATA COLLECTION AND ANALYSIS

Introduction

This chapter presents the findings resulting from the study. The purpose of the study was

to identify the key factors that influence levels of customer satisfaction in every facet of business

operations. This study was considered necessary because levels of satisfaction could be the

determining factor in the degree of customer retention, the chief concern of this study project.

This study was expected to be particularly helpful in determining whether leadership roles have

an impact on the levels of satisfaction. These factors may be an attribute of customer retention.

As stated above, this study employed a combination of qualitative and quantitative

research methodologies. An unstructured interview lasting approximately 45 minutes was

conducted with the respondents. The qualitative data collection also included 11 open-ended

questions and audio taped interviews which were supplemented by handwritten notes in the

event of equipment malfunction. The strategy was to ensure that data be reported precisely as it

was collected. The questionnaire used in quantitative data collection consisted of 19 closed-

ended questions. Responses from both sets of data collection provided answers to the research

questions regarding the barriers and challenges that may present obstacles to a high level of

customer retention.

Description of the Study Sample

There were 108 respondents to the survey; this represents more than 49% of the

population tested. Data for the quantitative analysis was derived from a survey of 220 current


customers of Ebbs Insurance which was conducted in March 2006. Of the 108 respondents, over

half (52%) were female and the remaining 48% were male. Data collection included marital

status and level of education. More than 74% of respondents had four or less adults living in their

households.

To better understand the challenges to ensuring customer retention at the Ebbs Insurance

Agency, the following questions were posed to respondents for the purpose of qualitative

analysis:

Question 1: What Is Your Gender?

The responses to this question revealed that 52% were female and 48% were male.

Question 2: What Is Your Level of Education?

The number of respondents with university/some university or graduate/professional

level educations was about 39%; approximately 61% had a high school diploma or less.

Table 1. Analysis of Variance (ANOVA) by Level of Education

Q2: What Is Your Level of Education? Sum of Squares df Mean Square F Sig.

Between Groups 2.482 7 .510 2.033 003

Within Groups 39.313 101 .142

Total 41.795 108


The group with “high school diploma or less” was coded (F = 0.009) and the group with

“university/some university or graduate/professional level education” was coded (F = 0.006).

Table 1 shows that the average customer retention (CR) within “high school diploma or

less” group was statistically significantly larger than the CR within the “university/some

university or graduate/professional level education” group.

Question 3: What Is Your Age Range?

0%5%

10%15%20%25%30%35%40%45%

AGES

Under 2021-2425-2930-40 +

Figure 3. Age range distribution.

In terms of age, the respondents ranged from 18 years and over. Thirteen percent of the

respondents were in the 6–20 age group; 21% were in the 21–24 age group; 12% were in the 25–

29 age group; and 42% were in 30–40 and older age group.


Question 4: What Type of Insurance Policy Did You Purchase?

24%

4%

29%

24%

3%10% 6% Auto

MotorcycleHomeownersCommercialLifeHealthBoat

Figure 4. Insurance policy purchase distribution.

There were mixed responses to this question. 24% responded Automobile; 4% responded

Motorcycle; 29% responded Homeowners; 24% responded Commercial; 3% responded Life;

10% responded Health; and 6% responded Boat.

Question 5: If You Purchased Automobile or Motorcycle Insurance Policies, How Many Years Have You Been Licensed in Your State or out of State?

The response to this question reveals that 64% of the respondents have a California

drivers license while 33% were out of state licensees and 3% were international licensees.

Question 6: What Was Your Driving Record Like in the Past 3 Years?


0%

5%

10%

15%

20%

25%

30%

DrivingRecords

Clean DrivingRecord1-3 MovingViolations1-3 Accidents

1-2 DUIs

1-2 RecklessDriving

Figure 5. Driving record distribution.

The response to this question was very critical to customers’ driving behaviors. While

29% responded clean driving records, 25% responded 1-3 moving violations, 10% responded 1-3

accidents, 3% responded 1-2 DUI (driving under the influence), and only 1% responded 1-2

reckless driving incidents.

The responses to this question seem to be one of the key contributing factors impacting

the level of customer retention.

Question 7: If You Purchased Insurance Policies Other Than Automobile and/or Motorcycle Policies, How Well Did the Agent Explain the Coverage and the Claim Procedures Involved Therein?

In response to this question, 32% responded completely, 20% responded very completely,

14% responded not completely, 9% responded very poor, 7% responded poor, and 18%

responded not interested and no comment. The fact that 18% of the respondents did not comment

on agent evaluation is a concern to Ebbs management. Additionally, approximately 30% of the


respondents indicate poor customer satisfaction levels, perhaps due to the quality of services they

have experienced in dealings with the Ebbs Insurance organization.

Question 8: How Did You Hear About This Particular Insurance Company?

In response to this question, 39% responded from friends, 27% responded from flyers,

20% responded from radio, and 14% responded from yellow pages. This indicates that there

were more contented customers during this period who decided to refer their friends to the Ebbs

Insurance organization.

0% 20% 40%

Friends

Flyers

Radio

Yellow Pages

PercentResponded

Figure 6. Organization’s first contract distribution.

Question 9: How did you obtain your insurance premium estimates?

The responses to this question in particular give a clear indication of the initial

satisfaction level of customers. Customer satisfaction levels commenced immediately from the


beginning or formation stage of the sales and purchase relationship. 55% responded walk-in

while 45% responded telephone quotations.

Question 10: What Was the Atmosphere Like the Very First Time You Contacted the Insurance Company for Premium Indication?

First time Atmosphere

33%

19%17%

18%13%

Very FriendlyComfortableProfessionalUncomfortable"I don't care."

Figure 7. Atmospheric condition distribution.

Here the responses indicate how the relationship began, particularly for the walk-ins.

33% responded very friendly, 19% responded comfortable, 17% responded professional, 18%

responded uncomfortable, and 13% responded “I really do not care.” Again, the responses here

are extremely critical to the formation of the relationship. The long-term goal of Ebbs’

management is to make all customers happy and to ensure lasting relationships. It is conceivable

that most of the “uncomfortable” respondents were either nervous meeting an agent for the first

time or that they were not comfortable with available insurance products or other similar reasons.


Question 11: How Long Have You Been With the Insurance Company?

The responses to this question from survey participants reveal that 27% have been with

the Ebbs organization for 1- 3 years, 18% have been with the organization for 4-6 years, 36%

have been with the organization for 7-10 years, and 19% have been with the organization for 11-

20 years.

Question 12: How Do You Rate Your Level of Satisfaction With the Insurance Organization?

The responses here are mixed but surprisingly close. 20% responded very satisfied, 29%

responded satisfied, 26% responded dissatisfied, and 25% responded very dissatisfied.

Question 13: How Would You Rate Your Agent?

0%5%

10%15%20%25%30%35%

Excellent BelowAverage

Rating ofAgent

Figure 8. Agents’ rating distribution.


The gathered data reveals that there are mixed feelings in regard to this particular

question. The results show that 29% responded Excellent, 33% responded Satisfactory, 17%

responded Average, 8% responded Below Average, and 3% responded Poor while the remaining

10% responded Not Interested. The total responses from Below Average to Poor down to Not

Interested is 26%; this is a relatively high percentage that may be an attribute of low customer

retention. The lowest 21% of responses may represent customer dissatisfaction.

Question 14: What Would Cause You to Cancel Your Insurance Policies With the Ebbs Insurance Agency?

The responses to this question clearly indicate the reasons for low customer retention.

While 42% responded dissatisfaction with Ebbs Agency’s products and services, 32% responded

financial reasons, 20% responded relocation to distant cities or to another state, and 6%

responded no comment. These are significant responses bearing directly on the levels of

customer satisfaction. This is why the Ebbs Agency management team has concerns with regard

to customer retention. The quality of Ebbs Agency products and services is very sensitive to the

levels of customer satisfaction; this is a determining factor in establishing a high level of

customer retention.

Question 15: What Difficulties Are You Experiencing With the Ebbs Insurance Agency in Regard to Your Insurance Policies?


30%6%

43%

21%

Untimely phone calls Unfriendly servicesPolicy Cancellations No difficulty

Figure 9. Reasons why unsatisfied.

Ebbs Agency management placed great weight on the responses to this question.

Customer feelings relating to perceived difficulties constitute the force driving customer

retention. The responses here undoubtedly give a true picture of why a majority of Ebbs Agency

customers do not remain in the Ebbs’ book of business for a long period of time. The responses

given included 43% of the respondents citing untimely response to phone calls and feedbacks,

6% stated unfriendly services, and 30% stated several policy cancellation and intent to cancel

notices from the insurance carriers; this may be an attribute of the Ebbs Agency’s customer

service performance. The remaining 21% of the responses stated no difficulties experienced with

the Ebbs Agency or its consumer interactions.


Question 16: Are These Difficulties Being Addressed?

Responses to this question were mixed. While 40% of the respondents felt that nothing

has been done on this front, 60% of the respondents felt that efforts were being made to address

the issues, thus increasing customer retention in every business operation; this was especially so

with regard to the Ebbs Insurance organization.

Question 17: If You Are Happy With the Ebbs Insurance Agency’s Service, Would You Refer This Insurance Organization to Your Family Members and Friends?

The response to this question is very typical. Almost all the respondents stated that their

happiness is the driving force when referring their friends and relatives to purchase insurance

policies from the Ebbs organization. The customer level of happiness is the same as the

satisfaction level and is also the determining factor for customer retention. Only 7% of all survey

participants responded “I do not care.”

Question 18: What Advice or Ideas Would You Contribute to Upgrade the Service Standard in the Ebbs Insurance Organization?

How to upgrade their service standard

89%

11%

0% 50% 100%

Impr

ove

Cus

tom

erSe

rvic

eD

oes

not

mat

ter

Responses

Figure 10. Expected service standard distribution.


The respondents believe that effectively improving the products and services in the Ebbs

Insurance organization will require that both management and staff commit themselves to

excellence. The response to this question was that 89% of the respondents, who are themselves

customers, believe that improved customer service will surely boost customer retention. The

remaining 11% of the respondents feel that it does not matter.

Question 19: What Is Your Most Important Service or Benefit Expectation From the Ebbs Insurance Agency Based on Your Long Term Relationship With Them?

The survey feedback indicates that from a total of 108 respondents 96% (about 104

persons) expect a trustworthy agency to service their insurance policies and claims efficiently

while 4% (about 4 respondents) expect nothing at this time.

Findings From the Descriptive Analysis

Data for the qualitative analysis focused on the levels of customer satisfaction. Figure 11

below presents the percentage distribution of responses to Survey Question 1. “What is your

gender?” Of the total number of survey respondents, 52% responded female and 48% responded

male.


Figure 11. Frequency distribution of gender.

In research question #1 the researcher asked “What are the Ebbs Insurance Agency

customer expectations after 10 years of the customer/company relationship?” The responses to

this question reveal that 36% of respondents state that they have been with the Ebbs organization

for 7-10 years, and 19% responded that they have been with the organization for over 10 years.

Participant responses to Survey Question 11 find that the percentage of respondents who have

spent 7-20 years with the Ebbs organization is 55%. This response is directly related to research

question #1 and reveals that a significant percentage of respondents have spent 7-20 years with

the Ebbs organization. There is a high probability that these customers who have been with Ebbs

for an extended period of time expect higher-quality products and services from the organization,

particularly in light of so many years having been invested in the development of long-term

customer/agency relationships.


Research question #1 also relates to Survey Question 19 in which the researcher asked

“What are your most important services or benefit expectations from the Ebbs Insurance Agency

based on your long term relationship with them?”

According to the survey feedback, 57% of respondents expect a trustworthy agency to

take care of their insurance policies while 43% expect premium discounts. Survey Question 19

addressed the research question #1 which is an attribute of customer satisfaction. Almost every

customer expects better products and services, especially when they have spent a long time with

the organization.

Question 3: What Is Your Age Range?

In terms of age, the respondents ranged in age from 18 years and over. Thirteen percent

of the respondents were in the 18–20 age group; 21% were in the 21–24 age group; 24% were in

the 25-29 age group; and 42% were in the 30-40 age group and older.

01020304050

Res

pons

e D

istrb

utio

n

18 -20

21 -24

25 -29

30 -40

Age Range

Age Demographics

Figure 12. Age demographics.


Analysis of this collected data reveals that there is a significance difference in the age

range of 30-40 and older. Figure 12 illustrates the frequency distribution of age range.

Table 2. Descriptive Statistics (DS) Age Range Distribution

ICSS - PIE CHART

21 - 2421%

25 - 2924%

30 - 4042%

18 - 2013%

18 - 2021 - 2425 - 2930 - 40

Figure 13. Pie-chart of age ranges.

Q3: What Is Your Age Range?

Valid Mean Median Sd. Deviation Min. Max.

18–20 14 3.1350 2.730 1.145513 1.92 3.54

21–24 23 3.2250 2.700 1.484924 1.65 3.75

25–29 26 3.4725 2.815 1.859691 1.5 4.13

S 30–40 45 3.3000 2.770 1.499066 1.71 3.83


Figures 12 and 13 and Table 2 depict the same data in different ways. Questionnaire #3

addresses age demographics with descriptive statistical analysis in Table 2. Table 2 therefore

shows a statistical significant difference that existed in the average Ebbs Insurance customers

among the 30–40 age group referring to the “Max.” column in Table 2. In Figure 13, the pie-

chart of the age range reported 42% of the respondents that fall within the age range of 30–40.

Figure 13 therefore shows that the pie-chart result revealed that there is a significant difference

in the age group who participated in the age group.

In research question #5 the researcher asked “Are Ebbs Insurance customer levels of

satisfaction a factor in determining the degree of customer retention?” The response to Survey

Question 12 is related to research question #5. The response to question #5 is critical because it

addresses the most important research concerns. Although the response to Survey Question 12 is

mixed it was very close. The response revealed that about 15% of the respondents stated they

were very dissatisfied while 13% responded neither satisfied nor dissatisfied. The 13% who

responded neither satisfied nor dissatisfied may in reality not be satisfied either. The researcher’s

interpretation of the response is that 28% of total respondents may have actually been expressing

their dissatisfaction; this number may be considered a significant percentage of respondents

expressing dissatisfaction with the Ebbs Insurance organization’s products and services.

In research question #2, the researcher asked: “Are the agency customer levels of

satisfaction attributed from the management and leadership styles in the Ebbs Insurance Agency

under study?” This research question evaluates the management and leadership attributions to

customer levels of satisfaction; research question #2 correlates closely with Survey Question 13.

Moreover, Survey Question 13 (“How would you rate your agent?”) addressed the managing


employees (these include the agents at Ebbs) and the leadership styles attributions to customer

retention efforts.. Customer satisfaction is dependent on the strength of management and

leadership styles in every organization. The comparison of Survey Question 13 responses to

research question #2 is significant because customer satisfaction can be measured based on the

customers’ relationship with the servicing employees/agents. The responses from Survey

Question 13 reveal that about 26% (representing about 27 survey respondents from a total of

108) expressed unhappiness and dissatisfaction; thus customer dissatisfaction could result from a

lack of strong management and leadership styles in the Ebbs organization. As a result, customer

levels of satisfaction are dependent on the positive implementation of the Ebbs Agency’s

management and leadership styles.

In research question #3, the researcher asked “Are the agency managing employees’

levels of satisfaction an attribute of customers’ levels of satisfaction?” The managing employees’

(i.e., agents) performance rating is very important to the evaluation of existing relationships in

the Ebbs agency in order to better address the study focus which is concerned with customer

retention in the Ebbs Insurance organization. The responses to Survey Question 13 seem to align

with the research question #3. It is crucial to understand the performance level of the agents and

be able to infer whether or not agent performance is an attribute of customer levels of

satisfaction. The total responses, from Below Average to Poor down to Not Interested, is 21%.

This percentage represents the dissatisfied customers and, as it is a relatively substantial number,

may be an attribute of low customer retention.


Question 13: How Would You Rate Your Agent?

The gathered data reveals that there are mixed feelings with regard to this question. The

response sensitivity indicates that 25% responded Excellent, 32% responded Satisfactory, 17%

responded Average, 12% responded Below Average, 4% responded Poor, and the remaining

10% responded Not Interested. The total responses from Below Average to Poor and down to

Not Interested are 26%; this is a relatively high percentage that may be an attribute of low

customer retention. The 26% portion of these respondents may represent customers’

dissatisfaction.

In research question #4, the researcher asked “Are the agency managing employees’

motivations necessary in the effort to achieve successful customer retention?” Research question

#4 aligns with both Question 13 and Question 15 on the Survey. As found in the research

question #2 analysis above, it is important to evaluate the employee/agent levels of satisfaction.

Employee satisfaction depends on the motivations of the management and leader of the

organization. Ensuring maximum output from employees requires making certain that they are

physically and mentally motivated to perform their work assignments. The responses from

Survey Question 13 reveal that about 23 responses were Below Average, Poor, and Not

Interested. This may mean that employees/agents were not motivated enough to perform

correctly when servicing their customers’ insurance needs. It may be taken as a certainty that the

level of motivation of these employees/agents was reflected in their state of mind and actions in

relation to customers. Responses from Survey Question 15 reveal that about 86 respondents were

more concerned with quality products and services in the Ebbs organization. Ensuring delivery

of the expected high quality of products and services depends on how motivated the


employees/agents are at the time of service. It is thus imperative to keep the managing

employees/agents motivated at all times in an effort to ensure successful customer retention in

the Ebbs Insurance organization.

Overall Tests of Hypotheses

Test of Hypothesis 1

Hypothesis 1 stated (Alt): Ebbs Insurance Agency customers have many expectations

after 10 years of the customer/agency relationship. This hypothesis was evaluated by comparing

responses to Question 11 and Question 19 on the Survey. Survey Question 11 was “How long

have you been with the insurance company?” and Question 19 was “What are your most

important services or benefit expectations from the Ebbs Insurance Agency based on your long

term relationship with them?” The responses to Survey Question 11 reveal that there is a

significant difference in the percentage of the respondents who have been with the insurance

agency for at least 7 to 20 years. Responses to Survey Question 19 indicated that the percentage

of customer expectations after so many years of a business relationship with the Ebbs Insurance

Agency was significantly different. The expectancy level from customers was very high, 96%

(about 104 respondents) and greater. The response also shows that there would be a significant

relationship and correlation between the length of time that customers have been with Ebbs

Agency and customer expectations and their levels of satisfaction. As a result, the alternate

hypothesis is accepted; it can be concluded that there is a significant difference in the number of


customers with greater expectations after a long-term relationship with the Ebbs Insurance

Agency.


Hypothesis 2 stated (Alt): The customer levels of satisfaction at the Ebbs Agency are

attributable from the management and leadership styles within the agency. This hypothesis was

again evaluated by comparing responses to Question 10, Question 13, and Question 17 on the

Survey. Question 10 was “What was the atmosphere like the very first time you contacted the

insurance company for premium indication?” About 18% responded Uncomfortable while 13%

responded “I really do not care.” This particular tested question was important in order to learn

the impressions of customers at the time of their initial contact with the agency. The

“Uncomfortable” and “I really do not care” responses to Question 10 may actually represent

about 34 persons out of 108 total Survey responses; the researcher finds this to be a very

significant number which further demonstrates a correlation between the customers’ initial

contacts with Ebbs Insurance Agency and customers’ levels of satisfaction. Question 13 was

“How would you rate your agent?” This question tested the satisfaction level of customers based

on their relationship with the management and leaders of the Ebbs Agency. Responses to this

question reveal that 26% of the respondents may be very unhappy and dissatisfied. Customer

dissatisfaction could indicate a lack of strong management and leadership styles. Management

and leaders set the rules to be followed by staff members – this is given. The researcher finds

that about 28% of respondents (about 29 persons) who have expressed their satisfaction level is a

significant number. “If you are happy with the Ebbs Insurance Agency’s service, would you refer


your family members and friends to this insurance organization?” was Survey Question 17. The

happiness level of customers is a driving factor ( a relationship) in their satisfaction level. When

customers are happy they will be much more prone to refer their friends and relatives to the Ebbs

Insurance Agency. Customer happiness is dependent on quality products and customer services

offered by the Ebbs Agency. Question 17 responses reveal that about 101 out of 108 respondents

(about 93%) state that they will refer their friends and relatives to the Ebbs Insurance Agency

provided that the Ebbs Agency continues to make them happy. Since customer satisfaction

correlates with the role of management and leadership styles in the Ebbs Agency, the alternate

hypothesis is accepted. It may thus be concluded that there is a significant number of customers

who derive happiness from strong management and leadership roles in the Ebbs Insurance

Agency.

Table 3. Correlation Significance: Correlations Between Customer Satisfaction and Management/Leadership Styles Within the Ebbs Insurance Agency (N = 108 respondents)

Variables 1 2 3

Customer Level of Satisfaction 1 1 1

Management Style -2.43* -.556**

Leadership Style 156**

** Correlation is significant at the 0.01 level (2 tailed).


Hypothesis 3 stated (Alt): The agency managing employees’ level of satisfaction is an

attribute of customer levels of satisfaction. Hypothesis 3 predicted that there would be a


statistically significant difference customer satisfaction when rating the agency employees.

Hypothesis 3 further predicted that there is a significant relationship between customer

satisfaction and quality of services rendered by the Ebbs Agency (agents) employees. This

hypothesis was evaluated by comparing responses to Question 12 and Question 13. Survey

Question 12 was “How do you rate your level of satisfaction with the insurance organization?”

Responses to Question 12 reveal that of 108 respondents a total of 51% expressed dissatisfaction

with their Ebbs organization agents. Question 13 was “How would you rate your agent?” In

response to Question 13, a total of 21% (about 23 persons) of 108 respondents expressed their

levels of satisfaction regarding the quality of Ebbs Agency services as Below Average, Poor, and

Not Interested. Questions 12 and 13 are clearly interrelated. Both questions deal with customer

levels of satisfaction. These two questions evaluated agents’ levels of satisfaction, and as stated

above Ebbs’ agents are the equivalent of managing employees. The key factor at the root of these

two questions is that when employees are unhappy or dissatisfied in the workplace then quality

production will be minimal. When this occurs it leads to customer dissatisfaction which in turn

leads to low customer retention. As a result, the alternate hypothesis is accepted. Since there is

a correlation between managing (agent) employees levels of satisfaction and customers’ level of

satisfaction, it is agreeable that the significant number of customers who find that the Ebbs

Agency managing employees’ level of satisfaction is an attribute to customer levels of

satisfaction.


ExcellentSatisfactoryAverageBelow AveragePoorNot Interested

Figure 14. Customer rating on agents.


Hypothesis 4 stated (Alt): The Ebbs Agency managing employees’ motivation is

necessary for successful customer retention efforts. Hypothesis 4 predicted that there would be a

statistically significant difference in customers’ perception of successful customer retention

efforts. The hypothesis was evaluated by comparing responses to Question 13, Question 15 and a

reference to Question 18 on the Survey. Question 13 was “How would you rate your agent?”

Once again, responses to Question 13 reveal that a total of 21% (about 23 of the respondents)

expressed their levels of satisfaction regarding the quality of services they have experienced with

the Ebbs Agency as Below Average, Poor, and Not Interested. Question 15 was “What

difficulties are you having with the Ebbs Insurance Agency in regard to your insurance

policies?” Responses to Question 15 reveal that 79% of respondents (about 86 persons of the

total 108 responding to the questionnaire) truly represent the majority of Ebbs Insurance


customers; this 79% were more concerned with the quality of service at the Ebbs Insurance

Agency.

In the early data analysis, the researcher referenced employee satisfaction as a factor in

customer retention. The same finding applies here: If employees are not motivated, production

will not be maximized and thus profits will not be marginalized. This leads inexorably to

customer dissatisfaction followed by low customer retention. Customers, when referring to

Survey Question 18 (“What advice or ideas would you contribute to upgrade the service standard

in the Ebbs Insurance organization?”), believe in improved products and services from the Ebbs

organization. Figure 1 above gives a clear indication of just how important employee motivation

is. Customer retention is dependent on how satisfied the employees are. The hypothesis test has

further predicted that there is a strong relationship and correlation among the employees’

satisfaction and customers satisfaction. The alternate hypothesis is thus accepted with the

conclusion that there is a significant number of respondents who strongly believe that employee

motivation is necessary for successful customer retention efforts.


Hypothesis 5 stated (Alt): The Ebbs Insurance customer levels of satisfaction are a factor

in determining the degree of customer retention. Hypothesis 5 predicted that there would be a

significant correlation between customers levels of satisfaction and the degree of customer

retention. This hypothesis was evaluated by comparing responses to Question 12 with reference

to Question 13 on the Survey. Question 12 was “How do you rate your level of satisfaction with


the insurance organization?” About 51% representing 55 respondents expressed dissatisfaction

with the insurance organization.

Very Satisfied SatisfiedDissatisfied Very dissatisfied

Figure 15. Customer satisfaction level distribution.

Figure 15 explains how important customer satisfaction is in determining the degree of

customer retention. Question 13 reveals that a total of 21% of respondents (about 23 persons)

expressed their levels of satisfaction regarding the quality of services received from the Ebbs

Agency as Below Average, Poor, and Not Interested. Customer satisfaction is a very important

factor in determining the degree of customer retention. As a result of the above tests the alternate

hypothesis is accepted; it can be concluded that there is a significant number of respondents who

believe that customer levels of satisfaction are a factor in determining the degree of customer

retention hence there is a significant correlation among the two variables.


Interviews

The researcher conducted 45-minute interviews with selected industry leaders of the

Alpha Plus Insurance and Financial Agency. During the consensual taped interview, Tony Ujad

and Maria Chavez expressed their concerns with regard to customer retention. The Alpha Plus

organization was established 13 years ago in Southern California. According to Tony Ujad,

president of the organization, the agency’s chief concern is establishing a continuous retention of

customers in their book of business. Maria Chavez, the Alpha Plus vice president of operations,

reports that on average customers are retained in the agency’s book of business for only about 3

years. She further states that Alpha Plus Agency’s management is always struggling to acquire

new customers in the face of constant loss of customers to competitors. Tony Ujad, as the leader,

is very concerned with this unstable retention level and mentions an in-house research project

that will complement the researcher’s main study focus is scheduled to commence in the near

future. Finally, Mr. Ujad commended the researcher’s study project as one of the most important

measures to: (a) create awareness in all insurance agencies concerning the importance of

customer retention; (b) establish the appropriate measures to improve quality products and

services in order to ensure customer satisfaction in an effort to ensure a high degree of customer

retention; and (c) establish a reference guide for all insurance agents and employees as well as

leaders within the entire insurance industry.

The interview with the principal leaders of the Alpha Plus Agency was the secondary

source of this research study’s data collection. It was very necessary to gather inter-agency

feelings and concerns in regard to the main study focus, the issue of customer retention.


Summary

This chapter summarized how all data was collected and gave the analysis of this data

based on participant responses to the Survey questionnaire. The analysis of the questionnaire

variables revealed that there was statistical significance in the average Ebbs Insurance customer

who is in the 30-34 age group. No statistical difference existed for gender. These results suggest

that those in the lower education brackets may not have a clear knowledge of the importance of

maintaining their insurance policies.

In the concluding chapter 5 that follows, results of the study findings are summarized. In

addition, conclusions and recommendations for future research are presented.

CHAPTER 5: RESULTS, CONCLUSIONS, AND RECOMMENDATIONS

Introduction

The overriding objective of this study has been to examine the extent to which the

strengths and weaknesses of the customer/company relationship influence customer retention in

the insurance agency setting. Chapter 4 presented an analysis of the findings from the study.

This chapter will explore the summary results, conclusions and recommendations for further

study on the evaluation of relationships that exist in insurance agency settings. The research

questions included in the study focused on the relationship between insurance agency customers

and insurance agency managing employees. The questions in the study were: (a) What are Ebbs

Insurance Agency customer expectations after 10 years of the customer/company relationship?

(b) Are the customer levels of satisfaction attributed from the management and leadership styles

within the agency under study, the Ebbs Insurance organization? (c) Are the agency managing

employees’ levels of satisfaction an attribute of customer levels of satisfaction? (d) Are highly

motivated agency managing employees necessary in the effort to achieve successful customer

retention? (e) Are Ebbs Insurance customer levels of satisfaction a factor in determining the

degree of customer retention?

The study was also aimed at determining (a) the type of leadership roles available in the

insurance agencies; (b) the possible existence of relationships between insurance agency

customers and insurance agency managing employees; (c) the factors responsible for the decline

or inadequate customer retention in the Ebbs Insurance Agency; and (d) if there is a correlation

between customer levels of satisfaction and the degree of customer retention.


Summary of Results

Descriptive statistics were used in addressing the research questions. The results of the

findings are consistent with what is known about the inadequacy of products and services offered

by the Ebbs Insurance Agency. Independent variables of the respondents’ personal

characteristics such as age, gender and education levels were analyzed to assess if they influence

changes in customer behavior in relation to Ebbs Insurance products and services.

Findings from the study revealed that in an effort to improve Ebbs’ products and services,

the agency’s management adopted a decentralized management style of operation; hence

management implemented a random evaluation of product and service distributions at the Ebbs

Insurance Agency. The decentralized management style placed certain authorities and

responsibilities on smaller management units. The responsibilities entrusted to these smaller

units included the constant operation and maintenance of products and services offered to Ebbs

Agency customers as well as providing reorientation training of managing employees in order to

attain better customer service performance.

Age Demographics

A summary of the findings showed significant differences between the age groups of the

respondents. The study further revealed that the 30-34 age group tends to purchase insurance

policies and have continued to maintain their policies longer than other age groups.


Gender Demographics

The study respondents consisted of slightly more than 48% males and 52% females.

Customer loyalty disparity seems to be evidenced in behaviors in relation to Ebbs Agency

products and services. A summary of the findings revealed that there was no significant

difference between males and females.

Education Demographics

There was a significant difference among the groups in educational background. The

study showed that approximately 61% of the respondents had high school or less educations.

This group, representing the majority of respondents, indicated a lower sense, ability, and

knowledge of the quality products and services offered by the Ebbs Insurance Agency.

Addressing the Research Questions

This study focused on the following research questions:

Research Question 1: What Are the Ebbs Insurance Agency Customer Expectations After 10 Years of the Customer/Company Relationship?

As previously stated, this study was conducted using a 19-question closed-ended

questionnaire to survey a random sample of participants who also truly represented Ebbs

Insurance Agency customers. Questions 2, 6, 10, 11, 12, 13, 14, 15, 16, and 17 on the Survey

questionnaire were used to analyze the participants’ impressions in regard to their levels of

satisfaction with Ebbs Insurance products and services. Results from the statistical analysis

revealed that an overwhelmingly significant percentage of responding customers have concerns

about the quality of products and services offered by the Ebbs Agency.


Based on the above statistical analysis, it would be prudent to infer that customer levels

of satisfaction remain the driving factor in the degree of customer retention attained in all

business operations, and especially in the insurance industry.

Research Question 2: Are the Customer Levels of Satisfaction Attributed From the Management and Leadership Styles Found in Ebbs Insurance Agency Under Study?

This research question places its focus on the management and leadership attributions to

customer levels of satisfaction. Moreover, customer satisfaction depends on the strength of

management and leadership styles in every organization. An evaluation of the existing

relationships between customers and managing employees was very important to Research

Question 2 because customer satisfaction can be measured based on the relationship they have

with the servicing managing employees and their associates. Questionnaire responses from the

aligned Survey Question 13 showed that 26% (about 27 respondents of the total 108) expressed

unhappiness and dissatisfaction. Further analysis finds that this customer dissatisfaction could

have been caused by a lack of strong management and leadership styles within the organization.

Based on the above analysis, it then becomes appropriate to infer that customer levels of

satisfaction can be attributed from the management and leadership styles in the Ebbs Insurance

Agency under study.

Research Question 3: Are the Agency Managing Employees’ Levels of Satisfaction an Attribute of Customer Levels of Satisfaction?

Early analysis of this research question revealed that the performance rating of the

managing employees’ (the same as Ebbs agents) is important to the evaluation of existing

relationships at Ebbs in order to better address the research study focus. The responses to Survey


Question 13 seem to align with Research Question 3. An understanding of the agents’

performance levels is significantly helpful in clarifying whether the performance of the agents is

an attribute of customer levels of satisfaction. The responses to the aligned Survey Question 13

revealed that a total of 21% of respondents expressed dissatisfaction as customers; this is a

relatively substantial number that may be an attribute of low customer retention.

In light of this analysis it is appropriate to conclude that managing employees’ levels of

satisfaction is an attribute of customer levels of satisfaction.

Research Question 4: Is It Necessary That Agency Managing Employees Be Highly Motivated in the Effort to Achieve Successful Customer Retention?

Research studies have used various means for the measurement of managing employees’

levels of satisfaction. Such techniques include the evaluation of employees’ on-the-job

satisfaction. In these studies individual employee occupations are used to determine how

comfortable they are from the standpoint of salary and benefits.

Others have used “loyalty lines” as a basis for this distinction (Maddock, 2000). In a

particular study described by Maddock, the term “job occupation” was used to distinguish

loyalty lines between those employees who serve customers better and those who do not. It may

be stated with certainty that employee satisfaction is driven by the motivations of the

management and leadership of any given organization. Therefore, to ensure maximum output,

policies to ensure that employees are motivated to perform their work assignments at all times

should be in place.


Based on the previous statistical analysis, it is appropriate to conclude that the

motivations of managing employees are a key factor in the effort to achieve successful customer

retention.

Research Question 5: Are Ebbs Insurance Customer Levels of Satisfaction a Factor in Determining the Degree of Customer Retention?

The response to Research Question 5 was critical as it addressed the most important

research concerns. Further analysis of Research Question 5 revealed that a significant number of

respondents expressed their dissatisfaction with Ebbs Insurance Agency products and services.

As this result is directly linked to the main research concern, the researcher suggests that Ebbs

Agency management has a high degree of responsibility in ensuring that its customer are happy

with the services offered by the organization.

Conclusion

In an effort to improve Ebbs Insurance Agency products and services, the agency’s

management implemented random evaluations of products and services offered by the Ebbs

Insurance Agency. The agency’s decentralized management style places certain authorities and

responsibilities on the smaller management units in the organization. As stated above, the

responsibilities entrusted to these smaller management units include the operation and

maintenance of Ebbs Insurance Agency’s products and services as well as the provision of

managing employees’ reorientations to ensure better customer service performance.


Recommendations

As a result of this study, and to ensure a continuous high degree of customer retention,

the researcher believes that following the below recommendations would greatly improve the

quality level of products and services offered by the Ebbs Insurance Brokers organization. Some

efforts may be called for at the management level but the most important needed measure here is

an ongoing evaluation and improvement of the methods used in employee training and education

regarding the products and services offered by the Ebbs Insurance Agency.

Additionally, it is imperative that Ebbs Agency leadership extends its improvement

monitoring to all management branches within the organization in order to provide an effective

system of checks and balances; this will guarantee that quality products and services are being

offered by the Ebbs Agency.

Finally, the results of the study indicate that Ebbs Insurance as an organization must

strenuously evaluate the need for products and services improvement; the researcher strongly

recommends that Ebbs Insurance Agency management embark on an efficient allocation of

quality products and services to Ebbs Agency customers in order to ensure a high degree of

customer retention. Improvement in the products and services offered by the Ebbs Insurance

organization will allow it to not only retain more customers in the book of business but will also

increase productivity as well as maximizing profit.

Suggestions for Future Research

The results of this research study suggest that all insurance organizations in the service

industries mirror a Western style of business operations; they especially emulate the Australians


in their particular attitude toward customer needs. As financial industries are more passionate

about customer needs, which in fact is the cornerstone of Fred Taylor’s study of an individual’s

needs, it would be appropriate in future research studies to determine if Taylor’s results are

unique to products and service providers such as the insurance industry. A specific study of

managing employees (the agents in this industry) and their attributes to customer needs and

customer retention is very necessary because employees in every organization contribute to

customer satisfaction, a requirement for achieving customer retention. Comparatively,

manufacturing organizations are better able to track employee production than most service

industries; however, the identification of methods used by service-oriented industries whose

focus is on customer needs to ensure a high degree of customer retention is always of interest.

An additional suggested future study is to determine the impact of high loss ratios in the

insurance industry in regard to customer retention. Excessive losses are an epidemic that

determine how many insurance policies remain in the book of business. It is therefore necessary

to study the impact of high loss ratios in insurance agency settings.

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APPENDIX A: REQUEST FOR PARTICIPATION

Dear Sir/Madam: My name is Chika Ebenezer Duru. I am a student in the School of Business at Capella University in Minnesota, U.S.A. I am pursuing a PhD degree in Organization and Management Leadership. My dissertation topic is “The Impact of Leadership Roles In Relation To Customer Retention: An Analysis of The Relationship Between Insurance Agency Customers and The Insurance Agency Management.” The purpose of this study is to analyze the key factors that influence levels of customer satisfaction in every business operation in relation to customer retention. As an Ebbs Insurance Agency customer, your personal data, obtainable from Ebbs records, is intended to be used and your input in this study would be very helpful. If you agree to participate, the study involves you completing the study Survey Questionnaire and to be interviewed by me, the principal investigator. In regard to the interview, it will be held at a place and time convenient for you. The interview will last about one hour and will be recorded on a tape recorder. If at any time you are uncomfortable being taped, the tape recorder will be turned off while our discussion continues. In the event the tape recorder is turned off, I will take notes of our conversation. If at any time during the interview you wish to stop or withdraw from the interview, you may do so without prejudice. Additionally, there is no direct benefit to you; hence your participation in this study is strictly voluntary.

All information collected for this study will be kept strictly confidential and destroyed after 7 years following the completion of this study. If you agree to participate, it would be greatly appreciated. Thanking you in advance for agreeing to participate in this study. Sincerely, Chika E. Duru Chika Ebenezer Duru

APPENDIX B: CONSENT FORM

My name is Chika Ebenezer Duru, a student in the School of Business at Capella University in Minnesota, U.S.A. I am seeking a PhD degree in Organization and Management Leadership. My dissertation topic is “The Impact of Leadership Roles In Relation To Customer Retention: An Analysis of Relationships Between Insurance Agency Customers and Insurance Agency Management.” The purpose of this study is to analyze the key factors that influence levels of customers satisfaction in every business operation in relation to customer retention. As one of Ebbs Insurance Agency customers, your personal data, obtainable from Ebbs records, is intended to be used and your input in this study would be very helpful. If you agree to participate, the study involves you completing the study Survey Questionnaire and to be interviewed by me, the principal investigator. In regard to the interview, it will be held at a place and time convenient for you. The interview will last about one hour. I will record the interview using a tape recorder. If at any time you are uncomfortable being taped, I will turn the tape recorder off while our discussion continues. In the event the tape recorder is turned off, I will take notes of our conversation. If at any time during the interview, you wish to stop or withdraw from the interview, you may do so without prejudice. In addition, there is no direct benefit to you; hence your participation in this study is strictly voluntary. I will follow professional ethical standards to avoid practices that may harm, humiliate, or mislead you when conducting the interview. To ensure anonymity, all information gathered will be held in strict confidence. I will use every effort to remain objective and to report the findings as accurately as possible. The results will only be disclosed to those who have a need to know in order to evaluate this dissertation. Thank you for agreeing to participate in this study.

AUTHORIZATION:

I, __________________________________, have read the above and understand the nature of this study. I understand that by agreeing to participate in this study, I have not waived any legal or human rights. I have received an explanation of the procedure to be used in this study. I also understand the procedure, benefits, and any rights to withdraw from this study at any time without prejudice. In addition, I understand that my participation is voluntary, and that by participating I am giving permission for the findings to be published in research articles. I also understand that my identity will be held in strict confidence. I understand that my signature acknowledges that I have received a copy of this consent form. Participant’s Name_____________________ Signature________________ Date_______ Researcher’s signature _______________________Date_____________


REQUEST FOR PARTICIPATION Tony Ujad, President. Maria Chavez, Vice President Operations Alpha Plus Insurance and Financial Agency Long Beach, California Dear Sir/Madam:

My name is Chika Ebenezer Duru. I am a student in the School of Business at Capella University Minnesota, U.S.A., pursuing a PhD degree in Organization and Management Leadership. My dissertation topic is “The Impact of Leadership Roles In Relation To Customer Retention: An Analysis of Relationships Between Insurance Agency Customers and Insurance Agency Management.” The purpose of this study is to analyze the key factors that influence levels of customer satisfaction in every business operation in relation to customer retention. As the leaders in the Alpha Plus Insurance Agency, your input in this study would be very helpful. If you agree to participate, the study involves your being interviewed by me, the principal investigator. With regard to the interview, it will be held at a place and time convenient for you. The interview will last about one hour. I will record the interview using a tape recorder. If at any time you are uncomfortable being taped, I will turn the tape recorder off while our discussion continues. In the event the tape recorder is turned off, I will take notes of our conversation. If at any time during the interview you wish to stop or withdraw from the interview you may do so without prejudice. In addition, there is no direct benefit to you; hence your participation in this study is strictly voluntary. I will follow professional ethical standards to avoid practices that may harm, humiliate, or mislead you when conducting the interview. To ensure anonymity, all information gathered will be held in strict confidence. I will use every effort to remain objective in reporting the findings as accurately as possible. The results will be disclosed only to those who have a need to know in order to evaluate this dissertation. Thank you for agreeing to participate in this study. Sincerely, Chika E. Duru Chika Ebenezer Duru

APPENDIX C: PARTICIPATION ACCEPTANCE

Chika Duru, President Ebbs Insurance Agency Long Beach, California Dear Mr. Duru, Thanks for your request to interview Miss Maria Chavez and I, Tony Ujad. We do not have any problems being interviewed by you in order to carry on with your research study. At any day and time that you want to schedule this interview, we will make ourselves available. Just let us know the exact date and time to enable us to calendar it. Much success in your studies. If you have questions, please contact either Maria or Tony. Sincerely, Tony Ujad, Tony Ujad Maria Chavez, Maria Chavez Alpha Plus Insurance Agency

APPENDIX D: SURVEY INSTRUMENTS

Customer Questionnaire:

A selected sample of Ebbs Insurance Agency customers completed this questionnaire in order to determine their level of satisfaction. This was an effort to measure the level of relationships

that exist between Ebbs Agency customers and the Ebbs organization as well as to determine the expected return of consumer loyalty toward the Ebbs Insurance Agency. The Questionnaire is as

follows:

On a scale of 1-5 (1=Strongly agree, 2=Agree, 3=Strongly disagree, 4=Disagree,

5=Neutral).

On a scale of 1-5 (1=Very completely, 2=Completely, 3=Not completely, 4=Poor, 5=Very

poor).

On a scale of 1-5 (1=Very satisfied, 2=Satisfied, 3=Dissatisfied, 4=Very dissatisfied,

5=neutral).

Please circle, insert, or check where applicable the number which describes your

experience with the Ebbs Insurance Agency.

Section 1: Background.

1. What is your gender? Please check one: ( )Male ( )Female

2. Your level of education. Please check or circle one:

( )High school & grade 9 10 11 12 ( )College Degree

( )Undergraduate Degree ( )Graduate Degree

3. What is your age range? ( )18-25 ( )26-34 ( )35-44 ( )44-older.


4. What type of insurance policy did you purchase?

( )Automobile ( )Motorcycle ( )Homeowners ( )Commercial

( )Life ( )Health ( )Boat

5. If you purchased automobile or motorcycle insurance policies, how many years have

you been licensed within below options? Insert number of years in space provided:

( )California ( )Out of State ( )Total years licensed in the USA

6. What was your driving record like in the past 3 years? Insert number of violations in the

spaces provided: ( )Moving violations ( )Accidents ( )DUI

( )Reckless driving ( )Other felonies

7. If you purchased insurance policies other than automobile and/or motorcycle policies,

how well did the agent explain the coverage and the claim procedures involved

therein? Check one: ( )Very completely ( )Completely ( )Not completely

( )Poor ( )Very poor

Section 2. Quality of Service.

8. How did you hear about this particular insurance company? Check one: ( )TV

( )Radio ( )Yellow Pages ( )Flyers ( )Friend

9. How did you obtain your insurance premium estimate?

( )Walk-in ( )Telephone quotation

10. What was the atmosphere like the very first time you contacted the Insurance

Company for premium indication? Check one: ( )Very professional

( )Professional ( )Very friendly ( )Friendly


( )Comfortable ( )Uncomfortable

11. How long have you been with the Ebbs Insurance company?

( )1-3 years ( )4-6 years ( )7-10 years ( )11-20 years

12. How would you rate your level of satisfaction with this insurance organization? Check

one: ( )Very satisfied ( )Satisfied ( )Neither satisfied nor dissatisfied ( )Very

dissatisfied

Section 3. Level of Relationship.

13. How would you rate your agent? Check one: ( )Excellent

( )Very good ( )Good ( )Satisfactory ( )Average ( )Below average

( )Poor

14. What would cause you to cancel your insurance policies with the Ebbs Insurance

Agency?

___________________________________________________________________

___________________________________________________________________

15. Are there any difficulties that you have encountered with the Ebbs Insurance Agency

regarding your insurance policies?

___________________________________________________________________

___________________________________________________________________

16. If so, are these difficulties being addressed?

___________________________________________________________________


17. If you are happy with Ebbs Insurance Agency’s service would you refer your family

members and friends to this insurance organization?

___________________________________________________________________

18. What advice or ideas would you suggest to upgrade the service standard in the Ebbs

Insurance organization?

__________________________________________________________________

__________________________________________________________________

19. What is your most important service or benefit expectation from the Ebbs Insurance Agency

based on your long-term relationship with them?

__________________________________________________________________

__________________________________________________________________

APPENDIX E: INSTITUTIONAL REVIEW BOARD APPLICATION

Institutional Review Board

225 South 6th Street, 9th Floor Minneapolis, Minnesota 55402

Institutional Review Board Application (When this IRB application is completed, it is to be submitted with the research proposal for the next stage of review. The Provost, or designee, gives final approval. See the checklists at the end of this form to verify that you have completed all of the information for this application.) Name (e.g., Learner, Faculty Employee, Consultant, Directed Employee/Agent, Independent Contractor, Adjunct Faculty) Learner: Chika Ebenezer Duru Date: September, 2005. Address__3236 Pozo Drive, Hacienda Heights, CA 91745 Phone (Work) 562-498-0069 (Home) 626-855-4435 Email Address: [email protected] ________________________________________________________________ Field of Study: Organization and Management Leadership Degree Program: PhD Supervisor Name: Raj K. Singh, Ph.D. Supervisor Title: Mentor Supervisor, Staff Position: Capella University Organization and Management Faculty Address: 20606 Mesa Oak Drive, Riverside, CA 33972 Phone (Work) 951-295-8307 (Home) 951-295-8307 Email Address: [email protected] _________________________________


Provost: Karen Viechnicki, Ph.D. February 3, 2005. Fill in date you successfully completed the online IRB Training required modules and optional modules appropriate to research topic 1. Project Title: The Impacts of Leadership Roles in Relation to Customers Retention: An Analysis of Relationship Between Insurance Agency Customers and Insurance Agency Management. _____________________________________________________________ 2. Inclusive dates of project: August 2005 through June 2006 3. Abstract Describe your research, including research questions and methods to be used (research question, hypothesis, and methodology). Describe the purpose of the research and explain what the research subjects/participants will be asked to do. Please use language that can be understood by a person unfamiliar with the area of research. Avoid area-specific jargon as much as possible. If you must use area-specific jargon, also include an explanation of its meaning. If using existing data or records, describe the sources of the data and your means of access to the data. If you are not using human participants, clearly indicate the nature of data collection. Attach abstract. See checklist to verify that you have completed the abstract. The proposed research study will investigate the key factors that influence levels of customers’ satisfaction in every business operation especially in insurance agency settings. This research is proposing to limit its focus to Ebbs Insurance customers levels of satisfaction. The purpose of this research is to investigate the role of customers satisfaction level characteristics in an insurance agency setting(s) as well as explore other factors that may influence customer retention efforts. Research Methodology:

Although, this study will utilize quantitative research method to some extent but this research study will predominantly utilize qualitative research methodology. The combined methodology will allow for a comprehensive and in-depth analysis of the relationship that exists in insurance agency settings. Qualitative data will be gathered from journal entries and interviews. A smaller sample of participants will be asked to keep a log of their activities, learning behaviors, performances and thoughts for a two-week duration. The data from these journal entries will be extrapolated for common themes that will then be used to formulate interview questions to further the research inquiries.

Quantitative process which involves a random selection of 220 participants (ages 18 and over), will be used to derive statistical analysis of how levels of relationship impacts customer retention efforts in Ebbs Insurance Agency. Research participants will be asked to complete a survey instruments that focus on the relationship that exists in Ebbs Insurance Agency.


Research questions:

1. What are the Ebbs Insurance agency customers’ expectations after 10 years company

relationship?

2. Are the agency customers’ levels of satisfaction attributed from the management and

leadership styles in Ebbs Insurance Agency under study?

3. Are the agency managing employees’ levels of satisfaction an attribute to customers’

levels of satisfaction?

4. Are the agency managing employees’ motivation necessary for successful customers’ retention

efforts?

5. Are Ebbs Insurance customers’ levels of satisfaction a factor towards determining the

degree of customers’ retention.

Participant/Subject Population (or Final Sample to be selected)

a. Number: Male __X__ Female __X__ Total –Minimum of 220 b. Age Range: 18 years and older c. Location of Participants: (Check all that apply) __X_normal volunteers ____elementary / secondary school ____outpatient ____hospital / clinic ____university / college __X_other special institutions: specify: Current customers of Ebbs Insurance Agency.


d. Special Characteristics: (Check all that apply) __X adults with no special characteristics ___Capella University learner, faculty, and/or staff ___inpatients ___outpatients ___prisoners ___students ___other special characteristics: Specify __________________________________________ If research is conducted through organizations or agencies, written documentation of approval / cooperation from each agency (e.g., business, school, hospital, clinic) must accompany this application. The proposed study will not be conducted through organizations or agencies. e. Recruitment of Participants/Subjects Describe how participants/subjects will be identified and selected for recruitment. Attach recruitment information (e.g., advertisement, bulletin board notices, recruitment letters) Attach description and examples of information as it will appear to potential participants. 220 of current Ebbs Insurance Agency customers will be contacted via electronic messages to participate in the proposed research study. A pool of the volunteers from the sample population will constitute the study participants. The preliminary recruitment message/letter attached (Appendix A). f. Approval for Use of Records If participants/subjects are chosen from records (e.g., email address list, postal address list, telephone number list, patient charts, student grades), indicate who approved use of the records. If records consist of medical students, or other private records, provide the protocol for securing consent of the participants/subjects in the records and approval from the custodian of the records. If appropriate, specify how Standards for Privacy of Individually Identifiable Health Information (the Privacy Rule) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) have been observed. See website found at http://privacyruleandresearch.nih.gov/ Attach description. Although, the researcher has access to the records to be used, but the initial approval to use the primary data comes from the intended participants which are the actual representatives of Ebbs Insurance Agency customers. The researcher ensures that the voluntary survey participants are well informed of their personal data access usage prior to conducting this research study to prevent any and all biases. The researcher also makes sure that participants’ right of privacy act is not


violated. These rights are the participants’ right to have their identity/records kept private and confidential, and not to use them for any purpose without consent from the participants who are the owners of the records. The researcher ensures that all participants information is strictly used for the purpose this research study. See Appendix A.

The participants demographics will not include medical students or other private records other than stated herein this form. g. Initial Contact with Participants/Subjects Who will make the initial contact with participants/subjects? Describe how contact will be made. Attach description.

Initial contact with study participants will be made by the researcher. E-mail message will be sent to potential participants explaining the dissertation focus and potential participation needs.

Although, the researcher sampled and tested his “Participation Request Letter” with only 5 potential participants via e-mail in which the potential participants responded positively via e-mail as well. Upon approval of this research proposal, the researcher will continue to make initial contacts with potential participants. Recruiting the required number of participants begins with those who will respond committed to participate in the research study. A copy of the initial contact letter attached. See Appendix A. h. Inducements or Rewards to Participants/Subjects Will participants/subjects receive inducements before, or rewards after the study? Include this information in your assent/consent documents. See checklist at the end of this form to verify that you have completed the informed assent/consent documents or the cover to an anonymous questionnaire. Attach description. Participants will not receive any inducements or rewards for participating in this study. Participation is voluntary. Participation conditions are made available on the informed consent form attached (Appendix B). i. Activity for Control Group If some of the participants/subjects are in a control group, describe in detail the activity planned for that group. (This information must be included in the consent/assent forms.) Attach description.

Not applicable. Participants will not be in a controlled group. 5. Confidentiality of Data a). Describe what provisions will be made to establish and maintain confidentiality of data and who will have access to data. If anonymous surveys are distributed, provide all the information that would have been given in an informed consent form as a cover to the survey (see the checklist at the end of this form to verify that you have completed the cover to the survey). Attach description.


Only the researcher will have access to the data and other information pertinent to this research study. Data will be coded and reported using participant ranges, no names will be mentioned. Also, data will be secured in a fire-proof box with lock and key. Participant information will be provided using general demographics such as number of male and female participants and age range. b). Where will the data be stored and for how long? Whatever media (e.g., audiotape, paper, digital recording, videotape) are used to record the data, explain who will have access and how long the media will be retained. It is required that data be stored for a minimum of seven years after publication of results (such as a dissertation). If data will be destroyed, describe the secure method for destroying the materials that will maintain confidentiality. Attach description. All data collected will be stored electronically until analysis and findings are written and presented to dissertation committee. Data will be later stored on a password protected external thumb drive. Recordings of interviews with the smaller sample of participants will be kept electronically and on the same external thumb drive. All data will be retained for seven years and will be safe guarded in a fire proof box. Thereafter, all records pertinent to this research including audio tapes and/or any personal identifying information will be shredded to ensure anonymity of the research participants’. All documents relating to ethical treatment of human participants/subjects which will be used in the course of the research must be attached to this form. These documents include consent forms, cover letters and other relevant material. See checklist at the end of this document to verify that the application form has been completed. Submit completed checked checklists with this application form to your school’s designated IRB reviewer. Signature of Researcher As a Researcher (e.g., Learner, Faculty Employee, Consultant, Directed Employee/Agent, Independent Contractor, Adjunct Faculty) you certify that:

• The information provided in this application form is correct and complete. • You will seek and obtain prior written approval from the Committee for any

substantive modification in the proposal. • You will report promptly to your Supervisor any unexpected or otherwise significant

adverse events in the course of this study. • You will report to the Supervisor and to the participants/subjects, in writing, any

significant new findings which develop during the course of this study which may affect the risks and benefits to participation in this study.

• You will not begin the research until final written approval is granted. • You understand that this research, once approved, is subject to continuing review and

approval by your Supervisor. You will maintain records of this research according to Supervisor guidelines. Substantive change requires submitting an addendum to a


previously approved application. An addendum is a totally new application form with attachments. The cover letter with the addendum describes the changes that were made from the originally approved application.

If these conditions are not met, approval of this research could be suspended. Signature of the Researcher: Chika Ebenezer Duru Date_8/26/05_ ------------------------------------------------------------------------------------------------------- Signature of Supervisor As a Supervisor (e.g., Mentor, Instructor, Practicum Supervisor, Internship Supervisor, Staff Supervisor) you certify that:

• The information provided in this application form is correct and complete. • You will review and provide prior written approval to your Supervisee for any

substantive modification in the proposal. You will inform the committee members appointed to oversee the research and its results.

• You will receive reports from your Supervisee about any unexpected or otherwise significant adverse events in the course of this study. You will inform the committee members appointed to oversee the research and its results.

• You will review research records maintained by your Supervisee until the final written document is produced and approved by you and the oversight committee.

• You will inform the oversight committee about the progress of your Supervisee from the time of developing research questions, through the proposal, IRB application, collection of data, writing results, and completing the documentation of the research.

• You will contact the Lead Subject Matter Expert (e.g., Chair of the Specialization, Faculty Director) if additional review is needed.

• You will make sure that this application has been completed by your Supervisee including all accompanying attachments before signing your name for approval.

• You assume responsibility for ensuring that the research complies with University regulations regarding the use of human participants/subjects in research.

If these conditions are not met, approval of this research could be suspended. Signature of the Supervisor:

Name: ________________________________ Date October 17, 2005 Title: Mentor/Chair


Signature of Provost or Designee As Provost, or designee, I acknowledge that this research is in keeping with the standards set by the university and assure that the researcher has met all requirements for review and approval of this research. Signature of Provost or Designee Name __________________________________________ Date____________ Completed forms should be sent as email attachments. Scan signature pages and attach as files. Send email messages with attachments to the designated IRB reviewers in one of the following schools representing your specialization affiliation: Harold Abel School of Psychology School of Business School of Education School of Human Services School of Technology

Documents

Duru, C.E. 2006, The Impact of Leadership Roles in Relation to Customer Retention an Analysis of the Relationship Between Insurance Agency Customers and Insurance Agency Management,