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, Capella University.

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
Copyright 2006 by
Duru, Chika Ebenezer
All rights reserved.
UMI Microform 3226799

Copyright 2006 by ProQuest Information and Learning Company.
All rights reserved. This microform edition is protected against
unauthorized copying under Title 17, United States Code.
ProQuest Information and Learning Company

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P.O. Box 1346
Ann Arbor, MI 48106-1346
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 managements 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.
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.
iii
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
iv
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.
Table of Contents
Acknowledgments
iv
List of Tables
List of Figures
xi
CHAPTER 1: RESEARCH PROBLEM
Introduction
Background of the Study
Statement of the Problem
Purpose of the Research Study
Research Questions
Nature of the Study
Significance of the Study
Definition of Terms
Assumptions and Limitations
Organization of the Remaining Chapters

CHAPTER 2: LITERATURE REVIEW
10
12
Introduction
12
Rationale of the Research
12
Theoretical Framework
13
The Customer/Organization Relationship
15
vi
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
Researchers Philosophy
57
Description of Methodology
57
61
Research Hypotheses
63
Sample Design
65
Full Disclosure Statement
66
Instrument
67
vii
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
viii
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
ix
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
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. Robsons 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. Organizations 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
xi
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
organizations 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
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
Customer Retention
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 leaders 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,
Customer Retention
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 Mammans 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).
Customer Retention
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 managements 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
Customer Retention
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 customers strengths and areas of
opportunity for possible retention and growth within the organization. Laurie (2000) further
asserts that customer retention is everybodys 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
Customer Retention
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
Customer Retention
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
Customer Retention
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
employees (agents) 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
Customer Retention
10
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.
Customer Retention
11
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 researchers 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 todays
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
Customer Retention
13
whether or not ones 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
researchers 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.
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
Customer Retention
14
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. DeAth (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
Customer Retention
15
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
(DeAth, 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
Customer Retention
16
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.
Customer Retention
17
Hersey, Blanchard, and Johnson (2000) have the opinion that a focus on the ultimate
readers 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 todays
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,
Customer Retention
18
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 organizations goals.
According to Hammer (2001), a projects success or failure depends on leadership and its style.
Customer Retention
19
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
organizations 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 chains many locations. These authors also relate that the insurance industry,
pharmaceutical firms, credit card companies, major airlines, wireless providers and cable
Customer Retention
20
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 todays banks have established modern banking technologies
such as internet banking, telephone banking, and ATM machines for their customers
Customer Retention
21
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).
Customer Retention
22
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 ones own voice and clearly
see ones 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
Customer Retention
23
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.
Customer Retention
24
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 organizations 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
Customer Retention
25
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 allimportant 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 organizations team players
Customer Retention
26
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
Customer Retention
27
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
organizations 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 organizations products and services they expect
Customer Retention
28
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 firms 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 firms service loyalty and
creates a responsive and sustained patronage thereafter.
Customer Retention
29
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 organizations 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).
Customer Retention
30
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 organizations 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).
Customer Retention
31
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 expectationsthe 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 multipleitem 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
Customer Retention
32
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 customers 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 organizations survival.
Customers commonly desire personalized and close relationships with service providers
(Parasuraman et al., 1991); nevertheless, customers appreciate the benefits of maintaining the
Customer Retention
33
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 todays 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 organizations 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
Customer Retention
34
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 todays 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 customers
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 Retention
35
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 organizations
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 organizations 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
Customer Retention
36
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 customers 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 customers 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 customers 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
Customer Retention
37
(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 providers social interaction with the customer.
Researchers such as Iwasaki and Havitz (2004) studied many aspects of relationship
quality and perceive it to be a buyers trust in a salesperson and satisfaction in the relationship.
Additionally, research performed by Bejou et al. (1996) asserts that the quality of the customersalesperson 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
Customer Retention
38
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 firms
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 customers perspective a strong relationship
with the supplier is largely defined by the service firms 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 firms 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 Schneiders 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
Customer Retention
39
the relationship is clearly the special attachment, including a customers voice, which is
responsible for continued loyalty to the firm. He adds that even with a given estimate of ones
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 firms 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 firms 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 personnels 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
Customer Retention
40
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 organizations ability to connect emotionally and forge a long-term
bond with the customer. They maintain that a customers loyalty and trust is gained by the
service personnels 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.
Customer Retention
41
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.
Customer Retention
42
(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 complainthandling 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 services complaint-handling
process.
Customer Retention
43
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
44
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 Herzbergs
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 Maslows 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).
Customer Retention
45
Lawler (2000) has done a research study on performance-contingent wages as a means

for inducing high productivity, a view which is contrary to Herzbergs Two-factors theory.
Edward Lawlers 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
Customer Retention
46
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.
Customer Retention
47
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 companys 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 Vrooms 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.
Customer Retention
48
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 plans 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
Customer Retention
49
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.
Taylors theories have apparently aided in the transformation of blue-collar and whitecollar 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 employees time by the hour; this process
provided no incentives for workers to put forth extra effort.
Customer Retention
50
Incentives Vs. Satisfaction

The researchers 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).
Customer Retention
51
A follow-up related in Joseph Martocchios 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
Customer Retention
55
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 (DeAth, 2002). Moreover,
in the analysis of relationships between customers, employees and leadership styles in
organizations, DeAth (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.
Customer Retention
56
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 persons 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 studys 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
Customer Retention
57
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.
Researchers 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 researchers 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
Customer Retention
58
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
Customer Retention
59
the qualitative research study approach has the ability to use specific methods that are ultimately
limited only by the researchers 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
Customer Retention
60
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 (DeAth, 2002). To further analyze the
relationships between an insurance agencys management and the leadership styles in
organizations, DeAth (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).
Customer Retention
61
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
researchers reasoning is that retaining customers in an organizations 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.
Customer Retention
High
Customer
Retention/
High Profit
Very High Retention

Rate/New Customers
From Referrals/
Low Claims Rate
Management
Team/
Employees/
Agents
Satisfaction
Ebbs Insurance
Organization
Customer
Satisfaction
Great Performance
and
Productivity
But Unhappy Due to
Economic Reasons
Such as
Unemployment/
Low Income
Leadership
Roles/ Styles
Management
Team/
Employees/
Agents
Dissatisfaction
Low
Customer
Retention/
Low Profit
Very Low
Production/
Low
Performance
Customer
Dissatisfaction
Cancellations/Nonrenewals/
Excessive Claims/
No Referrals =
No New Customers
Figure 1. The relationship cycle in the Ebbs insurance organization model of relationship.
An adopted view from Cunningham (1997) and Motowildo (1982).
62
Customer Retention
63
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.
Customer Retention
64
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 researchers 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 (DeAth, 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
Customer Retention
65
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 researchers sample design was created from the theoretical population of current
customers in the Ebbs Insurance organization. The intended study sample population will be the
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66
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.
Customer Retention
67
Instrument
This research studys 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 researchers 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
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68
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 Creswells 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.
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69
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:
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70
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 peoples 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.
Customer Retention
Researcher/
Analyst
Interviewer
Participant
Researcher specifies subject of

question, analytic use of
questions, and respondent task.
Interviewer administers question.
Participant
comprehends
question
(interprets subject
and task).
71
Researcher
analyzes
response.
Interviewer
records answer.
Participant
recalls
information
and forms
judgment.
Interviewer/
coder enters
data into data
set.
Participant gives
answer.
Figure 2. Robsons 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.
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72
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 researchers 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 researchers questions are related to facts, peoples beliefs
about the facts, feelings, motives, present and past behaviors, standards for behaviors and/or
conscious reasons for actions or feelings (DeAth, 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
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73
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).
Customer Retention
74
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
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75
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 persons
perception of the meaning of an event as opposed to the event as it exists externally before a
persons eyes. In other words, a phenomenological study is a study that attempts to understand
peoples 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 organizations current customers; the researcher was
thus not expected to involve participants other than from the Ebbs Insurance organization.
Customer Retention
76
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 2week 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.
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77
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.
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78
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 agencys 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 researchers 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 closedended 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
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80
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
Between Groups
2.482
.510
Within Groups
39.313
101
.142
Total
41.795
108
Sig.
2.033 003
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81
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?
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Under 20
21-24
25-29
30-40 +
AGES
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 620 age group; 21% were in the 2124 age group; 12% were in the 25
29 age group; and 42% were in 3040 and older age group.
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82
Question 4: What Type of Insurance Policy Did You Purchase?
10%
6%
Auto
24%
3%
Motorcycle
Homeowners
Commercial
4%
24%
Life
Health
29%
Boat
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?
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83
30%
Clean Driving
Record
1-3 Moving
Violations
1-3 Accidents
25%
20%
15%
10%
1-2 DUIs
5%
0%
Driving
Records
1-2 Reckless
Driving
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
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84
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.
Yellow Pages
Radio
Percent
Responded
Flyers
Friends
0%
20%
40%
Figure 6. Organizations 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
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85
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

Very Friendly
Comfortable
Professional
Uncomfortable
"I don't care."
13%
33%
18%
17%
19%
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.
Customer Retention
86
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 1120 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?
35%
30%
25%
20%
Rating of
Agent
15%
10%
5%
0%
Excellent
Below
Average
Figure 8. Agents rating distribution.
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87
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 Agencys 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?
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88
21%
43%
30%
Untimely phone calls

Policy Cancellations
6%
Unfriendly services
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 Agencys customer
service performance. The remaining 21% of the responses stated no difficulties experienced with
the Ebbs Agency or its consumer interactions.
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89
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 Agencys 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?
Improve
Customer Does not
Service
matter
How to upgrade their service standard
11%
Responses
89%
0%
50%
100%
Figure 10. Expected service standard distribution.
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90
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.
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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.
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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 1820 age group; 21% were in the 2124 age group; 24% were in
the 25-29 age group; and 42% were in the 30-40 age group and older.
Distrbution
Response
Age Demographics
50
40
30
20
10
0
18 20
21 24
25 29
Age Range
Figure 12. Age demographics.
30 40
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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

Q3: What Is
Your Age
Range?
Valid
Mean
Sd.
Deviation
Median
Min.
Max.
1820
14
3.1350
2.730
1.145513
1.92
3.54
2124
23
3.2250
2.700
1.484924
1.65
3.75
2529
26
3.4725
2.815
1.859691
1.5
4.13
3040
45
3.3000
2.770
1.499066
1.71
3.83
ICSS - PIE CHART

18 - 20
13%
30 - 40
42%
21 - 24
21%
25 - 29
24%
Figure 13. Pie-chart of age ranges.
18 - 20
21 - 24
25 - 29
30 - 40
93
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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 3040 age group referring to the Max. column in Table 2. In Figure 13, the piechart of the age range reported 42% of the respondents that fall within the age range of 3040.
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 researchers
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 organizations 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
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95
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 Agencys
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.
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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
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97
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
Customer Retention
98
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 Agencys service, would you refer
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99
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
Customer Level of Satisfaction
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
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100
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.
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101
Excellent
Satisfactory
Average
Below Average
Poor
Not 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
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102
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
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the insurance organization? About 51% representing 55 respondents expressed dissatisfaction

with the insurance organization.
Very Satisfied
Satisfied
Dissatisfied
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.
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104
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 agencys 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 agencys book of business for only about 3
years. She further states that Alpha Plus Agencys 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 researchers main study focus is scheduled to commence in the near
future. Finally, Mr. Ujad commended the researchers 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 studys 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.
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105
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.
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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 agencys 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.
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108
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.
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109
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
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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.
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111
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 agencys
management implemented random evaluations of products and services offered by the Ebbs
Insurance Agency. The agencys 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 Agencys products and services as well as the provision of
managing employees reorientations to ensure better customer service performance.
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112
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
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113
in their particular attitude toward customer needs. As financial industries are more passionate
about customer needs, which in fact is the cornerstone of Fred Taylors study of an individuals
needs, it would be appropriate in future research studies to determine if Taylors 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.
Participants Name_____________________ Signature________________ Date_______
Researchers signature _______________________Date_____________
Customer Retention
124
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 (
)Undergraduate Degree ( )Graduate Degree
3. What is your age range? (
)College Degree
)18-25 ( )26-34 (
)35-44 (
)44-older.
Customer Retention
127
4. What type of insurance policy did you purchase?

(
)Automobile (
)Life (
)Motorcycle (
)Health (
)Homeowners (
)Commercial
)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
spaces provided: (
(
)Moving violations ( )Accidents (
)Reckless driving
)DUI
)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: (
(
)Poor (
)Very completely (
)Completely (
)Not completely
)Very poor
Section 2. Quality of Service.

8. How did you hear about this particular insurance company? Check one: (
(
)Radio (
)Yellow Pages (
)Flyers (
)TV
)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
the
Customer Retention
(
)Comfortable (
128
)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?
one: (
)Very satisfied (
)Satisfied (
)Neither satisfied nor
dissatisfied (
Check
)Very
dissatisfied
Section 3. Level of Relationship.

13. How would you rate your agent? Check one: (
(
)Very good (
)Poor
)Good (
)Satisfactory (
)Excellent
)Average (
)Below average
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?
___________________________________________________________________
Customer Retention
129
17. If you are happy with Ebbs Insurance Agencys 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: 2child@gte.net

________________________________________________________________
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: _rsingh@simcorporation.com _________________________________
Customer Retention
131
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.
Customer Retention
132
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.
Customer Retention
133
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
Customer Retention
134
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.
Customer Retention
135
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 schools 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
Customer Retention
136
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
Title: Mentor/Chair
17, 2005
Customer Retention
137
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

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, Capella University.

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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, Capella University.

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THE IMPACT OF LEADERSHIP ROLES IN RELATION TO CUSTOMER RETENTION:

AN ANALYSIS OF THE RELATIONSHIP BETWEEN

A Dissertation Presented in Partial Fulfillment

UMI Number: 3226799

UMI Microform 3226799

ProQuest Information and Learning Company

Chika Ebenezer Duru, 2006

CHAPTER 1: RESEARCH PROBLEM

Background of the Study

Statement of the Problem

Purpose of the Research Study

Nature of the Study

Significance of the Study

Assumptions and Limitations

Organization of the Remaining Chapters

Rationale of the Research

The Customer/Organization Relationship

Customer Relationships and Retention

Rational Systems Views

Natural Systems Views

Open Systems Views

General Systems Views

Customer Loyalty and Expectations

Managing Employee Motivation and Loyalty

The Theory of Expectancy

Scientific Management Theory

Incentives Vs. Satisfaction

Synopsis of Literatures Reviewed

Research Study Focus

Full Disclosure Statement

Survey Design Strategy

Validity and Reliability

Qualitative Data Analysis

Dependent Research Variables

Independent Research Variables

Data Collection Procedures

Coding, Multiple Sources, and Corroboration

Limitations and Strategies for Minimizing Impacts

Ethics and Institutional Review Board Policies

Timelines for Each Research Activity

CHAPTER 4: DATA COLLECTION AND ANALYSIS

Description of the Study Sample

Findings From the Descriptive Analysis

Overall Tests of Hypotheses

CHAPTER 5: RESULTS, CONCLUSIONS, AND RECOMMENDATIONS

Addressing the Research Questions

Suggestions for Future Research

APPENDIX A: REQUEST FOR PARTICIPATION

APPENDIX B: CONSENT FORM

APPENDIX C: PARTICIPATION ACCEPTANCE

APPENDIX D: SURVEY INSTRUMENTS

APPENDIX E: INSTITUTIONAL REVIEW BOARD APPLICATION

Table 2. Descriptive Statistics (DS) Age Range Distribution

Table 3. Correlation Significance: Correlations Between Customer Satisfaction and

Figure 3. Age range distribution.

Figure 4. Insurance policy purchase distribution.

Figure 5. Driving record distribution.

Figure 6. Organizations first contract distribution.

Figure 7. Atmospheric condition distribution.

Figure 8. Agents rating distribution.

Figure 9. Reasons why unsatisfied.

Figure 10. Expected service standard distribution.

Figure 11. Frequency distribution of gender.

Figure 12. Age demographics.