Developing a model of measuring Islamic relationship marketing practice among takaful agents : exploring its implications on consumer retention

Abstract

The term ‘relationship marketing’ has grown to become a popular subject in marketing literature for the last three decades. The literature indicates the significance of maintaining long-term relationship with customers in ensuring the future of a company. In Asian literature, discussion on relationship marketing has been gaining popularity in recent years. Yet, research conducted on the subject; particularly in Islamic financial institutions, is very limited. This research aims to address the research gap on relationship marketing particularly in the context of the Islamic insurance industry, or Takaful. The theoretical framework of this research; built based on review of past literature, consists of four independent constructs of Islamic relationship marketing (Islamic ethical behaviour, social, structural, and financial bonds), three mediators of relationship quality (relationship satisfaction, trust, and commitment), and customer retention as the sole dependent construct. The framework is tested using primary data obtained from a survey of 755 Family Takaful customers in the Klang Valley. Data gathered was analysed with two statistical analysis software applications: SPSS and AMOS. Results obtained from measurement and structural equation modelling indicate that there were four significant constructs underlined the Islamic relationship marketing practice in Takaful industry namely Islamic ethical behaviour, social, structural, and financial bonds. The practice of these constructs has significantly influenced the retention of Family Takaful customer in future. In addition, results of structural modelling also indicate that customers would remain with the same agent and operator if they act in accordance with Islamic ethics and provide good facilities to them. Furthermore, relationship quality; which is measured by customer satisfaction, trust, and commitment, is regarded as an important factor that strengthens the influence of Islamic relationship marketing practice in ensuring future customer retention. Overall, findings of this research would be an important reference material for market players in the Takaful industry in helping them to strengthen relationship with their customers. Indeed, a strong relationship with customers will contribute to the development of the Takaful industry in the future.