Internal marketing’s influence on South African long-term insurance: An emerging market view

Abstract

Orientation: Addressing employee needs in a competitive market for independent financial advisor (IFA) skills is becoming increasingly important in the South African long-term insurance industry to strengthen IFA commitment and reduce their turnover intention.

Research purpose: To explore the interrelationships between internal marketing mix elements and IFA employees’ perceived value, employee satisfaction and turnover intention. In addition, the study also explores the moderating role of brand commitment on the employee satisfaction and turnover intention relationship in the South African long-term insurance industry.

Motivation for the study: Numerous scholars have investigated internal marketing in multiple contexts in a business-to-consumer setting (B2C). However, no previous study on internal marketing explored its linkage to outcomes such as perceived value, employee satisfaction and turnover intention among IFAs in the South African long-term insurance industry.

Research approach/design and method: A total of 410 responses were obtained for data analysis. The measurement and structural models were measured through structural equation modelling.

Main findings: Perceived value positively influences employee satisfaction, while the latter has a positive relationship with turnover intention. Furthermore, brand commitment moderates the employee satisfaction-turnover intention relationship.

Practical/managerial implications: By considering this study’s findings, South African financial services providers can design internal marketing activities that enhance the value financial advisors perceive in the employment exchange, increase their satisfaction, and thus reduce the high employee turnover characteristic of the industry.

Contribution/value-add: This study provides an enhanced understanding of the need for internal marketing and its relationship to perceived value, employee satisfaction and turnover intention in a B2C context in South Africa.