Distribution systems, loyalty and performance

Abstract

Purpose

This paper aims to examine the influence of distribution systems and customer loyalty on firm performance.

Design/methodology/approach

Efficiency scores and profitability are used as the proxies for performance. The data envelopment analysis approach is used to calculate efficiency scores. The sample is from the Taiwanese life insurance industry.

Findings

The results suggest that a multiple distribution channel strategy performs worse than a single distribution channel strategy in terms of efficiency and profitability. It is also found that agent turnover rate is negatively related to technical efficiency, cost efficiency, and profitability. The evidence also suggests that insurers with higher customer loyalty perform better than insurers with lower customer loyalty.

Originality/value

The paper's results can assist insurers to make decisions on distribution channels and improve agent turnover rate and customer loyalty.

Citation

Su Chen, M. and Lai, G.C. (2010), "Distribution systems, loyalty and performance", International Journal of Retail & Distribution Management, Vol. 38 No. 9, pp. 698-718. https://doi.org/10.1108/09590551011062448