Effective strategies to retain institutional clients in the South African medical scheme industry.

Abstract

The purpose of the study is to establish the most effective strategy in the retention of institutional clients in the South African medical scheme industry. The rate and ease of defection by institutional clients presents a retention challenge for South African medical scheme intermediaries. This study also aims to establish factors that influence the decision by a client to retain a specific medical scheme intermediary or terminate their services. The study is pursued through a review of academic literature relevant to the topic and is supported by a quantitative analysis of secondary data made available by Alexander Forbes Health, the largest company providing intermediary services in the South African medical scheme industry. The data is based on telephonic surveys that had been commissioned by the company to establish the level of satisfaction amongst the company’s clients. The study focuses on 12 variables deemed to be relevant to client retention strategies. The study seeks to establish which factors are independent vs dependent and what the significant drivers of dependent variables are. The study focuses on business-to-business (institutional clients) transactions and not on individual clients. Results of the study confirm that overall satisfaction or experience, net promoter score and quality service are the dependent variables, and that ‘ease of interaction’ is the most significant driver for all three dependent variables. The conclusion from the study is that an effective client retention strategy should not focus on one variable to the exclusion of others. A successful strategy should incorporate aspects of numerous variables, appreciating that some are more significant than others. The study provides guidance on the development of client retention strategies by South African medical scheme intermediary companies. The study will inform relevant companies on the efficient allocation of resources towards initiatives that yield better outcomes.