Investigating factors influencing the customer’s choice of insurer when purchasing a new decoder device: a case of Multichoice Umhlanga.

Abstract

Satellite decoders are devices that render a video service over satellite. They are vulnerable to failure like other electronic devices. When a Multichoice customers’ decoder goes faulty it results in the customer losing their primary service until their decoder is replaced. This results in customer frustration. Customers who have insurance in place usually get up and running quickly. Studies have been conducted regarding extended warranties (Su and Wang, 2016) and service contracts (Tong, Liu, Men and Cao, 2014) but there was no research relating to insurance for satellite decoders. By selling more decoder insurance the company can improve customer service levels and at the same time generate more revenue through insurance sales. To achieve this, the company would need to understand the factors influencing the customers’ choice of insurer for decoders. To determine the factors influencing the customers’ choice of insurer when purchasing a new decoder device, a qualitative study using semi-structured interviews was conducted. Convenience sampling was used to identify 20 customer service representatives from Multichoice. The findings showed that the insurance cost, decoder replacement cost and video subscription cost were factors that influenced the customers’ choice of insurer. Other key factors identified by participants were the process of claiming from insurance as well as the process of signing up for decoder insurance. There were expectations from customers that they would be able to upgrade their decoder when doing an insurance claim, but upgrades are not optional during insurance claims. In some cases, customers would not take insurance as the decoder comes with a one-year manufacturers’ warranty. Such customers often end up forgetting to take insurance before the manufacturers’ warranty expires resulting in lost insurance sales. It was recommended that in order to increase insurance sales, the customers identified by this study should be targeted. The company could look at rewards programmes to increase sales. More can be done with the marketing of the insurance. Customers should be offered insurance just before the manufacturer’s warranty expires. The process of signing up for insurance should be streamlined. And the company should consider adding an upgrade option when doing insurance claims.