EMPLOYEES’ ENGAGEMENT AND CUSTOMERS’ LOYALTY FOR UTILITARIAN SERVICES: A MODERATED MEDIATION MODEL

Purpose of the study: The present study aimed to determine the impact of employee engagement on customers’ loyalty through customers’ engagement. Moreover, this study also aimed to examine the moderating role of customers’ trust and the mediating role of customers’ engagement on the relationship between employees’ engagement and customers’ loyalty. Methodology: The data were collected from 220 insurance service users through a non-probability sampling technique. Data reliability and validity were confirmed through Cronbach’s alpha and confirmatory factor analysis and hypotheses were tested through Andrew F. Hayes model 7. Main Findings: Results show a significant direct effect of employee engagement on customers’ loyalty. Moreover, the findings confirmed the significant role of customers’ engagement as a mediator between employee engagement and customers’ loyalty. Results also confirmed customers’ trust moderating effect between employee engagement and customers’ engagement. Furthermore, the result confirmed the mediation of trust-based-customers engagement between the link of employee engagement and customers’ loyalty. Applications of this study: This study would have some positive repercussions for utilitarian services such as insurance services providers. For instance, this study's findings revealed the process through which companies can make customers more loyal. Insurance companies through their employees' engagement and customer engagement can make a dyade that can better explain customers’ loyalty. Novelty/Originality of this study: This study explored the underlying mechanism that links employee engagement to customers’ loyalty. Moreover, this study introduces a new term “trust-based engagement” as an important attribute in enhancing customers’ loyalty in general and particularly for insurance companies.


INTRODUCTION
Customer's foremost or in some cases the only connection with insurance service providers is through front-line employees. The positive attitude of the frontline employee during interaction with the service receiver is considered as a key for a satisfying customer experience that eventually leads to customers' loyalty to the service provider (Cain, Tanford, & Shulga, 2018). Employee engagement (EE) is considered as one of the basic primacies for service organizations (Young, Glerum, Wang, & Joseph, 2018) during the interaction between frontline employees and customers. EE is a workplace approach leading to the correct circumstances for all staff to relinquish their best, committed to their organization's goals and values with a strengthened sense of their well-being. EE is conceptually defined as "a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption (Schaufeli, Salanova, González-Romá, & Bakker, 2002, p. 465)". Since Insurance companies provide services, they require a significant level of interactions between service employee and customer, henceforth, employee engagement is crucial for a successful service outcome (Hollebeek, Srivastava, & Chen, 2019).
A high degree of participation can be a competitive objective for a broader spectrum of businesses in different industries. Engaged employees are devoted to their bosses, pleased with their jobs, and eager to devote more effort to meet the company's objectives. Literature indicates that engagement impacts many key human resources priorities, such as retention, work efficiency, absence, and (indirectly via the credibility of the employer) performance (Mach et al., 2020). Moreover, engaged employees can be some of companies biggest brand/service advocates in service encounters (P. Li (Kumar & Pansari, 2016), and customer attitude towards the brand (Shiri D Vivek et al., 2012). However, efforts related to link EE with CE and loyalty directly and indirectly in general and particularly in insurance services are equal to naught. Hence, the primary aim of this study is to examine the indirect impact of employee engagement on customer loyalty through customer engagement.
This study is conducted in a utilitarian service setting such as insurance services. The reasons for conducting the current research in insurance services setup is that 1) the attachment level of the customer with service employee in this sector is considered as weak, 2) a lack of affective component in service provider and customer relationship (Bowden, Gabbott, & Naumann, 2015), 3) it requires a significant level of interactions between the service provider and customer during service encounter to complete a transaction and 4) Despite the importance of EE and CE in insurance services, this sector got less attention by academician and researchers.

Employee Engagement (EE)
EE is initially defined by Kahn (1990) as " the harnessing of organization members' selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances (p. 694)". This definition is believed to be very comprehensive for it includes the physical, emotional, and cognitive attributes of EE. EE links to individual and organizational level outcomes. It is believed that engage employee embodies job satisfaction, participation, and interest in work (Cain et al., 2018). It has a strong relationship with customer satisfaction, customer loyalty, and overall firm performance (Harter, Schmidt, & Hayes, 2002;Ram, Swapna, & Prabhakar, 2011). The service sector, such as Insurance firms need front line employees who are physically, emotionally and cognitively engage in service encounter for a successful service outcome. Engage employees are better to equip for challenging service encounters (Slåtten & Mehmetoglu, 2011), they work harder than dis-engaged employees (Cain et al., 2018) and they will go the extra mile to for customers' requirement (Macey & Schneider, 2008). Thus, for frontline employees' readiness to go beyond their formal role for customer requirements, engagement can be considered as an essential attribute.

Employee engagement vs Customer loyalty
Customers who return to the same service provider is considered as a loyal customer (Meesala & Paul, 2018). In such a dynamic and challenging environment where consumerism is at the peak, service firms are highly dependent on loyal customers. Since in service sector such as insurance services require many interactions between service employee and customer, employee engagement is crucial for making customers loyal (Brodie et al., 2011). Furthermore, service-profit chain (SPC) theory suggests that employee engagement in a service encounter leads to customers' satisfaction which further leads to loyalty (Frennea, Mittal, & Westbrook, 2014). Hence, it can be assumed from the above literature that more engaged employee will enhance customer loyalty thus the first hypothesis of the study is; H1: Employees engagement significantly enhances customers' loyalty. Brodie et al. (2011) proposed that "customer engagement reflect a psychological state, which occurs by interactive customer experiences with a focal object (e.g., a brand) in-service relationship" (p. 260). Similarly, SDL suggests that the consumer is considered as an active member that engages in interaction with service employees and helps value co-creation practice . CE alone may not be enough in service encounters, service employee and customer should work together for the successful service encounter (Coulter, 2011). Notwithstanding, Kumar and Pansari (2016) defined engagement in both customer and employee context as "Engagement represents co-creation, interaction, solution development, and so on, all of which depend on the attitude that drives the behavior of customers and employees toward a firm. We define engagement as the attitude, behavior, the level of connectedness (1) among customers, (2) between customers and employees, and (3) of customers and employees within a firm" (p. 498). Hence, it can be argued from the above literature that employee engagement in an interaction between service employee and customer in a service encounter may lead to customer engagement. Thus the 2 nd hypothesis of the study is developed.

Employee Engagement vs Customer Engagement
H2: Employee engagement has a significant positive impact on customers' engagement.

Moderating Role of Trust
Environmental factors such as technology, competition, and the growing trend of consumerism have forced companies to focus on customer relationships. Customers are considered the primary contributor to firms' performance when they feel connected to the firm (Kumar, 2013). Pansari and Kumar (2017), argued that the level of happiness and emotional interaction depends on the relationship between the company and the customer. Moreover, they argued that attributes of relationship marketing such as; satisfaction, trust, and commitment are the important elements for CE. Similarly, the theory of CE argued that customer engagement occurs only after trust and commitment are achieved (Kumar, 2013). Henceforth, the attributes of relationship marketing are incorporated in engagement theory, therefore it can be argued that logically CE comes after the relationship is formed. Furthermore, the role of trust as a moderator has already been verified in various context by many scholars (see e.g, Emmanuel, 2020; Hamakhan, 2020). Thus, it can be inferred from the above literature, that the link of EE and CE will positively be strengthened due to the interaction of trust. . Moreover, SPC claims that employee who is motivated and highly engaged in service encounter leads to customer loyalty (Kim, 2014). Furthermore, J. L.-H. Bowden (2009) argued that CE is a mental process that helps in creating and sustaining loyalty for new and existing customers respectively. In addition (Yen, Teng, & Tzeng, 2020) also confirms the role of customers' engagement as a mediator between innovativeness and customer value co-creation. Hence, from the above discussion, it can be assumed that employee engagement attitude will encourage customers' participation in service encounters which will further lead to patient loyalty.

Participants and Procedure
This study intends to investigate the mechanism through which EE affects CL. The study is based on a descriptive approach and data were collected through an adopted questionnaire from the customers of the insurance company. Since it's not sensible to introduce each subject into the analysis, convenience sampling is used for knowledge assortment in line with varied conditions together with accessibility and availableness of the respondents (Dörnyei, 2007). A total of 336 questionnaires were distributed. Out of 336, we got 250 questionnaires from respondents by removing some incomplete questionnaires we used 220 questionnaires for the analysis purpose.

Customers' Trust:
Customers' trust scale was adopted from Malhotra, Kim, and Agarwal (2004). It comprises 5 items including ("the employee of the insurance company is trustworthy in handling my personal information"; "I trust that this loyalty program would keep my best interests in mind when dealing with my personal information"). The Cronbach's alpha for customers' trust was found 0.86. Zeithaml, Berry, and Parasuraman (1996). It consists of 5-items including ("I am likely to say positive things about [the store] to other people"; "I would recommend XYZ to someone who seeks my advice"). The Cronbach's alpha value for the CL scale was found as 0.84.  CFI less than 0.95, SRMR less than 0.06, RMSEA less than 0.08, and PClose greater than 0.05 are the acceptable thresholds for model fitness. Therefore, the model is found fit for further analysis.

RESULTS
Based on the fit indices and the threshold criteria set by Hu and Bentler (1999), all the individual models and the measurement model are a reasonable fit for further analysis (see table 2)   figure 2 which is as follows.

DISCUSSION
The literature has acknowledged EE and CE as strategic importance for building relationships between customers and employees. The current study was intended to examine the impact of EE on CL. Moreover, it investigated the mechanism through which EE affects CL. Empirical data were collected through an adapted questionnaire from 220 customers of various insurance companies. After analysis, it was found that EE directly affects CL. As suggested by SPC theory, an engaged employee would lead to customers' satisfaction and repeat purchase behavior (Brodie et al., 2011;Frennea et al., 2014) supports the finding of the first hypothesis. The finding was also consistent with previous findings of (Afridi, Shahjehan, Haider, & Munawar, 2020). Moreover, the mediating effect of CE between the association of EE and CL was examined. It was found that both the direct and indirect effect of EE on CL was significant. It shows that CE partially mediates the underlying association. The findings of this hypothesis are consistent with previous studies such as (Cain et al., 2018;Yen et al., 2020). Afterward, the moderating effect of customer trust was examined between the link of EE and CE. It was found that adding trust as an interacting term with EE, strengthens the positive effect of EE on CE. The results are consistent with CE theory that advocates that customers would engage more interactively and emotionally with the company they trust more (Kumar, 2013). Finally, the moderating, mediating effect of trust-based customers' engagement was examined. Results suggest that trust-based customer engagement fully mediates the association. The findings of this hypothesis are consistent with S-D logic, value co-creation literature, and CE theories that suggest that dyadic engagement between the customer and employee in service encounters leads towards outcomes like customer loyalty (Frow et al., 2014;Hamakhan, 2020;Kumar, 2013).

CONCLUSION
This study was intended to examine the role of EE, CE, and CT in enhancing CL. For this purpose, the data were collected from 220 insurance customers through the non-probability sampling technique. Empirical data were tested with the help of Andrew hayes model 7. Findings revealed that employee engagement has a significant positive impact on customers; loyalty. Moreover, data confirm that customers' engagement partially mediates the association of EE-CL. Results revealed that Customers' trust significantly and positively moderates the link of EE-CE. And trust-based customers' engagement significantly mediates the link between EE-CL.

CONTRIBUTION IN THE STUDY AREA
The present study contributed theoretically by adding literature regarding EE, CE, CT, and CL in general and particularly in utilitarian services such as insurance services. The role of the employee in general and particular for the service sector such as insurance company is very crucial, for it has a direct interaction of employee and customer. Previous studies were related to the direct effect of EE on customer satisfaction (Brodie et al., 2011;Frennea et al., 2014), however, the present study extended their study and verify the impact of EE on CL. Moreover, this study added literature in terms of EE by examining its importance in making customers loyal. Also, this study verified the mechanism behind the link between EE and CL. Finally, the findings of the present study unfold a new term (trust-based customer engagement) as the underlying mechanism between EE and CL.

LIMITATION AND FUTURE RESEARCH RECOMMENDATION
Just like other studies, this research has also some limitations. First of all the data were gathered purely from those who were using insurance services. It may lead to the generalizability and validity issue. Second, that data were cross-sectional while the experimental design is recommended for future research. Third, only one mediator and one moderator were used to examining the underlying mechanism, however, more potential mediators and moderators could be explored between the link of EE and CL. This study uses CE as a mediator while CT as moderator, however, other potential variables such as; employees' volunteerism, employees' self-efficacy, and employees' reliability.