Customer Benefits and Company Consequences

of Customer-Salesperson
Relationships
in
Retailing

KRISTY E. REYNOLDS
University of Central

Florida

SHARON E. BEATTY
University

of Alabama

Building customer relationships is a top priority in many fkms. This study examines the
benefits customers receive from relationships with clothing/accessories salespeople. We
found that relationship benefits are positively associated with satisfaction, loyalty, word of
mouth and purchases. Implications and directions for future research are given based on
thesefindings.

INTRODUCTION

Customer relationships have received considerable attention from both academicsand

practitioners. The popularity of relationship marketing stems,in part, from the assumption
that building customer relationshipsyields positive returns in the form of customer satisfaction, loyalty, word of mouth, and purchases.According to Sheth and Parvatiyar (1993,
studieson relationship marketing in consumermarketsare lacking. We agree.Particularly,
the topic of the benefits customers obtain from long-term relationships with retail salespeople and the outcomesof thesebenefits hasreceived little empirical attention in the academic literature (Berry, 1995; Bitner, 1995; Gwinner, Gremler, and Bitner, 1998).

Kristy

E. Reynolds,

Box 161400, Orlando,

FL 32816-1400

<Kristy.Reynolds@bus.ucf.edu>.

Journal of Retailing,
Volume 75(l), pp. 1132, ISSN: 0022-4359
Copyright
Q 1999 by New York University.
All rights of reproduction

11

iu any form

reserved.

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1 1999

FIGURE 1
Overall

Model

of Relationship

Benefits

and Consequences

A recent study examining customer benefits from long-term relationships with service
firms, conductedby Gwinner et al. (1998), is the only empirical work in a consumercontext and servesasa useful predecessorto the presentstudy. These authorsspecifically call
for causalresearchin the areaof relationship benefits and in contexts other than services.
Therefore, we conducted a study to test whether the functional and social benefits that
customers detive from a retail clothing salespersonrelationship are associatedwith
reported levels of satisfaction, loyalty, word of mouth, and shareof clothing purchases.

MODEL

AND

HYPOTHESES

Following Czepiel (1990), we define a customer-salesperson relationship as existing

when there is an ongoing seriesof interactions betweena salespersonand a customerand
the parties know each other. The overall model for this study, presented in Figure 1,
focuseson the relationship and its resulting benefits as the genesisfor important consequences,namely satisfaction,loyalty, word of mouth, and shareof total clothing purchases.

Customer Benefits and Company Consequences

Relationship

13

Benefits

The concept of benefits segmentationrests on the idea that consumersselect products/

serviceson the basisof the benefitsthey desire(Haley, 1968; Gutman, 1982; Reynolds and
Gutman, 1984). According to Darden and Dorsch (1990), consumerscan also obtain benefits, suchas product or information acquisition or social interaction, from shopping.
Further, consumerscan receive benefits from interpersonalrelationships,which serve to
fill many important humanneeds(McAdams, 1988). In addition to relationshipswith family or friends, relationshipswith salespeopleor service providers may alsoprovide benefits
that fill important needs(Adelman, Ahuvia, and Goodwin, 1994; Beatty, Mayer, Coleman,
Reynolds, andLee, 1996; Bitner, 1995; Gwinner et al., 1998).Thus, consumerswho maintain salespersonrelationshipsdo so to fulfill certain desiresor needsby obtaining benefits
from theserelationships.
According to Gwinner et al. (1998), customerswho have relationshipswith service providers not only expect to receive satisfactory delivery of the core service, but they are
likely to receive additional benefits from the relationship. Theseresearchersconducted two
studiesto identify the benefits customersreceive from service relationships.Their findings
revealed that relational benefits could be categorized into three distinct types: confidence,
social, and special treatment benefits. These authors also found significant correlations
between service benefits and outcomessuchas loyalty, positive word of mouth, and satisfaction with the service.
Beatty et al. (1996), in a naturalistic inquiry into customerrelationshipswith salespeople
in an upscale department store context, observed that the benefits customersclaimed to
receive from thesetypes of relationshipsappearedto fall into two primary categories:functional benefits or social benefits. Both functional and social types of relationship benefits
have been suggestedby others (cf. Adelman et al., 1994; Berry, 1995; Bitner, 1995;
Dwyer, Schurr, and Oh, 1987; Gwinner et al., 1998)
Therefore, basedon the findings from both the Beatty et al. (1996) and Gwinner et al.
(1998) studies,and the relationship marketing literature, we classify relationship benefits
in our particular setting as either functional or social. In this study, functionaE benefits
include time savings, convenience, fashion advice, and better purchasedecisions.Thus,
our functional benefits encompassthe Gwinner et al. (1998) confidence and specialtreatment benefits. Social benefitsmight include enjoying the salespersons
company and/or the
closerelationship, having a good friend, and enjoying spendingtime with the salesperson.

Relationship

Consequences

Building relationshipswith customersis thought to increasecustomer satisfaction and

loyalty (Berry and Parasuraman,1991; Czepiel, 1990), increasethe amount of favorable
word of mouth they exhibit (Berry and Parasuraman,1991; Griffin, 1995) and increase
purchases(Berry and Parasuraman,1991). For example, British Airways has found that
building relationshipswith its premium customers increasedthe amountof businessgeneratedby thesecustomersby nine percent (Prokesch, 1995).

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Satisfaction
A primary determinant of satisfaction is perceived quality or performance, which may be
viewed as the extent to which a product meets a customers needs or desires (Fornell,
Johnson, Anderson, Cha, and Bryant, 1996; Anderson, Fomell, and Lehmann, 1994).
However, the institutional model of satisfaction in retailing (Maddox, 1977) holds that
retail outlets provide consumers with satisfactions distinct from the products they sell.
According to Singh (199 1) there may be several distinct, separate objects about which
a consumer will make satisfaction judgements. For example, in the case of a consumers
use of health care services, he/she may make separate satisfaction evaluations of the physician, the hospital, and the insurance provider. The consumer has different expectations in
interacting with the different objects, so the objects will be evaluated separately. Researchers employing this perspective have found differences in terms of the antecedents and consequences for salesperson and store satisfaction (Swan and Oliver, 1989). Thus, consumers
can experience satisfaction from their overall experience with the store and from interactions with salespeople, among other things (Westbrook, 198 1). Although satisfaction with
the salesperson and satisfaction with the store are related, we view them as separate constructs.
Within a relationship, the interaction between the customer and salesperson, the roles
they play, and the customers view of this dynamic are central to satisfaction (Crosby,
Evans, and Cowles, 1990).
Thus, because customers desire and receive benefits from the salesperson in addition to
pure product acquisition (Beatty et al., 1996; Bitner, 1993, we feel that customers will
judge the extent that they are receiving the benefits they desire from their salesperson relationship. In fact, Gwinner et al. (1998) found that the perception of benefits from service
relationships was positively correlated with satisfaction with the service.
Therefore, we offer the following hypothesis:
Hl:

The perception of relationship benefits (social andfunctional)

itively associated with satisfaction with the salesperson.

is pos-

We also believe that salesperson satisfaction is associated with company satisfaction,

Research has found that overall satisfaction with a specific product or manufacturer is preceded by satisfaction with other facets of the products purchase, such as satisfaction with
the salesperson or dealer (cf. Goff, Boles, Bellenger, and Stojack, 1997). Beatty et al.
(1996) observed that customers positive feelings towards their salesperson often transferred to the company. Goff et al. (1997) found, in a study involving automobile purchasers, that satisfaction with the salesperson positively affected satisfaction with the dealer.
Oliver and Swan (1989) and Crosby et al. (1990) also support this view. Therefore, we propose the following hypothesis:
H2:

Satisfaction with the salesperson

faction with the company.

is positively associated with satis-

Customer

Benefits

and Company

Consequences

15

Loyalty
We specifically examine loyalty constructs related to different levels of retail relationships: person-to-person and person-to-firm. Researchers have argued that differences exist
between person-to-person and person-to-firm relationships (Iacobucci and Ostrom, 1996).
Further, Oliver (1997) argues that interpersonal loyalty, or loyalty to the salesperson, is
more substantial than other forms of loyalty, such as loyalty to a brand or store. This may
be because loyalty at the interpersonal level tends to be built on the foundations of trust,
attachment, and commitment, which may be more deeply exhibited in human relationships
(Czepiel, 1990).
Researchers have shown that there are important conceptual distinctions between salesperson loyalty and store loyalty. For example, Beatty et al. (1996) found that a customers
primary loyalty was to the sales associate, which positively influenced a customers loyalty
to the store. However, if that sales associate were to leave the company, the customers
would follow as long as the merchandise is similar among stores. Similar to satisfaction,
researchers have shown salesperson loyalty and store loyalty to be separate, distinct constructs (Macintosh and Lockshin, 1997). Thus, since loyalty may assume different forms,
we distinguish between loyalty to the salesperson and loyalty to the company.
It is contended that highly satisfied customers are also loyal customers (Fornell, 1992;
Fomell and Wemerfelt, 1987; Parasuraman, Berry, and Zethaml, 1991; Reichheld and
Sasser, 1990) and that satisfaction is an antecedent to loyalty (Bitner, 1990; Dick and Basu,
1994; Fomell et al., 1996; Oliva, Oliver, and MacMillan, 1992). Satisfaction has been conceptualized as an affective antecedent to loyalty (Dick and Basu, 1994). Further, research
has shown that satisfaction with a store is an antecedent to store loyalty (Macintosh and
Lockshin, 1997) and that satisfaction with service positively impacts customer retention
(Gwinner et al., 1998). Therefore, we offer the following hypotheses:
H3:

Satisfaction with the salesperson is positively associated with loyalty

to the salesperson.

H4:

Satisfaction with the company is positively associated with loyalty to

the company.

It has been shown that positive feelings toward salespeople often carry over to feelings
toward the firm (Beatty et al., 1996; Goff et al., 1997). Further, researchers have modeled
the relationship between salesperson loyalty and store loyalty, demonstrating that the former
is an antecedent to the latter (Macintosh and Lockshin, 1997). Hence, we propose that when
a customer is highly loyal to his/her salesperson, he/she is also highly loyal to the company
that supports and employs that salesperson and present the following hypothesis.
H5:

Salesperson loyalty is positively related to company loyalty.

Close, personal relationships can satisfy certain personal needs (McAdams, 1988).
According to Adelman et al. (1994), a relationship with a salesperson or service provider
may give a customer social support. The customer and salesperson/service provider may

16

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even develop a friendship, which may serve to enhance the customers quality of life (Bitner, 1995). Gwinner et al. (1998) discovered several customers who considered their service providers to be friends. They found that a customers perceptions of social benefits
were positively correlated with loyalty.
Likewise, Beatty et al. (1996) found that long-term customers often described their relationships with their salesperson in social terms and strong customer-salesperson
friendships were common in their study. In fact, some of these customers actually said that they
would follow their salesperson if he/she went to work for another company, given that the
merchandise were of equal quality. Finally, Bendapudi and Berry (1997) propose that the
social bonding that may occur in the context of a customer relationship can serve to
increase the customers dependence on the service provider and build the customers trust.
Thus, based on the previous discussion, we hypothesize the following:
H6:

The perception of social benejts is positively associated with loyalty

to the salesperson.

Word of Mouth

Arndt (1967, p.1) stated, Informal conversation is probably the oldest mechanismby
which opinions on products and brands are developed, expressed,and spread. Word-ofmouth recommendationshave been found to be very important in consumersdecision
making for a variety of products and services(Gremler, 1994; Murray, 1991; Freiden and
Goldsmith, 1988).
High levels of satisfaction should result in behaviors such as positive word of mouth
(Howard and Sheth, 1969; Oliver, 1980; Swan and Oliver, 1989; Reichheld and Sasser,
1990; Singh, 1990). A satisfied customer will often give both the company and the salespersona good reference (Crosby et al., 1990). Griffin (1995) contends that building relationshipswith customerswill lead to customeradvocacy, where word of mouth flourishes.
Beatty et al. (1996) noted that the relationship customersin their study appearedto engage
in extensive word-of-mouth advertising. Further, Bendapudi and Berry (1997) suggest
that relationship advocacy results from dedication-basedrelationships (the relationship
exists becausethe customer wants it to continue, rather than feeling like he/she has no
choice).
It hasbeen suggestedthat customersmay exhibit word of mouth about the various, separate dimensionsof the retail experience (Higie, Feick, and Price, 1987). Thus, we distinguish between word of mouth regarding the salespersonand word of mouth about the
company in general and hypothesize the following:
H7:

Satisfaction with the salespersonispositively associatedwith word of

mouth about the salesperson.

HS:

Satisfaction with the company is positively related to word of mouth

about the company.

Customer Benefits

and Company

Consequences

17

Further, consistentwith our hypothesesregarding satisfaction and loyalty, we offer this

hypothesis:
H9:

Word of mouth about the salespersonis positively related to word of

mouth about the company.

Shareof Purchases
Becausetheir needsare met very efficiently, relationship customerstend to be highly
satisfied.Highly satisfiedcustomers,in turn, are likely to make substantialpurchases(Zeithan& Berry, and Parasuraman,1996). Parasuramanet al. (1991) suggestthat becauserelationship customersare highly satisfied, they are the most profitable customers,spending
more money with the firm and often buying additional services.This view is supportedby
others(cf. Griffin, 1995; Fomell, 1992; Berry and Parasuraman,1991). Thus, we hypothesize the following:

length

HlO:

Satisfaction with the salespersonispositively related to the particular

companys share of a customers total monthly clothing purchases.

Hll:

Satisfaction with the company is positively associatedwith the company s share of a customerstotal monthly clothing purchases.

of Relationship

It hasbeen suggestedthat as the length of a relationship increases,customersare more

likely to receive benefits from the relationship (Gwinner et al., 1998). Because little is
known in this area, we posethe following researchquestion:
RQ:

How doesthe length of the customer-salespersonrelationship affect

the customersperception of functional and social benefits, satisfaction, loyalty, word of mouth, and purchases?

METHOD

Pretest

A mail survey was usedto test the proposedmodel. First, one hundred departmentstore
call customers (customersidentified by the company as having relationshipswith various salespeople)were mailed a copy of the questionnaire,following the sameprocedures
usedin the main study. Of the 100 mailed, six questionnaireswere non-deliverable, while

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45 surveys were returned, yielding a response rate of 47.8%. Then, a sample of these
respondents was contacted to ensure that the wording of the survey items was clear and
appropriate with regards to a customer-salesperson
relationship. All of these respondents
reported that they felt the items were clear and relevant.

Data Collection

Our goal in this study was to examine relationship customers.In this context, this was
a customer who hasan ongoing relationship with a clothing/accessoriessalesperson.The
participating companiesand salespeoplewere askedto provide namesof relationship customers. Thus, our samplingframe consistedof relationship customerlists that were generated from either salespersonor company recordsfrom the following:
1. All branchesof an upscale,fashion department storechain located in the southeastem United States.
2. A subsetof the branches of an upscale, fashion department store chain located
mainly in the southeast.
3. An upscale mens clothing store, with two locations in the southeasternUnited
States.

A questionnaire was mailed, along with an introductory cover letter and postagepaid
return envelope, to all potential respondents.In the cover letter, it wasexplained to respondentsthat the questionnairereferred to aspectsof their relationshipswith their salesperson
at the particular company. A follow-up reminder postcard was mailed to all non-respondentstwo weeksafter the initial questionnairemailing.
In total, 756 questionnaireswere mailed. Nineteen respondentswere deleted from the
sampling frame because of incorrect addresses,leaving a valid sample of 737. The
responserate was 47.9%, with 353 surveys returned. However, 23 questionnaireswere
incomplete, resulting in 330 usablequestionnaires.
Standard checksfor non-responsebias indicated that this was not a problem in the current study (Armstrong and Overton, 1977). First, the first ten percent of respondents(early
respondents)were comparedto the last ten percent (late respondents).No differences were
detected. Second, a sampleof nonrespondentswas contacted and surveyed on a subsetof
the questionnaire items. No differences between respondentsand nonrespondentswere
found.
Sample

Characterktics

Overall, the sampleis primarily in the 3549 age group (54%); married (78%); highly
educated(35% having earneda graduatedegree); earnsa high income (58% over $70,000
per year); and is mainly employed in either a professional/technical or sales/marketing

Customer

Benefits

and Company

Consequences

19

capacity. The sample is almost equally represented by both genders: 51% male and 49%
female.

Measures

The scalesusedin this study were first factor analyzed to initially assesstheir psychometric properties. At this point, a few items were identified as candidatesfor deletion (i.e.,
items that did not load at 0.40 or above on any factor or items with high cross-loadings).
Coefficient alphasfor the measuresranged from .80 to .96.
Items in all scalesused seven-point agree-disagreestatements,with the exception of
shareof clothing purchasesand word of mouth. Respondentswere askedto estimatetheir
average monthly purchaseswith the particular company, as well as their average total
monthly clothing expenditures at all traditional retail stores,catalogs, intemet stores,and
television home shopping channels. Share of clothing purchaseswas then computed by
dividing company purchasesby total purchases.The word-of-mouth measureuseda fivepoint scale, in which respondentswere askedto report how often they tell someoneabout
their relationship with their salespersonand how often they recommend the company.
Responsecategoriesrangedfrom not very often (1) to very often (5).
Appendix A contains final measurecharacteristicsand items. The relationship benefits
items were developed in this study becauseno previous measureexisted. The satisfaction
measureis a modification of a scaleusedby Ganesan(1994).
The loyalty items were drawn from the loyalty literature in marketing and from the discussionin Beatty et al. (1996). Finally, the word-of-mouth measurewasdrawn from a scale
originally usedby Higie, Feick, and Price (1987).

ANALYSIS

AND

RESULTS

All measureswere then analyzed for reliability and validity following the guidelines
offered by Anderson and Gerbing (1988) and Joreskog and Sijrbom (1989). The resulting
measurementmodel x*(237) was 351.23, (p = .OOO).All composite reliabilities for the
multi-item scaleswere above .87. Convergent validity was assessed
by the significance of
the hg loadings (Anderson and Gerbing, 1988). All of the loadings in our model were significant (See Appendix A).
Evidence of discriminant validity exists when the proportion of variance extracted in
each construct exceeds the squareof the @ coefficients representing its correlation with
other constructs (Fomell and Larcker, 1981). One pair of scaleswith a high correlation
betweenthem was functional and social benefits (Q= .63, @*= .40). The variance extracted
estimateswere .77 and .82, respectively, indicating adequatediscriminant validity.
One might alsobe concernedabout the discriminant validity of the salespersonand company constructs.The correlation between salespersonand company satisfactionwas .4X (@2
= .23). The variance extracted estimatesfor thesescaleswere .88 and .94, respectively. The

of Purchases

Loyalty
Word-of-Mouth
Word-of-Mouth

Company
Salesperson
Company

Share

6.44
6.24
5.93

Satisfaction
Satisfaction
Loyalty

Salesperson
Company
Salesperson

.63

5.90
3.54
3.50

5.89
6.01

Mean

Functional
Benefits
Social Benefits

TABLE 1

S.D.

.40

1.41
0.89
0.90

1.15
1.17
1.40

1.16
1.29

FB

.I9

.44
.27
.05

.49
.45
.59

1 .oo
.63

.09

.46
.30
.05

.46
.39
.72

1 .oo

SB

Correlation

.31

.44
.26
.08

1.00
.48
.55

5s

Matrix

.29

.62
.13
.14

1 .oo
.45

cs

.17

.51
.21
.09

1 .oo

SL

.I8

1 .oo
.09
.05

CL

.I5

1 .oo
.27

SW

.07

1 .oo

cw

1 .oo

Customer Benefits and Company Consequences

21

TABLE 2

Results Of Proposed Model

Standardized
Estimate
Functional

Benefits

Path Direct

Effects

CT-value)

Salesperson

Satisfaction

.42 (4.08)
.23(2.25)
.69 (11.56)
.63 (10.65)

Social Benefits
-+ Salesper&
Satisfaction
Social Benefits
- Salesperson
Loyalty
Salesperson
Satisfaction
- Company
Satisfaction
Salesperson
Satisfaction
+ Salesperson
Loyalty
Company
Satisfaction
4 Company
Loyalty
Salesperson
Loyalty
-b Company
Loyalty
Salesperson
Company
Salesperson
Salesperson
Company

Indirect
Functional

.27(4.51)
.58 (9.82)
.33 (5.75)
.35 (5.41)

Satisfaction
- Salesperson
Word-of-Mouth
Satisfaction
--, Company
Word-of-Mouth
Word-of-Mouth
+ Company
Word-of-Mouth
Satisfaction
-. Purchases
Satisfaction
+ Purchases

.I 0 (1.50)
.31 (4.62)
.26 (2.95)

.I8 (2.05)

Effects
Benefits

Social Benefits
Functional
Benefits
Social Benefits
+
Functional
Benefits
Social
Benefits
-

Company

.27 (3.86)
.I 5 (2.21)
.I2 (2.79)
.06 (2.23)
.I9 (3.68)
.33 (5.20)
.I5 (3.29)
.08 (2.08)
.07 (2.76)
.04 (1.93)
.I6 (3.39)

Satisfaction

Company
Satisfaction
+ Salesperson
Loyalty
Salesperson
Loyalty
--, Company
Loyalty
Company
Loyalty

Functional
Benefits
- Salesperson
Word-of-Mouth
Social Benefits
--+ Salesperson
Word-of-Mouth
Functional
Benefits
-. Company
Word-of-Mouth
Social
Benefits
+ Company
Word-of-Mouth
Functional
Benefits
-. Purchases
Social
Benefits
- Purchases
Salesperson
Salesperson
Salesperson

Satisfaction
Satisfaction
Satisfaction

-f Company
-+ Company
- Purchases

.ov
.45
.I 7
.I1

Loyalty
Word-of-Mouth

(2.11)
(9.43)
(3.70)
(2.03)

Percentage
Construct
Salesperson
Company
Salesperson
Company
Salesperson

.44
.39
.84
.63

Satisfaction
Satisfaction
Loyalty
Loyalty
Word
of Mouth

.I2
.I2

Company
Word
of Mouth
Share of Purchases

Notes:

of

Variance
Explained

x2 (23)

= 48.62

.I6
GFI =

.97 AGFI

.94

CFI =

.97

PNFI

= .61 n=330

correlation between salespersonand company loyalty was Sl (4 = .26). The variance

extracted estimatefor eachof thesescaleswas .82. Thus, according to this assessment,
the
measuresappearto have acceptablelevels of reliability and validity.
Table 1 shows the means,standard deviations, and intercorrelations for all constructs.
The proposed model was assessedusing LISREL 8 (JBreskogand S&born, 1993). Each

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1 1999

FIGURE 2
Hypothesized

Model

of Relationship

Benefits

and Consequences

Results

multiple item scalewas summatedand eachsingle indicant loading was fixed at its scales
coefficient alpha, which helps the model parametersremain more stablecomparedto using
individual items as indicants (seeMorgan and Hunt, 1994 and Netemeyer, Johnston, and
Burton, 1990). In addition, the correlation between functional benefits and social benefits
was allowed to be estimatedin the Q,matrix.
The results, shown in Table 2 and Figure 2, indicate support for ten of the eleven paths
associatedwith the proposed model. The models fit was acceptable: x2(23) = 48.62,
(p = .00139); GFI = .97; AGFI = .94; and CFI = .97; RMSEA = .058; RMR = .05 1.
All of our hypothesized relationshipswere supportedexcept for the associationbetween
company satisfactionand company word of mouth. Specifically, both types of relationship
benefits (functional and social) were found to be positively associatedwith salespersonsatisfaction. In addition to the significant paths, a large portion of the variance (SMC = .44)
in salespersonsatisfaction was explained by functional and social relationship benefits.
Social benefits alsopositively influenced salespersonloyalty, aspredicted.
All of the hypothesized relationshipsbetween salespersonsatisfaction and the consequenceswere supported.The standardizedpathsfrom salespersonsatisfactionto company
satisfaction and to salespersonloyalty were high. In addition, the model explained a large
portion of the variance: 39% for company satisfaction and 84% for salespersonloyalty.

Customer

Benefits

and Company

Consequences

23

Salespersonsatisfaction was also positively associatedwith salespersonword of mouth

and shareof purchases,aspredicted.
As hypothesized, company satisfactionwas positively associatedwith company loyalty,
with the model explaining over half of the variance in company loyalty (SMC = .63).
Although company word of mouth was positively associatedwith company satisfaction,
the relationship was not significant. However, company satisfaction was positively related
to shareof purchases.
Salespersonloyalty waspositively related to company loyalty, ashypothesized. Finally,
the path between salespersonword of mouth and company word of mouth waspositive and
significant, aspredicted.

Full Model

An emerging consensusin structural equationsmodeling is that researchersshould not

only test a proposedmodel,but shouldcomparerival models(Bollen andLong, 1992).Thus,
we tested a model that included several additional paths(which is in Figure 3).
This model allowed for the following additional paths:
TABLE 3
Customer

Comparisons

on length

of Relationship
Group
Group

(3 years
less)

or

Means
croup 2
(4 years or
more)

Variablea

F-Ratio

Social
Benefits
Functional

64.99

.OOOl

5.0

5.9

1.18

.28

5.9

6.0

.97

.32

6.4

6.5

.46

.50

6.2

6.3

7.23

,008

5.6

6.0

1.95

.I6

5.8

5.9

9.49

,002

3.3

3.7

13.30

.0003

3.3

3.7

.03

.85

0.62

0.63

Benefits
Salesperson
Satisfaction
Company
Satisfaction
Salesperson
Loyalty
Company
Loyalty
Salesperson
WOM
Company
WOM
Share of

Signif.

Level

Purchases

Note:

%cales
higher
mouth
often).

measuring
benefits
and loyalty
are seven
numbers
representing
greater
agreement
scale is a five point
scale,
ranging
from

point,
agree-disagree
with the statement.
one (not very often)

scales,
with
The word-ofto five (very

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1. Direct paths from salesperson loyalty to salesperson word of mouth and share of
purchases;
2. Direct paths from company loyalty to company word of mouth and purchases;
3. Direct paths from functional and social benefits to all other outcomes not previously
hypothesized: salesperson and company word of mouth, share of purchases, company loyalty and company satisfaction.
Although model fit improves by adding paths (x2(8) = 12.75, p = .12; GFI = .99; AGFI
= .95; and CFI = 1.00; RMSEA = .042), only one of the additional paths is significant (the
path from functional benefits to company satisfaction). Moreover, the hypothesized model,
which is based on existing theory, is more parsimonious than the full model. A models
parsimony can be assessed by examining the Parsimony Normed Fit Index (PNFI). The
PNFI for the hypothesized model is .61, and that for the rival model is .22. Thus, a large
loss of parsimony occurs, with only a small improvement in model fit. In addition, theory
does not justify the addition of most of the new paths.

Research

Question

To answerour researchquestion, we askedrespondentsto report on the length of their

relationships. We found someinteresting differences when comparing respondentswho
had maintained their relationshipsfor three years or less(n = 99) versus those who had
maintainedthe relationship for four or more years (n = 228). Thesecomparisonsare shown
in Table 3.
Longer-term customersscoredhigher on the perception of social benefits, salesperson
loyalty, and word of mouth about both the salespersonand the company. The groups were
not different in terms of functional benefits, shareof purchases,salespersonsatisfaction,
company satisfaction, or company loyalty.

DISCUSSION

Some researchershave called into question the usefulnessof relationship marketing programs(cf. Foumier, Dobscha,and Mick, 1998). Others have questionedthe value of satisfaction as a dependablemeasureof successin customer relationships (cf. Bhote, 1995;
Reichheld, 1996a, 1996b). We have attempted to demonstratehere that relationships do
provide benefits andvalue to customers,leading to not only satisfaction,but alsoto loyalty,
word of mouth, and shareof purchases.
Specifically, we found that when customersperceived high social and functional benefits, they were more satisfied with the salesperson.Further, salespersonsatisfaction
appearsto translate to vital bottom line consequencesfor the firm-company satisfaction,
company word of mouth, and possibly mostimportantly, shareof total purchasesof clothing. Theseare significant findings in that they illustrate the importance of the contribution

Customer Benefits and Company Consequences

25

of both functional and socialbenefits on salespersonsatisfactionand the subsequenteffects

of salespersonsatisfaction on other variables essentialto the survival of the company.
According to our results,both types of benefits are important in building satisfying relationships with customers.
In addition, the perception of high social benefits positively influences loyalty to the
salesperson.Berry (1995) hassuggestedthat when both social and structural bonds can be
built with customers,the relationship is more strongly solidified. It is possible,however,
that relationship customersegmentsmay be differentiated basedon the value they place on
functional benefits versussocial benefits (Gwinner et al., 1998).
Another valuable finding here is that relationship customersseemto be satisfied and
loyal to both the salespersonand the company. The importance of creating bondsbetween
the company and the customer,asopposedto only betweenthe salesassociateand the customer, hasbeen emphasized(Beatty et al., 1996; Reichheld, 1996b; Sheth and Parvatiyar,
1995). Until now, this has not been empirically investigated. We also demonstratedthat
positive feelings about the salespersondo translate into positive feelings about the company. This hasbeen suggestedin the previous literature (cf. Beatty et al., 1996) and empirically tested in other contexts (cf. Goff et al., 1997), but not tested in a setting similar to
ours.
In this study salespersonsatisfaction was also shown to be an important precursor to
word of mouth about the salespersonand company. Thus, assuggestedin the literature (cf.
Griffin, 1995), customerswho receive value appearto becomeadvocatesfor the salesperson and the firm. However, company satisfaction was not significantly related to word of
mouth about the company. Our use of a single item to measureword of mouth may be
problematic and may have contributed to this finding.
We alsoexaminedhow length of the relationship relatesto severalvariables, finding that
longer-term customersperceive higher social benefits, score higher on both salesperson
and company word of mouth, and are more loyal to the salespersoncomparedto customers
who have not maintained relationships as long. Barnes (1997) and others (cf. Berscheid
and Peplau, 1983) have suggestedthat extremely close and less close relationshipsmay
exist in virtually all situations.Thus, the longer-term customersappearto have developed
closer relationshipsand serve asimportant advocatesto others.
Finally, and most importantly, we demonstratedthat salespersonsatisfaction is directly
and positively associatedwith the proportion of purchasesthat a customer allocatesto the
company. This effect also flows indirectly through company satisfaction (seeTable 2 for
direct and indirect effects). Thus, salespersonand company satisfaction are both important
determinantsof purchases.

LIMITATIONS

AND

DIRECTIONS

FOR FUTURE

RESEARCH

Although we have shedsomelight on several important issues,we recognize that there are
limitations associatedwith our study. First, we acknowledgethat the customersin our sample may constitute a very high end of retailing, given that our focus centered on upscale
departmentand specialty stores.Becausethe constructs in our model may play out differ-

26

Journal

of Retailing

Vol.

75, No.

1 1999

ently other retail settings, we caution that the results of this study may not be generalizable
across other retail and service domains. In addition, it may be that the number of customersalesperson relationships in other, less upscale types of stores may be much lower than in
the types of stores studied here.
Thus, future research should focus on examining other retail and service settings in
which customer-salesperson relationships are likely to exist to increase our understanding
of this phenomenon. In this study, however, we discovered that our findings were similar
across the department and specialty store data. Future studies might examine if the type of
retail or service context
has an effect on relationship benefits and outcomes.
Identifying other relationship benefits that may be important in different settings is an
area in need of research. For example, Bitner (1995) suggests that stress reduction may be
a benefit in complex services (legal), high ego involvement service contexts (weight loss
center), or situations involving monetary investment (brokerage firms).
Another limitation of our study is its cross-sectional design. Although the ordering of our
model is consistent with logic and previous research, we recognize that we cannot truly
declare cause and effect relationships between the variables studied. Only with experimental designs or longitudinal studies can we be more confident in the temporal ordering of
events. Also, most of the constructs examined in this study have not been measured previously. We believe that additional psychometric testing and development of our concepts is
definitely warranted.
We also believe that further development of our model is needed. First, other antecedents
to satisfaction, such as commitment, trust, shared values, and communication may help
explain more of the variance in purchases-only
16% of the variance in this construct was
explained by our model. How these possible constructs fit into our model and how they
interact in this and other settings should be examined. It might also be advantageous to
obtain data on actual purchases (e.g., taken from charge account records), given that this
would provide more precise purchase data.
Further, in the estimation of the full model we discovered that functional benefits have a
significant, positive impact on company satisfaction. Intuitively, this seems logical. A customer who perceives to benefit from the advice, convenience, and/or time savings benefits
provided by a salesperson is likely to be satisfied with the company that employs that salesperson.
However, based on our review of the literature, we did not hypothesize a direct relationship from either of our relationship benefits constructs to company-related variables, since
the actual benefits are delivered by the salesperson. Moreover, this significant link, which
was discovered during a respecification of our original model, could be a result of pure
chance. Hence, we question the validity of this empirical finding. Nevertheless, we feel
that the direct effects of both functional and social benefits to company satisfaction and
other firm-related constructs should be examined in future studies in this and other contexts.
In terms of other under-researched areas, we know very little about issues such as relationship closeness (Barnes, 1997) or about how firms or customers characterize the status
or strength of relationships (Czepiel, 1990). What does it actually mean to have a relationship and what determines how close a relationship is? Amould and Price (1993) and Price,
Amould, and Tiemey (1995) show that in highly extended, affective, and intimate service

Customer

Benefits

and Company

Consequences

27

encounters, the service provider oftentimes must offer the customer friendship and emotional benefits. Qualitative inquiries in this area would be beneficial in deepening our
understanding about the nature of relationships across settings and varying degrees of
closeness. Foumiers (1998) study of consumer-brand
relationships has contributed
immensely to our knowledge of this particular phenomenon.
In addition, a further examination of why people do not have retail relationships is in
order. For example, Beatty et al. (1996) found that non-relationship customers did not have
salesperson relationships because they did not see that the relationships would be beneficial in any way. Thus, it appears that benefits may be a driving force for actually having
and maintaining a relationship and for the development of a closer relationship.
We also know very little about why and when customers terminate salesperson relationships (Bitner, 1995). Is it because of dissatisfaction, the search for novelty, superior alternatives, costs, or conflict? We also have limited knowledge regarding customer sacrifices
or costs involved in relationship maintenance (Liljander and Strandvik, 1995). These may
include money, effort, time, and other costs. In addition, in many retail settings salesperson
turnover is high. How this affects the development and maintenance of customer relationships should be investigated.
There are still numerous unresolved issues relating to salesperson-customer
relationships. We believe that our study provides some early empirical work in the assessment of
customer benefits and firm consequences of relationships in a retail/ service context. We
hope that this study will serve as an impetus for future research in this area.

28

Journal

APPENDIX

Standardized
Loading

Item/Construct
I value

T-Value

Benefits
17.29

I value the time saving benefits

my sales
associate
provides
me very highly.
I benefit
from the advice
my sales associate gives me.

.86

18.60

.74

15.08

I make better
purchase
decisions
because
of my sales associate.

.75

15.92

.85

18.84

.85

18.87

.a5

18.58

.84

18.27

sales associate
highly.

benefits
provides

my

Composite
Reliability

me very

Benefits

.91
aspect
my sales

of my relationassociate
is very

important
to me.
I enjoy
spending
time with my sales
associate.
I value the close, personal
relationship
have with my sales associate.
I enjoy
my sales associates
company.

Satisfaction

No.

.87

the convenience

The friendship
ship with

75,

Properties

.82

Social

Vol.

1
Item Measurement

Functional

of Retailing

.94

with the Salesperson

Please indicate
your feelings
with
respect
to your relationship
with
your sales associate
at (company
name).
Pleased
1234567
Unhappy
1234567
Disgusted
1234567
Frustrating
1234567

Satisfaction

Displeased
.a5

19.10

.89

20.47

.92

21.58

.90

20.64

Ww
Contented
Enjoyable

with the Company

.97

Please indicate
your feelings
with
respect
to shopping
at (company
name).
Pleased
1234567

Displeased

Unhappy
1234567
Disgusted
1234567
Frustrating
1234567

Happy

.94

22.57

.94

22.50

.97

23.96

.92

21.66

Contented
Enjoyable
(continued)

1 1999

Customer

Benefits

APPENDIX

and Company

Consequences

29

(Continued)
Item/Construct

Standardized
Loading

T-Value

Composite
Reliability

loyalty to Sales Associate

.91
I am very loyal to my sales
.a3
17.76
associate at (company
name).
I dont plan to shop with my
.a7
19.81
sales associate at (company
name) in the future. (R)
I am very committed
to my sales
.86
19.61
associate at (company
name)
I dont consider myself very
.81
17.40
Loyal to my sales associate
at (company
name). (R)
Loyalty to the Company
.91
I am very loyal to (company
name).
.87
19.05
I am very committed
to
.90
20.95
(company
name).
I dont consider myself a loyal
.85
18.29
(company
name) customer. (R)
I dont plan to shop at
.74
15.05
(company
name) in the future. (R)
Share of Purchases
Please estimate your average monthly purchases at (company
name).
Please estimate your average total monthly clothing purchases.
Include all stores, catalogs, television, and computer
shopping.
Salesperson
Word of Mouth
About how often do you tell others about your relationship
with your sales associate? [Not very
often (1) to Very often (S)]
Company
Word of Mouth
About how often do you recommend
(company
name)?
[Not very often (I) to Very often (5)]

Acknowledgment: Acknowledgement: This research was partially funded by a research grant to

the first author by the College of Business, University of Central Florida and a research grant to the
second author by the Culverhouse College of Commerce and Business Administration, University of
Alabama. The authors would like to thank David Mothersbaugh, Robert Morgan, Linda Price,
Ronald Pimentel, and Ronald Michaels for their helpful comments regarding earlier drafts of this
paper.

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