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European Journal of MarketingEmerald Article: An empirical investigation into the impact of relationship selling and LMX on salespeople's behaviours and sales effectivenessNicholas G. Paparoidamis, Paolo Guenzi
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To cite this document: Nicholas G. Paparoidamis, Paolo Guenzi, (2009),"An empirical investigation into the impact of relationship selling and LMX on salespeople's behaviours and sales effectiveness", European Journal of Marketing, Vol. 43 Iss: 7 pp. 1053 - 1075
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An empirical investigation intothe impact of relationship selling
and LMX on salespeople’sbehaviours and sales
effectivenessNicholas G. Paparoidamis
IESEG School of Management, Universite Catholique de Lille, France, and
Paolo GuenziSDA Bocconi School of Management, Universita Bocconi, Milan, Italy
Abstract
Purpose – This study aims to develop and test a model of relationship selling management. It seeksto examine the impact of leadership quality and relationship selling, as antecedents of salespeople’srelational behaviours, on sales effectiveness.
Design/methodology/approach – Starting from a review of literature, the model incorporates twoclasses of salespeople’s relational behaviours, namely customer-oriented selling (COS) and adaptiveselling (AS), two classes of managerial antecedents (i.e. relationship selling strategy and LMX) and oneconsequence (sales effectiveness). The authors collected data from 164 sales manager-salespersondyads in a sample of French firms. A structural equation modelling approach was employed to test thehypotheses.
Findings – The findings show that relationship selling and LMX stimulate salespeople’s relationalbehaviours, which in turn positively affect sales effectiveness. Moreover, the results reveal a positiveimpact of relationship selling on sales manager-salesperson exchanges.
Research limitations/implications – The study is cross-sectional, and many other relevantconstructs should be investigated in future research on the topic. Objective measures of performancemay also be incorporated.
Practical implications – The study demonstrates that companies can stimulate desirablebehaviours of salespeople, which drive to better performance, by leveraging on controllableorganisational factors, i.e. selling strategy and leadership.
Originality/value – The research fills three important gaps in the extant literature. First of all, thestudy clearly sheds some light on the role played by specific organisational variables (e.g.leader-member exchange quality) and behaviours of salespeople in implementing relational strategies.Second, the study shows that the quality of the relationship between supervisors and salespeople canaffect specific behaviours of subordinates. Third, the paper contributes to a better understanding oforganisational drivers of customer-oriented selling and adaptive selling, and finds evidence of apositive impact of such behaviours on sales effectiveness.
Keywords Relationship marketing, Customer orientation, Sales performance, Behaviour, Sales force
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0309-0566.htm
The review process for this paper was managed entirely by Professors Gilmore and Carson andnot by the Guest Editors of this special issue.
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Received June 2007Revised January 2008,
May 2008Accepted July 2008
European Journal of MarketingVol. 43 No. 7/8, 2009
pp. 1053-1075q Emerald Group Publishing Limited
0309-0566DOI 10.1108/03090560910961515
1. IntroductionIn today’s highly competitive marketplace, personal selling is a critical element in theeffort of modern firms to achieve organisational success based on customersatisfaction, loyalty and profitable sales volume (Anderson and Sullivan, 1993;Fierman, 1994; Reichheld and Sasser, 1990; Anderson, 1996; Baldauf and Cravens,1999; Reynolds and Arnold, 2000). Enhancing sales effectiveness is considered as oneof the most urgent tasks that sales managers face (Boles et al., 2000). The firm’smarketing success is largely dependent upon salespeople, who have the mostimmediate influence on customers (Williams and Attaway, 1996). The role ofsalespeople has expanded beyond sales generation and more towards “relationshipselling” as a means of creating customer satisfaction and loyalty (Ingram, 1996; Weitzand Bradford, 1999; Wilson, 2000; Ingram et al., 2001).
This is consistent with the general evolution of the discipline of marketing, which isincreasingly interpreted from a relational perspective. For example, the AmericanMarketing Association recently modified the official definition of marketing, statingthat “marketing is an organisational function and a set of processes for creating,communicating and delivering value to customers and for managing customerrelationships in ways that benefit the organisation and its stakeholders”. We arguethat salespeople play a key role in customer relationship management and inunderstanding, creating, communicating and delivering value to customers.
In fact, relational strategies are to a great extent implemented by sales managersand salespeople: the boundary-spanning role of the salesperson is critical inrelationship marketing (Sharma and Patterson, 1999). Langerak (2001) demonstratedthat “the manufacturer is fully dependent upon the attitude and behaviours ofsalespeople to successfully build and maintain relationships with customers” (p. 232).Unfortunately, however, there are often discrepancies between marketing strategiesand their functional implementation at the sales level (Strahle et al., 1996). Theimplementation of relational strategies requires the adoption of relational behaviours(customer-oriented selling and adaptive selling) from salespeople and adequateleadership support from sales managers.
The main goal of our study is to fill three important gaps in the literature.First, in the extant literature, little attention has been paid to the role of the sales
force and sales management in the implementation of relationship marketingstrategies (Slater and Olson, 2000). Viswanathan and Olson (1992, p. 45) pointed outthat studies “linking specific sales management activities with marketing strategieshave been largely non-existent”. More specifically, researchers to date have notsufficiently examined the extent to which relationship marketing affects salespeople’sbehaviours and ultimately sales effectiveness.
Second, we investigate the impact on specific behaviours of salespeople of thequality of the relationship between supervisors and subordinates. In fact, strategicorganisational guidelines (e.g. relationship selling strategy) and supervisors may havedifferent influences on salespeople’s behaviours and, hence, on sales effectiveness.Importantly, Jones et al. (2003, p. 334) demonstrated empirically that “salespeopleperceive the actions of the firm separately from the actions of the sales manager”.Based on leader-member exchange theory, we posit that the quality of the relationshipbetween sales managers and salespeople within the sales department plays animportant role in the implementation of relational strategies. Sales managers must
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become strategy-driven leaders capable of influencing subordinates in their efforts toachieve sales objectives (Ingram et al., 2002). Unfortunately, to date, there is a scarcityof research investigating the role of leadership in stimulating relational sellingbehaviours, such as customer orientation and adaptive selling, and its impact on saleseffectiveness (Lagace, 1991; Flaherty and Pappas, 2000; Stock and Hoyer, 2002).
Third, we want to contribute to a better understanding of organisational drivers ofCOS and AS, as well as to examine further their impact on sales effectiveness.
To address the above-cited gaps, we develop and test a model of relationshipselling management (see Figure 1), starting from literature on relationship selling,salespeople’s behaviours and leader-member exchange (LMX). Our modelincorporates two classes of salespeople’s relational behaviours, namelycustomer-oriented selling (COS) and adaptive selling (AS), two classes ofmanagerial antecedents (i.e. relationship selling strategy and LMX) and oneconsequence (sales effectiveness). Our study examines the impact of leadershipquality and relationship selling, as antecedents of salespeople’s relationalbehaviours, on sales effectiveness. Our framework is consistent with the mostwidely accepted models of sales management, since it focuses on two organisationalvariables influencing sales force behaviours and performance (Walker et al., 1977,1979; Churchill et al., 1990).
The study begins with an examination of the key constructs used in our study.Then the conceptual framework and research hypotheses are presented and themethod used in this research is explained. The results are then presented anddiscussed. Finally, conclusions and managerial implications of the study are provided.The limitations of the study and a set of future research directions are also discussed.
Figure 1.The conceptual model
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2. Literature review2.1. Relationship selling strategyAs market relationships expand from discrete transactions to relational exchanges,relationship marketing and selling are at the forefront of academic research (Day, 2000;Fontenot and Wilson, 1997; Garbarino and Johnson, 1999; Jolson, 1997). Manyresearchers in the sales literature have argued that salespeople adopting a relationalapproach provide the grounds for gaining competitive advantage by adding value forcustomers and influencing future purchase intentions (Luthy, 2000; Boles et al., 2000).
We define “relationship selling strategy” as a strategic approach developed by asupplier willing to establish long-term and mutually profitable relationships with itscustomers (Jolson, 1997). From the seller’s point-of-view, the relationship sellingstrategic approach impacts on organisational decisions as well as individual attitudesand behaviours of sales managers and salespeople. In fact, Day (2000, p. 28) states that“relationship orientation [. . .] is immediately evident in the mind-set of those who dealdirectly with the customer”. Salespeople typically contribute to improving relationshipquality by performing value-adding activities such as customer problem solving andcustomisation (Crosby et al., 1990). Compared with traditional, short-sighted sellingstrategies, a relationship-oriented approach requires management and salespeople tochange or adopt some specific behaviours. When adopting a relational strategy, forexample, salespeople should abandon transactional (hard) selling approaches andbehaviours, which are short-sighted and aimed at maximising immediate sales volume,often at the expense of long-term results. In fact, it has been empirically demonstratedthat using closing techniques (Hawes et al., 1996) or some ingratiatory behaviours(Strutton et al., 1996) leads to lower levels of customer satisfaction, trust and loyalty.
To sum up, leadership capabilities as well as specific behaviours of salespeople needto be developed and adopted when a relationship selling strategy is pursued.Consequently, we will focus on customer-oriented selling, adaptive selling andleader-member exchange quality.
2.2 Relational behaviours of salespeopleCompanies pursuing relational selling strategies need to direct their salespeople toadopt relational selling behaviours (Wotruba, 1996). In this research, we focus on twoconstructs that have attracted a lot of attention from researchers in the current,relational era: customer-oriented selling (Saxe and Weitz, 1982) and adaptive selling(Spiro and Weitz, 1990).
2.2.1 Customer-oriented selling. Customer-oriented selling is defined as theimplementation of the market orientation construct at the level of individualsalespeople. As companies move toward relational exchanges, a win-win philosophyshould be adopted, with salespeople becoming customer partners (Weitz and Bradford,1999) and increasing their customer orientation, as opposed to their selling orientation(Saxe and Weitz, 1982). Williams (1998) argues that customer-oriented selling is offundamental importance in customer relationship development. Customer-orientedselling is consistent with the building of long-lasting positive relationships between thebuyer and the seller and is widely recognised as an important aspect of relationalselling behaviours (Flaherty et al., 1999; Keillor et al., 2000; Martin and Bush, 2003;Siguaw et al., 1994; Weitz and Bradford, 1999). Saxe and Weitz (1982) clearly statedthat “highly customer-oriented salespeople engage in behaviours aimed at increasing
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long-term customer satisfaction” (p. 344) and found that “the SOCO scale correlatedwith a measure of long-term versus short-term time orientation” (p. 347).Customer-oriented individuals would defer short-term returns for long-termdividends: salespeople, therefore, will engage in customer-oriented selling when theyexpect future transactions with the buyer.
Research specifically devoted to examining the link between COS and relationshipselling strategy, on the one side, and the quality of the supervisor-salespersonrelationship, on the other, is almost completely lacking (Flaherty et al., 1999;Schwepker, 2003). However, it is important to investigate these links because, based onextant literature, both the firm’s strategy and the sales managers’ actions can influencesalespeople’s customer orientation (e.g. Siguaw et al., 1994; Jones et al., 2003).
2.2.2 Adaptive selling. Adaptive selling is defined as “the altering of salesbehaviours during a customer interaction or across customer interactions based onperceived information about the nature of the selling situation” (Weitz et al., 1986,p. 175). A high level of adaptive selling is achieved by using different salespresentations and communication styles across encounters (Spiro and Weitz, 1990).Adaptive selling should be more applicable to selling situations characterised byvarying needs across customers, complex buying centres, complex buying tasks,complex products, high information needs and high perceived risks, i.e. typicalsituations in which relationship-specific approaches are required (Porter et al., 2003). Atthe company level, high adaptation to customer needs and customisation of the offerare usually considered important dimensions of a relational strategy (e.g. Cannon andPerreault, 1999). Similarly, at the individual salesperson level, the practice of adaptiveselling is consistent with a relationship selling strategy as “[its] benefits will likelyexceed opportunity costs with potentially large orders or with a high probability ofusing currently collected information to secure future sales” (Porter et al., 2003, p. 277).
To sum up, adaptive selling is a relevant aspect of relational behaviours, because ofits links with customer satisfaction, customer trust and the achievement of long-lastingbuyer-seller relationships (Spiro and Weitz, 1990; Vink and Verbeke, 1993).
2.3 LMXRole theory, social exchange theory and equity theory developed the theoretical basisof the leader-member exchange (LMX) model, providing a thriving approach to thestudy of leadership (Dansereau et al., 1973; Graen et al., 1982; Graen and Scandura,1987). Leader-member exchange theory posits that leaders and members engage in anumber of exchanges and interactions over time, which affects the development of theinterpersonal relationship between the two parties involved. Drawing on socialexchange theory, different types of interpersonal relationships may exist betweensupervisors and subordinates: low-quality leader-member relationships form pureeconomic exchanges following contractual agreements, with supervisors obtainingroutine subordinate performance and subordinates receiving standard organisationalbenefits (Graen and Cashman, 1975). On the contrary, high-quality leader-memberrelationships form working exchanges characterised by mutual trust and support(Liden and Graen, 1980), with subordinates showing increased levels of commitmentand competence (Dansereau et al., 1973) and supervisors offering favourableperformance rewards and promotions (Graen et al., 1990; Yukl, 1994).
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Although many studies focused on leader-member exchanges, a number of issuesremain unresolved, mainly due to the lack of tests in various relationship formats andenvironments (Miner, 1988; Dienesch and Liden, 1986). More specifically, furtherinvestigation is needed into the association between performance and LMX quality in asales department context (Dunegan et al., 1992; Bauer and Green, 1996).
Research reported in the sales literature suggests an association between LMXquality and job satisfaction and conflict (Lagace, 1991), salespersons’ willingness toaccept future job changes (McNeilly and Lawson, 1999), subordinates’ loyalty andreliability (Wakabayashi et al., 1990; Delvecchio, 1998; Flaherty and Pappas, 2000).
Based on these foundations, we argue that sales management is a relevant contextfor studying LMX. Unfortunately, however, research relating LMX quality to sellingbehaviours and performance is lacking.
3. Research hypotheses3.1 Salespeople’s relational behaviours and sales effectivenessFrom a theoretical standpoint, COS summarises the ability and willingness ofsalespeople to show concern for customers, to analyse their problems and findappropriate solutions, and to act in the customer’s interest. As a consequence, it isposited that COS should drive to higher customer satisfaction which, in turn, shouldincrease sales effectiveness (Saxe and Weitz, 1982). Empirical studies generallysuggest that COS has a positive impact on performance (e.g. Boles et al., 2000, 2001;Brown et al., 2002). However, we believe that this topic deserves further investigation.In fact, the recent meta-analysis by Franke and Park (2006) found that COS increasesonly self-rated performance. In addition to this, in the extant research, performancewas often measured by “soft” measures like customer satisfaction and trust (e.g. Goffet al., 1997; Williams, 1998; Bejou et al., 1998), while fewer studies analysed the impactof COS on bottom line performance (e.g. Keillor et al., 2000). We address these gaps inthe literature by investigating the impact of COS on manager-rated hard measures ofperformance. Based on the above-cited arguments and evidence, we hypothesise that:
H1. COS is positively related to sales effectiveness.
From a conceptual standpoint, the main rationale behind the hypothesis of a positiveimpact of AS on a salesperson’s effectiveness lies in the contingency model ofsalespeople’s effectiveness (Weitz, 1981). Adaptations in sales interactions helpsalespeople customise the content and format of their messages, which in turn increasecommunication effectiveness by improving rapport and reducing objections.
Starting from the seminal study by Spiro and Weitz (1990), research largelyconcludes that AS improves salesperson performance (e.g. Boorom et al., 1998;Giacobbe et al., 2006; Keillor et al., 2000; Piercy et al., 1999; Rich and Smith, 2000; Spiroand Weitz, 1990). This conclusion is also strongly supported by the meta-analysis byFranke and Park (2006). Hence, we hypothesise:
H2. AS is positively related to sales effectiveness.
3.2 Relationship selling strategy and salespeople’s relational behavioursFrom a conceptual standpoint, relationship marketing theory clearly underlines theimportance of customer satisfaction, trust and commitment in stimulating continuityof exchanges over time (Palmatier et al., 2006). These customer-focused relational
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mediators are strongly affected by the absence of opportunistic behaviour andprovision of relational benefits by sellers (e.g. Morgan and Hunt, 1994), which, at thelevel of individual salespeople, are mainly represented by their level of customerorientation. Similar considerations can be found in the market orientation literature, inwhich customer orientation is a key behavioural component of the market orientationconstruct (Narver and Slater, 1990), which in turn is a key precondition for increasingcustomer satisfaction and developing a long-lasting relationship with customers (e.g.Kohli and Jaworski, 1990). From an empirical standpoint, Williams and Weiner (1990)found an association between relationship selling strategy and COS. Williams (1998)pointed out that customer-oriented selling is of fundamental importance in customerrelationship development. Beatty and Lee (1996) also found an association betweensuccessful long-term relationships with clients and customer-oriented selling.Langerak (2001) empirically demonstrated that market orientation of the sellingcompany fosters salespeople’s COS, which in turn positively affects customer trust, i.e.a key relational outcome. Based on this evidence, we hypothesise:
H3. Relationship selling strategy is positively related to salespeople’s COS.
From a theoretical standpoint, relationships are a dynamic phenomenon. As aconsequence, in the relationship lifecycle, different phases can be identified (e.g. Ford,1980; Dwyer et al., 1987). Each phase is characterised by different priorities and keysuccess factors (e.g. Wilson, 1995), so the seller’s ability to adapt to changing customerrequirements over time and in different situational contexts is a critical component ofsuccessful relationships. Conceptually, adaptation is a vital interaction process indyadic relationships between a buyer and a seller (Moller and Wilson, 1995). In fact,when a supplier engages in a relational selling strategy, one of the biggest challengesfor salespeople is to deliver messages consistently to customers in a manner thatspecifically targets the needs, wants and concerns of each individual buyer (Rich andSmith, 2000; Sengupta et al., 2000). Customers are constantly increasing their demandsthat the selling organisation, as well as their salespeople, adopt customised approachesto their specific desires (Jolson, 1997). Hence:
H4. Relationship selling strategy is positively related to salespeople’s AS.
3.3. Leader-member exchange quality and salespeople’s relational behavioursSocial learning theory suggests that, in a personal selling context, the sales manager isthe person most likely to be responsible for shaping a salesperson’s behaviours.However, the extent to which salesperson-manager exchange relationships affectsalespersons’ behaviour is still unclear. For example, Lagace (1990), measuringsalesperson effectiveness, found no significant relationship with salesperson-managerexchange quality. Most of the research on LMX focused on its impact on subordinates’job performance, job satisfaction, job commitment, role conflict, role clarity andturnover intentions (Gerstner and Day, 1997). In contrast, the influence of LMX onspecific behaviours has been relatively overlooked. Studies in leadership suggest thatexchanges that occur between salespeople and their managers can have an impact onsubordinates’ selling behaviours (e.g. Butler and Reese, 1991; Graen and Uhl-Bien,1995).
So far, only a few studies have examined the antecedent role ofsupervisor-subordinate relationships on COS (e.g. Stock and Hoyer, 2002). O’Hara
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et al. (1991) stressed the importance of salesperson-manager relationship quality,demonstrating that relationships based on trust, support and fairness are positivelyrelated to COS. Martin and Bush (2003) suggested that salespeople will engage in COSwhen they perceive a positive psychological climate through sales manager’sleadership style. This contention was later supported empirically (Martin and Bush,2006). Boles et al. (2001) pointed out that supportive supervisors can create cohesiveworking environments in which salespeople are more likely to collaborate towardssatisfying customer needs. Conversely, in a non-supportive working environment,salespeople may behave in a rather egoistic manner, in order to maximise sales figuresand avoid negative sanctions from sales managers (Eisenberger et al., 1986; Teas,1983). Moreover, Schwepker (2003, pp. 164-165) suggested that “sales managers whowant to foster customer-oriented selling may want to develop supportive relationshipswith salespeople [. . .] that are based on trust, interaction, support”. Hence:
H5. The quality of the LMX is positively related to salespeople’s COS.
High quality leader-member relationships generate a psychological climate whichfosters salespersons’ empowerment by increasing subordinates’ perceptions ofautonomy and support (Martin and Bush, 2006). Similarly, the level of trust between asales manager and a direct subordinate salesperson positively affects the salesperson’sperceptions of autonomy and innovativeness (Strutton et al., 1993). Moreover,subordinates perceiving high value congruence between themselves and their leadersare more productive in generating ideas (Jung and Avolio, 1999). In keeping with jobenrichment theory, empowerment and autonomy emphasise individual contributionand employee initiative, flexibility, creativity and self-determination (Spreitzer, 1996;Anderson and Huang, 2006), which are all preconditions for adaptive selling. Theapplication of adaptive selling requires strong managerial support in terms of thesupervisor’s investment in limited resources such as time and attention (Knowles et al.,1994). This support can be an outcome of the relationship between supervisors andsubordinates aimed at developing proper internal communication and role formation(Dubinsky et al., 1986). In the absence of good relationships, subordinates may avoidadaptive selling behaviours (Spiro and Weitz, 1990). Delvecchio (1998) pointed out thatthe salesperson-manager relationship quality, by playing the role of support tosalespeople, may foster increased levels of AS behaviours. Hence:
H6. The quality of the LMX is positively related to salespeople’s AS.
3.4 Relationship selling strategy and leader-member exchange qualityDay (2000) states that, to develop strong relationships with customers, “a relationshiporientation must pervade the mind-sets, values and norms of the organisation” (p. 24).This implies the existence of a strong esprit de corps in the selling firm (Homburg et al.,2002), which, at the personal level, can be examined through the existence ofleader-member exchange quality.
In a broader perspective, based on relationship marketing theory, we argue thatbuilding enduring relationships with customers implies adopting a relational approachinternally, i.e. in terms of both inter-functional and interpersonal relationships insidethe selling firm (e.g. Gronroos, 1991; Gummesson, 1999). The same argument is widelyused in CRM literature (see for example Meyer and Kolbe, 2005; Tuominen et al., 2000).To our goals, the main rationale behind this argument is that high quality LMX
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reduces subordinates’ turnover (Graen et al., 1982; Ferris, 1985) and turnover intentions(Vecchio and Gobdel, 1984), thus increasing employee retention, which is an importantprerequisite for customer retention. This is especially true for front-line personnel, likesalespeople. In other words, a firm pursuing a relationship selling strategy is stronglydependent on the ability of its salespeople to create long-lasting relationships withcustomers; to do this, the selling firm should reduce salespeople’s turnover, and thisgoal can be accomplished by increasing their job satisfaction. Due to the bond betweensatisfaction with the supervisor and job satisfaction (Lagace, 1991), relationship sellingstrategy should be associated with high levels of LMX quality (Jones et al., 2003).Therefore, we propose:
H7. Relationship selling strategy is positively related to the quality of the LMX.
4. Method, data analysis and results4.1 Data collectionTo test our hypotheses, a cross-sectional survey was conducted in a sample of firmslocated in France. Following similar methodologies in the sales and organisationalbehaviour literature, chief and field sales managers and their sales personnel wereselected as respondents (Lagace, 1991; Dyne et al., 2002; Moideenkutty et al., 2006). Apreliminary test of the questionnaire was run by means of 15 personal interviews withfield sales representatives. All items were checked in terms of readability, clarity andface validity. Then, we randomly selected 480 chief and field sales managers from a listof 3,000 French companies. They were contacted by telephone and 350 managersagreed to participate in the study and fill in a questionnaire measuring relationshipselling and sales effectiveness. They were also asked to provide the names and contactinformation of individual salespeople they directly supervised, and permission to sendthem questionnaires measuring customer-oriented selling, adaptive selling and LMX.Hence, 723 salespeople were contacted. Information related to the type of industryrespondents represent is summarised in the appendix. This process generated 278usable questionnaires from sales managers and 211 from salespeople. By combiningthe two samples, we obtained 164 dyads.
Importantly, the separation of respondents for dependent and independentvariables for the relationships tested in our model provides a guard against commonmethod variance (Podsakoff et al., 2003).
In order to assess non-response bias, a comparison of early respondents and laterespondents was made on all variables of interest (Armstrong and Overton, 1977). Nosignificant difference was found. Box’s M-test for homogeneity of variances betweenthe two groups, the multivariate Wilk’s lambda test and the test of between-subjectseffects for all constructs were nonsignificant. In addition, Levene’s test of equality orerror variances for all variables was also nonsignificant.
4.2 MeasuresSales effectiveness was measured using a four-item seven-point Likert scale (muchbetter/worse than competitors/objectives) describing the company’s change in salesvolume and market share in the last two years, compared with the major competitorand the unit’s objectives (Cravens et al., 1993; Babakus et al., 1996; Piercy et al., 1997;Grant and Cravens, 1999). LMX was measured using an eight-item scale (Liden andMaslyn, 1998); for relationship selling we used the four-item scale adopted by Slater
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and Olson (2000); for customer orientation we used the five-item scale proposed byThomas et al. (2001); for adaptive selling we used the five-item scale suggested byRobinson et al. (2002).
4.3 Measurement modelWe performed exploratory factor analysis (with Varimax rotation), which led to afive-factor solution (see Table I). The five factors explain 67.16 per cent of the totalvariance and, as expected, are: relationship selling (12.24 per cent), LMX (13.47 percent), customer-oriented selling (13.82 per cent), adaptive selling (12.91 per cent) andsales effectiveness (14.72 per cent). At this exploratory phase of the study, three itemsmeasuring LMX failed to load in any factor, thus the initial Liden and Maslyn (1998)scale was reduced to eight items. The reliability of each scale was estimated throughCronbach’s coefficient (Cronbach, 1970), which for all multi-items scales ranged from0.73 to 0.83, thus exceeding the threshold level of 0.70 suggested by Nunnally (1978).To assess the measurement model, we then conducted a confirmatory factor analysisusing LISREL 8.52. The overall fit of the model was adequate: with an x 2 of 352.26 (df216, p ¼ 0:00), a goodness-of-fit index of 0.99, an adjusted goodness-of-fit index of 0.99and a comparative fit index (Bentler, 1990) of 0.96. As for convergent validity, themeasurement factor loadings were all significant, and the average variance extracted(Fornell and Larker, 1981) indicated that, in each case, the variance captured by theconstruct was greater than the variance due to measurement error (see Table II).Finally, to test for discriminant validity, the procedure described by Fornell and Larker(1981) was used. As an indication of discriminant validity, the average varianceextracted (AVE) for each construct should be higher than the squared correlationbetween that construct and any other construct. In the present study, in no case wasthere a squared correlation between any two constructs that was higher than either ofthe constructs’ AVE (see Table III).
4.4 Structural modelThe structural relationships between the latent variables have been examined usingLISREL 8.52. The overall model fit indices, the standardised parameters and thet-values of this model are shown in Figure 2. The empirical results indicate that:
. relationship selling and LMX positively affect both customer-oriented selling(0.38, t ¼ 4:53 and 0.32, t ¼ 5:47, respectively) and adaptive selling (0.26,t ¼ 3:97 and 0.32, t ¼ 4:68, respectively);
. relationship selling positively affects LMX (0.22, t ¼ 2.76); and
. both customer-oriented selling (0.40, t ¼ 8.03) and adaptive selling (0.31,t ¼ 5.38) positively affect sales effectiveness.
Thus, all hypotheses are supported empirically.Although we did not formulate specific hypotheses concerning the direct impact of
relationship selling strategy and LMX on sales effectiveness, to test for the potentialexistence of direct paths we compared the proposed model (which can be interpreted asa full mediation model) with two rival models. More specifically, the two rival modelswere tested for partial (partial mediation model) or no mediation (no mediation model)of sales behaviours. It was found that the fit statistics of both the partial mediationmodel (x2 ¼ 379:42, df 217, p ¼ 0:001, NFI ¼ 0:90, CFI ¼ 0:88, RMSEA ¼ 0:149) and
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anag
erd
efen
ds
me
toa
sup
erio
r,ev
enw
ith
out
com
ple
tek
now
led
ge
for
the
issu
ein
qu
esti
on0.
619
My
sale
sm
anag
erw
ould
def
end
me
toot
her
sin
the
org
anis
atio
nif
Im
ade
anh
ones
tm
ista
ke
0.72
3I
do
wor
kfo
rm
ysa
les
man
ager
that
goe
sb
eyon
dm
yjo
bd
escr
ipti
on0.
660
My
sale
sm
anag
eris
the
kin
dof
per
son
one
wou
ldli
ke
toh
ave
asa
frie
nd
a
My
sale
sm
anag
eris
alo
tof
fun
tow
ork
wit
ha
My
sup
erv
isor
wou
ldco
me
tom
yd
efen
ceif
Iw
ere
“att
ack
ed”
by
oth
ersa
Itr
yto
fig
ure
out
acu
stom
er’s
nee
ds
0.68
3I
hav
eth
ecu
stom
ers’
bes
tin
tere
sts
inm
ind
0.69
5I
tak
ea
“pro
ble
mso
lvin
g”
app
roac
hin
sell
ing
pro
du
cts
orse
rvic
esto
cust
omer
s0.
654
Ire
com
men
dp
rod
uct
sor
serv
ices
that
are
bes
tsu
ited
toso
lvin
gp
rob
lem
s0.
678
Itr
yto
fin
dou
tw
hic
hk
ind
sof
pro
du
cts/
serv
ices
wou
ldb
em
ost
hel
pfu
lto
cust
omer
s0.
697
Ifa
sale
sap
pro
ach
isn
otw
ork
ing
,I
amab
leto
chan
ge
toan
oth
erap
pro
ach
0.70
6I
lik
eto
exp
erim
ent
wit
hd
iffe
ren
tsa
les
app
roac
hes
0.68
7I
amv
ery
flex
ible
inth
ese
llin
gap
pro
ach
Iu
se0.
637
Iam
cap
able
ofu
sin
ga
wid
ev
arie
tyof
sell
ing
app
roac
hes
0.65
5I
try
tou
nd
erst
and
how
one
cust
omer
dif
fers
from
anot
her
0.73
6S
ales
vol
um
eco
mp
ared
tom
ajor
com
pet
itor
(pas
t24
mon
ths)
0.80
1S
ales
vol
um
eco
mp
ared
tosa
les
un
itob
ject
ives
0.78
4M
ark
etsh
are
com
par
edto
maj
orco
mp
etit
or0.
758
Mar
ket
shar
eco
mp
ared
tosa
les
un
itob
ject
ives
0.81
2C
ron
bac
hal
ph
a0.
737
0.74
70.
794
0.77
70.
830
Per
cen
tag
eof
tota
lv
aria
nce
exp
lain
ed(6
7.16
per
cen
t)12
.24
13.4
713
.82
12.9
114
.72
Note:
aIt
ems
dro
pp
ed
Table I.Exploratory factor
analysis (VARIMAXrotation)
The impact ofrelationship
selling
1063
Item
sF
acto
rlo
adin
gl
t-v
alu
eR
ho
Jore
skog
rðY
Þ
Con
stru
ctre
liab
ilit
yrh
AV
ErvcðhÞ
Relationship
selling
(Sla
ter
and
Ols
on,
2000
)0.
870.
77T
he
par
ties
exp
ect
rela
tion
ship
sto
last
ali
feti
me
0.72
23.2
80.
69It
isas
sum
edth
atre
new
alof
agre
emen
tsw
ill
gen
eral
lyoc
cur
0.72
23.6
10.
69T
he
par
ties
mak
ep
lan
sin
term
sof
ind
ivid
ual
pu
rch
ases
bu
tal
soin
term
sof
rela
tion
ship
con
tin
uan
ce0.
7122
.97
0.70
Th
ere
lati
onsh
ipw
ith
our
cust
omer
sis
esse
nti
ally
“ev
erg
reen
”0.
7324
.24
0.72
LMX
(Lid
enan
dM
asly
n,
1998
)0.
820.
75I
app
reci
ate
alo
tm
ysa
les
man
ager
asa
per
son
0.70
22.5
60.
67M
ysa
les
man
ager
can
dep
end
onm
ew
hen
we
are
over
load
edw
ith
wor
k0.
7122
.89
0.69
Ire
spec
tm
ysa
les
man
ager
’sk
now
led
ge
ofan
dco
mp
eten
ceon
the
job
0.70
22.1
90.
67I
amim
pre
ssed
wit
hm
ysa
les
man
ager
’sk
now
led
ge
ofh
is/h
erjo
b0.
7223
.56
0.70
Iad
mir
em
ysa
les
man
ager
’sp
rofe
ssio
nal
skil
ls0.
7223
.68
0.70
My
sale
sm
anag
erd
efen
ds
my
wor
kac
tion
sto
asu
per
ior,
even
wit
hou
tco
mp
lete
kn
owle
dg
efo
rth
eis
sue
inq
ues
tion
0.74
25.3
40.
70M
ysa
les
man
ager
wou
ldd
efen
dm
eto
oth
ers
inth
eor
gan
isat
ion
ifI
mad
ean
hon
est
mis
tak
e0.
7122
.52
0.68
Id
ow
ork
for
my
sale
sm
anag
erth
atg
oes
bey
ond
my
job
des
crip
tion
0.74
25.7
20.
71M
ysa
les
man
ager
isth
ek
ind
ofp
erso
non
ew
ould
lik
eto
hav
eas
afr
ien
da
My
sale
sm
anag
eris
alo
tof
fun
tow
ork
wit
ha
My
sup
erv
isor
wou
ldco
me
tom
yd
efen
ceif
Iw
ere
“att
ack
ed”
by
oth
ersa
COS
(Th
omas
etal.,
2001
)0.
850.
78I
try
tofi
gu
reou
ta
cust
omer
’sn
eed
s0.
7526
.46
0.70
Ih
ave
the
cust
omer
s’b
est
inte
rest
sin
min
d0.
7527
.82
0.71
Ita
ke
a“p
rob
lem
solv
ing
”ap
pro
ach
inse
llin
gp
rod
uct
sor
serv
ices
tocu
stom
ers
0.71
22.2
60.
70I
reco
mm
end
pro
du
cts
orse
rvic
esth
atar
eb
est
suit
edto
solv
ing
pro
ble
ms
0.79
30.1
30.
78I
try
tofi
nd
out
wh
ich
kin
ds
ofp
rod
uct
s/se
rvic
esw
ould
be
mos
th
elp
ful
tocu
stom
ers
0.72
24.2
60.
71
(continued
)
Table II.Measurement model andconvergent validity
EJM43,7/8
1064
Item
sF
acto
rlo
adin
gl
t-v
alu
eR
ho
Jore
skog
rðY
Þ
Con
stru
ctre
liab
ilit
yrh
AV
ErvcðhÞ
AS
(Rob
inso
net
al.,
2002
)If
asa
les
app
roac
his
not
wor
kin
g,
Iam
able
toch
ang
eto
anot
her
app
roac
h0.
7324
.62
0.71
0.86
0.79
Ili
ke
toex
per
imen
tw
ith
dif
fere
nt
sale
sap
pro
ach
es0.
7223
.42
0.70
Iam
ver
yfl
exib
lein
the
sell
ing
app
roac
hI
use
0.71
22.1
90.
68I
amca
pab
leof
usi
ng
aw
ide
var
iety
ofse
llin
gap
pro
ach
es0.
8131
.91
0.76
Itr
yto
un
der
stan
dh
owon
ecu
stom
erd
iffe
rsfr
oman
oth
er0.
8131
.25
0.77
Saleseffectiveness
(pas
t24
mon
ths)
(Cra
ven
set
al.,
1993
)S
ales
vol
um
eco
mp
ared
tom
ajor
com
pet
itor
0.82
34.5
60.
780.
890.
81S
ales
vol
um
eco
mp
ared
tosa
les
un
itob
ject
ives
0.83
35.1
80.
79M
ark
etsh
are
com
par
edto
maj
orco
mp
etit
or0.
8032
.47
0.75
Mar
ket
shar
eco
mp
ared
tosa
les
un
itob
ject
ives
0.79
30.2
80.
78
Goo
dn
ess
offi
tst
atis
tics
:C
hi-
squ
ared
352.
26d
f21
6p
-val
ue
0.00
GF
I0.
99A
GF
I0.
99R
MS
EA
0.06
4C
FI
0.96
NF
I0.
95
Note:
aIt
ems
dro
pp
ed
Table II.
The impact ofrelationship
selling
1065
the no mediation model (x 2 ¼ 375:87, df 216, p ¼ 0:001, NFI ¼ 0:92, CFI ¼ 0:90,RMSEA ¼ 0:135) were inferior to those of the proposed model. The chi-squaredifference test can be used to assess whether the proposed model fits the datasignificantly better than the rival models (partial and no mediation models). Thecritical value (Dx 2ðDdf ¼ 1Þ . 3:84) was exceeded in both cases. Therefore, we canconclude that the proposed model is a significantly better representation of the data.
5. Discussion and implicationsOur study suggests that a relational environment (i.e. the adoption of a relationshipselling strategy and a high quality of leader-member exchange) enhances salespersonnel’s adoption of relational behaviours, which in turn positively affects saleseffectiveness. The findings also confirm that sales managers can strongly affect the
ConstructsRelationship
selling LMXAdaptive
sellingCustomer oriented
sellingSales
effectiveness
Relationship selling 0.745 *
LMX 0.478 * * 0.732 *
Adaptive selling 0.528 * * 0.364 * * 0.789 *
Customer oriented selling 0.455 * * 0.391 * * 0.219 * * 0.801 *
Sales effectiveness 0.080 * * 0.067 * * 0.502 * * 0.486 * * 0.814 *
Notes: *The diagonal entries represent the average variance extracted by the construct; * *Theoff-diagonal entries represent the variance shared (squared correlation) between constructs
Table III.Discriminant validity
Figure 2.The structural model
EJM43,7/8
1066
behaviours and performance of salespeople. In fact, they are critical boundaryspanners because they are often the only link between the salesperson and theorganisation (Swift and Campbell, 1998). More specifically, the results suggest that thequality of the interpersonal relationship between the supervisor and salespeople has apositive influence on two important classes of relational behaviours of salespeople.
Our findings show that the adoption of a relationship selling strategy per se doesnot necessarily increase performance. Rather, it improves performance by stimulatingsalespeople’s relational behaviours both directly and indirectly (i.e. via an increase inLMX quality). Moreover, the present study provides clear evidence of the role of LMXin fostering COS and AS. This suggests that effective leadership is an importantprecondition for implementing relationship selling strategies.
The contribution of this research effort to current knowledge can be summarised asfollows. In general terms, the study deepens our understanding of how relationalstrategies can be implemented at the sales department level. In fact the adoption of arelationship selling strategy stimulates salespeople’s relational behaviours bothdirectly and indirectly, that is, by increasing the quality of LMX. Furthermore, ourresearch highlights the contribution of salespeople’s behaviours in implementingrelationship selling strategies toward customers. Finally, we find further support of apositive impact of COS and AS on sales effectiveness. More specifically, our study fillsmany important gaps in the extant literature.
First of all, in the huge amount of literature on relationship marketing, the topic ofstrategy implementation at the sales department level is largely overlooked. Our studyclearly suggests that future research on the topic should investigate the role played byspecific organisational variables (e.g. leader-member exchange quality) and behavioursof salespeople in implementing relational strategies. In fact, mixed evidence andcontroversial findings on the impact of relational strategy on performance are often theresult of poor consideration of how such a strategy is actually implemented in the field.
Second, we demonstrate that the quality of the relationship between supervisorsand salespeople can affect specific behaviours of subordinates. Especially in thecontext of sales literature, investigating the impact of LMX on specific behaviours isimportant because salespeople, due to their boundary-spanning role, directly influenceorganisational performance exactly through their behavioural performance (Churchillet al., 1990). Again, we argue that controversial findings on the impact of LMX onbottom line performance, especially in sales settings, are largely a consequence ofoverlooking its impact on specific behaviours of subordinates.
Third, we contribute to a better understanding of organisational drivers of COS andAS. As underlined by many authors, most studies focused on individual-levelantecedents of these important behaviours (e.g. Schwepker, 2003). Even the recentmeta-analysis on COS and AS performed by Franke and Park (2006) only investigatedsalespeople’s individual drivers (gender and experience). This is clearly a limitation inthe extant literature, since both researchers and managers need to understand howcorporate strategies and leader-subordinate relationships can affect such behaviours.
Finally, we find evidence of a positive impact of AS and COS on sales effectiveness.Importantly, unlike most of the research on the topic, we focused on hard measures ofperformance (as opposed to “soft” measures like customer satisfaction and trust) andstrongly limited the risk of common method bias by using dyads instead of singlerespondents. This contribution should not be underestimated, especially in the light of
The impact ofrelationship
selling
1067
the findings of the analysis by Franke and Park (2006). In fact, their study shows thatthe impact of COS on performance is significant only when self-reported measures ofperformance are used, whereas its effects on manager-rated and objective performanceare nonsignificant, therefore raising questions about the effectiveness of COS.Similarly, the authors found that the impact of AS on performance depends on theperformance measures used because, again, AS is more related to self-ratedperformance than to manager-rated and objective performance. The authors state thatthis may result from common method bias. Hence, our use of dyads should beparticularly appreciated.
In terms of managerial implications, our study demonstrates that companies canstimulate desirable behaviours of salespeople that drive to better performance byleveraging on controllable organisational factors, i.e. selling strategy and leadership.Adopting a relational selling strategy often implies changing corporate culture, salesforce organisation, control systems and incentives. Similarly, building high-qualityleader-subordinates relationships implies investing in psychological contracts, asopposed to contractual agreements. The present study, in line with recent studies in thesales management area (Ingram et al., 2005), points out the need for the development ofsales managers’ leadership skills. The results of the study confirm the necessity formanagement practices that stimulate sales behaviours on the basis of successfulleadership styles. Moreover, it is apparent that sales behaviours buffer the impact ofthe quality of leadership on sales effectiveness.
6. Limitations of the study and directions for future researchThe present study has several limitations. First of all, since our study is cross-sectional,causal linkages should be interpreted with caution. Future research on the topic mayuse experimental and longitudinal designs helping the clarification of the causality anddirection of underlined relationships between relationship selling, LMX, customerorientation, adaptive selling and effectiveness.
Second, in the present study, a number of variables were not included (e.g. salesforce control systems, group cohesion etc.), which could reveal how the relationshipsbetween certain variables are mediated or moderated. Comparing the effects ofdifferent sales force control systems on the adoption of customer orientation andadaptive selling behaviours and sales effectiveness could have valuable implicationsfor sales force training and management.
Third, in our study we used self-reported measures of COS and AS, as well asmanagerial ratings of sales effectiveness. Ideally, future research may use customerperceptions of salespeople’s behaviours and objective measures of performance.
However, the use of dyads of respondents in our study strongly reduces the risk ofcommon method bias.
Finally, further research efforts are needed in the sales leadership domain,especially to identify the critical leadership capabilities.
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Appendix
Corresponding authorNicholas G. Paparoidamis can be contacted at: [email protected]
Industry Frequency %
Technology and electronics 34 20.73Raw materials 27 16.46Consumer services 22 13.41Consumer goods 17 10.36Insurance 16 9.75Health care and pharmaceuticals 12 7.31Real estate 11 6.70Financial services 9 5.48Transportation 8 4.87Business services 8 4.87Total 164 100
Table AI.Industry type –
distribution ofrespondents by industry
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