Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Marketing Study: Companies Benefit Most From Examining Where Customer Loyalty Lies

19.10.2007
Customers determine the success of any business; whether a sense of loyalty develops often depends on one particular dynamic: a customer’s relationship with the salesperson. A team of academic marketing professors, including one from the University of Missouri-Columbia, found that customer loyalty toward the salesperson – rather than the products and services tied closely to the seller –can inspire greater sales, but be bad for business by making the company more vulnerable.

The study was conducted by Robert W. Palmatier, Evert McCabe faculty fellow and assistant professor of marketing in the Michael G. Foster School of Business at the University of Washington; Lisa K. Scheer, the Emma S. Hibbs Distinguished Professor and associate professor of marketing in the MU College of Business; and Jan-Benedict E.M. Steenkamp, the C. Knox Massey Distinguished Professor of Marketing and marketing area chair of the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill.

Based on their findings, they strongly recommend that businesses develop strategies that encourage not only salesperson loyalty, but also enhance the company’s products and value. Doing so, Scheer said, results in loyalty to both the company and salesperson; in the long run, it is good for sales and revenues.

“Companies that believe they understand loyalty among their customers may be fooling themselves,” Scheer said. “They may not really understand precisely where that loyalty is directed. Is it to specific individuals who service them and work with them, or is it with the company and its products or brands?”

The study focused on business-to-business relationships between 362 industrial buyers and the manufacturers' representative salespeople who market products to buyers in a wide-range of industrial markets. Three sources of data were analyzed: the buyer provided information about his/her relationship with the selling company and salesperson; the salesperson provided information about the same relationships with the buyer; and sales managers shared objective information about buyers’ purchases. Scheer said despite having multiple sources to purchase from and numerous resources to compare prices, the bond between buyer and salesperson greatly influenced the transaction.

She said the consumer industry operates much the same, with personal relationships often determining which company a consumer patronizes.

“Relationships play a big role – whether customers are loyal to buying from one source or another,” Scheer said. “In the study, three-fourths of the buyers had other sources they could go to for exactly the same product; but they stayed loyal to a particular company. Even in a business-to-business context, the personal relationships are important. Companies need to understand the drivers behind customer loyalty. Is it vested in elements the company really controls and owns – like the brand, trademarks and products? Or, is it vested more in things that are not under the company’s control? What happens if a salesperson leaves to join a competitor? To ignore where loyalty is truly directed puts a company at risk.”
Scheer and her colleagues suggest that companies utilize more in-depth surveys to better understand factors that result in loyalty. Current approaches, she said, are often too vague – only asking “how likely are you to buy these products again or patronize us again? They don’t get into why’s.”

The study, “Customer Loyalty to Whom? Managing the Benefits and Risks of Salesperson-Owned Loyalty,” has been published in the Journal of Marketing Research.

Bryan C. Daniels | EurekAlert!
Further information:
http://www.missouri.edu

More articles from Studies and Analyses:

nachricht Researchers simplify tiny structures' construction drip by drip
12.11.2018 | Princeton University, Engineering School

nachricht Mandibular movement monitoring may help improve oral sleep apnea devices
06.11.2018 | Elsevier

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: UNH scientists help provide first-ever views of elusive energy explosion

Researchers at the University of New Hampshire have captured a difficult-to-view singular event involving "magnetic reconnection"--the process by which sparse particles and energy around Earth collide producing a quick but mighty explosion--in the Earth's magnetotail, the magnetic environment that trails behind the planet.

Magnetic reconnection has remained a bit of a mystery to scientists. They know it exists and have documented the effects that the energy explosions can...

Im Focus: A Chip with Blood Vessels

Biochips have been developed at TU Wien (Vienna), on which tissue can be produced and examined. This allows supplying the tissue with different substances in a very controlled way.

Cultivating human cells in the Petri dish is not a big challenge today. Producing artificial tissue, however, permeated by fine blood vessels, is a much more...

Im Focus: A Leap Into Quantum Technology

Faster and secure data communication: This is the goal of a new joint project involving physicists from the University of Würzburg. The German Federal Ministry of Education and Research funds the project with 14.8 million euro.

In our digital world data security and secure communication are becoming more and more important. Quantum communication is a promising approach to achieve...

Im Focus: Research icebreaker Polarstern begins the Antarctic season

What does it look like below the ice shelf of the calved massive iceberg A68?

On Saturday, 10 November 2018, the research icebreaker Polarstern will leave its homeport of Bremerhaven, bound for Cape Town, South Africa.

Im Focus: Penn engineers develop ultrathin, ultralight 'nanocardboard'

When choosing materials to make something, trade-offs need to be made between a host of properties, such as thickness, stiffness and weight. Depending on the application in question, finding just the right balance is the difference between success and failure

Now, a team of Penn Engineers has demonstrated a new material they call "nanocardboard," an ultrathin equivalent of corrugated paper cardboard. A square...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

VideoLinks
Industry & Economy
Event News

“3rd Conference on Laser Polishing – LaP 2018” Attracts International Experts and Users

09.11.2018 | Event News

On the brain’s ability to find the right direction

06.11.2018 | Event News

European Space Talks: Weltraumschrott – eine Gefahr für die Gesellschaft?

23.10.2018 | Event News

 
Latest News

Purdue cancer identity technology makes it easier to find a tumor's 'address'

16.11.2018 | Health and Medicine

Good preparation is half the digestion

16.11.2018 | Life Sciences

Microscope measures muscle weakness

16.11.2018 | Life Sciences

VideoLinks
Science & Research
Overview of more VideoLinks >>>