Developing Loyal Customers with a Value-adding Sales Force:

-Customer Satisfaction and the Perceived

Credibility of Consultative Salespeople
Annie H. Liu and Mark P. Leach

The consultative services of business-to-business salespeople are becoming increasingly important to customers when
evaluating a supplier's overall value. Thus, a customer evaluation may depend on the salesperson's expertise and
trustworthiness; without trust or expertise, customers hesitate to adopt the solutions presented by a salesperson. This study
investigates the perceived expertise and trust of a salesperson in a business-to-business context. Findings suggest that both
are important to overall customer satisfaction. Furthermore, customer perceptions of a salesperson's power in the supply-firm
and perceptions of the quality of interactions with a salesperson were found to be important when developing perceptions of
expertise among business customers.

Today, perhaps more rapidly than any other time in recent construct a theoretical model (see Figure 1). Furthermore,
history, the business-to-business competitive environment is customer perceptions of salesperson credibility are explored
changing. Large firms continue to reduce the number of sup- by examining factors that may lead customers to deem a
pliers they conduct business with, while electronic commerce salesperson as having a high level of expertise.
has increased the number of potential suppliers. Suppliers,
fearful of having their existing business relations with key Consultative Selling & Salesperson Credibility
customers terminated, have often seen their expenses rise
and margins fall as they covet long-term relations with these Consultative selling is the process of professionally provid-
customers (Rackham 2000). ing information for helping customers take intelligent actions
In competitive environments, organizational buyers who to achieve their business objectives. It involves proactive com-
are interested in establishing long-term relationships are in- munication by salespeople with their customers to facilitate
creasingly demanding value-added services from salespeople the identification and solution of customer problems (Gra-
(Rackham 2000; Graham 1996). As customers place more ham 1996; Tyler 1990; Chevalier 1993; Dunn, Thomas and
value on the advice and guidance provided by salespeople, Lubawski 1981). Thus, consultative selling involves the sales
suppliers have quickly recognized the pivotal role their sales professional as a valued advisor rather than someone merely
force plays in relational exchange. Thus, the effectiveness of promoting a particular product (Tyler 1990; Bragg 1986;
consultative selling activities is becoming critically impor- Hanan 1995). As such, salespeople, and the customized solu-
tant to suppliers who wish to pursue partnerships with their tions they provide, add value to customers. Meanwhile, the
key customers (Pardo 1997). development of trust and increasing levels of dependence by
The purpose of this article is to empirically examine the customers provide a barrier to switching and a source of
relationships among customer perceptions of salespeople, cus- sustainable competitive advantage for the sales firm.
tomer satisfaction, and customer loyalty behaviors. As such, Consultative selling relies on a customer viewing a sales-
this paper aims to help marketers understand how the cred- person as an industry peer and business expert (Smith 1991).
ibility of salespeople engenders loyalty behaviors among busi- Thus, consultative salespeople must possess extensive mar-
ness-to-business customers through enhanced levels of satis- ket knowledge at each level in a supply chain (Riso 1981), and
faction. Sales literature (e.g., Doney and Cannon 1997; Crosby, be able to communicate that knowledge in ways that provide
Evans and Cowles 1990) is incorporated with research on the value to customers. They must communicate effectively with
credibility of information sources (e.g., Grewal and Gotlieb both internal customers (e.g., support staff, technical depart-
1994), customer satisfaction (e.g., Oliver 1980) and repur- ments, etc.) and external customers, and they must be com-
chase behavior (e.g., Jackson 1985; Jones and Sasser 1995) to mitted to a long-term relationship where their own profits
grow as their customers' do (Tyler 1990; Smith 1991). In sum,
consultative selling requires customers view their salespeople
as having a high degree of expertise, and they must trust that
Annie H. Liu (Ph.D., Georgia State University) is an Assistant the solutions provided by these salespeople will be in the
Professor in the Department ofMarketing and Business Law at Loyola long-term interests of their companies.
Marymount University, Los Angeles, California. She has published in
Psychology & Marketing, Industrial Marketing Management, and Salesperson expertise has been empirically linked to the
other journals. Her research interests include relationship selling, level of trust a buyer has with a salesperson (Busch and
customer value and customer retention. Wilson 1976; Doney and Cannon 1997), and to buyer-seller
Mark P. Leach (Ph.D., Georgia State University) is an Assistant relationship quality (Crosby, Evans, and Cowles 1990). Like-
Professor in the Department ofMarketing and Business Law at Loyola wise, past business-to-business research provides evidence
Marymount University, Los Angeles, California. He has published in supporting the importance of trust in maintaining relation-
the Journal ofApplied Social Psychology, Industrial Marketing Man-
agement, Journal of Business & Industrial Marketing, Psychology &
ships (e.g., Morgan and Hunt 1994; Dwyer, Schurr and Oh
Marketing, and others. Prior to academia, he has held positions in
industrial sales.
The authors wish to thank the help from the editor and three anony- Journal of Personal Selling & Sales Management,
mous reviewers for their contributions to this manuscript. Volume XXI, Number 2 (Spring 2001, Pages 147-156).
148 Journal of Personal Selling & Sales Management
Figure 1
A Model of Perceived Salesperson Expertise and Trust with the Salesperson

Perceived Credibility

0.67

CFI=.96, GFI=.89, AGFI=.86,TLI=.95, RMSEA=.05

Chi Square=168.91, with 112 degrees of freedom

1987; Swan, Bowers, and Richardson 1999). Similarly, con- dependability, reliability, honesty, responsibility, and likabil-
sumer research investigating customers' perceptions of mar- ity as dimensions of buyer trust in business-to-business sales-
ket information has identified "source credibility" as being people. They found that among these dimensions, the de-
comprised of two underlying dimensions: perceived expertise pendability of a salesperson is most critical to the develop-
and trustworthiness (Dholakia and Sternthal1977). ment of trust. More recently, Doney and Cannon (1997) found
Studies of source credibility have found that, when a source that trust with a salesperson relies on both salesperson char-
is considered credible, the information provided is more per- acteristics (i.e., likeability, expertise, and similarity) and on
suasive (Gotlieb and Sarel 1991) and more likely to lead to the length and frequency of business contact between the
purchase intentions and brand choice (Grewal and Gotlieb buyer and salesperson (see Swan, Bowers, and Richardson
1994). As problem solving and developing customized solu- [1999] for a recent meta-analysis).
tions by salespeople becomes an integral aspect of the offer- Research investigating buyer-seller relationships (Crosby
ing, a customer's perception of a salesperson's credibility be- et al. 1990; Morgan and Hunt 1994) and channel working
comes increasingly important. Because the credible salesper- partnerships (Ganesan 1994; Anderson and Narus 1990;
son is trusted, a customer and salesperson can rely on one Anderson and Weitz 1989) suggests that the trust between
another to keep promises and to share sensitive information business partners reliably enhances the quality of the rela-
needed to design appropriate solutions (Anderson and Narus tionship and intentions to continue doing business together.
1990). Because a credible salesperson is seen as an expert, Trust is a fundamental aspect to maintaining relational ex-
this salesperson becomes a valued information source and change because it allows inevitable short-term inequities to
possibly a business partner. be overlooked and yield long-term mutual benefits (Gundlach
and Murphy 1993; Dwyer et al. 198 7; Williamson 1985; Schurr
Trust with a Salesperson and Ozanne 1985). Where there is trust between a buyer and
seller, both parties become more willing to share ideas, and to
Trust in a salesperson requires a belief that the salesper- clarify goals and problems. Communication becomes more
son can be relied on to behave in a manner such that the long- efficient as shared information becomes increasingly accu-
term interests of the customer will be served (Crosby, Evans rate, comprehensive, and timely (Anderson and Narus 1990).
and Cowles 1990). A customer's trust involves confidence that Furthermore, with trust, more effort is focused on proactive
the salesperson will deliver on promises (Crosby et al. 1990) solutions because there is less need for the continual monitor-
and fulfill long-term needs through coordinative actions ing of one another's actions (Hawes 1994; Schurr and Ozanne
(Ganesan 1994; Moorman, Zaltman, and Deshpande 1992; 1985). As such, the benefits of trust are most apparent when
Anderson and Weitz 1989). parties are subject to high levels of uncertainty and vulner-
Past research has identified several important antecedents ability (Moorman, Deshpande, and Zaltman 1993).
to trust with a salesperson. For example, Swan, Trawick, and Because consultative selling often requires an enhanced
Silva (1985) found that salespeople believe trust increases level of partnering and the sharing of proprietary informa-
when customers see them as dependable, honest, competent, tion, customers may feel that they become increasingly vul-
customer-oriented, and likeable (see also Swan and Nolan nerable to the salesperson. Under these situations, the trust
1985). Swan, Trawick, Rink and Roberts (1988) investigated that they establish with the salesperson is what allows con-
Spring 2001 149

sultative selling to take place; without trust, customers do not a nuisance, he or she must customize his or her communi-
not share the information needed for a salesperson to develop cation strategies to meet the desires of each customer. In this
appropriate solutions. way, providing an appropriate level of contact that is well
planned and coordinated is one way a salesperson can demon-
Perceived Salesperson Expertise strate social intelligence, which may enhance a customer's per-
ception of a salesperson's expertise. Therefore, we hypothesize:
Salesperson expertise is the belief that a salesperson pos- H2: Organizational buyers' perceptions of the qual-
sesses special knowledge that is relevant to the business rela- ity of interpersonal contact with a salesperson
tionship (French and Raven 1959). Expertise is most often are positively related to their perceptions of a
demonstrated through the solutions a salesperson provides to salesperson's level of expertise.
a customer. As such, expertise is a primary mechanism by Perceived Power of Salesperson in Supplying Firm. Exper-
which a salesperson provides added value to a customer; the tise is typically associated with technical knowledge. How-
higher the level of perceived expertise by an industrial cus- ever, expert power can also be derived from specialized knowl-
tomer, the higher the perceived level of value added. There- edge of how to get things done (French and Raven 1959;
fore, for a salesperson to be perceived as having a high degree Busch and Wilson 1976). A salesperson's power within the
of expertise, he or she must acquire accurate, current, and supply firm can be viewed as his or her potential to influence
specialized knowledge. Furthermore, the salesperson must the perceptions, behavior and/or decision making of members
utilize and convey this knowledge to the customer by provid- in the firm (Frazier 1983; Frazier and Summers 1984). In
ing tailor-made solutions. business-to-business consultative selling, where transactions
Past research provides evidence that salesperson expertise involve somewhat customized solutions, a salesperson's abil-
builds buyer trust by increasing the buyer's confidence that ity to advocate a customer's position and sell a solution to
the salesperson can provide viable and valuable solutions and internal customers is critical to the continued success of the
deliver on promises. Swan, Trawick, and Silva (1985) in- relationship with that customer. A customer's perception of a
cluded competence as an important determinant of a salesperson's power in the supplying firm is often an essential
customer's trust in a salesperson. Busch and Wilson (1976) element of the added value that the customer views receiving
found that organizational buyers perceived salespeople with from doing business with the salesperson. Doney and Cannon
higher levels of expert power as more trustworthy. Moorman, (1997) investigated a customer's perception of salesperson power
Deshpande, and Zaltman (1993) investigated the use of mar- in the supplying firm and found that perceived power increases
keting research and found that researcher expertise was trust in the salesperson. Although they did not empirically
strongly associated with trust. Additionally, researcher ex- investigate the relation between power and expertise, they
pertise was a significant predictor of a customer's use of re- theorize that power affects trust through enhancing a customer's
search results. Finally, Doney and Cannon (1997) and Crosby, perception of a salesperson's expertise (p. 40). As such, a
Evans and Cowles (1990) found that a customer's perception salesperson's ability to influence internal members (i.e., per-
of a salesperson's level of expertise was a significant predictor ceived salesperson power) may be a fundamental antecedent to
of trust. Therefore, we hypothesize: perceived salesperson expertise. Hence, we hypothesize:
H1: Organizational buyers' perceptions of a H3: Organizational buyers' perceptions of a
salesperson's level of expertise are positively re- salesperson's level of power in the supplying firm
lated to their level of trust with the salesperson. are positively related to their perceptions of a
salesperson's level of expertise.
Antecedents to Perceived Salesperson Expertise
Customer Satisfaction
Expertise is the primary mechanism by which a salesper-
son adds value to the customer; therefore, salesperson factors Customer satisfaction is a post-purchase attitude formed
that enhance a customer's perceived value may subsequently through a mental comparison of the quality that a customer
enhance a customer's perception of a salesperson's expertise. expected to receive from an exchange and the level of quality
In other words, factors that demonstrate or convey a the customer perceives actually receiving from the exchange
salesperson's capabilities or knowledge will lead to the per- (Spreng, MacKenzie, and Olshavsky 1996; Oliver and Swan
ceived expertise of the salesperson. Two factors that have 1989; Oliver 1980). Customer satisfaction has been useful to
received recent attention in the sales literature that seem marketers for identifying three types of customers (Jones and
particularly relevant to expertise perceptions are (1) a Sasser 1995). Cus~mers whose expectations are not met are
customer's perception of the quality of the interactions with a dissatisfied customers. Customers whose expectations are met
salesperson (i.e., contact quality), and (2) a customer's per- or exceeded slightly are merely satisfied customers, and cus-
ception of a salesperson's power in the supplier firm. tomers whose expectations are substantially exceeded are
Perceived Contact Quality with the Salesperson. Past lit- highly satisfied or delighted customers.
erature on buyer-seller interactions generally shows that the Identifying these three types of customers is useful to busi-
frequency of contact (Doney and Cannon 1997; Heide and ness-to-business marketers and industrial salespeople because
Miner 1992), open communication (Anderson and Narus 1990), repurchase motivations differ for each. Dissatisfied custom-
and information sharing (Morgan and Hunt 1994; Ganesan ers are more likely to actively look for alternative suppliers
1994) enhance relationship quality and cooperation. How- and leave the exchange relationship. Merely satisfied cus-
ever, the benefits of the frequency of contact and communica- tomers are likely to remain in the relationship but are not
tions may lead to the misperception that organizational buy- committed and will switch to a competitor when an alterna-
ers prefer to be called on and checked up with a lot. In fact, tive offering appears to provide superior value. Delighted
some organizational buyers may not desire excessive contact. customers are loyal to the relationship; therefore, they are
Thus, for a salesperson to be viewed as a valued expert and less sensitive to competitors' offers and are most likely to
150 Journal of Personal Selling & Sales Management
continue to repurchase (Jones and Sasser 1995; Rust and Sample and Data Acquisition
Zahorik 1993; Rust, Zahorik, and Keiningham 1995). As such,
we hypothesize: A mail survey was sent to a sample of735 organizational buyers.
H4: Organizational buyers' satisfaction with a sup- These organizational buyers were identified through a major fi-
plier is positively related to their loyalty behav- nancial staffing service supplier who provided contact information
iors toward that supplier. on their current customers, and prospective customers all within
Lambert, Sharma, and Levy (1997) found that satisfaction Washington, D.C., Georgia, and Florida This supplier is one of the
with a salesperson is positively related to satisfaction with six largest national firms in the staffmg service industry.
the selling organization. Humphreys and Williams (1996) in- Because this industry is characterized by a large amount of
vestigated organizational buyers' customer satisfaction and multiple-sourcing of suppliers by organizational customers,
found that a buyer's assessment of a salesperson's interper- respondents were asked to identify one supplier and provide
sonal process attributes (i.e., service quality) is more highly information pertaining only to that supplier. Half were di-
related to satisfaction than the technical attributes of the rected to give information pertaining to a primary supplier
product. Dorsch, Swanson, and Kelly (1998) investigated dif- and the other half were directed to provide information on
ferences in how customers view their best, typical, and worst one of their secondary suppliers.
vendors and found that better vendors have salespeople that Questionnaires were sent to the key contact person of each
are perceived to be customer-orientated and trustworthy. customer. Although Philips (1981) criticizes mono-method
Thus, although relationships between customer perceptions approaches, such as the single key informant method, most
of salespeople and overall satisfaction with a supply-firm have researchers find the key informant approach efficient (Heide
received some empirical attention, limited research has in- and John 1990), and with little self-report bias (Silk and
vestigated the relationship between a customer's trust with a Kalwani 1982). Empirical evidence supports the key infor-
salesperson and overall satisfaction with the supply-firm mant techniques and suggests that it can provide reliable and
(Dorsch, Swanson, and Kelly 1998). Furthermore, the rela- valid data (John and Reve 1982; Silk and Kalwani 1982).
tionship between salesperson expertise and customer satis- In order to ensure the qualification of the key informants,
faction has not previously been investigated. screening criteria were employed. Responses to competency ques-
As with other cognitively based attitudes, customer satisfac- tions were collected to evaluate key informants' experience with
tion is formed through the evaluation of relevant attributes the service supplier and tenure with the company (Kumar, Stern
(i.e., beliefs) and the perceived importance of those attributes and Anderson 1993). In addition, key informants were asked about
(Fishbein and Ajzen 1975). In business-to-business exchange, the their degree of involvement in each ofthe decision stages (Patterson,
importance customers place on receiving added value from consul- Johnson and Spreng 1997). The purpose of this procedure was to
tative services implies that the effectiveness of a salesperson at reduce a threat to validity from respondent biases.
providing these services will be a prominent attribute in the forma- Seventeen (17) questionnaires were returned by the post
tion of customer satisfaction (see Grewal and Sharma 1991). In office due to wrong addresses or names. Twenty-two were
fact, Graham (1996) has argued that the added value of a salesper- returned indicating their inability to participate. Reminder
son is the most important attribute of a sale. post-cards were sent to the remaining 696 companies two
Identifying problems and providing tailor-made solutions for weeks after the initial mailing. Five weeks after the initial
customers requires a high degree of involvement from both mailing, 172 usable responses (24%) were received. Three key
consultative salespeople and their customers (Pardo 1997). The respondents did not meet the screening criteria and their
willingness of an organizational buyer to develop highly coop- responses were eliminated. Thus, responses from 169 buyers
erative relations with a salesperson may depend on how ca- were found useful for hypotheses testing.
pable the buyer believes the salesperson to be, and whether or Further analysis of demographic information indicated that
not the buyer feels that the salesperson can be trusted. As such, early and late respondents were very similar. This analysis
credible salespeople are likely to provide added-value to indus- provides some assurance that the characteristics of respon-
trial customers (Swan, Bowers, and Richardson 1999) that will dents were similar to non-respondents (Armstrong and
enhance customer satisfaction (Liu, Bernhart, and Leach 1999; Overton 1977), and provides a certain level of confidence that
Grisaffe and Kumar 1998). Thus, integrating literature on source findings from this study are valid and generalizable to the
credibility and customer satisfaction, a customer's perception population from which the sample was drawn.
of a salesperson's expertise and trustworthiness are identified On average, respondents had been involved in buying decisions
as two key concepts influencing a customer's overall satisfac- for their company for seven years (mean=7.08, s.d.= 6.6). They
tion with the exchange relationship. reported being actively involved in all stages of buying decisions for
H5: Organizational buyers' level of trust with a sales- financial staffmg. However, they were more involved during the
person is positively related to their level of satis- final supplier selection stage of the process than either the informa-
faction with the supplier. tion search stage (t=5.5, p<0.001) or in preparing a short list of
H6: Organizational buyers' perceptions of a salesperson's suppliers (t=6.1, p<0.001). On average, they reported working with
level of expertise are positively related to their level three financial staffing suppliers at any one time (mean=3.13, s.d.=
of satisfaction with the supplier. 3.5). The evaluated supply-firm was an exchange partner for an
average of 3. 7 years (range=2 months to 25 years, s.d.=3.2 years).
Methodology Respondents personally dealt with this supplier for most of this
time (mean=3.5 years, range=2 months to 25 years, s.d.=3.3 years).
As illustrated in Figure 1, a model of perceived salesperson
credibility with the salesperson has been developed. The pro- Measures
posed model intends to investigate the critical salesperson
factors that are related to effective value-adding consultative Measures were developed following standard psychometric
selling activities. scale development procedures (Anderson and Gerbing 1988).
Spring2001 151
Multi-item scales were generated from previously established share-of-business given to a supplier (Jackson 1985), (2) call-
scales when applicable, from a review of relevant literature, ing on a supplier first, and (3) giving a supplier ample time to
and from qualitative interviews conducted with five organi- provide a qualified candidate before calling on a competing
zational buyers, four business-to-business salespeople, and supplier. These elements were developed into a three-item scale.
two marketing executives in the industry. A total of six con-
structs were assessed in this study. Table 1 provides a com- Analytical Procedures and Results
plete list of items and scale reliabilities. The measurement of
each construct will be described below. Structural equation methodology was used to validate the
Trust with a Salesperson. Perceived trust with the sales- measurement of theoretical constructs and to test the hypoth-
person was measured using five seven-point, agree-disagree esized relationships among constructs. Prior to estimating
scaled items (i.e., 1 to 7). These items were adapted from the structural model, a measurement model (i.e., confirma-
those used by Dorsch, Swanson, and Kelly (1998), Doney and tory factor analysis) was estimated to evaluate the appropri-
Cannon (1997), and Crosby, Evans, and Cowles (1990) to ateness of item indicators (Anderson and Gerbing 1988). The
ascertain respondents' perceptions of trust with the salesper- measurement model was specified so items loaded on only the
son from the target firm relative to salespeople from compet- construct they were developed to represent. To specify the
ing suppliers. Items from these established scales were se- scale of each latent construct, one item indicator per con-
lected because they assessed a customer's overall impression struct was set to unity (Joreskog and Sorbom 1979).
of the trustworthiness and honesty of a salesperson. Initial CFA results showed adequate fit (x2=324.05, df= 155,
Having respondents evaluate a salesperson relative to oth- CFI=0.91, TLI=0.89, GFI=0.84, RMSEA=0.08), providing sup-
ers in the industry provides the respondents with a point of port for the appropriateness of the relations between mani-
reference and may enable them to provide a more accurate fest indicators to their intended latent constructs. To ensure
assessment of the salesperson. In this study, respondents a high degree of homogeneity and unidimensionality of items
have knowledge of several competing salespeople due to the measuring each construct in the measurement model, modifi-
high degree of multiple-sourcing in the industry. cation indices as well as the standardized residual matrix
Perceived Salesperson Expertise. The perceived level of ex- were examined. Judicious re-specification of measurement
pertise of the salesperson was measured using three seven- constraints was made in order to achieve an acceptable fit for
point, agree-disagree scaled items (i.e., 1 to 7). These items the measurement model (James, Mulaik and Brett 1982;
were adapted from scales developed by Doney and Cannon Anderson and Gerbing 1988). As a result, one item from the
(1997), and through qualitative interviews with organiza- set of items indicating the construct ''trust with the salesper-
tional buyers and sellers. Respondents were asked to rate the son," one item from the set indicating ''perceived expertise,"
salesperson from the target supplier relative to salespeople and one item from the set indicating "satisfaction with the
from competing suppliers. supplier" were removed. The resulting measurement model
Perceived Contact Quality with the Salesperson. Three items fit statistics were: x2=162.51, df=104, CFI=0.96, TLI=0.95,
were developed for this study to measure an organizational GFI=0.90, AGFI=0.85, RMSEA=0.05. Table 2 provides de-
buyer's perception of the quality of the interactions with the scriptive statistics of the measurement scales and the corre-
salesperson. These seven-point, agree-disagree scaled items lation matrix for the six latent constructs.
were developed from qualitative interviews with industry buy- To further evaluate the unidimentionality of the measured
ers and sellers to capture the appropriateness of a salesperson's constructs, discriminant validity, convergent validity, and
visits, and communications with the customer-firm. They asked scale reliabilities were evaluated. To assess the discriminant
respondents to evaluate the overall quality of contact with a validity among latent constructs, additional models were es-
salesperson relative to other salespeople in the industry. timated fiXing the correlation between each pair of constructs
Perceived Salesperson Power in the Supply-Firm. The per- to unity, one pair at a time. The resulting significant chi-
ceived power a salesperson has in the supplying firm was square inflation between these models and the measurement
measured using two seven-point, agree-disagree scaled items model provide evidence of discriminant validity among latent
(i.e., 1 to 7). These items were adapted from scales developed constructs (e.g., Ping 1994; Burnkrant and Page 1982). Fur-
by Doney and Cannon (1997) to ask about a salesperson's thermore, for each construct, principle components factor analy-
perceived power in the supply-firm relative to other sales- sis identified a single factor with an Eigen value greater than
people in the industry. one, and this sole factor accounted for more than sixty-four
Customer Satisfaction with the Supplier. Extensive re- percent of the total variance in a construct (range 64% to 84%).
search in the area of customer satisfaction provides an array Finally, scale reliabilities were all at adequate levels for new
of definitions and scales for customer satisfaction in business- scales and ranged from 0. 70 to 0.89. The unidimentionality of
to-business settings (e.g., Patterson et al. 1997; Spreng et al. constructs along with the overall measurement model fit statis-
1996; Oliver and Swan 1989; Churchill and Surprenant 1982). tics support the appropriateness of measured indicators.
In order to capture the overall attitude toward the business- After evaluating the measurement model, a structural model
to-business service supplier, the current study takes a cumu- was estimated to test the hypothesized relationships between
lative perspective of customer satisfaction. Thus, in this study, latent constructs. In order to impose the hypothesized pat-
satisfaction with the supply-firm was measured using four tern of relationships among the latent constructs, structural
items on a seven-point agree-disagree scale (i.e., 1 to 7) adapted parameters were systematically allowed to vary freely or were
from Oliver and Swan (1989). fixed to zero. This model was found to have good fit (x2=168.91,
Customer Luyalty Behavior. Personal in-depth interviews df=l12, CFI=0.96, TLI=0.95, GFI=0.89, AGFI=0.86,
were used to identify appropriate loyalty behaviors specific to RMSEA=0.05), and the constraints placed on the structural
the staffing industry. Three key behaviors were identified model did not significantly reduce the level of fit from the
that were believed to represent loyalty by both organizational measurement model (.dx2=6.40, df=8, ns.). Table 3 provides
salespeople and buyers. Loyalty was expressed by (1) the model fit statistics and path coefficients.
152 Journal of Personal Selling & Sales Management
Table 1
Measurement Items and Scale Reliabilities

PCA Factor
Eigen % Varience Scale"**
Values >1 Explained Reliability

Perceived Power and Influence of Salesperson in Supplying Firm 75.3 0.70

Compared to the salespeople of other suppliers, ...
. . . the salesperson from this supplier has more power in his/her firm to get things done .
. . . the salesperson from this supplier has the clout to get his/her way with the supplier.

Perceived Contact Quality with the Salesperson 75.5 0.84

Compared to the salespeople of other suppliers, ...
. . . the salesperson from this supplier visits our location(s) as needed .
. . . the salesperson from this supplier engages in extra planning assistance for us .
. . . the salesperson from this supplier follows through and checks up with us as needed.

Perceived Expertise of the Salesperson 83.8 0.81

Compared to the salespeople of other suppliers, ...
. . . the salesperson from this supplier is very knowledgeable .
. . . the salesperson from this supplier knows how to provide solutions that fit our needs .
. . . the salesperson is not an expert. (r) *

Trust with the Salesperson 74.9 0.89

Compared to the salespeople of other suppliers, ...
... the salesperson is not trusted by the people at my firm. (r)
... this salesperson sometimes acts opportunistically at our expense. (r)
... the salesperson is trustworthy .
. . . the salesperson is always honest with us .
. . . the salesperson always acts in the spirit of cooperation. *

Satisfaction with the Supplying Firm 76.5 0.87

My company is very satisfied with this supplier.
My company is very pleased with this supplier.
My company would highly recommend this supplier to others.
My company dislikes this supplier. (r) *

Loyalty Behavior 64.4 0.76

My company usually contacts this supplier first when we have financial staffing needs.
My company usually gives this supplier ample time to find a qualified candidate before seeking service elsewhere.
Approximately, what percentage of your financial staffing expenditure does your company expect to give to this supplier in the
future?**

Responses were given to each item on seven-point agree/disagree scales

* Items eliminated through re-specification of the confirmatory factor analysis measurement model.
'** Responses ranged from 0% to 100%. For reliability analysis, this item was recoded into seven categories to coincide with the scale of other
items.
***Scale reliabilities were computed using procedures described by Raykov (1997) except for "perceived power'' and "perceived expertise."
Reliability for these two-item scales were computed using Chronbach's alpha.
(r) Reverse coded items.

Table 2
Scale Means, Standard Deviations and Correlations Among Latent Constructs

Mean Std. 1 2 4 5 6

1 Perceived Salesperson Power 4.36 0.20

2 Perceived Quality of Contact 4.64 0.37 .68
4 Perceived Salesperson Expertise 5.02 0.14 .71 .76
5 Trust with the Salesperson 5.46 0.28 .31 .44 .61
6 Satisfaction with the Supplier 5.03 0.17 .58 .67 .83 .62
7 Customer Loyalty Behavior 4.26 1.44 .40 .41 .33 .11 .23
Spring2001 153
Table 3
Structural Model Path Coefficients and Model Fit Statistics

Standard Standard z
Estimate Error Estimate value

Structural Parameters
Satisfaction with the Supplier ~ Loyalty Behavior 0.765 0.121 0.53 6.31
Trust with the Salesperson ~ Satisfaction with the Supplier 0.196 0.078 0.19 2.52
Perceived Salesperson Expertise ~ Satisfaction with the Supplier 0.697 0.089 0.73 7.83
Perceived Salesperson Expertise ~ Trust with the Salesperson 0.562 0.085 0.59 6.58
Perceived Salesperson Power ~ Perceived Salesperson Expertise 0.332 0.135 0.30 2.46
Perceived Quality of Contact ~ Perceived Salesperson Expertise 0.540 0.112 0.57 4.82
Measurement Parameters
Loyalty Behavior ~ Loyalty1 1.000 0.94
Loyalty Behavior ~ Loyalty2 0.856 0.124 0.66 6.929
Loyalty Behavior ~ Loyalty3 0.506 0.083 0.55 6.092
Satisfaction with the Supplier ~ Satisfaction 1 1.000 0.88
Satisfaction with the Supplier ~ Satisfaction2 0.977 0.064 0.90 15.29
Satisfaction with the Supplier ~ Satisfaction3 0.614 0.064 0.66 9.58
Trust with the Salesperson ~ Trust1 1.000 0.79
Trust with the Salesperson ~ Trust2 0.880 0.086 0.74 10.25
Trust with the Salesperson ~ Trust3 1.063 0.082 0.91 12.93
Trust with the Salesperson ~ Trust4 1.042 0.090 0.82 11.63
Perceived Salesperson Expertise ~ Expertise1 1.000 0.80
Perceived Salesperson Expertise ~ Expertise2 0.895 0.078 0.85 11.51
Perceived Salesperson Power ~ Power1 1.000 0.88
Perceived Salesperson Power ~ Power2 0.630 0.108 0.58 5.83
Perceived Quality of Contact ~ Contact1 1.000 0.79
Perceived Quality of Contact ~ Contact2 0.918 0.088 0.81 10.43
Perceived Quality of Contact ~ Contact3 0.897 0.088 0.79 10.18
Model Fit Statistics
Saturated Model: ,i'=O.OO, 0 df
Null Model: .i'=1655.61, 136 df (p<.001)
Measurement Model: .i'=162.51, 104 df (p<.001)
More Constrained Model:* .i'=174.90, 113 df (p<.001)
Less Constrained Model:- .i'=165.68, 111 df (p<.001)
Theoretical Model: .i'=168.91, 112 df (p<.001)
Fit lndicies: CFI = .96
GFI= .89
TLI = .95
RMSEA= .05
Explained Variance (SMC): Perceived Salesperson Expertise = .65
Trust with the Salesperson = .35
Satisfaction with Supplier = .73
Loyalty Behavior = .28

* Specification constrained the parameter from salesperson trustworthiness to satisfaction with the supplier to be zero.
**Specification allowed the parameter from salesperson power to trust with the salesperson to freely vary.

The hypothesized structural model was further compared pared to five models that constrained one additional path to
to a series of nested models. First, the chi-square of the hy- zero. Each of these models reduced fit significantly. The model
pothesized model was compared to four less-constrained mod- increasing the chi-square statistic the least constrained to
els. These models were specified to allow one additional pa- zero the parameter from salesperson trustworthiness to cus-
rameter to freely vary. Freeing a parameter reduces the chi- tomer satisfaction (~:x:2 =21.01, df=l, p<O.Ol). Thus, adding
square statistic. The model that showed the largest reduction additional free parameters did not enhance overall fit, while
in chi-square was that which allowed a path from salesperson constraining a hypothesized parameter to zero reduced over-
power to trustworthiness to be estimated. However, the chi- all fit of the model.
square was not statistically different from the theorized model To statistically test the hypotheses that freed parameters
(~.x2 =3.23, df=l, ns.). Next, the hypothesized model was com- were not zero, parameter z-values were evaluated. The re-
154 Journal of Personal Selling & Sales Management
sults provided support for all hypothesized paths (see Figure in today's rapidly advancing technological environment, cus-
1). Findings support the hypothesized positive relationship tomers are adopting various means of communicating (e.g.,
between an organizational buyer's level of satisfaction and electronic mail, voice messaging, skytel, etc.). As such, sales-
changes in a buyer's loyalty behavior (z=6.31, p<0.001; H4). people must also evaluate customers' preferred method of
Similarly, the level of customer satisfaction was found to be interaction and align their communications to customer pref-
positively related to both the perceived expertise of a salesper- erences. Thus, future studies may want to investigate contact
son (z=7.83, p<0.001; H6) and the level of trust an organiza- quality as a multidimensional construct.
tional buyer feels with that salesperson (z=2.52, p<0.05; H5). Finally, findings from this study add to the growing body of
A buyer's perception of the expertise of a salesperson was research indicating that customer satisfaction is related to a
found to be an important intervening variable. Not only was customer's intention for future business contact (e.g., Rust
it positively related to customer satisfaction, but it was also and Zahorik 1993; Reichheld and Sasser 1990). As such, en-
positively related to a buyer's level of trust with a salesperson hancing the level of a customer's trust and perception of exper-
(z=6.58, p<0.001; H1). Both the level of power a buyer per- tise with a salesperson may ultimately enhance sales revenue.
ceives a salesperson to have in the supplying firm (z=2.46, In today's business environment, supply firms are critically
p<0.05; H3) and the quality of the interactions the buyer feels evaluating the feasibility, costs, and payoff of retaining cus-
a salesperson provides (z=4.82, p<0.001; H2) were found to tomers. These evaluations become increasingly critical when
enhance the perceived expertise of a salesperson. Implica- current customers are limiting the number of suppliers they
tions will be discussed in the following section. are working with. Under these circumstances, supply firms
often have to commit to substantially increasing the value of
Discussion their offering, or decide that the payoff is too minimal or too
risky and forgo future business (Rackham 2000). When firms
In order for business suppliers to retain customers at current opt to pursue value-adding strategies with key customers,
or enhanced levels of business, they must maintain high levels they have two basic approaches (Anderson and N arus 1998;
of satisfaction among their customers (Rust and Zahorik 1993; Gale 1994). The first is to enhance value by reducing prices
Jolson 1997). This research suggests that one way that firms significantly. Often, this requires simplifying and automat-
can help manage the satisfaction of their customers is through ing the sales function and reducing service to minimal levels.
their sales force. Findings suggest that salespeople can en- In many commodity and low-tech markets, this action pro-
hance customers' satisfaction levels by effectively managing their vides the highest perceived value to customers (Berry and
image with their customers. In particular, being perceived as trust- Yadav 1996). The second approach is to enhance value through
worthy and having a high degree of expertise may help a salesper- enhancing and adding valued services (e.g., consultative sell-
son to establish long-term business relationships. ing services). The effectiveness of this strategy often relies of
Other studies have identified salesperson expertise as an the quality of the sales force and its ability to convey and
important variable that influences the relationship between deliver value to customers (Rackham 2000). Findings from
a buyer and a salesperson (e.g., Busch and Wilson 1976; this study suggest that, when firms opt to pursue key custom-
Moorman, Deshpande, and Zaltman 1993; Crosby, Evans, ers through sales and service focused strategies, the consulta-
and Cowles 1990; Doney and Cannon 1997; Swan et al. 1999). tive selling activities of salespeople can play a key strategic
This study extends this stream of research by providing evi- role. However, in order to do this, salespeople must be per-
dence that salesperson expertise is not only related to trust ceived as credible consultants.
but also to customer satisfaction.
A salesperson's level of expertise was positively related to Limitations and Future Research Directions
two key variables. First, salesperson expertise was related to
a buyer's perception that a salesperson has the power in his Although the current study does provide insight into the
or her own firm to get things done. Often, whether a deal is importance of customer perceptions of a salesperson and iden-
made or broken relies on the salesperson's ability to effectively tifies some key variables to help business-to-business sales-
advocate his or her external customer's position internally to people manage their image with customers, several limita-
those who are going to fmance, manufacture, alter, transport, tions to the research must be considered. First, the selection
or service the sale. Thus, the fmdings ofthis study suggest that, of a business-to-business service company is a subjective pro-
not only do industrial salespeople have to effectively deal with cess, and the use of any one firm's database of current, and
their internal customers, but they must also try to communi- prospective customers as a sampling frame may hinder
cate this effectiveness to their external customers. generalizability. Specifically, customers' satisfaction assess-
Perceived expertise of a salesperson was also related to a ments depend on what is relevant and important in that
buyer's perception that the interactions with a salesperson business relationship; determining factors may differ across
are appropriate and valuable. Qualitative research conducted industries (Herr, Kardes, and Kim 1991; Leach and Liu 1998).
during the scale development stage of this study support the In addition, given the number of model parameters, replica-
importance of interaction quality. Qualitative interviews with tion with a larger sample size and in other business-to-busi-
both organizational buyers and sellers indicated that buyers ness settings is a critical area for future research.
dislike it when sellers attempt to interact too often or without Findings from this study illustrate the importance of sales-
substantial justification. Furthermore, many buyers prefer person power in the internal selling process. Future research
not to have extensive contact with a salesperson but expect may expand the sales and organizational behavior literature
the contact they have to be valuable. As such, salespeople by investigating bases of power (French and Raven 1959) and
who are able to determine how often customers wish to be manifest influence strategies (Kohli 1989) among the selling
called on are more apt to be viewed as having a high level of team. Specifically, how salespeople exercise various forms of
expertise. In this study, contact quality was conceptualized influence with their internal customers to service their exter-
as providing appropriate levels of communication. However, nal customers is an area deserving of future research effort.
Spring2001 155
The potential importance of a customer's perceived switch- Fishbein, Martin and leek Ajzen (1975), Belief, Attitude, Intention,
ing costs is another area for future investigation (Sengupta, Behavior: An Introduction to Theory and Research, Reading,
Krapfel, and Pusateri 1997; Jackson 1985). Switching costs MA: Addison-Wesley Publishing Co.
include the psychological, physical, and economic costs a cus- Frazier, Gary L. (1983), "On the Measurement of lnterfll"Ill Power in
Channels of Distribution," Journal of Marketing Research, 20
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In this study, we found that perceived salesperson expertise and John 0. Summers (1984), "Interfirm Influence
and trust impact future business with a customer through Strategies and Their Application Within Distribution Channels,"
enhancing customer satisfaction. By establishing trust and a Journal of Marketing, 48 {3), 43-55.
customer's confidence in consultative capabilities (i.e., exper- French, J.R.P., Jr., and B. Raven (1959), ''The Bases of Social Power,"
tise), a salesperson can establish exit barriers among custom- in D. Cartwright, ed., Studies in Social Power, Ann Arbor: Uni-
ers and, thereby, establish loyalty and safeguard against versity of Michigan, 150-167.
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Service that Customers Can See, New York: The Free Press.
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isfaction and establishing relationship-specific investments Buyer-Seller Relationships," Journal of Marketing, 51 (2), 11-27.
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