Journal of Selling
Valuing the Salesperson: Assessing Financial Consequences
of B2B Customer Loyalty to the Salesperson
By Ellen Bolman Pullins, Michelle Roehm, and Stacey Schetzsle
The paper proposes two strategic tools which allow management to better understand an individual salesperson’s value
and to assess the financial consequences of customer loyalty toward the salesperson. Two approaches are presented
to assist managers in capturing the real value of the salesperson in the buyer-seller relationship. A conjoint analysis
is used to measure buyer preferences contributing to loyalty toward the salesperson. This tool allows managers to
uncover buyer preferences and provides useful information to strategically quantify the value of the salesperson’s role.
An Economic Value Metric is presented to calculate the actual value associated with the salesperson’s relationship
with the customer. Managers utilizing this tool can determine the value of the salesperson relative to the investment
being made.
Introduction
The current study demonstrates two tools that could
be used by sales management to assess the financial
consequences of customer loyalty toward businessto-business salespersons. These tools assist in
capturing the real value of the salesperson in a buyerseller relationship. Specifically, we develop possible
performance metrics for the sales force that will
help management better understand an individual
salesperson’s value. These metrics also help researchers
confirm that the salesperson-to-customer relationship
does produce unique value, and that a salesperson can
be financially valued by the firm.
The purpose of this paper is to propose two methodologies
which can be utilized by management to assess the value
salesperson add to buyers. Determination of the value
of the customer’s loyalty has important implications
for valuing resources, evaluating a salesperson, and
making sales force compensation decisions, as well
as designing sales strategy for a business-to-business
firm (e.g., relationship selling, building long term
Ellen Bolman Pullins (Ph.D., Ohio State University),
Professor of Marketing & International Business, Edward H.
Schmidt School of Professional Sales, University of Toledo,
Toledo, OH, ellen.pullin@utoledo.edu
Michelle Roehm (Ph.D., Northwestern University), Senior
Associate Dean of Research, School of Business, Wake Forest
University, Winston-Salem, NC, roehmm@wfu.edu
Stacey Schetzsle (Ph.D., Purdue University), Assistant
Professor of Marketing, Ball State University, Muncie, IN,
sschetzsle@bsu.edu
34
relationships with customers, evoking loyalty and
commitment, partnering, etc.).
In the following sections, a review of literature on
customer loyalty to the salesperson is examined.
Following that, we provide two illustrative cases of
utilizing two different tools for valuing the sales force.
First, the findings of a conjoint study are presented, and
then an economic approach for valuing the sales force
is developed. The paper demonstrates that a purchase
agent’s loyalty to the salesperson has a specific
financial value associated with it and that this value can
be captured by management.
Customer Loyalty to the Salesperson
Loyalty has traditionally been studied in terms of
actual behaviors of a customer, for example, as a
percentage of business, repeat purchase, or purchase
intent (e.g., Bayus 1992; Fader and Schmittlein 1993;
Krishnamurthi and Raj 1991; Reichheld and Teal
1996; Zeithaml, Berry, and Parasuraman 1996). Recent
studies on customer-based brand equity (Netemeyer et
al. 2004), relationship marketing (Palmatier et al. 2006),
customer value (Palmatier et al. 2007; Sirdeshmukh
et al. 2002), and relationship quality (Rauyruen and
Miller 2007) indicate that customer loyalty improves
financial performance of the firm. Moreover, even
those extant frameworks that envision loyalty in a more
psychological sense (e.g., Evanschitzky et al. 2006;
Fournier and Yao 1997; Rauyruen and Miller 2007)
position it as a consequential phenomenon.
Northern Illinois University
Volume 14, Number 1
Dick and Basu (1994) posit loyalty as a cognitive
antecedent to repeat purchase. However, the attitudinal
structure they discuss, and in a departure from typical
treatments labeled “loyalty”, does not differentiate
possible targets of loyalty: the salesperson, the firm, the
product and so on. Our conceptualization of customer
loyalty to the salesperson differs from the Dick and Basu
concept in being specific to a salesperson. Loyalty to the
selling firm is the customer’s predisposition to maintain
a relationship with the firm (Sirdeshmukh et al. 2002).
However, the intent to continue the relationship may be
based on the customer’s interaction with the salesperson
(Beatty et al. 1996; Berry 1995; Palmatier et al 2007).
Social psychology literature indicates that interpersonal
relationships are more influential in terms of desired
behaviors, actions, and duration in comparison to
person-to-group relationships (O’Laughlin and Malle
2002) and is further supported in marketing literature
examining individual-to-firm relationships (DeWulf
et al. 2001; Iacobucci and Ostrom 1996). What hasn’t
been understood is how to translate loyalty to a specific
monetary value. As such, it may be more compelling
to study the value of individual relationships between
customers and salespersons.
Interpersonal relationships with key contact employees
often have stronger and more enduring effects than
the relationship with the firm itself (Bendapudi and
Leone 2002; Hamilton and Sherman 1996; Palmatier,
Scheer and Steenkamp 2007). Bendapudi and Leone
(2002) conduct an exploratory study showing that
customers value strong relationships with key contact
employees, and that this is a function of how critical
the key contact is to satisfaction and the likelihood
there is an acceptable replacement. This relationship
and its resultant loyalty-consequences demonstrate one
way that loyalty corresponds to a specific value of the
salesperson to the firm, which might be translated to a
financial value.
Outside of professional B2B sales research, there has
been some consideration of these types of issues, but it
is minimal (Beatty et al. 1996; Berry and Yadav 1996;
Czepiel 1990; Sirdeshmukh et al. 2002). Reynolds and
Arnold (2000) studied retail customer loyalty to the
retail salesperson versus loyalty to the store and found
that there were related but separate effects on store level
outcomes (e.g., share of purchase, word-of-mouth and
competitive resistance). This type of work has only
recently been tested in the industrial salesperson realm
(e.g., Palmatier et al. 2007), where relationships and
loyalty behaviors take on additional importance.
Loyalty to the salesperson is defined as the customer’s
intent to perform motivational behaviors to maintain
a relationship specifically with the focal salesperson
(Palmatier et al. 2007). This relationship can directly
impact outcomes. For example, Tax and Brown (1998)
noted that American Express estimates that 30% of
financial advisors’ clients would move with an advisor
if the advisor left the firm. In a B2B sales context,
Palmatier et al. (2007) report that buyers would transfer
26% of business purchases to follow a defecting
salesperson. Qualitatively, we would also expect that
other loyalty behaviors (such as repeat purchase in the
face of competitive pressure and referrals) would also
impact the financial outcomes level of the firm (e.g.,
Anderson and Narus 2004).
Palmatier et al. (2007) examine both the customer’s
overall loyalty to the selling firm (individual-to-firm
loyalty) and the customer’s loyalty to the individual
salesperson (salesperson-owned loyalty). They found
customer loyalty to the salesperson had more of an
impact on the financial outcomes of sales growth
and selling effectiveness. In addition, when loyalty
is present in both the salesperson and selling firm the
customer is more willing to pay price premium for the
products or services offered.
Recently, there has been an increased call for metrics
to understand salesperson performance and value of
the salesperson for the firm (e.g., Ingram et al., 2005;
Rackham and DeVincentis, 1999). Specifically there
is a need for process-linked measures, which includes
tracking the actual value delivered to the customer.
Brand equity literature suggests one potential way
to measure salesperson value (e.g., Netemeyer et al.
2004). The current research considers the relationship
between customer-based brand equity and a more
financial notion of brand equity (value to the firm;
Aaker 1991). This can be accomplished through one
of three approaches: cost (replacement value), market
(present value of future economic benefits), or income
35
Journal of Selling
(discounted future cash flow; Keller 1998). One can
conceive of valuing the salesperson in a similar manner,
for example: cost (for example, the cost to recruit,
hire and train a new salesperson plus lost sales in the
interim), market (the value the salesperson could earn
[total compensation] in the best unlimited alternative
position), or income (discounted profit generated
over the life of the salesperson versus the average
salesperson). Our focus in this paper includes both
market and income considerations.
Based on evidence stating interpersonal relationships
have more effects than person-to-firm relationships
(Hamilton and Sherman 1996; Oliver 1999; Palmatier
et al. 2007), the notion that a salesperson can build
customer loyalty behaviors has two important strategic
implications. First, firms must consider this as a
potential competitive advantage, which can be built
and established much like brand equity. Second, firms
can consider the financial value of the loyalty. There is
a negative financial value of a salesperson who might
take clients if s/he leaves the firm. However, there is a
positive financial value if a salesperson can count on
customer business in the face of competitive promotions
or price negotiation. In addition, when a salesperson can
get customer recommendations and referrals, a certain
proportion of which develop into new business, there is
a financial value.
The following study demonstrates the application of
conjoint analysis to identify a value that can be associated
with the salesperson’s established relationship by
demonstrating a B2B customer’s preference to buy
from a salesperson that they have a loyal relationship.
A conjoint analysis is used to discover the actual utility
of the loyalty to the salesperson, much as it is used to
determine brand preference in the brand literature. As
with branding/pricing conjoint studies, the utility can
then be translated to an actual financial value of that
unique relationship.
The Conjoint Tool
Conjoint has typically been used to identify attribute
preference and value (Green and Wind 1975). Keller
(1998) notes brand name can be included as an attribute
in such a study. We include, instead, a salesperson’s
name, developed in a scenario as an attribute. Conjoint
36
has been used in a number of non-traditional applications
such as salesperson reward preferences (Churchill and
Pecotich 1981) and supply chain design (Reuttener and
Katzab 2000), demonstrating its versatility in handling
an issue such as Customer Loyalty to a Salesperson.
Initial exploratory research was conducted using
suggested qualitative research practices (Creswell 2003;
Savin-Baden and Major 2013). Using phenomenological
methodology, studying the subjective experiences of
others to interpret their experiences, a series of qualitative
data collecting methods were applied. As a preliminary
step, we conducted exploratory interviews to confirm
our thinking about valuing loyalty behaviors through
price premiums, as well as to assist us in building a
reality-based scenario for the main study. A two-phase
exploratory investigation employed a series of qualitative
interviews aimed at probing the concepts. The first phase
consisted of unstructured, open-ended interviews with
nine purchasers (eight from manufacturing firms and
one from a public agency). The second phase consisted
of structured interviews with fourteen salespeople (three
pharmaceutical reps, two financial service clients, and
nine bankers with commercial selling responsibility),
and eight additional purchasers (three financial service
clients, one manufacturing purchase agent, three
doctors, and one technology purchasing executive).
All interviewees for both stages were selected from a
convenience sample. Based on these qualitative, exploratory interviews, we
were able to confirm that price premiums may result
for a salesperson who has earned customer loyalty. For
example, one purchaser said “…the salesperson that
has earned your trust usually earns your business period
[manufacturing].” Some buyers indicated they would
buy from a salesperson they are loyal to regardless
of price: “It’s rare that we find a salesperson who has
both the technical skills and the sales skills that they
need. When we do, we are likely to form a long-term
relationship with him regardless [manufacturing].”
In addition, buyers indicated that the salesperson
might benefit in other ways such as writing reference,
recommending products and “I help the rep out by
influencing my peers [doctor].”
The data also indicated potential situations where
price and loyalty are “traded off” in order to develop
Northern Illinois University
Volume 14, Number 1
scenarios that were appropriate for conjoint analysis.
For example, one interviewee said, “if everything else
is equal, then the decision is priced-based [service],”
elaborating that you don’t really find situations where
everything else is equal. When others were asked they
confirmed, in fact, they did consider the salesperson
when looking at various aspects of the situation to make
a buying decision. In sum, the preliminary qualitative
data helped to affirm that a price premium is one
manifestation of when customer loyalty results in a
quantifiable value and to provide enough information to
develop a hypothetical scenario in which to demonstrate
the application of this tool, as well as show that it can
quantitatively detect the value of loyalty. Utilizing the
qualitative study, we constructed conjoint scenarios to
test conjoint as a tool for this type of application.
responding in the first 20% versus those who responded
in the last 20%, and the list seems to reflect a reasonable
representation of the overall ISM membership.
Based on the qualitative interviews conducted in the
exploratory stage, an overall purchase scenario was
developed. The scenarios included one product, two
salespeople, and three price levels (see Appendix for
actual scenarios). Two brands (Brand A and Brand B)
of the product were positioned as being essentially
the same, both meeting the minimum success criteria
of the purchaser. Two salespeople were presented;
each salesperson represented different levels of
experience, relationship interactions, expertise, and
loyalty. Based on the literature, we consider loyalty
to be a consequence of relationship quality, trust, and
other variables. Our theoretical treatment position
the SP-buyer relationship as a construct and loyalty
Method
as an outcome. Accordingly, and consistent with the
A conjoint study was developed as a web-based survey.
qualitative findings, these dimensions are designed into
Email addresses for 2,500 purchasers were provided on
the scenario. Three price levels ranged between $80 to
a random list from Institute of Supply Management.
$120 per unit, representing the relative flexibility that
Each purchaser was emailed a link to the web-based
salespeople often have in product pricing. Purchasers
survey and asked to complete this survey. Participants
were then asked to rate their preference for a particular
1 to 10,
1 representing
thetolowest
wereofentered
intowith
a drawing
for a chance
win onedegree of preference and 10 representing the
deal on a scale of 1 to 10, with 1 representing the lowest
of two $50 amazon.com gift certificates. One reminder
degree of preference
representing
the highest
degree
of preference.
Every
possible combination
of dealsand
(1210
total
=2
emailhighest
was sent.
Although
ISM leadership
indicated
degree of preference. Every possible combination of
that the email addresses were provided by individual
(12 totaland
= 2 each
salespeople
x 2 brands
3 prices)
salespeople
x 2ofbrands
3 prices) 698
waswere
presenteddeals
randomly,
purchaser
rated xeach
members,
of the list
2,500 xpurchasers,
was presented randomly, and each purchaser rated each
not deliverable. A total of 208 purchasers responded,
deal (see for
Table
1). This
allowed
us to calculate
dealthe
(seeresponse
Table 1).
allowed
to calculate
utilities
each
of the
dimensions.
Theutilities
making
rateThis
11.5%.
Thereuswere
no
for each of the dimensions. The primary dimension of
significant differences in respondent profiles of those
primary dimension of interest is the salesperson.interest is the salesperson.
Table 1
Scenario Manipulation (M1-M12)
Brand A
Brand B
Chris Michaels
Alex Grayson
Chris Michaels
Alex Grayson
M1
M4
M7
M10
$80
M2
M5
M8
M11
$100
M3
M6
M9
M12
$120
The scenarios were read by two other faculty members, considered expert in the field, and a convenience sample of ten
The scenarios were read by two other faculty members, considered expert in the
salespeople from across industries. While a few minor edits were suggested, the experts and salespeople concurred that
the scenarios were understandable and would capture the construct of interest, customer loyalty (based on whether a
field, and a convenience sample of ten salespeople from across industries. While a few
preference was given to Chris over Alex for no other reason than length of relationship).
minor edits were suggested, the experts and salespeople concurred that the scenarios were
understandable and would capture the construct of interest, customer loyalty (based on
whether a preference was given to Chris over Alex for no other reason than length of
37
Journal of Selling
Analysis and Results
Data was submitted to a standard linear regression
with dummy variables. Preference was the dependent
variable of interest. All respondents’ preferences for
all deals were analyzed together. To characterize the
relative importance of the salesperson (preference
for Chris Michaels for whom there is a hypothetical
loyalty established), we look at the choices purchasers
made, trading off between salesperson (with or without
the loyal relationship) versus price and brand. Using
conjoint, individual utilities could be calculated for
each purchaser that responded to the survey. Since the
purpose of this conjoint was simply to demonstrate
that Chris Michaels had a positive utility that was
substantial enough to be of some value, we grouped all
respondents’ data on each of the twelve deals.
Chris Michaels, the salesperson with the “loyal
relationship” with the customer, had a utility of
.752 (t=7.996, p<.000). The overall regression was
significant (F=340.2, p<.000), with an R-square=.284.
This demonstrates a preference for Chris Michaels,
based simply on the fact that the scenario told them they
had a long term loyal relationship with Chris. Moreover,
this finding supports the notion that a salesperson with a
loyal relationship, even in a hypothetical scenario, does,
in fact, influence the purchase decision. Customers are
willing to pay a higher price for having Chris be a part
of the deal.
As with pricing research, these results can be used to
calculate an actual numerical value for having Chris
Michaels as the salesperson, based on the part-worth
values associated with Chris (where having him leads to
paying a higher price). With conjoint data, a numerical
utility can be individually calculated for any individual
purchaser for whom data has been gathered. If the
price paid for the salesperson preference is known, a
dollar value can be calculated for the relationship for
each purchaser who responded. A firm can capture this
for the average customer of a salesperson in a market
research study and calculate the total worth of the
salesperson across customers.
Thus, using a conjoint approach, a firm can quantify
the value of the salesperson’s role with the customer.
It is noteworthy that the same method used in this
38
hypothetical can be applied in a real-world setting
without need for the scenario to establish loyalty.
More generally, this exercise in application also helps to
support the notion that there is, in fact, a demonstrable
value of each unique salesperson-customer relationship
when loyalty is developed. The idea of valuing a
customer’s loyalty to the salesperson using a conjoint
approach provides business with a way to determine
the value of a salesperson and a metric for evaluating
performance. Conjoint analysis provides managers
with useful and valid information and affords a strategic
tool for quantifying value. These multi-attribute models
allow mangers to uncover and measure real or hidden
drivers behind buyer preferences.
However, capturing actual conjoint data in a market
research study may not be realistic in all situations,
depending, for instance, on the willingness of the
customer to provide the information. Conjoint analysis
assumes that all products and information are equal. Due
to these limitations, we explore an alternative means by
which the worth of a salesperson could be calculated.
Economic Value Metric
Valuation of brand equity is often grounded in the
assumption that a reasonable indicator of a brand’s
equity is the price premium it is able to command over
similar products without the same brand label (Aaker
1991). Similarly, we propose that a premium can be
extracted in a purchase transaction by a salesperson
with equity and that the size of this premium can serve
as an indicator of salesperson equity strength. For a
salesperson, this premium would come in the form of
higher negotiated price due to the loyalty attached to the
relationship. In other words, this premium represents
the extra dollars a salesperson is able to extract over
what another salesperson, selling a similar product or
service, could command.
To calculate an individual salesperson’s total equity
based on customer loyalty, the premium collected by
the specific salesperson on individual sales must be
determined and then aggregated across all sales made
by that salesperson. We calculate the premium on an
individual sale as follows. We begin with the assumption
that an “average” salesperson collects no premium on a
Northern Illinois University
salesperson collects no premium on a sale of a unit of Product X. We then compare a
Volume 14, Number 1
particular the particular salesperson sells for the company, and sum up these differences
sale of aover
unit of
X. Wewe
thenarrive
compare
particular
salesperson
sells for the These
company, and sum
allProduct
products,
at aa particular
total equity value
for the
salesperson.
salesperson’s negotiated price (say, for a unit of “Product
up these differences over all products, we arrive at a
X”) to the
average
across
all
salespeople
in
the
firm
for
total
equityas
value
formost
the salesperson.
procedures
procedures are reflected in mathematical terms
below,
with
economicThese
models,
a unit of Product X. This difference represents a local
are reflected in mathematical terms below, as with most
indicator
of
that
particular
salesperson’s
equity.
If
we
there is an assumption that all other variables economic
are held models,
equal. there is an assumption that all other
calculate this same difference for each product that the
variables are held equal.
SPQi = Salesperson Equity of salesperson i =
n
∑ SPQx, i
x=1
Where:
i = index for a particular salesperson
x = index for a particular product sold by the firm
n = total number of products sold by the firm
SPQx, i = Salesperson Equity for salesperson i with respect to Product X
= [(Perf x, i) – (AvgPerfx)] * Unitsx, i
Perf x, i = Profits per unit of Product X generated by salesperson i
= (Total dollar profits on sales of Product X by salesperson i) / (Total unit sales of
Product X by salesperson i)
AvgPerfx = Average profit per unit of Product X generated by all salespersons in the firm
= (Total dollar profits on sales of Product X by all salespersons in the firm) / (Total
unit sales of Product X by all salespersons in the firm)
Unitsx i = Total unit sales of Product X by salesperson i
Using this model, the firm or the sales manager can
in the company had an average profit on Product X of
then determine the
value
of
the
individual
salesperson,
1,000
000 determine
= $7 per unit.the
Thus,
Chris’
Using this model, the firm or the sales$7,000,000
manager /can
then
value
of price
relative to the investment and the compensation being
premium with respect to Product X is $10 - $7 = $3, and
made. As an example, imagine that Chris and his fellow
his equity, based on this price premium, is $3 x 100,000
12
salespeople in the firm each sell the same Products
units = $300,000. Say that Chris’ equity with respect to
X, Y and Z and that each product ranges in price
Product Y and Product Q was $200,000 and $400,000,
from $80 - $120 per unit. All of the salespeople have
respectively. His total Salesperson Equity would be
flexibility in their pricing of these products. Say that
$300,000 + $200,000 + $400,000 = $900,000.
Chris sold 100,000 units of Product X last year which
Therefore, if the firm were weighing a new resource
generated $1,000,000 in profit. All 10 salespeople in
allocation to Chris, it becomes clear that this would be a
the organization collectively sold 1,000,000 units of
worthwhile investment. The calculation also illustrates
product X and generated $7,000,000 in profit.
the order of magnitude for extra investment that may
Chris’s profit per unit of Product X sold then was
be justified.
$1,000,000 / 100, 000 = $10 per unit. All salespeople
39
Journal of Selling
Discussion
The study presents two methodologies to calculate
customer loyalty to the salesperson. A conjoint analysis
is used to measure buyer preferences at an individual
level. This process estimates the trade-offs that the
buyer makes when evaluating multiple attributes
contributing to the loyalty toward the salesperson. This
method may not be realistic in all situations. Therefore,
an Economic Value Metric was also presented to also
demonstrate how an actual value can be associated with
the salesperson’s relationship with the customer.
Using either approach, an understanding of customer
loyalty to the salesperson provides the firm with a
tactical and strategic tool. Tactically, identifying which
salesperson has greater value helps with compensation/
incentive decisions, as well as a model of salesperson
attributes that can be used for training. Strategically,
customer loyalty to the salesperson can be used to
create a sustainable competitive advantage, possible
industrial customer segmentation variables, and better
valuation of buyer-seller relationships.
This paper intends to introduce these methods as
tools for sales management. Implications for valuing
resources, evaluating salespeople, making sales force
compensation decisions, sales force retention, as well
as designing sales strategy for a business-to-business
firm (e.g., relationship selling, building long term
relationships with customers, evoking loyalty and
commitment, partnering, etc.), all stem from knowledge
that can be gained through application of these tools.
First, as firms strategically evaluate their resource
investments, and look for ways to reduce costs and
improve performance, the sales force has increasingly
come under attack. A number of firms are, for example,
moving more sales functions to inside sales. According
to Business World, the call center industry is expected
to grow by 15-20% this year, representing an actual
slowdown in growth rates (Hermosa 2010). The
industry ended 2011 at around $7 billion, with a work
force exceeding 400,000. To make these decisions in
an informed way, information on the value of the loyal
relationship with a customer is beneficial. These tools
can play a role in generating this type of information.
Even more tactical decisions, such as which salesperson
40
to invest resources in, can be better informed by these
tools, as can salesperson evaluation.
Having an understanding of which customers and which
salespeople have loyal relationships can have an impact
on sales force organization and compensation decisions.
When the return is known, the investment of resources
is better informed. In addition, an evaluation of whether
rewards are going to those salespeople who build the
most profitable relationships would be beneficial. This
has specific implications for retaining salespeople.
More specifically, knowing when salespeople are likely
to take important customers with them has important
retention implications. Sales management has not had
strong tools to consider when it is worthwhile to incent
a salesperson, who is considering leaving the firm, to
stay. These methods can help to address that issue.
Finally, as more and more firms adopt long term
relationships into their sales strategy, the approach used
can allow them to evaluate their sales strategy. If a firm
makes a decision to move toward less transactional,
more long term consultative sales strategy, this requires
a certain level of investment. An understanding of what
the value is of current relationships, or projected value
of future loyal relationships, can help in evaluating the
strategic decision and investment required. Either of the
presented methods can be used to estimate the future
value of the strategy and consider the projected return.
Additional development of the two methods should be
further tested to improve the validity and reliability of
the measurement. This support can help researchers and
managers determine the best measurement technique
to use in various situations and provide additional
confidence that the technique truly measures the
construct examined.
Given the calls for performance metrics (Ingram et
al., 2005; Rackham and DeVincentis, 1999) that are
useful and meaningful in the selling literature, the
value of this study is in demonstrating that customer’s
loyalty, when uniquely focused on the salesperson
relationship, can be financially valued, both at the
firm, and at the individual customer level. Traditional
performance measures in selling are often short term
in nature. Loyalty exists at the level of the on-going
relationship between the purchaser and the salesperson.
Northern Illinois University
Volume 14, Number 1
As such, when a salesperson is successful in moving a
relationship forward, s/he will also increase the value
of the customer’s loyalty. Consideration can be given
to measuring a salesperson’s or sales force’s overall
loyalty value, or to valuing the individual relationships
that the salesperson has with a specific buyer. A next
step would be to consider other important loyalty
behaviors that are generated by the loyal customer,
which are also of value to the firm in leveraging these
relationships to maximize financial outcomes, such as
referrals and influencing others.
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Appendix
This study is designed to consider the decisions that
you make as a purchase agent. Please read through the
following hypothetical situation carefully. Try to put
yourself in this situation, as though you were really
attempting to purchase Product X. The more you put
yourself into the situation, the more your decisions
on the questions that follow will actually reflect your
decision processes.
You have been tasked to purchase 10 units of Product
X for your firm. You have researched Product X and
determined that the various brands of Product X are
essentially the same. There are two brands on the market
… Brand A and Brand B. Although there are minor
variations, both brands would meet your minimum
success criteria. If everything else were equal, you
would choose Brand A. All brands of this product range
in price from $80 per unit to $120. Salespeople have
a relatively high degree of flexibility in their pricing
of product X. You have met with two salespeople that
represent different distributors, each of whom carries
both brands. You have done approximately an equal
amount of business with each distributor on other
products in the past, and have found no difference
in service or delivery or quality of the distributors.
Each of the salespeople makes a proposal to you. The
salespeople are:
Chris Michaels
Chris Michaels is an experienced representative for
this distributor in your region. You have worked with
Chris for a number of years on a variety of purchase
types. You would characterize the relationship that
you have with Chris as a loyal one. Chris has a high
degree of expertise on your business, as well on the
products represented. You have found Chris to be very
trustworthy, and you like Chris. You believe that Chris
has your best interests at heart, and would believe a
recommendation that Chris makes to you.
Northern Illinois University
Volume 14, Number 1
Alex Grayson
Alex Grayson is new to this region, although Alex
has sufficient experience in the product and with the
distributor. This is the first time that you have dealt with
Alex Grayson, so you are hesitant to make judgments
about Alex, and any potential for future dealings.
You would characterize Alex as friendly, but have
no loyalty to Alex. You think that Alex is reasonably
knowledgeable, but don’t have a lot of information on
which to judge Alex’ trustworthiness.
On the following pages, you will be presented with
twelve possible deals. As each deal is presented,
please rate your preference for that deal, where one (1)
represents the lowest degree of preference and ten (10)
the highest degree of preference. Once you have rated a
particular deal, please do not return to it to revise your
rating. Please do not read ahead to the next deal until
you have rated each deal you are presented with.
43