Antecedents to salesperson customer orientation.

Johnson, Julie T. ; Boles, James S.

INTRODUCTION

Sales research has consistently demonstrated the importance of a salesperson maintaining a "customer oriented" selling approach rather than a "salesperson oriented" selling approach (e.g. Goff et al., 1997; Saxe & Weitz, 1982). The SOCO literature (salesperson orientation versus customer orientation) has been examined in wide variety of sales settings (e.g. O'Hara et al., 1991; Siguaw et al., 1994; Williams & Attaway, 1996). This research provides support for the importance of a developing and maintaining a customer oriented sales approach. Salesperson customer orientation is related to salesperson performance and job satisfaction as well as customer satisfaction (Saxe & Weitz, 1982; Siguaw et al., 1994; Swenson & Herche, 1994).

Another topic of continuing interest in the sales management literature involves the role of the manager in providing guidance, direction, and support to customer contact marketing personnel as they operate in their boundary spanning capacity (e.g. Challagalla & Shervani, 1996; Johnston et al., 1990; Schwepker, Ferrell & Ingram, 1997). Previous studies have directly or indirectly linked manager behaviors in the work environments to a variety of desirable work related attitudes and perceptions. These include job satisfaction and reduced role stress (Babin & Boles, 1996; Kohli, 1989). One area, however, that has received relatively less attention concerns how an organization's work environment/climate influences the actual behaviors occurring within the sales encounter between outside business-to-business salespeople and their customers (Oliver & Anderson, 1994; Vitell, Rallaplalli, & Singhapakdi, 1993).

Thus, previous research has demonstrated considerable interest in the topics of salesperson SOCO as well as supervisory behavior/management style. While many studies have investigated these issues, one area that has not been directly addressed is the how a salesperson's customer orientation is influenced by the sales manager's support for a customer orientation. Additionally, the effect of a firm's compensation plan on a sales manager's support for salesperson customer oriented selling has not been addressed. Therefore, this research will extend the current SOCO and sales management literature by examining the effects of a firm's compensation plan on managerial support for a salesperson customer oriented selling. Further, it will determine how these managerial approaches affect salesperson customer orientation.

STUDY BACKGROUND: SELLING AND CUSTOMER ORIENTATION

Customer orientation is "the practice of the marketing concept at the level of the individual salesperson and customer" by providing customer satisfaction and establishing mutually beneficial long term relationships (Saxe & Weitz 1982, p. 343). On the other hand, a firm engages in selling orientation when "an organization seeks to stimulate demand for products it produces, rather than producing products in response to customer needs" (Saxe & Weitz, 1982, p.344).

A salesperson's customer orientation has been linked to several very positive outcomes in the buyer-salesperson dyad. One set of these results relates to salesperson performance from the selling firm's perspective. Customer orientation has been linked to salesperson performance in various settings (i.e. Saxe & Weitz, 1982). These include both industrial and retail settings (Dunlap, Dotson & Chambers, 1988; Swenson & Herche, 1994). Salespeople that adopt a customer oriented versus a sales oriented approach to selling appear to perform better across time.

A second set of consequences occurs in the dyadic interaction between a salesperson and his/her customer. First, customer orientation is related to relationship quality in a business-to-business sales environment (Williams & Attaway, 1996). In addition, the greater the customer orientation a salesperson exhibits toward a customer, the greater the customer satisfaction with the salesperson and indirectly with the firm and manufacturer (Goff, Boles, Bellenger, & Stojack, 1997). These results indicate the great importance that a firm should place on a salesperson that sells expensive or risky products/services adopting a customer oriented approach to the sales process. The question that remains to be answered is how to develop a customer oriented sales force?

SUPPORTIVE WORK ENVIRONMENTS

An employee's work environment is very important for two reasons. First, the work environment is one aspect of the job that is subject to considerable managerial control and is, therefore, subject to managerial intervention. Second, the work environment is antecedent to a number of important work related attitudes and behaviors.

A number of studies have linked various aspects of the work environment to role conflict and role ambiguity. For example, Teas (1983) found that supervisor support was negatively related to role conflict and role ambiguity. Other research also reports a negative relationship between supportive work environments and role conflict and role ambiguity (Kohli, 1989). In addition, there appears to be a direct, positive link between salesperson job satisfaction and support from his/her manager (Kohli, 1989). Other aspects of managerial behaviors/actions have also been found to be highly related to salesperson job satisfaction (Kohli, 1985).

Research findings regarding the importance of manager behaviors have been reported in non-sales work settings. Supervisor support and role stress (role conflict and role ambiguity) have consistently been found to be negatively related across a wide range of work environments (i.e. Schaubroeck et al., 1989; Kirmeyer & Lin, 1987). Further, supportive work environments have consistently been found to be positively related to job satisfaction in a variety of jobs (e.g. Babin & Boles, 1996; Parkes, 1982).

In general, the effects of positively perceived work environments on employee attitudes and beliefs are overwhelmingly positive. By providing a supportive environment, a manager can help insure job satisfaction and role clarity. Increased job satisfaction and role clarity are, in turn, positively related to organizational commitment and negatively related to propensity to leave and turnover (Jolson, Dubinsky & Anderson, 1987; Terborg & Lee, 1984). Thus, supervisor support has a powerful effect on employees including salespeople. These previously reported findings suggest that if a supervisor supports a salesperson performing an action or behaving in a specified way, then the salesperson is likely to continue with that behavior.

COMPENSATION PLAN

Salesperson compensation is another of the key issues in sales force management (Moncrief & Shipp, 1997). Firms typically use compensation plans as one method to direct salesperson behavior (Churchill et al., 1997; Inc. Magazine, 1994) and provide motivation (Boyd, 1995). Unfortunately, given its importance to management and its influence on salesperson behaviors, empirical research concerning the effect of compensation plans is somewhat limited. Most of the academic literature examining this issue appears to focus either on the preferences of managers and salespeople for various types of rewards (i.e. Bellenger, Wilcox, & Ingram, 1984; Chonko, Tanner, & Weeks, 1992) or the role of incentives to achieve sales objectives (Caballero, 1988; Hastings, Kiely, & Watkins, 1988).

While the reward attractiveness literature suggests plans that may be more (less) attractive to salespeople, it provides little insight into how the plan affects behavior other than motivation. Previous studies examining compensation and/or managerial behaviors on salesperson activities have examined the role of psychological climate on the attractiveness of rewards (Tyagi, 1985), the role of compensation as it influences the performance of service providers (Evans & Grant, 1992; Gardner & Rowland, 1979) and the effect of an organization's culture on customer orientation (Williams & Attaway, 1996).

Another area of compensation research that has recently received relatively greater interest involves examining the effects of an outcome-based versus behavior-based management control system (Anderson & Oliver, 1987). Cravens et al. (1993) found that behavioral control systems are important in providing more direct control of salesperson behaviors--which is relevant to the current study. Oliver and Anderson (1994) also examined the effects of an outcome-based versus and behavior-based control system in a sales setting. Their findings suggest that, "contrary to expectations, perceived control systems do not appear, for the most part, to affect the salesperson's behavioral strategy" (p. 60). These results indicate some conflict regarding the role of supervisory support for specific behaviors and sales force performance of those behaviors. Once again, the effect of compensation plans on manager behaviors is not explicitly examined in detail.

Even though bases of control issues have been examined with some regularity, that literature provides little support for one system being superior. Further, none of these studies explicitly examines the effect of sales manager support for a particular type of selling orientation and the effect of that support on salesperson attitudes and/or behavior. This leads to the proposed model in the current study.

MODEL

Most firms hope to use their compensation system to influence salesperson behavior -thereby achieving important organizational goals (Churchill, Ford & Walker, 1997). However, if that system is resulting in negative or unwanted behaviors, then the organization may see unanticipated consequences of the compensation plan. Further, a manager will see the compensation system as guiding and directing his/her managerial focus. Thus, a compensation plan that is improperly targeted or imprecisely thought out may result in unwanted results in terms of salesperson behaviors relative to customers.

The model being tested in the current research can be seen in Figure 1. It is based on previous literature examining supervisory support and management control. This model proposes that the type of selling approach supported in a firm's compensation plan directly affects managerial behaviors relative to that plan. Further, these managerial behaviors directly affect salesperson customer orientation. This perspective is taken since previous research indicates that a salesperson's selling orientation-customer orientation is a behavior rather than a trait (Williams & Wiener, 1990). Specifically, we propose that a customer oriented compensation plan will be negatively related to managerial support for a selling orientation and positively related to managerial styles that support a customer oriented approach. Customer oriented management styles will be negatively related to selling oriented managerial styles. A selling oriented management style will be negatively related to salesperson customer oriented behaviors. Finally, management support for a customer oriented sales approach will be positively related to salesperson customer orientation.

[FIGURE 1 OMITTED]

SAMPLE

The study was conducted with business-to-business salespeople in one regional sales force of a Fortune 100 firm. The sponsoring firm was interested in studying the effects of the compensation system on sales manager behavior. Additionally, the firm was interested in examining the effects of the sales manger's behavior on the salesperson's use of salesperson customer oriented selling behavior when dealing with the customer.

The salespeople examined in this research worked in outside sales, selling a service to businesses. The firm administered the survey to approximately 335 salespeople. Of those, 277 completed the questionnaire. This represents a seventy-eight percent response rate. The typical salesperson for the firm had a college education and was in his/her mid-thirties. Average sales experience with the firm was slightly over three years.

MEASURES

All measures used in the study were created jointly by the firm and the researchers for the purposes of this study. While these measures do not strictly follow any existing scales, this approach was used because the firm insisted on a very short survey. The length of the survey almost certainly accounts for some part of the high response rate. All items were scored on a 1-7 response scale where 1 = strongly disagree and 7 = strongly agree. The customer oriented compensation plan measure consisted of 2 items; the management support for customer oriented selling approach measure was composed with 5 items; the management support for selling oriented sales approach scale consisted of 5 items; and the salesperson customer oriented selling scale included 4 items.

MEASUREMENT MODEL RESULTS

Analyses were conducted using LISREL 8 in accordance with Anderson and Gerbing's (1988) two-step approach. A covariance matrix, computed using PRELIS 2, was used for analyses. The correlation matrix is shown in Table 1.

The measurement model was analyzed using all 16 items. Results model indicated that model fit could be improved (2(129) = 261.36, p< .01; GFI = .91; AGFI = .88; RMR = .07; RMSEA = .06; CFI = .94). Two items were removed from the scale assessing management support for customer oriented selling approach. One item was removed from the management support for selling oriented sales approach measure, and one item was removed from the salesperson customer oriented selling scale.

The modified measurement model indicated that all remaining items performed well and were retained in the model (2(71) = 122.94, p< .01; GFI = .94; AGFI = .91; RMR = .04; CFI = .97). The remaining items had large and significant loadings on their latent construct, indicating convergent validity. Discriminant validity was assessed by constraining the estimated correlation parameter (fij) between constructs to 1.0 and performing a chi-square difference test on the values obtained for the constrained and unconstrained models (Joreskog, 1971). A significantly lower chi-square value for the unconstrained model indicates that the two constructs are not perfectly correlated and discriminant validity is achieved. Results provided strong evidence of discriminant validity among the constructs. All items indicated good scale composite reliability (see Table 1) with all items performing above the .70 level (Bagozzi & Yi 1988).

STRUCTURAL MODEL RESULTS

The results, shown in Table 2, indicate an good fit (2(72) = 123.35, p< .01; GFI = .94; AGFI = .91; RMR = .05; CFI = .97). We also assessed fit by examining the RMSEA. The RMSEA is a test of close fit, whereas chi-square is a test of exact fit (Browne & Cudek, 1993). The null hypothesis of close fit (RMSEA) provides a more realistic test than the null hypothesis of exact fit (Browne & Cudek, 1993). RMSEA values of about .05 or lower indicate a close fit of the model (Browne & Cudek, 1993). The structural model performs well on this fit diagnostic (RMSEA = .05; p-value = .45).

Our findings indicate four of the five hypotheses were supported. H1 was supported. It hypothesized that a customer oriented compensation plan was positively related to management support for a customer oriented selling approach (t = 7.05). Results indicate that a customer oriented compensation plan was negatively related to perceived to management support for a selling oriented sales approach (H2; t = -3.55). Managerial support for salesperson customer oriented selling also was negatively related to management support for a selling oriented sales approach (H3; t = -6.77). Management support for a selling oriented sales approach was negatively related to salesperson customer oriented selling (H5; t = -4.00). H4, which hypothesized that management support for salesperson customer oriented selling approach was positively related to salesperson customer oriented selling was not significant and in the opposite direction than expected (t = -1.62).

DISCUSSION AND IMPLICATIONS

The degree of customer orientation that a salesperson exhibits has been linked to both salesperson performance (in various settings) and to customer satisfaction. Saxe and Weitz (1982) suggest that purchasers involved in risky situations where failure may be critical to the firm are likely to be particularly motivated by a salesperson exhibiting a customer orientation. Research supports that view since it indicates that business-to-business customers and big-ticket retail buyers respond to a salesperson's customer oriented selling approach (Dunlap et al., 1988; Michaels & Day, 1985; Saxe & Weitz, 1982). For these reasons, salesperson customer orientation is quite important.

If customer orientation is important to a firm's well being, then finding ways of fostering salesperson customer oriented selling is, likewise, very important. Previous studies have shown how a firm's market orientation (Siguaw, 1994) and culture (Williams & Attaway, 1996) can influence a salesperson's customer orientation. This study adds to this body of literature by indicating how a compensation plan affects management behaviors which, in turn, can influence salesperson customer oriented selling approaches.

Results from this study indicate that the compensation plan used by a firm has a strong influence on the selling style that sales manager's support. Specifically, a customer-oriented compensation plan is positively related to managers encouraging a customer-oriented selling approach by their salespeople and negatively related to a manager emphasizing a selling oriented style of selling. Furthermore, managers who emphasize a selling orientation among their salespeople are more likely to reduce customer orientation among those salespeople.

Interestingly, while managers who encourage a selling oriented approach among salespeople are likely to see a reduction in customer oriented behavior on the part of salespeople, managers emphasizing customer orientation may not see a significant increase in salesperson customer oriented selling among their sales personnel. Perhaps salespeople in this business-to-business sample are customer oriented and, therefore, management emphasis does little to increase that orientation. At the same time, however, management actions supporting a selling orientation will reduce salesperson customer orientation.

An alternative explanation to explain these findings involves the role of the business-to-business customer. Perhaps, customers in this sales setting generally expect and/or demand a customer orientation--resulting in salesperson customer oriented selling being the default approach unless otherwise influenced by management support for selling oriented sales approach. If that is the case, managers need to be aware of what customers in their market expect regarding the salesperson's role. Failure to take into account the customer's perspective may reduce the effectiveness of incorrectly targeted management efforts designed to stimulate sales.

This study suggests several areas for future research. First, additional linkages are needed to establish how managers can foster customer oriented behaviors among salespeople. Another questions involves the role of leadership among sales managers. Do salespeople expect the manager to "practice what he/she preaches?" Also, further research is needed to clearly delineate the role of the compensation plan in fostering management styles and directing salesperson behavior. Is the compensation plan typically linked only indirectly, through the sales manager, to salesperson activities? Or, is the compensation plan more centrally linked to the activities and behaviors of the sales force?

While this study is based on a fairly large business-to-business sample, the study has several limitations. The measures used in the research, while psychometrically sound, were created specifically for this study. The use of established scales, rather than those created specifically for the study, would make the results more directly comparable with other research examining customer orientation and management behaviors. Also, one cannot be certain that these results are generalizable to other sales settings. For example, would a similar study of business-to-business salespeople that sell products produce similar results. That question cannot be answered by the current research. All that we can say is that in this study, the compensation plan drove management behavior and that some management behaviors are directly related to a salesperson use of a salesperson customer oriented selling approach.

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Julie T. Johnson, Western Carolina University

James S. Boles, Georgia State University

TABLE 1
CORRELATION MATRIX

 X1 X2 X3 X4

Customer Oriented Comp Plan (.85)
Management Support for C.O. .49 (.89)
Management Support for S.O. -.56 -.76 (.73)
Salesperson customer oriented selling .19 .22 -.43 (.81)

Construct reliability estimates are on the diagonal.

TABLE 2
STRUCTURAL MODEL RESULTS

Hypothesis Estimate t-value H supported

Customer oriented comp plan
Management support for customer
 oriented selling approach (H1) .49 7.05 Yes

Customer oriented comp plan
Management support for selling
 oriented sales approach (H2) -.24 -3.55 Yes

Management support for customer
 oriented selling approach
Management support for selling
 oriented sales approach (H3) -.64 -6.77 Yes

Management support for customer
 oriented selling approach
Salesperson customer oriented
 selling (H4) -.22 -1.63 No

Management support for selling
 oriented sales approach
Salesperson customer oriented
 selling (H5) -.58 -3.98 Yes

Overall Results: 2(72) = 123.35, p< .01; GFI = .94; AGFI = .91;
RMR = .05; CFI = .97, RMSEA= .05 with p = .45