Executive summary of “Increasing business-to-business buyer word-of-mouth and share-of-purchase”

Citation

(2014), "Executive summary of “Increasing business-to-business buyer word-of-mouth and share-of-purchase”", Journal of Business & Industrial Marketing, Vol. 29 No. 5. https://doi.org/10.1108/JBIM-04-2014-0085

Executive summary of “Increasing business-to-business buyer word-of-mouth and share-of-purchase”

Article Type: Executive summary and implications for managers and executives From: Journal of Business & Industrial Marketing, Volume 29, Issue 5

This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefits of the material present.

The importance to profit-making of increased buyers’ word-of-mouth communications (WOMC) and share-of-purchases (SOP, sometimes referred to as share-of-wallet) has long been recognized. However, study of WOMC and SOP has tended to be focused on retailing rather than business-to-business (b-t-b) relationships.

While the notion of multi-level relationships has been well received in retailing, empirical attempts at examining SOP and WOMC in the b-t-b literature have been primarily conceptualized at one relationship level, typically the firm level. Researchers have noted that, although a buyer’s relationship with the salesperson and selling firm is independent of one another, they co-mingle to the point of exerting a cross-over effect. For example, it has been argued that buyer’s perception of trust and expertise for salespeople was different from their perceived level of supplier trust and expertise. Other researchers noted that the salesperson tactics impact the quality of the buyer – supplier relationship. In the case of buyer’s satisfaction, studies involving a variety of consumer samples attest to how selling firm satisfaction is in part derived from the customer’s level of satisfaction with the salesperson.

The problem with testing SOP and WOMC strictly from the firm level is the tendency for managers to overlook the important role salespeople play as the firm’s boundary-spanning agent. Salespeople as boundary spanners are instrumental to their firms’ success because they represent the entity that directly interacts and manages the company’s relationships between customers, suppliers and internal co-workers.

As in any b-t-b encounter, the length, complexity and high spending power of consumers ought to warrant constant monitoring of the buying behavior, especially as it relates to increasing WOMC and SOP. In“Increasing business-to-business buyer word-of-mouth and share-of-purchase”, Dr Nwamaka A. Anaza and Dr Brian Rutherford examine how satisfaction and loyalty impact WOMC and SOP within a b-t-b procurement context, specifically asking:

• Do the interrelations between the b-t-b salesperson and firm as it relates to satisfaction, loyalty and WOMC hold, based on the existing retail literature? and

• How do individual aspects of the buyer’s relationships with the salesperson and selling firm impact the buyer’s WOMC and SOP within a b-t-b context?

Answering the first question, the conclusion – following a study involving buyers from various industries including manufacturing, office supplies, electronics, retail, construction, medical supplies, information technology, food/restaurant/hospitality, shipping, finance, furniture, auto/aviation/marine and others – was that there is indeed support for the relationships holding in multiple industries in b-to-b markets, with satisfaction, loyalty and WOMC with regards to the salesperson directly impacting satisfaction, loyalty and WOMC with the selling firm, respectively.

However, the answer to the second question suggests that differences exist between retail and b-t-b markets as to what factors influence a buyer’s WOMC. For instance, in a retail setting, previous research has found that salesperson-owned satisfaction acts as an antecedent of salesperson WOMC. Contrary to this, the present model failed to discover a similar relationship within a b-t-b context.

The present study demonstrates that b-t-b buyer’s satisfaction with the selling firm encourages increased buyer’s post-purchasing communication concerning the firm’s performance. However, this does not appear to be the case within a retail context. Managers are cautioned to refrain from applying satisfaction strategies used to encourage WOMC in retail store settings to business markets.

Another important issue is the lack of support for the association between buyers’ satisfaction with the salesperson and buyers’ positive WOMC regarding the salesperson. Although conflicting results emerge, the examined model highlights the presence of a “cross-over” effect between the buyer’s WOMC concerning the salesperson and the WOMC regarding the selling firm. Considering that a positive relationship was found between salesperson-owned loyalty and positive WOMC concerning the salesperson, this indicates that when a buyer recommends the salesperson to other interested buyers, the buyer is indirectly recommending the selling firm. Thus, a mediating effect may be the reason for the insignificant relationship between buyers’ loyalty to the selling firm and buyers’ WOMC concerning the selling firm.

The study found that buyer’s satisfaction with the selling firm affects volume of purchases from the buying firm. Organizational relationships established between a firm and its customers play a greater role in encouraging customer spending in b-t-b markets than the relationship established between a salesperson and the buyer. This finding is contrary to results from a retail context that shows satisfaction with the salesperson and the firm both encouraging customers’ spending.

Given that purchases within b-t-b markets are not as frequent as purchases in retail settings, the study’s results reiterate the necessity for suppliers to maintain customer satisfaction as a direct means of ensuring constant revenue generation, increased market share and customer lifetime value. This finding demonstrates the importance of selling firms to meet or surpass customer expectations by paying close attention to all aspects of the buying firm’s history including product quality, delivery, price, discounts, product options, product availability, quantity and product guarantees.

For the full article, enter 10.1108/JBIM-10-2011-0143 into your search engine.

(A précis of the article “Increasing business-to-business buyer word-of-mouth and share-of-purchase”. Supplied by Marketing Consultants for Emerald.)