Professional Documents
Culture Documents
www.emeraldinsight.com/0309-0566.htm
Customer
Customer orientation and orientation
salesperson performance
Mark E. Cross
Robinson College of Business, Georgia State University, Atlanta, Georgia, USA 821
Thomas G. Brashear
Isenberg School of Management, University of Massachusetts at Amherst, Received May 2005
Accepted April 2006
Amherst, Massachusetts, USA, and
Edward E. Rigdon and Danny N. Bellenger
Robinson College of Business, Georgia State University, Atlanta, Georgia, USA
Abstract
Purpose – This paper aims to examine the impact of customer orientation, at the levels of both the
company and the salesperson, on salesperson performance.
Design/methodology/approach – A survey of 283 salespeople provides the database that was
analyzed using structural equation modeling.
Findings – Prior studies suggest that both company and salesperson customer orientation has a
positive effect on performance. The findings of this study suggest that a salesperson’s customer
orientation completely mediates the relationship between company customer orientation and
salesperson performance. Thus, the influence of a company’s customer orientation on salesperson
performance acts through the customer orientation of the salespeople.
Originality/value – The study reinforces the importance of customer orientation and the role of
salespeople in putting customer orientation into practice.
Keywords Customer orientation, Sales performance
Paper type Research paper
Customer orientation has been shown to have a positive impact on performance at both
the company (Narver and Slater, 1990; Singh and Ranchhod, 2004) and salesperson
(Sujan et al., 1994; Donavan et al., 2004) levels. Such findings support the fundamental
tenet of the marketing concept. The question addressed in the research reported here is
– does company level customer orientation have a direct impact on salesperson
performance or does it enhance salesperson performance indirectly by impacting the
orientation of the salesforce?
A great deal of practitioner literature suggests that the role of the salesperson is
declining (Brooks, 2004; Weeks, 2000). Electronic and various self-service means are
increasingly employed to handle transactional exchanges while team selling is
reserved for dealing with large accounts in more of a consultative role. It is asserted
that the traditional salesperson is becoming less important and can survive only by
providing added value in the exchange process. However, if the salesperson’s customer
orientation actually mediates the relationship between the company and their European Journal of Marketing
Vol. 41 No. 7/8, 2007
customers, eliminating this role could be detrimental to sales performance. pp. 821-835
A company’s market orientation, as popularly conceptualized (Kohli and Jaworski, q Emerald Group Publishing Limited
0309-0566
1990; Kirca et al., 2005; Narver and Slater, 1990), incorporates two primary dimensions: DOI 10.1108/03090560710752410
EJM (1) Customer orientation, which is a focus on the needs and wants of the customers.
41,7/8 (2) Competitive orientation, which emphasizes a focus on competitive threats.
Part of the power of the market orientation concept comes from the fact that it includes
most of the elements that have traditionally been associated with successful sales
performance. Market orientation reflects the focus of the entire company.
822 Academic literature examining market orientation has consistently found that market
oriented organizations achieve higher levels of sales performance, but this ignores the
possibility that the effect seen is the result of intervening variables at a lower level of
analysis. Companies that have achieved higher levels of market orientation have done so
by creating a culture and environment that supports the marketing philosophy (e.g.
Hartline et al., 2000). Such an environment might reasonably be expected to influence
salespeople within the organization to be more customer-oriented. The research focused
on salespeople and their customer orientation, reports that salespeople who have a
stronger customer orientation tend to achieve higher levels of sales performance (Harris
et al., 2005). It is conceivable that the effects of market orientation at the company level
act indirectly through salespeople who are the organization’s ambassadors to their
customers, and who implement the company’s philosophy on the front lines.
Conceptual background
For nearly 50 years market orientation was seen primarily as an organizational
phenomenon. Market orientation was recognized in academic literature as early as the
1920s (Strong, 1925), and by the 1950s market orientation was viewed as an
operationalization of the marketing concept at the organizational level (Borch, 1957;
McKitterick, 1957). The initial interest in organizational market orientation was
focused on the ability of top management to shape the values and orientation of their
organizations (Felton, 1959). By the mid-1960s, empirical studies were beginning to
measure the effects of market orientation, and for the next few years emphasis moved
to theory construction which examined the effects of organizational structure on
organizational market orientation. In the early seventies, the importance of
organizational market orientation was seen to diminish in the face of rapid
technological change which reduced the advantages gained by responsiveness to an
individual customer’s needs (Kaldor, 1971; Tauber, 1974).
Over the next decade, the focus of the literature moved inside the selling organization
and began to examine the market orientation of the salesforce as a consequence of
evaluation and reward systems (Hopwood, 1974; Anderson and Chambers, 1985). This
individual level of market orientation, referred to as salesperson customer orientation, is
of great interest because of salespeople’s direct contact with customers and the belief that
this will impact sales outcomes. Continuing with their focus inside the selling
organization, researchers theorized that information flow within the organization
facilitated organizational market orientation (Patton, 1978; Deshpandé and Zaltman,
1982), and saw conflict as an inhibitor (Lusch et al., 1976; Ruekert and Walker, 1987).
In the 1980s, interest in relationship marketing brought increased attention to
market orientation (Shapiro, 1988; Webster, 1988; Deshpandé and Webster, 1989). This
led to an examination of the influence of market orientation as it applied to relational
outcomes, such as satisfaction and trust (Stock and Hoyer, 2005). The link between
organizational market orientation and performance was empirically examined as early
as 1990 (Narver and Slater, 1990). The link between a salesperson’s customer Customer
orientation and performance was observed by Saxe and Weitz as early as 1982, and orientation
was the subject of empirical examination by Sujan et al. (1994).
Market orientation
The idea of market orientation as a unifying focus for the organization has prompted 823
considerable research (e.g. Kirca et al., 2005). By collecting and sharing information
about the customers’ needs and competitors actions, an organization can be sensitive to
customer needs, responsive to competitor threats, and prepared to respond rapidly
(Kohli and Jaworski, 1990; Kulp et al., 2004). A number of articles have found positive
direct effects of an organization’s market orientation on sales performance (Boles et al.,
2001; Jaworski and Kohli, 1993). Accordingly, we hypothesize:
H1a. Customer orientation of an organization is positively related to salespeople’s
performance.
H1b. Competitive orientation of an organization is positively related to
salespeople’s performance.
According to Jaworski and Kohli (1993), an organization’s market orientation reflects
the degree to which the marketing concept has been adopted into an organization’s
business philosophy. From a cultural perspective, organizational market orientation is
described as a culture that:
.
places the highest priority on the profitable creation and maintenance of superior
customer value while considering the interest of the other stakeholders; and
.
provides norms for behavior regarding the organizational development of and
responsiveness to market information (Slater and Narver, 1995, p. 67).
A “market-driven culture supports the value of thorough market intelligence and the
necessity of functionally coordinated actions directed at gaining a competitive
advantage” (Day, 1994, p. 43).
Figure 1.
Proposed theoretical
model
Methodology Customer
Sample orientation
Study participants were field salespeople based in a large metropolitan city in the
southeastern US, with sales territories across the US. The sample in this study consists
of business-to-business salespeople who were selected from a broad cross-section of
“big ticket” business-to-business sales positions selling services and/or products.
Potential respondents were individually screened to make sure they were full-time 825
business-to-business salespeople who worked in the field and not inside sales. A total
of 500 surveys were distributed to potential respondents by the drop-off method
similar to Babin and Boles (1998) that resulted in a usable sample of 283 surveys. The
average age of the respondents was 35, with the average sales experience being 8.7
years. Males and females responding were almost evenly distributed, with 51.7 percent
being males. About half were married with children. These demographic
characteristics are similar to other industrial sales samples in the literature (e.g.
Brashear et al., 2005; Chandrashekaran et al., 2000; Grant et al., 2001). All respondents
had at least some college, and the majority had received a bachelor’s degree. The
salespeople were paid on commission based sales plans and averaged over $40,000 in
annual income. A comparison of early and late respondents found no differences
among the demographic characteristics, length of employment, products sold,
industry, or the research constructs (Armstrong and Overton, 1977).
Measures
The constructs were measured using multi-items scales adapted from the literature. All
scales used a seven point Likert scale anchored by “strongly disagree” and “strongly
agree” unless stated otherwise. The scale for organizational market orientation
developed by Narver and Slater (1990) is divided here into the two dimensions of
organizational customer orientation and organizational competitive orientation.
Organizational customer orientation was assessed with a six-item measure.
Captured in this measure are elements of satisfying customer needs, creating value,
obtaining commitment, and service. Organizational competitive orientation is reflected
in a four-item measure. Captured in this measure are elements of “information sharing”
about the market conditions experienced by the organization, including competitor
action awareness, and competitive advantage.
A study associating marketing orientation with new product innovation (Lukas and
Ferrell, 2000) found both customer orientation and competitive orientation to be
important. The findings imply that customer oriented businesses may be more
proficient at uncovering hidden customer needs and even changing the mindset of the
customers to consider new possibilities that would otherwise be rejected. Competitive
oriented businesses may be more responsive to turbulence in the marketplace.
Customer orientation of the salesperson was measured using a 12-item scale developed
by Saxe and Weitz (1982). The respondents were asked to describe their relationship
with customers with regard to their helping customers and attempts to satisfy
customer needs. Finally, performance is an assessment of the salesperson’s sales
success in terms of quantity and quality of achievement. The survey items are similar
to those used in a scale developed by Brown and Peterson (1994). Items asked the
salesperson to evaluate their efforts relative the rest of the company ranging from
“among the worst in the company” to “among the best in the company”. Behrman and
EJM Perreault (1982) found that self-evaluated salesperson performance measures produce
41,7/8 results consistent with manager evaluations and company quantitative measurements
of sales performance. The seven point Likert type scale was anchored by “among the
best in the company” and “among the worst in the company”. A listing of the
measurement items for each contstruct appears in the Appendix.
826 Results
Measurement model
Although there are proponents (e.g. Bagozzi and Edwards, 1998; Goff et al., 1997;
Ramaswami and Singh, 2003) of creating aggregate scores from multiple item
scales, all scales were modeled at the item level and Table I contains a complete
reporting of the individual item correlations. In order to maintain comparability
with previous research, this study avoided modifying the scales through item
deletion or substitution and to assure their validity and reliability, a confirmatory
factor analysis was performed with structural equation modeling (SEM) (Anderson
and Gerbing, 1988) using AMOS. Before estimating the structural model, we
evaluated the fit of the measurement model with four correlated factors. Parameter
estimates and construct reliabilities from the SEM analysis are reported in Table II.
The assessed fit of this model provided only limited support for the proposed
congeneric measurement model – x2ðdf¼318Þ ¼ 781:46 (p ¼ 0:000), root mean square
error of approximation ðRMSEAÞ ¼ 0:075 (95 percent confidence interval 0.068 –
0.081), comparative fit index ðCFIÞ ¼ 0:92, standardized root mean square residual
ðSRMRÞ ¼ 0:052. This result falls somewhat short of guidelines suggested by Hu
and Bentler (1999). Hu and Bentler recommended a composite standard for
approximate fit, combining a CFI of 0.95 or above with either an RMSEA of 0.06 or
below or an SRMR of 0.06 or below. But are the fit problems here substantive?
Based on a careful re-examination of the questionnaire, and guided by model
diagnostics, we developed an alternate model which was consistent with Hu and
Bentler’s criteria. This alternate model added seven free parameters. Two of these
were cross-loadings of organizational competitive orientation items (“my company
strives to respond rapidly to competitors’ actions” and “my company strives to
target opportunities for competitive advantage”) onto the organizational customer
orientation construct. These items’ loadings on the competitive orientation construct
remained significant and large – larger than the cross-loadings. One of the other
five free parameters was a correlated error term linking two items in the
organizational customer orientation scale (“my company strives to develop customer
commitment” and “my company strives to create customer value”). These results
point to the high level of complexity in the larger market orientation scale. The
other four free parameters were correlated error terms linking pairs of items from
the 12-item salesperson customer orientation scale. Given the large number of items
in this scale, the need for some model modification is not surprising. Still, despite
prior use of these scales in the literature, these results point to a need for further
refinement in these key scales.
The modified model 2 produced x2ðdf¼311Þ ¼ 588:47 (p ¼ 0:000), RMSEA ¼ 0:056 (95
percent confidence interval 0.049 – 0.063), CFI ¼ 0:95, standardized RMR ¼ 0:049.
While this model satisfied Hu and Bentler’s criteria, the modifications slightly alter the
correlations among the factors (see Table III). In particular, the modifications
OC1 OC2 OC3 OC4 OC5 OC6 OK1 OK2 OK3 OK4 SC1 SC2 SC3 SC4 SC5 SC6 SC7 SC8 SC9 SC10 SC11 SC12 P1 P2 P3 P4 P5
Performance
P1 0.15 0.14 0.09 0.08 0.13 0.14 0.05 0.06 0.09 0.05 0.20 0.23 0.19 0.25 0.16 0.18 0.11 0.17 0.20 0.26 0.14 0.22 1
P2 0.15 0.16 0.12 0.08 0.11 0.15 0.09 0.12 0.10 0.06 0.34 0.28 0.27 0.25 0.22 0.25 0.24 0.31 0.31 0.31 0.18 0.27 0.56 1
P3 0.22 0.23 0.24 0.17 0.20 0.20 0.04 0.10 0.09 0.10 0.33 0.37 0.35 0.30 0.31 0.29 0.33 0.36 0.39 0.40 0.24 0.37 0.51 0.55 1
P4 0.11 0.07 0.05 0.04 0.02 0.09 0.05 0.08 0.00 2 0.02 0.27 0.24 0.20 0.18 0.21 0.25 0.22 0.26 0.29 0.27 0.09 0.20 0.44 0.61 0.52 1
P5 0.17 0.16 0.12 0.11 0.13 0.13 0.04 0.03 0.03 0.02 0.34 0.34 0.22 0.28 0.30 0.32 0.34 0.35 0.39 0.37 0.21 0.35 0.54 0.61 0.63 0.61 1
Item correlations
orientation
Customer
827
Table I.
EJM
Model 1 Model 2
41,7/8 Estimate * t-value Estimate * t-value
Salesperson performance
P1 0.66 11.91 0.66 11.92
P2 0.77 14.58 0.77 14.60
P3 0.75 13.98 0.75 14.00
P4 0.72 13.33 0.72 13.33
P5 0.82 16.06 0.82 16.03
Correlated errors
SC2, SC1 – – 0.14 5.58
SC6, SC5 – – 0.13 4.63
Table II. SC8, SC7 – – 0.11 4.01
Estimate factor loadings SC10, SC3 – – 2 0.13 2 4.97
and correlated errors for OC2, OC1 – – 0.07 3.75
confirmatory factor
models Note: *Completely standardized parameter estimates
Structural model
To monitor the impact of the modifications on the structural model, we evaluated the
structural model both with and without these modifications (the structural model is
saturated, so overall fit indices are the same as for the CFA models.) While parameter
estimates differ between model 1 and model 2 (see Table IV), the substantive
conclusions are the same. H3a, the direct effect of organizational customer orientation
on salesperson customer orientation, is supported. The parameter estimate for the path
was 0.58 (t ¼ 8:26) in model 1 and 0.59 (t ¼ 8:77) in model 2. In H2, the direct effect of
salesperson customer orientation on salesperson performance, was also supported. In
model 1, the estimate was 0.54 (t ¼ 6:3): in model 2, the estimate was 0.56 (t ¼ 6:43). All
of the other structural parameters were nonsignificant; therefore, H1a, H1b and H3b
were not supported in either model.
Model 1 Model 2
Limitations
The findings of this study must be viewed in light of limitations. First, the survey and
data collection were cross-sectional. Second, all of the measures for constructs under
examination in this study were self-report by a single respondent. This means that the
strength of some of the relationships as reported may be inflated due to common
method variance. The size of the survey (21 different constructs and 142 responses) and
the structure (mixed throughout) made it difficult for a respondent to surmise the
hypotheses being examined, and to “invent” responses that would reinforce this guess.
Since the anonymity of respondents was stressed in the survey instrument, the chances
that self-evaluations were biased towards self-leniency are reduced (Heneman, 1974).
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