Commitment and vulnerability in B2B relationship selling in the Hong Kong institutional insurance service industry

Abstract

Purpose -The purpose of this paper is to understand the impact of the antecedents of the exchange domain (use of coercive influence, ideational favor exchange, calculative resource-dependence, and decision uncertainty) on relationship building. The paper examines the link between the two mediating dynamics of embedded trust and relationship-specific customization and loyalty by developing a model of vulnerability-based commitment. Design/methodology/approach -The links between the model elements are tested using data from a survey of clients in the Hong Kong insurance service. Structural equation analysis is used to test research hypotheses and to examine the extent to which vulnerability-based commitment leads to the development of loyalty. Findings -The degree of embedded trust between parties is enhanced by the use of coercive influence, favor, and resource-dependence. Embedded trust has a negative relationship with decision uncertainty. The antecedents of coercive influence, favor, and resource-dependence have positive impacts on relationship-specific customization. Vulnerability-based commitment is positively affected both by trust and customization whilst commitment has a positive impact on loyalty. Practical implications -A vulnerability-based commitment model is developed as an analytical and managerial tool for understanding the benefits and hidden vulnerabilities of client loyalty and for implementing effective service strategies. Originality/value -By understanding the implications of the benefits/costs in commitment vulnerabilities, the findings can help in the design of a loyalty quality system. A new measurement tool is provided to enable researchers to perform more vigorous scale development of commitment.

Sales activity systematization and performance: differences between product and service firms

“…These findings are in line with recent findings that e.g. slowly evolving vulnerability-based commitments is a key characteristic in successful B2B service selling relationships (Wong et al, 2008) but not in non-service companies.…”

Understanding the strain of inter-personal relationships on employees

“…As insurance is a complex service (Wong et al , 2008), inter-personal relationships were expected to be considered to be important. Participants echoed this viewpoint seeing the need to build relationships as common place within the sector: Yes, it is important.…”

“…The relationship under scrutiny was the inter-personal relationship that exists between the account managers of UK insurance brokers and their business customers. Wong et al (2008) characterized insurance as being complex and dynamic, requiring customization to the client’s needs and difficult to evaluate before purchase. As a result, buyers require contact with the seller throughout the life of the policy (i.e.…”

Editorial: Interdisciplinary research in services marketing

“…A second challenge is that services marketing scholars do not sufficiently draw on paradoxical thinking, which restricts them from thinking in “both-end” terms simultaneously (Gustafsson and Bowen, 2017). Examples paradoxes in service marketing research, include: the positive and negative feelings of consumers in a technology‐based service setting (Matthing et al , 2006); service problems and satisfaction (Swan and Bowers, 1998); and customers seeking routinization of the choice process while deliberately look for new providers by exiting the relationship (Wong et al , 2008).…”