Buyer–seller relationship, sales effectiveness and sales revenue: a social network perspective

Abstract

PurposeThis study aims to examine the underlying mechanism of buyer–seller ties and salespeople’s performance. Also examined was the moderating effects of the density of the customer network in which the salesperson is embedded.Design/methodology/approachThe study developed a framework incorporating five key variables: strength of ties, network benefits, network density, sales effectiveness and sales revenue. The framework was tested using data from insurance companies in China.FindingsProcess regression and stepwise regression results indicated that information, influence and solidarity benefit will mediate the effects of strength of ties on sales effectiveness both when taken as a set and separately. Information, influence and solidarity benefit will mediate the effects of strength of ties on sales revenue when taken as a set, but only influence will mediate the effect separately. In addition, the positive relationship between strength of ties and solidarity benefit is weaker when network density is high.Practical implicationsSales managers should initiate trainings and workshops about how to obtain high-quality information from customers, improving influencing power and establishing solidarity with customers. Moreover, salespeople should avoid conducting business with a group of customers if they are densely connected to one another.Originality/valueOn the one hand, this study contributes to the underlying mechanism research on buyer–seller ties and sales performance. On the other hand, it contributes to the contingency research on sales performance and the development of social network theory.