European

Journal Using Neural Network

of Marketing
28,10
Analysis to Evaluate Buyer-
Seller Relationships
32
Barry Wray
Received October 1993 University of North Carolina at Wilmington,
Revised March 1994 Wilmington, USA
Revised May 1994
Adrian Palmer
Leicester Business School, De Montford University,
Leicester, UK, and
David Bejou
University of North Carolina at Wilmington,
Wilmington, USA

European Journal of Marketing,
Vol. 28 No. 10, 1994, pp. 32-48.
© MCB University Press, 0309-0566
Introduction
Relationship marketing has been hailed by some as a paradigm shift which
moves attention away from individual buyer-seller transactions towards on-
going relationships. Instead of adopting a warfare approach to the bargaining
of each transaction, buyers and sellers become interrelated and achieve shared
goals through patterned relationships with one another[1]. In an ongoing
relationship, promises are exchanged and relationships developed on the basis
of trust[2].
Of course, there is nothing new in the way that organizations have sought to
develop ongoing relationships with their customers. Before the advent of large-
scale production systems and mass marketing, producers of goods were able to
know each of their customers individually and able to suggest appropriate
product offers. They also knew what level of credit to trust them with. Mass
production inhibited the development of ongoing personal relationships. More
recently, the development of powerful user-friendly databases has allowed
organizations to recreate relationships with their customers – a computer can
now know what a business owner knew in his or her head, allowing relationship
development responsibilities to be given to a large number of staff within an
organization. Some have argued that in markets where companies offer
similarly high levels of product quality, the quality of an ongoing relationship
becomes a means of gaining competitive advantage[3].
Relationship marketing strategies are not appropriate to all buyer-seller
interactions. They are most appropriate where purchases involve a high level of
risk and a relationship acts as a manager of risk exposure[4]. Relationships are
often a necessity where the stream of service benefits is produced and
consumed over a period of time or where they can reduce the transaction costs
associated with repeated purchase routines[5].
 To suppliers of services, the development of strong relationships helps to Using Neural
build loyalty from customers whose loyalty is challenged by competing Network
suppliers. Retaining existing customers rather than expensively seeking new Analysis
ones can have a major impact on profitability[6].
Although the increasing importance of relational as opposed to discrete
exchange has triggered considerable research into the quality of buyer-seller
relationships, measurement of the concept remains poor. Previous research has 33
produced conceptual models of the antecedents of relationship quality, or
quantified simple relationships based on one or two components at a time.
In reality, the components of relationship quality are complex, with
significant interaction between the contributory components. Attempts to
isolate a few of these components at a time have generally failed to recognize
interdependence and to give clear indications of the relative importance of each
factor in contributing towards a higher-order relationship quality construct.
Much of the weakness of previous research can be attributed to the use of
regression techniques which require a prior specification of input and output
relationship variables. A number of multivariate techniques, such as Canonical
Correlation, have been developed which do not presuppose relationships other
than to identify which are the dependent and independent variables. An
alternative approach – which is adopted in this article – is the use of neural
network analysis. Such a methodology does not require this prior knowledge,
since the network “learns” hidden relationships in data implicitly. Linear, non-
linear, interactions and multi-colinearity relationships are thus discovered and
automatically assimilated into a network of relationships. In the context of
buyer-seller relationships, the model is capable of learning the relationship
between a salesperson’s actions and customers’ perceptions of relationship
quality. The neural network is then able to map any variety of seller’s actions
and link them to a customer response (i.e. it predicts outcomes on the basis of
inputs).
This article describes an application of neural network analysis to the study
of relationship quality in the financial services sector, a sector which has seen
significant development of relationship marketing strategies. First, it outlines
previous studies of relationship quality, then develops a neural network to
analyse data from a survey of customers of financial services’ intermediaries.
The results of the neural network analysis are finally compared with those
obtained from a more traditional regression analysis.

Previous Studies of Relationship Quality

There has now been considerable research into the factors that hold buyers and
sellers together in an ongoing relationship. Emerging from general models of
buyer behaviour, a number of theoretical and empirically-based models have
been developed to explain the processes of interaction between buyers and
sellers, both in the industrial sector[7-10], and more recently for consumer
markets[11,12]. Studies of relationship quality have drawn heavily on the social
psychology literature of interpersonal relationships, for example in explaining
European trust[13,14] and conflict resolution[15,16]. Analogies have been drawn between
Journal buyer-seller relationships and relationships within families[17].
of Marketing The development of ongoing relationships between an organization and its
customers can involve a wide range of operational and marketing staff and
28,10 satisfactory delivery of a service has been seen as pre-requisite to the
development of a relationship[18,19]. However, particular attention has been
34 given to the relationships which develop between buyers and sales personnel.
For some low-contact services, such as financial services, customers’ most
important contact with an organization may be through its sales personnel.
Previous research into sales persons’ effectiveness has concentrated on a
static analysis of the behavioural, environmental and organizational factors
that influence performance. The relatively static nature of much of this analysis
has been followed by analyses which see the sales person as a dynamic
processor of information, analyses in which interaction between customers and
sales personnel results in the development of long-term relationships[12].
A number of studies have identified individual components of relationship
quality, using concepts and measurement devices used in social psychology. A
comprehensive model of relationship quality has been proposed by Lagace et
al.[20] which conceptualized two components of quality – trust in a salesperson
and satisfaction in the relationship so far. From the literature, a number of
antecedents of these components have been identified, including sellers’
customer orientation/empathy, sellers’ expertise, sellers’ ethics, the degree of
sales orientation shown by a salesperson, and the duration to date of the
relationship.
A number of studies have sought to conceptualize relationship satisfaction.
Three dimensions have been attributed to it by Crosby and Stevens[19]:
satisfactory interactions with personnel; satisfaction with the core service (the
extent to which a service satisfies customers’ needs), and satisfaction with the
organization. In a study of life insurance customers, satisfaction with the core
service was found to be closely related to satisfaction with the contact person
and the organization.
An important objective of relationship marketing strategies is the
development of trust, which has been seen as having a crucial function in a
relationship in allowing tensions to be worked out[14]. Its development results
in the exchange of promises being perceived by both buyer and seller as more
important than short-term transactional exchange. Trust facilitates joint
problem solving.
Some studies have sought to measure the extent to which sales personnel
exhibit customer orientation[21,22]. Sales personnel who are customer-oriented
“practice the marketing concept at the level of the individual salesperson and
customer”[21]. Such sales personnel are able to empathize with customers and
are concerned about satisfying their needs better than would their competitors,
in contrast to sales-oriented personnel who attempt to create demand for their
services with only a secondary regard for the needs of their customer. Saxe and
Weitz[21] have analysed customer orientation in terms of two factors:
“relations” and “ability to help”. The former refers to the abilities of sales Using Neural
personnel to develop long-term relationships with customers on the basis of Network
trust, co-operation and conflict resolution, while ability to help refers to “the Analysis
ability of salespeople to help their customers satisfy their needs”.
The opposite of a salesperson’s customer orientation is a sales orientation.
Many salespeople prefer to sell hard what they know best, rather than taking
trouble to identify customer needs[21]. A sales orientation may be present 35
where the salesperson fails to diagnose a clients’ product requirements[23] or
the processes by which the client wishes to evaluate alternatives[24]. Customers
may perceive a sales orientation as a form of pressure, and relationship
development may be inhibited by customers’ continuing suspicion that the
seller is paying too much attention to his or her own selling needs, rather than
to their needs as customers.
The inability of many customers properly to evaluate complex high-credence
goods and services can put them at the mercy of sales personnel. Without the
technical knowledge necessary to judge salespersons’ claims, buyers seek sales
personnel who act in an ethical manner. A preoccupation of sales personnel with
short-term goals may result in unethical behaviour which could subsequently
endanger the development of long-term buyer relationships[25]. The
importance of customers’ judgements of sales personnel’s ethics in evaluating
relationship quality has received much recent attention[20,29]. It has been
suggested that consumers’ assessment of a seller’s ethics are based on the
seller’s past ethical behaviour and their expectation of future ethical behaviour,
based on both personal and societal norms[29].
The effect of sales personnel’s levels of expertise on sales performance has
been researched extensively. Sellers’ expertise has had a number of elements
attributed to it including: their measurable technical knowledge; their ability to
demonstrate such knowledge and competence; proof that they are expert in
their field (e.g. through formal qualifications); and an explicit statement of
availability, ability and capacity to serve the customer[26]. Credibility,
reliability, responsiveness and an ability to get answers were seen as important
determinants of a salesperson’s competence by Hayes and Hartley[27], in
contrast to aggressiveness and persuasiveness, which detracted from it.
Finally, the duration of a relationship has been cited as a factor explaining
the quality of a relationship. This is particularly true in the development of
trust, for which Swan and Nolan[28] identify three stages of development. In the
first stage, there has been no opportunity for exploration of each parties’
credentials; therefore the level of trust between buyer and seller is at a
minimum. Once exchanges have occurred, trust development moves into the
second stage, in which the buyer has the opportunity to check the actual
delivery of a service against the promises that the seller has made. Trust is
established in the third stage, where the perceived performance matches the
promised performance.
European Neural Network Approach to Measuring Relationship Quality
Journal Previous studies of the factors contributing to relationship quality have
of Marketing produced mixed results in terms of the emerged constructs and the levels of
significance obtained. Furthermore, these have tended to give little indication of
28,10 the relative importance of each construct in contributing to overall relationship
quality or the interaction between underlying factors. Where regression
36 analysis has been used, models can only be run by a prior specification of the
relationship between dependent and independent variables. By limiting a model
to this set of relationships, other, possibly statistically significant, relationships
may be missed.
Many of the constructs which have emerged from previous studies are
interdependent: for example ethical behaviour contributes towards trust and
relationship satisfaction, while trust itself can be seen as contributing towards
the assessment of sales personnel’s ethical credibility. It would be more
appropriate to see these constructs in terms of an interdependent network of
influencers of relationship quality.
In analysing ongoing buyer-seller relationships, neural network analysis has
three primary advantages over regression analysis:
(1) Neural network development does not require knowledge of the
underlying relationships between the input and output variables (both
linear and non-linear), since the network “learns” relationships hidden in
the data. These complex relationships are discovered and automatically
assimilated into the weights connecting the nodes of the network. These
weights contain the “learned information” from the network training
phase and are analogous to regression coefficients.
(2) The associative abilities of neural networks make them more robust to
missing and inaccurate data, since the knowledge of relationships
between variables is distributed across numerous network connections.
Regression, on the other hand, cannot tolerate missing data and works
poorly with inaccurate data since all relationship knowledge is stored in
a single beta coefficient.
(3) Neural networks’ performance is not diminished by the multi-collinearity
problem of regression analysis. Non-standard conditions, violations of
assumptions, high influence points, and transformations can all be
handled by the neural network model.
As well as learning the relationship between a salesperson’s actions and
customer’s reactions, the neural network approach to predicting satisfaction
and trust also provides the user with the ability to identify factors which have a
significant impact on the customer’s perception of the salesperson. In this
manner, the neural network is both a predicting tool and a factor-screening tool.
There are two principal phases in neural network analysis: “learning” and
“predicting.” During the learning, or training, phase the network “learns” by
adjusting the weights between its nodes. The input data must be presented to
the network many times. Data are split into two files. The first is used to train Using Neural
the network and the second file (the recall set) is used as a test of the network’s Network
predictive ability. During the training phase the network weights are “saved” at Analysis
many intervals and tested to see how well the network can predict outcomes
using the weights it has learned up to that point. Following thousands of
iterations, convergence occurs and the best weights for each element of the
network can be derived. 37

Methodology
Sample Frame
The sample for this study was drawn from customers of financial services’
intermediaries. The financial services sector presents a good opportunity to
study buyer-seller relationships and the sector has been at the forefront of the
development of relationship marketing strategies, for a number of reasons.
Customers’ perception of the riskiness of financial services purchases can allow
a relationship to be used as a means of managing their perceived risk exposure.
The longevity of many financial services entails some form of relationship
continuing to exist between an organization and its customers and the sales
personnel are often the only people within the organization with whom a
customer will have dealings. Relationships are attractive to buyers because high
transaction costs can occur where a portfolio of financial services is transferred
from one provider to another. Finally, the intangible and often incomprehensible
nature of financial services encourages buyers to judge the ethical credibility of
sales personnel.

Instrument Development
A structured questionnaire comprising three sections was developed for this
study. The first group of questions related to the demographic and socio-
economic characteristics of respondents; for example, their age, income level,
gender and race. The second group of questions sought information about the
behaviour of respondents in relation to financial services; for example, the types
of financial services that they had purchased (e.g. stocks, bonds, etc.) from a
financial broker and the length of their relationship with the broker. The final
group of questions sought to elicit respondents’ attitudes towards their broker.
For this, a set of questions was developed based on the SOCO scale items[21]
and other scales. The SOCO scale has been used previously to measure the
extent of personnel’s sales orientation and customer orientation, and a number
of studies have replicated its results[22].
Seven emerged constructs were used in the neural network analyses:
(1) the level of sales orientation/pressure the customer perceived in the
broker (selling);
(2) the perceived level of the broker’s customer orientation (customer);
(3) the perceived ethical standards of the broker (ethics);
European (4) the broker’s perceived expertise (expertise);
Journal (5) the customer’s trust in the broker (trust);
of Marketing (6) the relationship’s duration (duration);
28,10 (7) the customer’s overall satisfaction (satisfaction).
Except in the case of relationship duration, response categories ranged from 7
38 “strongly agree” to 1 “strongly disagree” (for relationship duration, response
categories ranged from less than a year to three years and more). The selling,
customer and ethics scales were drawn from items of the SOCO scale. Some of
the items were worded negatively to reduce response bias and the scores of
these items reversed in the data analysis. Simple unweighted summations of the
scores of the scales were used in the artificial neural network analyses. The
reliability of the emerged constructs are shown in Table I. The duration,
expertise, satisfaction and trust scales were indicated by single-item questions.

Data Collection
A telephone survey was conducted in 1992 in four south-eastern cities of the
United States, using a randomly selected sample based on telephone numbers.
Interviewers were asked to interview the adult member of the household who
was most involved in the purchase of financial services. A pilot survey had
achieved an acceptable level of response. The problems of using telephone
surveys to collect personal information were recognized, and respondents were
asked to answer only those questions that they felt comfortable with. Out of
1944 interviews, 564 usable questionnaires were available (a response rate of 29
per cent). A total of 280 callbacks were made for verifications.

Development of the Neural Network

A neural network was developed using the InstaNet submenu in NeuralWorks
Professional II. The standard back propogation configuration suggested by
Rumelhart[30] was used. The heteroassociative neural network uses
generalized delta rule learning with five nodes in the input layer, 12 nodes in the
hidden layer and two nodes in the output layer. The input layer had one node for
each of the antecedent constructs described above (expertise, duration, selling,
customer and ethics).
The output layer had two nodes for relationship quality components:
(1) customer satisfaction with their relationship (satisfaction);
(2) customer’s trust in the seller (trust).
The number of nodes in the hidden layer is based on the rule of thumb that a
good guess is roughly twice the number of nodes in the input layer plus two. A
conceptual model of the neural network is shown in Figure 1.
A total of 564 survey responses were available and these were randomly split
into two files, each of 282 observations. The first file was used to train the
network and the second file (the recall set) was used as a test of the network’s
 Reliability: Using Neural
item-to-total Network
Constructs/scale items correlation Analysis
Selling
This salesperson applies sales pressure even though he/she knows the
product is not right for me 0.76 (0.59)
The salesperson implies that things are beyond his/her control when in
39
reality they are not 0.64 (0.47)
The salesperson spends more time trying to persuade than trying to discover
my product needs 0.69 (0.60)
This salesperson agrees with me only to please me 0.58 (0.45)
This salesperson is always looking for ways to apply pressure to make me buy 0.55 (0.54)
Eigenvalue 1.80
Percentage of variance 10.0
Coefficient alpha 0.76
Customer
This salesperson gives accurate representations of what the product will
do for me 0.51 (0.48)
This salesperson tries to get me to discuss my product needs 0.66 (0.44)
This salesperson tries to help me achieve my financial objectives 0.66 (0.61)
This salesperson tries to figure out what my financial needs are 0.75 (0.62)
This salesperson has my best interests as a customer in mind 0.57 (0.62)
This salesperson takes a problem-solving approach in selling to me 0.58 (0.49)
This salesperson recommends the product best suited to solve my
financial problems 0.68 (0.61)
This salesperson tries to find out which products would be most helpful
to me as a customer 0.60 (0.56)
Eigenvalue 6.19
Percentage of variance 34.4
Coefficient alpha 0.82
Ethics
This salesperson stretches the truth in the product representations 0.62 (0.48)
This salesperson talks first and listens to my needs later 0.79 (0.46)
This salesperson tries to convince me to buy more than I need 0.56 (0.58)
This salesperson paints rosy pictures of the products to make them sound
as good as possible 0.58 (0.55)
This salesperson makes recommendations based on what he thinks he can
sell, and not on the basis of long-term satisfaction 0.55 (0.48)
Eigenvalue 1.12
Percentage of variance 6.2
Coefficient alpha 0.75
Single-item scales
Experience
This salesperson is knowledgeable in financial services
Satisfaction
I am satisfied with the quality of the relationship with this salesperson Table I.
Trust Reliability Analysis of
This salesperson is trustworthy Scale Items of Emerged
Constructs
European
Journal Selling Customer Ethics Duration Expertise

of Marketing Input layer

28,10

40
Hidden layer

Output layer
Figure 1.
Conceptual Model of Trust Satisfaction
the Neural Network

predictive ability. During the training phase the network weights were “saved”
at many intervals and tested to see how well the network was able to predict the
customer’s satisfaction and trust based on the weights it has learned up to that
point.
“Prediction” involves two separate measures – customer satisfaction and the
customers’ trust in their broker. The difference between the predicted level of
satisfaction and the actual observed level is calculated for every data point in
the recall set. For instance, if the neural network predicted the level of
satisfaction to be 4.3 and the actual observed satisfaction is 5.2, then the
absolute difference for that one observation is 0.9. This absolute difference is
averaged over all data points to provide an overall measure to compare between
networks. The same is done for the trust variable. The best performance for
predicting satisfaction for the network is an average difference of 0.5760 when
the network is trained for 400,000 replications. The best performance for
predicting trust for the network is an average difference of 0.5927 when the
network is trained for 400,000 replications. The 282 data points were shown to
the network around 1,418 times each to get the best performance possible. It
should be reiterated that the network was predicting for 282 data points not
used in network training.

Validation of the Neural Network

To compare the performance of an artificial neural network to linear regression,
a regression equation was computed from the same data used for training the
neural network. Two separate regression equations are necessary because of
the two different output variables – satisfaction and trust. The equations were
then used to predict satisfaction and trust from the same recall data set used to
evaluate the neural network. The performance of each approach was tested to Using Neural
determine which tool is the better predictor. Using the SAS REG procedure, the Network
least squares multiple regression model computed for predicting customer Analysis
satisfaction was:
y = 3.120 + 0.3570 × expertise – 0.0333 × duration
– 0.2250 × pressure + 0.3174 customer – 0.1362 ethics 41
The multiple regression model’s best performance is an average difference of
0.6098 from the actual rating for customer satisfaction, whereas it was noted
above that the neural network’s performance was 0.5760. To test the
significance of the difference in predictive ability of the two models, a matched
sample pairs statistical procedure was used to test the hypothesis that the mean
difference between the models is zero (i.e. there is no difference between the
predictive abilities of the two models). The test statistic for the t-test is –1.69.
The probability of a greater absolute value for this statistic under the null
hypothesis that the population mean is zero (there is no significant difference
between the predictive ability of the two models) is 0.0928. This p-value is
evidence that the neural network outperforms the regression model for
predicting customer satisfaction.
The least squares multiple regression model computed for predicting
customer trust is:
y = 4.2509 + 0.3132 × expertise + 0.0364 × duration
– 0.3526 × pressure + 0.1599 customer – 0.1252 ethics
The multiple regression model’s best performance is an average difference of
0.6459 from the actual rating for customer satisfaction, compared to the neural
network’s performance which was 0.5927. A matched sample pairs statistical
procedure was again used to compare the predictive abilities of the two
approaches. The test statistic for the t-test was –2.42 and the probability of a
greater absolute value for this statistic under the null hypothesis that the
population mean is 0 is 0.0160. Again, the small p-value is evidence that the
neural network outperforms the regression model for predicting customers’
level of trust in their broker.

Analysis of the Relative Importance of Factors Contributing to Satisfaction

and Trust
The contribution of each of the input factors to relationship quality was
determined in the following way.
First, if the neural network’s ability to predict is observed to be unchanged by
removing a factor, the factor should be “trimmed” (left out of the process).
Second, when the neural network’s predictive ability is significantly reduced by
eliminating a single factor, the factor is contributing unique and valuable
information and should be kept. If a factor is critical in determining the level of
customer satisfaction and/or trust, an investigation is warranted to determine
why the factor’s influence is high. Third, factors having a negative impact on
European network performance, actually hindering the network’s ability to predict by
Journal presenting confounding information, should be excluded.
of Marketing
Results
28,10 A procedure analogous to step-wise regression was used to investigate the
significance of each determinant of customer satisfaction and trust, the two
42 output components of relationship quality.

Impact of Seller’s Actions on the Buyer’s Perceived Level of Satisfaction

To investigate the importance of each of the factors – expertise, duration,
selling, customer and ethics – to satisfaction, the following six-step procedure
was used:
(1) A new neural network was constructed with one less input processing
element using the same paradigm as the full model (learning rule,
transfer function, number of nodes in the hidden layer, etc.).
(2) A column of data was eliminated, corresponding to a single factor from
the training data set and recall data set.
(3) The new network was trained using the “trimmed” file.
(4) A recall was performed using the trimmed recall data set.
(5) The performance of the trimmed network was computed.
(6) Each of steps 2-5 were repeated for each of the five factors using the
same basic model as step 1.
Initially each network was trained for 800,000 replications, pausing at intervals
of 50,000 replications to save the network weights. The decision to end the
training process was based on the convergence of network learning as before.
The optimum performance of each network at the end of the training process
(minimum average deviation from optimal cost) is used to compare the
difference of networks. In order to determine whether the difference in
predictive ability of the six networks (the full model with all five factors and the
five models with one factor trimmed from each) is significant, a randomized
block design test was used. The treatments are the elimination of individual
factors, while the blocks are the set of survey results. Since there are six models
to test, a two-way analysis of variance (ANOVA) without interaction was
considered the most appropriate statistical test (Table II). All six distributions
exhibit very similar non-normal characteristics. The result of a test for
normality using PROC UNIVARIATE is a p-value < 0.0001. Since the normality
assumption is violated, it was necessary to use a technique to test for
homogeneous variance that does not rely on normality. A rank transformation
approach[31] was used to deal with the normality problem. This procedure is a
valid, powerful, and easily implemented non-parametric alternative to the
(parametric) ANOVA approach which does not require homogeneous variance
and alleviates the need for a test of homoscedasticity. A non-parametric
 Using Neural
ANOVA for variable satisfaction
Source DF Sum of squares Mean square F-value Pr > F
Network
Model 286 314,485,154.76 1,099,598.44 17.32 0.0001
Analysis
Error 1,405 89,178,341.74 63,472.13
Total 1,691 403,663,496.50
43
Source DF ANOVA SS Mean square F-value Pr > F
Block 281 311,952,284.67 1,110,150.48 17.49 0.0001
Group 5 2,532,870.10 506,574.02 7.98 0.0001

ANOVA for variable trust

Source DF Sum of squares Mean square F-value Pr > F
Model 286 303,448,958.32 1,061,010.34 14.88 0.0001
Error 1,405 100,214,583.18 71,327.11
Total 1,691 403,663,541.50

Source DF ANOVA SS Mean square F-value Pr > F

Block 281 300,724,173.58 1,070,192.79 0.10 0.0001 Table II.
Group 5 2,724,784.74 544,956.95 7.64 0.0001 ANOVAs for Variables
Satisfaction and Trust

analysis was created by transforming the data into ranks and then using the
ranks in a parametric ANOVA procedure.
In order to compare the predictive ability of different networks, a file was
created containing one observation for each block within each treatment. The
deviations from optimum for all five trimmed networks as well as the full
network were used.
The two-way ANOVA analysis revealed a significant difference between the
predictive ability of at least one of the six models (treatments) and at least one
block. The F-value of 17.32 is strong evidence (p-value < 0.0001) of a treatment
effect (the treatment being the elimination of one factor from the full model).
The significant F-test suggests that at least one of the factors included in the
study had a significant impact on the model’s predictive ability. The F-test for
the blocking factor, the different survey results, also has a significant impact on
predictive ability. The F-value of 17.49 is strong evidence (p-value < 0 .0001) that
blocking is important.
In order to compare the performance of each model with all other models, the
Walker-Duncan K-ratio T-test procedure was used on the rank transformed
data. As a result of the use of the rank transformed data, the test is more robust
and has more power[31] than a test using the raw data from non-normal
populations. The results of the test are shown in Table III. In this table, the
networks are ordered according to the arithmetic mean of differences from
optimum.
European
Rank transformation one-way analysis for variable satisfaction
Journal Walker-Duncan K-ratio T-test for variable: RDEV
of Marketing Alpha = 0.1, df = 1,405, MSE = 63472.13
28,10 Critical value of T = 1.85993
Minimum significant difference = 39.462
44 Walker grouping Mean N Group
A B 915.00 282 Selling
C B 858.56 282 Expertise
C B
C B 856.16 282 Customer
C B
C B 835.83 282 Ethics
C B
C B 826.39 282 Duration
C B
C B 787.07 282 (Full model)

Rank transformation one-way analysis for variable trust

Walker-Duncan K-ratio T-test for variable: RDEV
Alpha = 0.1, df = 1,405, MSE = 71327.11
Critical value of T = 1.86641
Minimum significant difference = 41.978
Walker grouping Mean N Group
C A 881.07 282 Duration
C A
C A 866.01 282 Selling
C A
C A 864.57 282 Customer
C A
C A 855.21 282 Ethics
Table III. C A
Rank Transformation C A 853.06 282 Experience
One-way Analyses for B B 759.09 282 (Full model)
Variables Satisfaction
and Trust

The most notable result is that the model with all five factors included
performed significantly better than the models with one missing factor, except
the model with duration missing. This indicates that all factors except duration
are providing some information important to determining customer
satisfaction. The relative importance (ranking) of each factor, from most
important to least important, is as shown in Table IV.
A second observation is that selling orientation is significantly more
important than any other factor included in the study.
Impact of Seller’s Actions on Buyer’s Perceived Level of Trust Using Neural
The same procedure was used to assess the importance of individual Network
determinants on the customers’ trust in their brokers. A file containing the Analysis
difference between the actual trust rating and the predicted trust rating for the
full model and for the five models with one factor left out was used.
The results of the ANOVA procedure for customer trust are shown in Table
II. The two-way ANOVA analysis revealed a significant difference between the 45
predictive ability of at least one of the six models (treatments) and at least one
of the blocks. The F-value of 14.88 is strong evidence (p-value < 0.0001) of a
treatment effect (the treatment being the elimination of one factor from the full
model). The significant F-test suggests that at least one of the factors included
in the study has a significant impact on the model’s predictive ability. The F-
value of 15.00 is strong evidence (p-value < 0.0001) that blocking is important.
Duncan’s multiple range test was again used on the rank transformed data and
the results are shown in Table II.
The key observation from the test is that all factors are contributing
information significant for determining customer trust. The relative impor-
tance (ranking) of each factor from most important to least important is as
shown in Table V.
The ranking of the factors for customer trust, however, is different from the
customer satisfaction ranking.

Conclusions
Many conceptual models have been developed in the attempt to explain the
processes by which salespeople develop ongoing relationships with their
customers; but there have been relatively few attempts to measure and quantify
the concept of relationship quality.
This study has indicated the usefulness of a research methodology
appropriate for the analysis of complex ongoing buyer-seller relationships. In a

(1) Salesperson’s sales orientation

(2) Salesperson’s expertise
(3) Salesperson’s customer orientation
(4) Salesperson’s ethics Table IV.
(5) Relationship duration Ranking of Factors for
Customer Satisfaction

(1) Relationship duration

(2) Salesperson’s sales orientation
(3) Salesperson’s customer orientation
(4) Salesperson’s ethics Table V.
(5) Salesperson’s expertise Ranking of Factors for
Customer Trust
European comparison of regression analysis and neural network analysis, the latter was
Journal significantly better able to explain the relationship between two indicators of
of Marketing relationship quality (relationship satisfaction and trust) and five of its
antecedents (level of salesperson’s customer orientation, level of salesperson’s
28,10 sales orientation, salesperson’s ethics, salesperson’s expertise and the duration
to date of the relationship). The neural network analysis has been able to show
46 that each of these factors has a statistically significant effect on the level of
perceived relationship quality.
Relationship satisfaction has been shown to be most influenced by the level
of sales orientation customers perceive in their salesperson. A high level of
pressure was negatively related to satisfaction, whereas expertise – which was
ranked the second most important factor – was positively related to
satisfaction.
In the case of trust, the primary ranking of relationship duration confirms
theories of trust development which see its development proceeding through a
number of stages in which trust only develops after the time has elapsed for a
buyer to check out the seller’s ability to honour sales promises.
This study has been restricted to customers of financial services
organizations, and replication studies would be useful. While it is quite likely
that the methodology is appropriate to a wide range of buyer-seller situations,
the input and output constructs may not be of general applicability. It may be
the case, for example, that ethical credibility is perceived as being an important
sought characteristic of financial sales personnel (because customers’ ability to
evaluate their product is low), but it may be of less relevance where a
salesperson is dealing with a tangible good.
Neural network analysis is a relatively new analytical tool which has only
recently begun to find marketing applications. The results of this study suggest
that it may offer superior solutions to a wide range of marketing prediction
problems characterized by complex and interdependent, causative variables.
The technique has been used in direct marketing to develop a profile based on
customer characteristics of the most profitable type of customer. The technique
would also appear to have potential for predicting consumer choice and the
success of site locations.
While this research has offered further insights into the complex factors
underlying buyer-seller relationships, further research would be useful in order
to model alternative networks. While the networks used in this analysis used
only those inputs which had been most frequently cited in the literature, it
would be useful to build alternative networks which include factors such as
mutual disclosure of information which some research has suggested may
contribute towards relationship quality.

References
1. Levy, S. and Zaltman, G., Marketing, Society and Conflict, Prentice Hall, Englewood Cliffs,
NJ, 1975.
 2. Gronroos, C., “Defining Marketing: A Market-Oriented Approach”, European Journal of Using Neural
Marketing, Vol. 23 No. 1, 1989, pp. 52-60.
3. Christopher, M., Payne, A. and Ballantyne, M., Relationship Marketing, Heinemann,
Network
London, 1991. Analysis
4. Lovelock, C.H., “Classifying Services to Gain Strategic Marketing Insight”, Journal of
Marketing, Vol. 47, Summer 1983, pp. 9-20.
5. Marshall, R.A.B., Palmer, B.A. and Weisbart, S.N., “The Nature and Significance of Agent- 47
Policyholder Relationships”, CLU Journal, Vol. 33, January 1979, pp. 44-53.
6. Reichheld, F.F., “Loyalty Based Management”, Harvard Business Review, Vol. 71 No. 2,
1990, pp. 64-73.
7. Ford, D., “The Development of Buyer-Seller Relationships in Industrial Markets”, European
Journal of Marketing, Vol. 14, 1981, pp. 339-53.
8. Hakansson, H., International Marketing and Purchasing of Industrial Goods, IMP Group,
John Wiley & Sons, New York, NY, 1982.
9. Frear, C.R. and Metcalf, L.E., “Marketing and Purchasing of Industrial Goods: A Study of
the US Commercial Aircraft Engine Industry”, in Turnbull, P. and Paliwoda, S. (Eds),
Research Developments in International Marketing, Manchester School of Management,
UMIST, Manchester, 1988, pp. 198-221.
10. Jackson, B., Winning and Keeping Industrial Customers: The Dynamics of Customer
Relationships, Lexington Books, Lexington, MA, 1985.
11. Dwyer, F.R., Schurr, P.H. and Oh, S., “Developing Buyer and Seller Relationships”, Journal
of Marketing, Vol. 51, April 1987, pp. 11-27.
12. Crosby, L., Evans, K.R. and Cowles, D., “Relationship Quality in Services Selling: An
Interpersonal Influence Perspective”, Journal of Marketing, Vol. 54, July 1990, pp. 68-81.
13. Pruitt, D.G., Negotiation Behaviour, Academic Press Inc., New York, NY, 1981.
14. Sullivan, J. and Peterson, R., “Factors Associated with Trust in Japanese-American Joint
Ventures”, Management International Review, Vol. 22, 1982, pp. 33-40.
15. Thomas, K.H., “Conflict and Conflict Management”, in Dunnette, M.D. (Ed.), Handbook of
Industrial and Organisational Psychology, Rand McNally, Chicago, IL, 1976, pp. 889-935.
16. Assael, H., “Constructive Role of Interorganisational Conflict”, Administrative Science
Quarterly, Vol. 14, December 1969, pp. 573-82.
17. Levitt, T., The Marketing Imagination, The Free Press, New York, NY, 1983.
18. Crosby, L.A., “Maintaining Quality in the Service Relationship”, in Brown, S.W. and
Gummesson, E. (Eds), Quality in Services, Lexington Books, Lexington, MA, 1989.
19. Crosby, L.A. and Stevens, N., “Effects of Relationship Marketing on Relationship
Satisfaction, Retention and Prices in the Life Insurance Industry”, Journal of Marketing
Research, Vol. 24, November 1987, pp. 404-11.
20. Lagace, R.R., Dahlstrom, R. and Gassenheimer, J.B., “The Relevance of Ethical Salesperson
Behaviour on Relationship Quality in the Pharmaceutical Industry”, Sales Management,
Vol. 4, Fall 1991, pp. 39-47.
21. Saxe, R. and Weitz R.A., “The SOCO Scale: A Measure of the Customer Orientation of Sales
People”, Journal of Marketing Research, Vol. 19, August 1982, pp. 340-51.
22. Michaels, R.E. and Day, R.L., “Measuring Customer Orientation of Salespeople: A
Replication with Industrial Buyers”, Journal of Marketing Research, Vol. 22, November
1985, pp. 443-6.
23. Churchill, G.A. Jr, Ford, N.M., Hartley, S.W. Jr and Walker, O.C. Jr, “The Determinants of
Salesperson Performance: A Meta-Analysis”, Journal of Marketing Research, Vol. 22, May
1985, pp. 103-18.
European 24. Symanski, D.M., “Determinants of Selling Effectiveness: The Importance of Declarative
Knowledge to the Personal Selling Concept”, Journal of Marketing, Vol. 52, January 1988,
Journal pp. 64-77.
of Marketing 25. Ebejer, J.M. and Morden, M.J., “Paternalism in the Marketplace: Should a Salesman be his
28,10 Buyer’s Keeper?”, Journal of Business Ethics, Vol. 7, 1988, pp. 337-9.
26. Swan, J.E., Trawick, I.F. and Silva, D., “How Industrial Salespeople Gain Customer Trust”,
Industrial Marketing Management, Vol. 14, August 1985, pp. 203-11.
48 27. Hayes, H.M. and Hartley, S.W., “How Buyers View Industrial Salespeople”, Industrial
Marketing Management, May 1989, pp. 73-80.
28. Swan, J.E. and Nolan, J., “Gaining Customer Trust: A Conceptual Guide for the
Salesperson”, Journal of Personal Selling and Sales Management, Vol. 5, November 1985,
pp. 39-48.
29. Whalen, J., Pitts, R.E. and Wong, J.K., “Exploring the Structure of Ethical Attributions as a
Component of a Consumer Decision Model: The Vicarious Versus Personal Perspective”,
Journal of Business Ethics, Vol. 10, 1991, pp. 285-93.
30. Rumelhart, D. and McClelland, J., Parallel Distributed Processing, MIT Press, Cambridge,
MA, 1986.
31. Perry, L.G. and Cronin, T.P., “A Note on Rank Transformation Discriminant Analysis: An
Alternative Procedure for Classifying Bank Commercial Paper Ratings”, Journal of
Banking and Finance, December 1986, pp. 605-10.