Research On The Influence Of Salesperons’ Guanxi Investments On Customer Loyalty And The Moderation Effect Of Employees’ Brand-Building Behaviors In The Direct-Selling Industry

With the intense competition in the market, firms have increasingly paid attention to customer loyalty as a way to cope with ambiguity and uncertainty. However, the construct "customer loyalty" as a multilevel loyalty includes both customer loyalty to the selling firm and to the specific salesperson. On the one hand, in the direct-selling industry, salespeople make large numbers of guanxi investments to capture customer loyalty. For example, they spare no effort to establish personal relationship with customers by ganqing investment, renqing, xinyong building and mianzi management, which leads to customer loyalty more to the salesperson than to the selling firm. On the other hand, salespeople as the pipeline between the selling firm and customers play an important role in connecting customers and the firm. Then, how will guanxi investments influence customer loyalty to the specific salesperson and the selling firm respectively and are there possibilities to make loyalty transfer?Drawing on the construct of interorganizational relation-specific investments (RSI) from transaction cost economics and relational exchange theory, we put up with interpersonal RSI-guanxi investments, including ganqing investment, renqing investment, xinyong building and mianzi management. We tested our theoretical model in the context of the Chinese direct selling industry. Using paired data from salespersons and customers, we found that guanxi investments made by the salespersons can promote both kinds of loyalties and individual loyalty and firm loyalty is positively related. Moreover, we demonstrated that loyalty transfer can be strengthened by employees’brand-building behaviors.Our findings help us further understand the construct of RSI and make contributions to the study on guanxi. We discuss the implications for managers on the loyalty transfer and the benefits of brand-building behaviors, and offer suggestions for ways to incorporate this knowledge into managerial strategies and practice.