The principal’s and agents’ contribution to customer loyalty within an integrated service distribution channel : An external perspective

A large number of service corporations are configured with headquarters that determine the major principles of operation (services, pricing, marketing and advertising) and regional salesforces that are responsible for acquiring new customers and catering to the needs of existing customers. This separation of work within the corporation opens up a principal‐agency approach to the service production and delivery. Develops a conceptual model to examine the individual and joint work done by headquarters and regional salesforces in creating customer loyalty. Uses an external dyadic channel perspective ‐ i.e. channel and customer. A relationship between the channel and the customer is hypothesized to be one where customers perceive the regional salesforces to be their focal point to the company. Proposes and empirically tests a conceptual model based on data from 1,400 individual customers of a Norwegian life insurance company. Analyses data using structural equation modelling. Estimates headquarters’ and regional salesforces’ contribution to customer satisfaction and loyalty on the attribute level, based on path coefficients. Concludes by claiming that headquarters’ contribution to customer loyalty is more significant than that of the regional salesforces. These findings challenge headquarters’ assumptions about improving customer relations through regional salesforces. From a managerial perspective, information regarding channel members’ individual and joint contribution to customer loyalty is vital with regard to resource allocation to improve customer satisfaction and thus customer loyalty.