The Moderating Role of Dependence in Relationship Marketing: an Example from the Wealth Management Industry

This paper examines the moderating role of customer dependence in relationship marketing. Data were obtained from a sample of 289 wealth managers. The findings indicate that a relationship model is more adapted in the high dependence context than in the low dependence context in which a transactional model is more suitable. Dependence is regarded by various researchers as central in explaining relationships. However, despite this recognition, the direct effect of dependence on trust and commitment has been shown to be relatively small. Such a small effect may be the result of a wrong specification of the effect of dependence, which may not be a direct effect, but a moderating one. In this paper, we thus hypothesize and empirically test the moderating effect of dependence. More specifically, we propose a moderating effect of dependence on the relationship between trust-building factors, such as a salesperson’s characteristics and the characteristics of the relationship and the perceptions of quality and satisfaction, as well as on the relationship between perceived quality and satisfaction. These moderating effects are tested within an extended relationship model including trust, commitment, and relationship outcomes. We test these hypotheses in the context of the relationship between wealth managers and financial analysts, where the wealth managers’ dependence is exacerbated by the intangible nature and the credence properties of the financial analysts’ services. The results of the study should provide useful insight into how dependence can be incorporated into customer relationships management by service firms. By better understanding the effects of dependence, managers can take steps to develop better relationships with their customers, as well as helping them to understand when a transactional approach would be more suitable. For further information contact: Olivier Furrer Nijmegen School of Management Radboud University of Nijmegen P.O. Box 9108 6500 HK Nijmegen, The Netherlands Phone: (+31 24) 361-3079 Fax: (+31 24) 361-1933 E-mail: [email protected] THE MODERATING ROLE OF DEPENDENCE IN RELATIONSHIP MARKETING: AN EXAMPLE FROM THE WEALTH MANAGEMENT INDUSTRY This paper examines the moderating role of customer dependence in relationship marketing. Survey data were obtained from a sample of 289 Swiss wealth managers. The findings indicate that certain characteristics of suppliers, such as expertise and responsiveness, have a stronger effect on perceived quality and customers’ satisfaction under a high level of dependence more than under a low level of dependence. They also indicate that perceived quality has weaker effect on satisfaction under a high level of dependence. Managerial implications of managing quality, satisfaction, trust, and commitment in dependence relationships are also discussed.