Do salespeople matter in competitive tenders?

Abstract

Organizational buyers are increasingly employing competitive tenders with objective buying criteria to mitigate the influence of personal relationships with suppliers and reduce the overall cost of buying. This paper investigates the role of salespeople’s relationships with buyers (i.e., purchasing managers) and how they affect supplier selection in such contexts. Drawing on data from 428 tenders across different buying organizations, this study shows that the quality of the salesperson’s relationship with the buyer influences the buyer’s evaluation of the tender proposal, which, in turn, affects supplier selection. Thus, the results support an indirect effect of salesperson relationship on supplier selection even in a tender context. In addition, the results indicate that the effect of a salesperson’s relationship on buyer’s proposal evaluation is contingent on the comprehensibility of suppliers’ proposals and buyer’s product knowledge. These results have significant theoretical and managerial implications for both buyers and suppliers in business-to-business (B2B) tender contexts.

Keywords:

• organizational buying behavior
• formal bidding
• competitive tenders
• sales management
• salesperson relationship quality
• proposal evaluation
• supplier selection

Declaration of interest

No potential conflict of interest was reported by the authors.

Notes

1 The phenomenon of competitive tenders has also been referred to as formal bidding and formal competitive bidding (e.g., Edelman 1965; Milgrom and Weber 1982). Because competition between vendors is stressed, we prefer the term competitive tender but use it interchangeably with tender in this research (see Jap 2002). We provide a more detailed discussion of key characteristics of competitive tenders in the conceptual framework.

2 Note that Doney and Cannon (1997) focused on trust whereas we focus on relationship quality, which includes trust, commitment, and satisfaction. Therefore, it is not an exact replication of Doney and Cannon (1997).

3 We acknowledge that this decision, while supporting face validity, reduces the internal consistency of the scale. To check whether the decision to keep the item may affect our results, we recalculated the moderation using the two-item solution and find that effects are consistent in direction and strength.

1 The scale anchors were “very low” (1) to “very high” (7).

2 The scale anchors were “strongly disagree” (1) to “strongly agree” (7).

3 (R) indicates a reversed item.