The Theory Customer Intimacy PDF

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TH E TH E O R Y O F C U ST O M E R INTIM ACY: T O W A R D S AN
U N D E R ST A N D IN G O F RELA TIO N SH IP M A R K E T IN G
IN A PR O FE SSIO N A L SERV ICE SE T T IN G
by
N IC O L E PO N D ER H O FFM A N
A D ISSER TA TIO N
Subm itted in partial fulfillm ent o f the requirem ents for the degree
o f D octor o f P hilosophy in the D epartm ent o f M anagem ent
and M arketing in the G raduate School o f
T he U niversity of A labam a
T U S C A L O O SA , ALA BA M A
2001
R ep ro d u ced with p erm ission o f the copyright ow ner. Further reproduction prohibited w ithout p erm ission.
UM! Number: 3027353
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Subm itted by Nicole Ponder H offm an in partial fulfillm ent

o f the requirem ents for the degree o f D octor o f Philosophy specializing in M arketing.
A ccepted on behalf o f the Faculty o f the Graduate School by the
dissertation com m ittee:
Sharon E. B eatty, Ph.D.
s D. Leeper, Ph:
RoberE*MT M orsanV h.D
Darryl L
Carl E. Ferguson, 94., Ph.D.

Chairperson
Ronald E. D ulek, Ph.D .

Department C hairperson
Date
Ronald W. R ogers, Ph.D.
Dean o f the G raduate School
Date
ii
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ACKNOWLEDGMENTS
M any people helped in m aking this dissertation a reality. I w o u ld first like to
thank my dissertation com m ittee for their support throughout this research project. My
chairperson, C arl Ferguson, deserves special thanks, as he m entored m e through this
process w ith great patience. His direction and encouragem ent w ere invaluable. Sharon
Beatty certainly w ent beyond the call o f duty as both com m ittee m em b er and doctoral
coordinator: I am deeply indebted to her for her guidance. Both C arl and Sharon have
taught me that w ith determ ination and persistence, any goal can be realized. I also thank
Rob M organ. Jim Leeper, and Darryl W ebb for their insights and assistan ce in
com pleting this dissertation.
Special thanks m ust also be extended to my friends and fellow students at The
University o f A labam a. I owe m uch gratitude to Bev Brockman, w ho guided me through
what can only be called very challenging tim es. Thanks also goes to C huck Viosca and
Zach Finney; I co u ld n t have asked for better colleagues as we w ent through this process
together. A nd a big "thank you" also goes to Jason Lueg. w ithout w hom this dissertation
may have never been com pleted. His encouragem ent and m oral su p p o rt show ed me that
perseverance is the key to success.
Dr. M orris M ayer deserves special thanks for his encouragem ent throughout my
tenure at The U niversity. From beginning to end, his words inspired me to pursue and
realize this dream .
Last, but not least, I would like to thank my parents, Gail and Patrick, who gave
me the encouragem ent and confidence I needed from day one. T hey have always
encouraged m e to pursue my educational goals, and for that I am fo rev er grateful.
iii
CONTENTS
A C K N O W L E D G M E N T S.........................................................................................
iii
LIST O F T A B L E S ........................................................................................................
vii
LIST O F F IG U R E S ......................................................................................................
ix
A B S T R A C T ...................................................................................................................
C H A PT E R 1: IN T R O D U C T IO N ............................................................................
S tatem ent o f the P roblem ....................................................................................
.5
Purpose and C ontribution o f S tu d y ..................................................................
O rganization o f the D issertation.......................................................................
B rief O verview o f the M odel..............................................................................
Sum m ary o f M ethod ............................................................................................
10
C H A PTE R 2: LITER A TU R E R EV IE W AND

C O N ST R U C T AN D M O D EL D E V E L O P M E N T ..............................................
11
G eneral T heories o f R elationship M ark etin g.................................................
11
The Fit o f C ustom er Intim acy in the R elationship M arketing Literature
15
Intim acy T heory in Social P sy ch o lo g y ............................................................
17
The P rocess o f C ustom er Intim acy....................................................................
19
Q ualitative R esearch F indings............................................................................
20
The C u sto m er Intimacy C o n s tru c t....................................................................
22
C o m m unication .............................................................................................
24
Social In te ra c tio n ..........................................................................................
25
C u sto m er P a rtic ip a tio n ...............................................................................
26
iv
C om prom ise...................................................................................................................... 26
T heoretical Model o f C ustom er Intim acy........................................................................... 27
A ntecedents....................................................................................................................... 30
C o n se q u e n ce s...................................................................................................................31
C H A P T E R 3: STUDY M E T H O D .............................................................................................. 35
C onstruct D evelopm ent........................................................................................................... 35
O perationalization o f C o m p o n en ts.............................................................................. 36
Introduction of R eflective C om binations................................................................... 53
M easures o f the A ntecedents..................................................................................................57
M easures o f the C onsequences............................................................................................. 59
D ata C ollectio n .......................................................................................................................... 61
T est for Bias Due to N onresponse and Common M ethods V a ria n c e ........................ 63
Sam ple C haracteristics........................................................................................................... 65
C H A PT E R 4: M EA SU R EM EN T M O D EL R ESU LTS......................................................... 68
M easurem ent Model O verv iew ............................................................................................. 68
M easurem ent Model for the C ustom er Intimacy C o n stru ct.........................................
69
M easurem ent Model for All C onstructs............................................................................ 76

Final M easurem ent M odel U sing Sum m ated Scales...................................................... 79
C H A PT E R 5: STRU C TU R A L M O D E L R ESU L TS..............................................................8 1
Proposed Structural M odel..................................................................................................... 81
R especification of the Structural M o d el............................................................................ 80
Split Sam ple A nalysis...............................................................................................................88
C om peting Theoretical M o d el................................................................................................93
CH APTER 6: C O N C L U SIO N S AND D ISC U SSIO N ............................................................. 97

M ajor C ontributions.................................................................................................................... 101
Limitations and Suggestions for Future R esearch ............................................................. 102
R EFER EN C ES.................................................................................................................................. 106
APPENDIX A: PR E L IM IN A R Y STUDY Q U E S T IO N N A IR E ......................................... I 15
APPENDIX B: M A IN S T U D Y QU ESTIO N N A IRE A N D C O V E R L E T T E R ............... 1 18
APPENDIX C: R E M IN D E R PO STC A R D ................................................................................ 127
vi
LIST OF TABLES
Table
2.1
R elationship M arketing in the A cadem ic Literature................................. 13
2.2
D efinitions for Components o f the C ustom er Intimacy C o n stru ct....23
2.3
D efinitions for Constm cts in the T heoretical Model o f C ustom er

Intim acy ............................................................................................................. 29
2.4
A Sum m ary o f Hypotheses in the "T heory o f Custom er In tim acy ".... 34
3.1
Survey Item s Representing Each C om ponent of C ustom er Intim acy.. 37
3.2
Sources o f Survey Items for the C u sto m er Intimacy C o n stru ct............... 40
3.3
Pretest Results: Reliability A n aly sis................................................................41
3.4
Pretest Results: Principal C om ponents A nalysis......................................... 43
3.5
M ain S tudy Results: Principal C om ponents A nalysis................................ 45
3.6
Pretest R esults: Confirm atory F actor A nalysis 1..........................................49
3.7
Pretest Results: Confirm atory F actor A nalysis II.........................................52
3.8
C onstruction o f Reflective C om binations for the C ustom er Intim acy

C o n stru ct...............................................................................................................56
3.9
Items U sed to Measure Perceived E x p e rtise .................................................57
3.10
Items U sed to Measure C ustom er K n o w led g e............................................. 58
3.11
Items U sed to Measure Shared V a lu es........................................................... 58
3.12
Items U sed to Measure T ru st.............................................................................59
3.13
Items U sed to Measure R elationship C om m itm ent..................................... 60
3.14
Items U sed to Measure Referral B eh a v io r................................................... 60
3.15
C om parison of Means for Early V ersus Late R espondents...................... 64
3.16
R espondent C haracteristics................................................................................ 66
vii
4.1
C orrelation M atrix, M eans, and Standard Deviations for Item s in the

C ustom er Intimacy C o n stru ct.......................................................................... 70
4.2
C onfirm atory Factor A nalysis R esults for Com ponents o f C ustom er

Intim acy................................................................................................................. 71
4.3
G oodness o f Fit Statistics for M odel o f Com ponents o f C u sto m er

Intim acy................................................................................................................. 73
4.4
M easurem ent Model R esults fo r C ustom er Intimacy and C o m fo rt.... 75
4.5
R eliability and Variance E xtracted E stim ates.............................................. 76
4.6
M easurem ent Model R esults for all M easures............................................. 78
4.7
C orrelation M atrix. M eans, and Standard Deviations for Indicators

in the Final M easurem ent M o d e l.................................................................... 79
4.8
C onfirm atory Factor A nalysis R esults for Final M easurem ent

M o d e l.................................................................................................................... 80
4.9
G oodness o f Fit Statistics for Final M easurem ent M o d el...................... 80
5.1
Proposed Structural M odel R e su lts.............................................................. 82
5.2
Sum m ary o f the Structural M odel Respecification P ro cess................... 85
5.3
Final Structural Model R e s u lts ..................................................................... 87
5.4
Proposed Structural M odel R esults From First H alf o f Split Sam ple ..89
5.5
Sum m ary o f the Structural M odel Respecification Process on First

H alf o f S a m p le ....................................................................................................89
5.6
Final Structural Model R esults from First H alf o f S a m p le ..................... 90
5.7
Final Structural Model R esults from Second H alf o f S a m p le ................ 91
5.8
A Sum m ary of H ypothesized F in d in g s ...................................................... 92
5.9
C om peting Structural M odel R e su lts.......................................................... 95
viii
LIST OF FIGURES
Figure
1.1
A Theoretical Model o f C ustom er Intim acy............................................... 9
2.1
A Theoretical (Structural) M odel o f C ustom er Intim acy......................... 28
3.1
M easurem ent Model o f C ustom er Intim acy C om ponents........................48
3.2
Levels of Abstraction in the C ustom er Intimacy C onstruct.................... 55
5.1
Proposed Structural M odel............................................................................. 83
5.2
C om peting Model to C ustom er Intim acy................................................... 94
6.1
Sim ple M odel of Trust and C o m m itm en t................................................... 100
6.2
M odel o f Trust and C om m itm ent with C ustom er Intimacy A d d e d .... 100
IX
ABSTRACT
Since m any service firms now realize that long-term relationships w ith custom ers
must be developed in order to maintain cu sto m er loyalty, the ability o f a firm 's
em ployees to learn the preferences o f custom ers and continually meet their needs over
time will becom e a valued asset. The purpose o f this dissertation is to create and
em pirically test a theory o f custom er intim acy w hich may be applied in service firm s that
offer a highly cu sto m ized outcome to custom ers. By using intimacy theory from social
psychology rather than exchange theory from econom ics as the basis for professional
business-to-consum er relationships, the affective nature o f these relationships may be
realized. A new m ethod o f m easurem ent aggregation utilizing structural equation
modeling was used to develop the custom er intim acy construct. Three com ponents were
found to be p resent in the custom er intim acy process: com m unication, social interaction,
and com prom ise. T hese com ponents w ere com bined by building "reflective
com binations so that the researcher could assess how the process of custom er intim acy
as a whole im pacts business relationships. It was found that perceived expertise,
custom er know ledge, and shared values contribute positively to the developm ent o f
custom er intim acy. In turn, custom er intim acy was found to have a positive im pact on
trust and com m itm ent. Potential contributions are tw ofold. W ith respect to theory
developm ent, firm s that offer custom ized products and services may better understand
how trust and co m m itm ent are established w ithin the custom er. W ith respect to
m easurem ent, the successful dem onstration o f reflective com binations offers researchers
an alternative fo r properly testing their theories at higher levels o f abstraction.
CHAPTER 1
INTRODUCTION
As the new m illennium begins, custom er relationship m anagem ent (CRM ) is

becom ing a central core business process that firms may practice in order to generate
value for custom ers. In fact, the M arketing Science Institute has m ade "managing
custom er relationships" one o f its 2000-2002 research priorities. T he process o f CRM . as
applied to a traditional product-oriented company, may be defined as "all aspects of
identifying custom ers, creating cu sto m er knowledge, building custom er relationships,
and shaping their perceptions o f the organization and its products" (Srivastava. Shervani.
and Fahey 1999). This process delivers value to custom ers by fostering trust,
satisfaction, and com m itm ent to that firm.
Practitioner-oriented literature has also called for organizations to focus on
offering som e type of value to th eir custom ers (Treacy and W iersem a 1993; Treacy and
W iersem a 1995; W iersem a 1996; W oodruff and G ardial 1996; W hiteley 1991; Day
1990). As global com petition intensifies, firms will have to conceive, design, produce,
and deliver a wide array of new products and services in unlim ited com binations in order
to capture and satisfy sm aller co n su m er segm ents (Slocum , M cG ill, and Lei 1994).
A dopting a custom er value delivery orientation requires organizations to learn
extensively about their m arkets and target custom ers (W oodruff 1997). Indeed, many
firm s now realize that in order to m aintain custom er loyalty, long-term relationships with
custom ers m ust be developed; this suggests that a firm s em ployees learn the preferences
of custom ers and continually m eet their needs over tim e (K ahn 1998).
Treacy and W iersem a (1995) advocate three different approaches or philosophies
that firms may adopt in order to deliver superior value to custom ers: operational
excellence, custom er intim acy, or product leadership. One o f these value disciplines" is
the idea o f custom er in tim acy -b ein g able to deliver to custom ers exactly w hat they want
(Treacy and W iersem a 1993). Underscoring its im portance, Buttle (2000) views
custom er intimacy as a crucial step in the CRM value chain process.
The concept o f C R M delineates an approach to practicing relationship m arketing.
By comparison, m ost o f the work involving relationship m arketing has been concentrated
in business-to-business environm ents, specifically in the literature pertaining to
interorganizational system s (Dwyer, Schurr, and Oh 1987; Johanson and SeyedM ohamm ed 1991: H eide and John 1992; M ohr and Spekm an 1994; M organ and Hunt
1994), channels o f distribution (Young and W ilkinson 1989; Anderson and N arus 1990:
M ohr and Nevin 1990; A nderson and W eitz 1992; Boyle. Dwyer. Robicheaux, and
Simpson 1992; Celly and Frazier 1996; Kim 2000; N icholson, Compeau, and Sethi
2001), and network relationships (Anderson, H akansson, and Johanson 1994). Theories
attem pting to explain relationships in consumer m arkets have surfaced more
predominantly in the area of services (Berry 1983; C rosby and Stephens 1987; Crosby.
Evans, and Cow les 1990; Bendapudi and Berry 1997; Price and Am ould 1999: G anesh.
Arnold, and Reynolds 2000). M ore recently, articles concerning consum er-business
relationships have begun to appear in specific areas, including retailing (Beatty et al.
1996; Reynolds and Beatty 1999), com m unication (D uncan and M oriarty 1998). and
advertising (Stem 1997).
W hile definitions vary by context, a general definition of relationship m arketing is
provided by M organ and H unt (1994, p. 22): R elationship m arketing m ay be defined as
all m arketing activities directed toward establishing, developing, and m aintaining
successful relational exchanges." In this context, "relational exchange" im plies the
retention o f the relationship over time. This is in contrast to discrete transaction-based
exchanges in w hich relational aspects are m inim al if existent at all. W ith consum er
markets in particular, relationships that attem pt to deliver value to custom ers through
relational exchange or partnering activities are likely to create a greater bond betw een
consum ers and m arketers (Sheth and Parvatiyar 1995). This greater bond, in turn, fosters
a deeper com m itm ent by the consum er to the relationship.
M ost com prehensive models o f m arketing relationships, how ever, are typically
grounded in exchange theory from econom ics and consider "reciprocity" to be the key
reason why firms w ish to engage in such relationships. Despite the prevalence o f using
exchange theory as the foundation of models for business-to-business relationships, this
fails to account for the more em otionally driven behavior of individual co n su m ers (Stem
1997). Perhaps these relationships may be better understood by using intim acy theory
from social psychology in order to explain the interactions between em ployees and
custom ers. By using intim acy theory as a basis to explain certain types o f business-toconsum er service relationships, the affective nature o f these relationships m ay also be
realized.
It is appropriate for T reacy and W iersem a (1993) to use the term custom er
intim acy to define these types o f business relationships. T h e O xford English D ictionary
(second edition) defines the w ord intim acy, in part, by the follow ing: 1) inmost, deepest,
profound, or close in friendship, 2) close in acquaintance o r association: closely
connected by friendship or personal know ledge, characterized by fam iliarity. 3)
fam iliarly associated; closely personal. Based on these defin itio n s, the word "intim acy"
may be used to explain certain types o f business relationships. A sense of closeness o r
friendship is certainly appropriate for personal relationships, but these characteristics can
be present in business relationships as well. Firms develop close relationships with
custom ers in order to continually provide them with products or services that meet their
distinct needs over time.
The focus o f this study is on service organizations w ith a high degree o f
custom izationthose that are able to provide their custom ers w ith individualized
offerings according to specific c u sto m er needs and preferences. K elley (1989) classifies
services according to the extent o f custom ization involved and the level of judgm ent
exercised by the service em ployee. If the degree o f cu sto m izatio n is high and the
em ployee m ust exercise a high level o f judgm ent when d eliv erin g the service, then a
hum anistic approach to service delivery should be em ployed. Such an approach is
characterized by a high degree o f contact between custom er and em ployee, an active
rather than passive role for the custom er, and greater discretion practiced by the service
em ployee (Kelley 1989). It is this type o f service delivery in w hich the practice o f
custom er intimacy may be beneficial for both the custom er and the service provider.
M ills and M argulies (1980) provide a typology for service organizations based on
the personal interaction betw een the custom er and the firm. They describe three types o f
service organizations: m aintenance-interactive, task-interactive, and personal-interactive.
These organizations are categorized according to seven dim ensions o f interaction that
may occur between the custom er and firm: type o f inform ation, type of decision being
made, am ount o f contact tim e involved, problem aw areness, switching barriers,
pow er/authority, and level o f attachment. The personal-interactive firm is characterized
by the personal nature o f the problem brought to the em ployee by the custom er. The
interaction between em ployee and custom er focuses on the im provem ent o f the
custom ers direct intrinsic and intimate well being (p. 261); exam ples of this type o f
firm include legal, m edical, and counseling organizations (M ills and M argulies 1980). It
is in this personal-interactive firm setting that the practice o f custom er intim acy may play
a critical role.
Statement of the Problem

There has to date been no academic literature concerning the developm ent o f
business-intim ate relationships. W hile many books and m agazine articles about getting
close to the custom er have surfaced in the popular business press, the question that firms
m ust ask is, "H ow exactly do we go about practicing th is? If custom er intim acy is
indeed one m ethod o f delivering value to custom ers, then firms should understand
precisely the process o f developing business-intim ate relationships with their custom ers
so that value may be passed on to them.
The theory of custom er intimacy proposed here not only specifies the process
involved in the creation and delivery of highly custom ized services, but it also suggests both
antecedents and consequences of such an approach. By studying a structural m odel, the
antecedents and consequences o f custom er intim acy may be better understood. Through
a new m easurem ent m ethod o f aggregation, the com ponents o f custom er intim acy will be
com bined in order to properly exam ine antecedents and consequences o f the entire
process o f custom er intim acy, rather than having to exam ine the construct at its lower,
com ponent level of abstraction.
Purpose and Contribution of Study

This purpose o f this dissertation is to pull from both practitioner and academ ic
literature in order to create and em pirically test a theory of custom er intim acy in a
professional service setting. Specifically, this study will exam ine the attom ey-client
relationship.
There are a num ber o f significant contributions of the proposed study. First, there
is currently no academ ic-oriented research to coincide with recent practitioner literature
concerning the developm ent o f business-intim ate relationships. This study will establish
the process of building such relationships with custom ers. By borrow ing from intim acy
theory in social psychology rather than the typically used exchange theory in econom ics,
the affective nature o f business-intim ate relationships may be properly investigated. By
exam ining the antecedents of custom er intim acy, this model w ould also help m anagers
determine whether this type o f practice is right for them. Additionally, the consequences
o f the intimacy process will be tested. Therefore, this study will provide em pirical
support to show m anagers o f professional services the benefits o f engaging in this type of
vaiue-delivery practice, including trust, com m itm ent, and referral behavior.
Future research includes examining the model in different contexts. One such
context is online products/services, whereby a customer works closely with a firm via the
Internet in order to obtain a customized outcome. In this case, the "social interaction"
component o f intimacy is based on technology (email, chatrooms) rather than human contact.
It will be interesting to note the differences o f the model's paths when com paring a context of
human interaction w ith a technology-only context.
Organization of the Dissertation

The rem ainder o f C hapter 1 includes a b rief overview o f the m odel as well as a
summary of the m ethod used to analyze the m easurem ent and structural m odels. C hapter
2 focuses on theoretical developm ent o f custom er intim acy and its role in relationship
marketing by a review of the literature pertaining to m arketing, social psychology, and
practitioner-based p o p u lar press. Q ualitative research is described w hereby the
com ponents o f cu sto m er intimacy are identified. This chapter also addresses the
theoretical developm ent o f the structural m odel, with justifications o f the hypothesized
antecedents and consequences of custom er intim acy. Hence, this review is used both to
develop the formal hypotheses of this study as well as to create definitions for all o f the
constructs involved in the model. Chapter 3 is dedicated specifically to the operational
developm ent o f the custom er intimacy construct and to the method em ployed for data
collection and analysis. The results from a pretest questionnaire are used to solidify the
measures for the cu sto m er intimacy construct. By m eans of a new m easurem ent
approach w ith structural equation modeling called "reflective com binations." a robust
measure of custom er intim acy is developed in order to properly test antecedents and
consequences of the process o f custom er intim acy as a whole. C hapter 3 also provides
measures for each o f the constructs in the theoretical model and describes the process
used for data collection. C hapter 4 presents the results for the m easurem ent models,
while C hapter 5 provides results for the structural m odel, including details o f a
respecification process as well as results from a com peting model. Finally, C hapter 6
provides a discussion o f results and offers conclusions, contributions, limitations o f this

study, and directions o f future research.
Brief Overview of the Model

B y applying know ledge from the literature in m arketing and intimacy theory in
social psychology and as well as draw ing on know ledge gained from primary qualitative
research, a m odel of business-intim ate relationships is form ulated. This model appears in
Figure 1 .1.
It is hypothesized that before the business-intim ate relationship can develop, the
custom er has to believe that the service provider possesses a degree o f expertise in a
particular product/service offering. In addition, the service provider m ust understand the
specific needs o f the custom er so that they are able to w ork together to achieve a
custom ized outcom e. Also, the custom er must believe that s/he and the service provider
share a sim ilar value system. T hese three elem ents are hypothesized to lead to the
developm ent o f a business-intim ate relationship.
It is also hypothesized that the process o f custom er intim acy involves
com m unication, social interaction, custom er participation, and com prom ise. If this
process is successful, trust and com m itm ent to the service p rovider are hypothesized to
develop. In addition, if the custom er is com m itted to the relationship, it is hypothesized
that s/he w ill engage in referral behavior and will be w illing to share his/her positive
experiences w ith others.
Figure 1.1
A Theoretical Model o f Customer Intimacy
The Customer
Perceived
Expertise
Gorrmmication
Trust
Compromise
Shared
Values
Referral
Social
Interaction
Behavior
10
Summary o f M ethod
The m odel was tested using LISR E L 8.3 for W indow s, a structural equation
m odeling analysis program developed by Jo resk o g and Sorbom (1999). Structural
equation m odeling is a statistical procedure w hich allow s researchers to exam ine the
plausibility o f th e ir notions about relationships and impacts when data are
nonexperim ental (M aruyam a 1998). The tw o-step approach for assessing m easurem ent
and structural m odels proposed by A nderson and G erbing (1988) was utilized. Under
this approach, the m easurem ent model is tested first in order to establish evidence of
reliability and validity o f the m easures. O nce this evidence is established, the structural
model is then tested in order to establish the strength and direction o f relationships
between constructs.
CHAPTER 2
LITERATURE REVIEW AND
CO NSTRUCT AND MODEL DEVELOPM ENT
As stated in the introduction, the term "custom er intim acy" em erged in the
practitioner-oriented literature as a solution to the superior delivery o f custom er value.
The very nature of the prom ise o f w hat custom er intimacy m ay be able to provide
w arrants the term's further study. T he purpose of this chapter is to explore the academ icoriented literature which lends support to the concept o f custom er intim acy and its place
in m arketing. The chapter begins by exploring general theories o f relationship m arketing.
It is then suggested how cu sto m er intim acy may fit in this stream o f literature. In
addition, literature from the social psychology field is exam ined in order to shed further
light on the concept of intim acy as applied to personal relationships. The process of
custom er intim acy is then carefully exam ined. In other words, w hat are the individual
com ponents in which firm s and custom ers should engage in o rd er to optim ize value for
the custom er? Finally, antecedents and consequences of such a process are proposed and
rationalized.
General Theories of Relationship M arketing

R elationship m arketing has been discussed in a variety o f contexts ranging from
consum er to business settings. T able 2.1 provides an overview o f this research. As can
be seen, m ost models o f relationship m arketing have been studied in business-to-business
II
12
contexts. Several o f these authors have proposed general theories o f relationship

m arketing in a particular dom ain Dwyer, Schurr, and Oh (1987); M ohr and Spekm an
(1994); and M organ and H unt (1994) for interfirm partnerships, Anderson and Narus
(1990) for channels o f distribution, and Sheth and Parvatiyar (1995) for consum er
markets. These general theories are discussed below in further detail.
D w yer et al. (1987) provide an early and widely cited conceptualization o f
relationship m arketing. Pulling from the social psychology literature on m arriage and
family, they postulate that the relationship developm ent process evolves through five
stages: aw areness, exploration, expansion, com m itm ent, and dissolution. In contrast,
discrete transactions involve very little buyer-seller com m unications, as the occurrence is
for one-time only, with no anticipation o f future interaction (D w yeret al. 1987). In the
relationship developm ent process, aw areness occurs w hen one party recognizes that
another is a feasible exchange partner, exploration occurs w hen the possibility o f
exchange is considered, expansion occurs when both benefits received and
interdependence between parties increases, and com m itm ent occurs when exchange
partners have pledged to continue the relationship. A fifth stage (dissolution) may occur
if one or both parties seek to term inate the relationship. W hile this theoretical article
opened the door for many em pirical studies related to relationship marketing, it did not
specifically address how the relationship evolves throughout these stages. In other words,
what actions and behaviors should both buyer and seller dem onstrate in order to foster a
com m itted relationship?
13
Table 2.1
Relationship Marketing in the Academ ic Literature1
Context
Contributing Authors and Dates
B usiness-to-consum er relationships
C onsum er services
Berry (1983). C rosby and Stephens (1987).

Crosby, Evans, and Cowles ( 1990)2.
Bendapudi and Berry (1997). Price and
A m ould (1999)
C onsum er m arkets
Sheth and Parvatiyar (1995)2. Fournier (1998)
Retailing
Beatty et al. (1996), Reynolds and B eatty

(1999)
C om m unication/A dvertising
Stem (1997), D uncan and M oriarty (1998)
B usiness-to-business relationships
Interfirm partnerships
Dwyer, Schurr, and Oh (1987)". Johanson and

Seyed-M oham m ed (1991), Heide and John
(1992), M o h r and Spekm an (1994)2. M organ
and Hunt ( 1994)2
M anufacturer-supplier
Frazier, Spekm an, and O 'N eal (1988). O Neal

(1989), G anesan (1994). Kalwani and
N arayandas (1995), Doney and C annon (1997 )
C hannels o f distribution
Young and W ilkinson (1989), A nderson and

N arus (1 9 9 0 )2, M ohr and N evin (1990),
A nderson and W eitz (1992), Boyle, D w yer.
R obicheaux, and Sim pson (1992), C elly and
Frazier (1996)
Strategic alliances
Bucklin and Sengupta (1993), V aradarajan and

C unningham (1995)
Networks
A nderson. H akansson. and Johanson (1994)
1 Adapted from Fontenot and W ilson (1997) and M organ and Hunt (1994)
" Provides a general theory o f this type o f relationship
14
Later articles em pirically exam ine the antecedents and consequences o f buyerseller relationships. A nderson and N arus (1990) find a positive relatio n sh ip between
com m unication and trust. They view tm st in term s o f perform ance and define it as the
firm s belief th at another com pany will perform actions that will result in positive
outcomes for the firm , as well as not take unexpected actions that w o u ld result in
negative outcom es for the firm." For trust to be m aintained in a relationship, open
com m unication m ust exist between partners. In term s o f fostering the relationship,
com m unication (the sharing of m eaningful and tim ely inform ation betw een firm s) should
focus on the quality o f inform ation shared rather than the quantity o r am o u n t (Anderson
and Narus 1990).
The tru st construct is further defined and operationalized by M organ and Hunt
(1994). They define trust as a confidence that one party has in an ex ch an g e partners
reliability and integrity. M organ and H unt (1994) find that trust d eterm in es com m itm ent,
and that trust and com m itm ent are both key m ediating variables o f relationship
marketing. T hey find that cooperation (situations in which partners w ork together to
achieve m utual goals) is directly influenced by com m itm ent and trust. Sim ilarly, M ohr
and Spekm an (1994) view trust and com m itm ent as key to a p artn ersh ip s success and
state that both aid in calm ing the fear that opportunistic behavior will occur. Therefore,
open com m unication in goal setting yields greater trust, and trust in turn fosters
cooperation betw een partners. B uilding a sense o f cooperation and tru st also serves to
enhance the continuity o f the interfirm relationship.
Sheth and Parvatiyar (1995) propose a general theory o f relatio n sh ip m arketing in
consum er m arkets. They argue that consum ers choose to engage in relationships with
15
firms in order to sim plify their buying and consum ing tasks by reducing the choices they
have available to them as well as reducing the perceived risks associated with a purchase.
They also suggest that consum ers will be more w illing to engage in relationships with
m arketers if a) the m arketer is able to m eet consum ers' personalized needs, and b) the
consum er plays an active role in the developm ent and m aintenance o f the relationship.
To em phasize this point, they state.
A ny relationship that attem pts to develop custom er value through
partnering activities is, therefore, likely to create a greater bonding
betw een consum ers and m arketers (their products, sym bols, processes,
stores, and people). The greater the enhancem ent o f relationship through
such bonding, the more com m itted the consum er becom es in the
relationship and hence is less likely to patronize other m arketers. (Sheth
and Parvatiyar 1995, p. 256)
W hile these propositions hint at the need for an em pirical exam ination o f business-toconsum er relationships, Sheth and Parvatiyar (1995) fail to specify a process by which
such relationships are developed and m aintained. The proposed theory o f custom er
intim acy delineates a relationship process for a specific type o f firm one that develops
highly custom ized products and/or services for its custom ers.
The Fit o f Custom er Intimacy in the Relationship Marketing Literature

S keptics m ay view custom er intim acy as simply an extrem e form o f relationship
m arketing, sim ilar to the extreme sports w hich have becom e en vogue o f late. Firms
that practice this sim ply go out of their way to make the custom er feel special and
appreciated. H ow ever, custom er intim acy can more appropriately be view ed as one way
in w hich firm s can build relationships with their custom ers. Such a practice would apply
to those types o f firm s that provide custom ers with a highly custom ized outcome.
16
Additional consideration o f custom er intim acys fit in relationship m arketing is provided

below.
W ebster (1992) sees m arketing relationships as a continuum ranging from discrete
transactions to vertical integration; the further aw ay partners get from discrete
transactions, the more relational aspects play a role in the exchange process. W eb ste rs
exchange fram ework clearly applies to business-to-business relationships, as the
continuum includes such partnerships like strategic alliances, network organizations, and
vertical integration. H ow ever, a sim ilar continuum may be constructed for relationships
in consum er markets. At one end o f the continuum m ight be a custom er w ho w alks into a
M cD onalds restaurant to order a ham burger. In this case, the exchange is transactional
in nature; the custom er exchanges money for a product w ith minimal contact betw een the
custom er and employee. A t the opposite end o f the continuum might be a cu sto m er who
seeks legal advice from a professional. In this case, the attorney works w ith his client in
order to deliver a highly custom ized service. Since there are risks involved for the
consum er, factors such as m utual dependence, partnering activities, understanding, and
trust become increasingly im portant. It is at this end o f the exchange continuum where
the concept of custom er intim acy may be found. The service is a highly individualized
one with the custom er taking an active role in the design and delivery of the finished
product or service.
M any different classification schemes have been proposed which attem pt to
categorize the various types o f consum er services offered by firms. These classification
schemes typically utilize the degree o f custom ization as a dim ension to separate and
categorize these various services. For exam ple, Bell (1986) attempts to categorize both
17
goods and services with resp ect to the degree o f custom ization as well as the degree o f
tangibility associated with the good or service. C ustom ized services represent the highest
level o f custom ization and the low est level o f tangibility in this classification m atrix.
Sim ilarly, Kelley (1989) classifies services according to the level o f judgm ent exercised
by the em ployee as well as the degree of custom ization required by the customer.
Lovelock (1983) proposes five different schemes, based on such factors as the nature o f
the service relationship betw een the service firm and its custom ers, or patterns o f dem and
relative to supply. He states that services with a high degree o f custom ization and high
degree o f judgm ent needed by personnel are often prescriptive: clients look to them for
advice as well as for custom ized execution. This is the type o f firm which will benefit
most from the practice o f cu sto m er intimacy.
Intimacy Theory in Social Psychology

As noted earlier, m ost com prehensive models o f m arketing relationships are
found in business-to-business contexts. These models are typically grounded in exchange
theory from econom ics and consider reciprocity to be the key reason why firms wish to
engage in such relationships. H ow ever, despite the prevalence o f using exchange theory
as the foundation of m odels for business-to-business relationships, this fails to account
for the m ore em otionally driven behavior of individual consum ers (Stem 1997). By
using intim acy theory as a basis for business-to-consum er service relationships, the
affective nature of these relationships can also be realized.
In the social psychology literature, different definitions o f intim acy exist based on
different theories from areas such as personality and interpersonal relations research
(Prager 1995). One discrepancy in its definition involves w hether intimacy is a quality
18
held within a person (i.e., a stable state) or a dynam ic process which evolves over tim e.
W aring et al. (1980) deduce four points about the co g n itiv e appraisal o f intimacy: 1) it is
based upon the exchange o f private and subjective experiences, 2) it is view ed as
transactional in that im portance is given to the process o f m utual sharing, 3) it is valued
as a positive relational process that entails m utuality as w ell as self-differentiation, and 4)
prior experiences influence current perceptions o f intim acy.
Chelune, R obison, and K om m or (1984) refer to intim acy as a relational process"
(p. 14). Likewise, Reis and Shaver (1988) define intim acy as "a core social
psychological process with distinct com m unicative a n d em otional features" (p. 368).
They cite self-disclosure and partner responsiveness as key com ponents o f the intim acy
process. By utilizing the Reis and Shaver definition o f intim acy, the theory o f custom er
intimacy proposed here realizes the dynamic, developm ental nature of business-consum er
service relationships and also includes the affective o r em otional com ponent o f these
relationships that business-to-business" m odels w hich are grounded in exchange theory
generally lack.
Psychologists also offer various guidelines fo r achieving intimate relationships.
For exam ple, Colem an (1988) cites key factors that are essential for increasing intim acy
in a relationship: effective com m unication, m utual self-disclosure, appropriate ground
rules, effective m ethods of conflict resolution, and such com ponents of long-term
relationships as acceptance, caring, com m itm ent, and aw areness. Chelune et al. (1984)
cite six relational qualities that characterize intim ate relationships: knowledge o f one
another, m utuality, interdependence, trust, com m itm ent, and caring; the m edium through
which these qualities develop is com m unication. T h ese qualities hold true in a business
19
context as well, particularly if partnering activities occur as part of the product/service

delivery process. The custom er must disclose inform ation about him self and his specific
needs; then the custom er and employee m ust w ork together to deliver the best offering to
fit the custom ers situation. If this process is successful (i.e., appropriate interactive
com m unication has occurred), then trust and com m itm ent are developed.
The m arketing discipline is only beginning to realize the benefits o f applying
intim acy theory to m arketing-related topics. For exam ple. Stern (1997) argues that
intim acy theory is more generalizable across services m arketing situations than either
exchange theory or seduction theory. She sees five attributes present in services
advertisingcom m unication, caring, com m itm ent, com fort, and conflict resolutionto be
attributes that em phasize intim acy rather than exchange or seduction. The custom er
intim acy construct developed here builds upon S te m s depiction o f advertising intimacy
as it relates to consum er services.
The Process of Customer Intimacy

Numerous sources were used to develop a conceptual definition o f the "custom er
intim acy concept. First, qualitative research was conducted in the form s o f interview s
and open-ended questionnaires from ten attorneys w ho deliver tailor-m ade services to
their clients on a regular basis. Second, a literature review was perform ed in the areas o f
social psychology (including intimacy theory and the interpersonal relationship literature)
and m arketing (including channels, interorganization, and services literature). Finally, a
review of the practitioner-oriented popular press literature was conducted; this included
how -to books for service firm s who wish to achieve intimate relationships w ith their
custom ers. Findings from the qualitative study are described in detail below .
20
Qualitative Research Findings

W ith respect to the qualitative research conducted, personal interview s with ten
attorneys were audio-recorded and transcribed in order to determ ine com m onalities
across respondents w ith respect to descriptions o f typical" attom ey-client relationships.
In addition to the personal interviews, a survey containing both o p en-ended and
structured-response questions was adm inistered to each respondent; a copy o f this survey
appears in A ppendix A. These interview s and surveys provided insights into a working
definition o f c u sto m er intim acy as well as helped to develop the theoretical model.
Several distinct them es em erged as a result o f these interview s. First, there seems
to be a degree o f personal or social interaction that is present in attom ey-client
relationships w hich is not found in other types o f transactions. This social interaction
may be present even before the business side o f the attorney client relationship begins, as
evidenced by the follow ing;
C lients hire individual law yers, not law firms. At the outset, a client
approaches an individual law yer because of som e sort o f respect for that
person, either because o f prior experiences with the law yer in a personal,
casual, or social setting, or by reputation or recom m endation from a third
source. In both instances, the client approaches the law yer because of the
atto rn ey s personal relationship with som eone."
Social interaction also occurs throughout the relationship:
Law yers are people-oriented. A ccordingly, m ost o f the tim e, the more
personal contact the law yer has with the client, the m ore interested the
law yer is in the m atter.
The im portance o f com m unication w as evident in attorneys com m ents about
their clients. A sam ple o f quotes illustrates the role that com m unication plays in the
relationship developm ent process:
21
The first step is for the law yer to listen. C lients do not talk like lawyers
think, so this may tak e m ore than one sim ple conversation. In all
likelihood, the law yer w ill have to probe a bit to really understand the
background and relevant facts.
M y primary role is first o f listener. Trying to find out exactly w hat the
client wants. W hat is the problem ? W hat is the goal?
There is a particular client that is very dem anding and constantly
com m unicates with m e to determ ine which direction we should w2 0 in."
It is such an important consideration that rules and guidelines pertaining to
com m unication are defined in the A la b a m a R ules o f P rofessional C onduct published by
the A labam a State Bar A ssociation. T hese rules cover such topics as tim ely responses to
clien ts inquiries, engagem ent letters, and verbal as well as w ritten advice given to
clients.
In addition to com m unication, active participation by the client also surfaced as a
key factor in the process of developing the relationship:
The client is active throughout every stage o f the process. The client not
only gives inform ation ov er the telephone, but com piles docum ents and
hand delivers those docum ents to our office or faxes them to our office.
He also requests an o pportunity to review all docum ents that we prepare
and wants at least one face-to-face m eeting to discuss all issues."
B ecause o f this active participation by the client, the attorney may frequently find
situations w hich the client feels should be handled in one particular way (as the client is
more fam iliar w ith his or her business o r personal situation), w hile the attorney
understands m ore about the law and know s that the situation should be resolved in a
different m anner. Therefore, com prom ise em erged as integral factor to the relationship
process:
M y meetings typically progress as follows: 1) general social discussion,
2) discussion o f specific issues. 3) listening to the clients thoughts and
suggestions, 4) my analysis o f those ideas, 5) give and take in

developing a course o f action, and 6) d ecisio n .
Since findings from a review of the literature corroborated the findings from the
qualitative study, it was determ ined that these four com ponentscom m unication, social
interaction, custom er participation, and com prom iseare the essential elem ents in the
process of custom er intim acy. Formal conceptual definitions o f each com ponent appear
in Table 2.2.
The Customer Intim acy Construct

A definition o f custo m er intimacy is offered w hich bridges the gap betw een the
practitioner-oriented concept and the academic literature:
C ustom er intim acy is the ongoing relational process o f w orking w ith
custom ers to develop and refine the co m p an y s product or service
offerings in order to meet individual custom er needs. This process is
executed by em ploying the following com ponents: com m unication,
custom er participation, social interaction, and com prom ise.
This definition indicates that custom er intimacy is a m ultidim ensional construct. The
practice of custom er intim acy demands that a firm 's em ployees possess certain
characteristics, including com m unication skills and the ability to com prom ise with clients
to determ ine the m ost appropriate offerings to deliver. This practice aiso dem ands that
the custom er is actively involved in achieving the desired outcom ethe firm is only able
to develop offerings if the individual custom er participates in the developm ent process.
23
Table 2.2
D efinitions for Components of the Custom er Intimacy Construct
Component1
Definition
C om m unication
the form al as well as informal sharing o f

m eaningful and tim ely inform ation betw een
two parties (A nderson and Narus 1990. p. 44)
C ustom er participation
the extent to which a custom er is actively

involved in the design and/or production o f the
firm s product or service offering
Social interaction
the extent o f contact or interplay betw een two

parties o f a pleasant or friendly nature
Com prom ise
a w illingness for both parties to give and take

so that a m utually acceptable outcom e is
attained
'These com ponents are based on qualitative research involving depth interview s and
open-ended questionnaires as well as a review o f relevant academic and practitioneroriented literature.
24
A review o f the literature from m arketing and social psychology provides further
insight into each of the four com ponents o f custom er intimacy.
Com m unication
A m ajor requirem ent of delivering tailor-m ade products to cu sto m ers is the
establishm ent o f open com m unication betw een buyer and seller. C o m m u n icatio n may be
defined as the form al as well as inform al sharing o f meaningful and tim ely inform ation
between two parties (A nderson and N arus 1990). In order for com m unication to occur
properly, the em ployee m ust engage in active listening in order to co m p letely understand
the custom ers needs and desires. Likew ise, the custom er m ust be w illin g to share
thoughts and feelings that convey to the em ployee exactly w hat is desired.
In the social psychology literature, com m unication is co nsidered to be the
medium through w hich the process o f intim acy occurs. A ccording to R eis and Shaver
(1988), intim acy results from a process th at is initiated when one person com m unicates
personally relevant and revealing inform ation to another person. Indeed, W aring et al.
(1980) consider self-disclosure, defined as the process by which one person lets herself or
him self be know n by another person (D erlega 1984), to be the central defining attribute
of intim ate relationships.
In addition to self-disclosure, partner responsiveness is also con sid ered to be
integral to the developm ent of intim acy in a relationship. Partners are responsive when
their behaviors (such as disclosures and expressions of em otion) address the
com m unications, needs, wishes, or actions o f the person with w hom they are interacting
(Laurenceau, B arrett, and Pietrom onaco 1998). In a business relationship, the custom er
expresses his needs and concerns, w hile the em ployee listens and ex p resses him self in
25
response to custom er actions. Therefore, com m unication is an integral com ponent of

custom er intim acy because it allow s em ployees to better understand specific custom er
needs.
Social Interaction
A partner who exhibits caring in a relationship possesses the qualities o f affection,
w arm th, and protectiveness tow ards the other party (Perlm an and Fehr 1987). Affection,
or the feeling of liking o n e's partner, is the most frequently reported aspect o f intimacy
(W aring et al. 1980). An affective state is a state o f feeling that is general and pervasive;
it refers to the feeling side o f consciousness, as opposed to thinking, which taps the
cognitive dom ain (Oliver 1997).
Social relationships are characterized by social interaction; persons engaged in
such relationships are likely to discuss social or personal topics (Ellis 1995). Benefits of
social interaction include the conversation, friendship, and com pany provided by the
relationship (Ellis 1995). In a business setting, personal o r social relationships that are
established by employees are oftentim es the key to the b u sin ess's success (Czepiel 1990).
Bendapudi and Berry (1997) suggest that custom ers may be m ore willing to maintain
ongoing relationships with service providers when social bonds have developed with the
provider. Indeed, such social interactions are believed to increase tolerance for service
failure and encourage greater loyalty even when com petitive differences are few (Berry
1995). Social interaction may be defined as the extent o f contact or interplay between
two parties o f a pleasant or friendly nature, and is considered here to be an integral
com ponent o f the custom er intim acy process.
26
Customer Participation
In a business-intim ate relationship, the goal o f the custom er is to get the product
or service made specifically to his or her specifications, w hile the goal o f the em ployee
and the firm is to keep the custom er loyal to its products and/or services. In this sense, an
active participation by both parties in the buyer-seller relationship is needed in order to
achieve mutual benefits (M organ and Hunt 1994). In order to successfully m aintain the
relationship, both parties m ust exert the appropriate effort (Harris and O M alley 2000).
W ith respect to business-intim ate relationships, it is essential that the custom er actively
participate in the design and/or production o f the firm s product or service offering, due
to the highly custom ized nature o f the outcome.
Custom er participative behavior has been show n to have a direct positive im pact
on variables such as quality o f service, satisfaction, and custom er retention (E nnew and
Binks 1999; Cerm ak. File, and Prince 1994). C u sto m er participation, defined as the
extent to which a custom er is actively involved in the design and/or production o f the
firm s product or service offering, is a necessary condition for business intim ate
relationships to occur. Indeed, when providing a custom ized product or service, it is
im portant that the custom er has a high level o f involvem ent and is able to personally
identify with the em ployee (Kelley, Donnelly, and S kinner 1990).
Compromise
During the process o f custom er intimacy, the em ployee may realize that it is
im possible or unwise to deliver a particular attribute to the custom er. In this case, it is
necessary for the em ployee to explain why that particular attribute o f the product or
service cannot or should not be implemented. C om prom ise may be defined as "a
27
willingness fo r both parties to give and take so that a m utually acceptable outcom e is
attained.
Form ally stated, the following is hypothesized:
H I: Perceived customer intim acy is a m ultidim ensional construct

containing four components: communication, custom er participation,
social interaction, and compromise.
In this case, the construct to be tested is p erceived custom er intim acy, because it is the
perception o f the custom er that determ ines w hether the relationship has been established.
Theoretical M odel of Customer Intimacy

Figure 2.1 provides a general theoretical model of custom er intim acy. Definitions
for each o f the constructs presented in this m odel are shown in T able 2.3. Proposed
antecedents and consequences o f custom er intim acy are discussed in greater detail below.
28
Figure 2.1
A Theoretical (Structural) Model o f C ustom er Intimacy
HI
The Customer
Intimacy Process
Fterceived
Expertise
Trust
H5
H2
H7
H3
H6
Corrmitment
Corrpromise
HS
H4
Shared
Values
Social
Interaction
Referral
Behavior
29
Table 2.3
Definitions for Constructs in the Theoretical Model o f Customer Intim acy
Construct
Definition
Perceived expertise
The custom ers evaluation o f relevant com petencies

associated with the service transaction (Crosby, Evans,
and Cowles 1990)
C ustom er know ledge
The possession o f detailed inform ation o f each custom er

that an em ployee serves
Shared values
The degree to which the value system /ethics/m orals o f the

custom er and service provider are sim ilar in nature.
Custom er intimacy
The ongoing relational process o f w orking with custom ers

to develop and refine the com panys product or service
offerings in order to m eet individual custom er needs. This
process is executed by em ploying the following
components: com m unication, custom er participation,
social interaction, and com prom ise.
Trust
A willingness to rely on an exchange partner in w hom one

has confidence (M oorm an, Zaltm an. and D eshpande 1992)
R elationship com m itm ent
The custom ers psychological attachm ent to the service

firm (C aitchfield 1998)
Referral behavior
A willingness to recom m end the service firm to others
30
Antecedents
C ustom er intim acy is not m eant to be utilized by all firms. R ather, this process
for delivering cu sto m er value is best practiced by a particular type o f firm , one which
facilitates learning by encouraging its em ployees to fully understand cu sto m ers as well as
product or service offerings.
Perceived expertise may be defined as the custom ers evaluation o f relevant
com petencies associated with the service transaction (Crosby. Evans, and C ow les 1990).
Sheth and Parvatiyar (1995) propose that the greater the need for expertise in m aking
choices, the greater will be the consum er propensity to seek a relationship w ith a
particular firm. B ecause expertise reflects the m astery o f relevant com petencies in
product or service delivery, custom ers are m ore likely to trust a partner w ho is perceived
as having greater expertise (Bendapudi and B erry 1997). Expertise has been em pirically
confirm ed as having a positive relationship w ith trust (Busch and W ilson 1976) as well as
with perceived relationship quality (C rosby, Evans, and Cowles 1990). T herefore, the
following is proposed:
H2: Perceived expertise is positively related to custom er intimacy.

In order to deliv er tailor-m ade products or services, em ployees m ust have a
detailed understanding o f his or her custom ers. In other words, the em ployee should
understand the c u sto m e rs specific needs, w hether personal or business-related, in order
to provide optim al custom er service. A new bank requiring legal advice, fo r exam ple,
would seek out an attorney who is well versed in banking law, because that person is
fam iliar with the needs o f these specific types o f clients. C ustom er know ledge may be
31
defined as the possession o f detailed inform ation of each cu sto m er that an employee
serves:
H3: Customer know ledge is positively related to custom er intimacy.

Finally, the custom er will not w ant to pursue a business-intim ate with an
employee w ho does not share a sim ilar ethical code or value system . M organ and Hunt
(1994) define shared values as the ex ten t to which partners have beliefs in com m on about
what behaviors, goals, and policies are im portant or unim portant, appropriate or
inappropriate, and right or w rong. F o r exam ple, if a client m eets w ith an attorney
initially and the advice given by the attorney does not meet the value system of that
client, then the client should choose n o t to pursue the relationship. C onversely, if a client
of questionable character meets w ith an attorney and the attorney does not provide the
advice the clien t w ants to hear, the c lien t will terminate that relationship and find an
attorney w ho is w illing to w ork with him /her. For this study, shared values may be
defined as the degree to which the value system /ethics/m orals o f the custom er and service
provider are sim ilar in nature:
H4: The perception o f shared values contributes positively to the

customer intimacy process.
Consequences
In a business context, trust is a key factor in separating econom ic exchanges from
relational exchanges. Trust has been show n to have an influence on m any constructs
central to building and m aintaining long term relationships with custom ers, such as long
term relationship orientation (G anesan 1994), com m itm ent (D w yer et al. 1987;
M oorm an, Z altm an, and D eshpande 1992; M organ and Hunt 1994), the propensity to stay
32
in a business relationship (A nderson and W eitz 1989), and relationship success (M ohr
and Spekman 1994; M organ and H unt 1994).
The im portance o f trust in interpersonal relationships has been established for
some time (R otter 1967, Schlenker, Helm, and Tedeschi 1973). T rust occurs when
intimate relationships develop and become long term (Zak, Collins, Harper, and M asher
1998). In the social psychology literature, some theoretical work and definitions o f
intimacy include trust as a distinct dimension or com ponent of intimacy (Sharabany
1994). However, this model considers the rationale provided by Zak. Collins, Harper.
and M asher (1998), who state that the goal o f m em bers in intimate relationships is to
achieve satisfaction and trust. Therefore, trust here is treated as a consequence of
custom er intimacy, rather than one o f its com ponents:
H5: There is a direct, positive relationship between perceived

customer intimacy and trust.
C om m itm ent may be thought o f as an enduring desire to m aintain a valued
relationship (M oorman et al. 1992; Morgan and H unt 1994). In addition to a
hypothesized direct relationship between custom er intim acy and trust, it is also
rationalized that custom ers who have invested the tim e in developing business-intim ate
relationships will be more psychologically attached to that service provider.
H6: There is a direct, positive relationship between perceived

customer intimacy and commitment.
T rust has been found to significantly reduce the perceived risk involved with a
purchase decision (Ganesan 1994; Berry 1995). Therefore, trust and the risk reduction
that is associated with it are key factors that tie a custom er to a long-term relationship
(M oorman et al. 1992). In a service relationship, the custom er will want to continue the
33
relationship with that service provider because s/he has developed trust and therefore
reduced the am ount o f perceived risk associated w ith that purchase. T herefore, the
following is proposed:
H7: There is a direct, positive relationship between trust and

commitment.
Finally, those custom ers who do possess a psychological bond or attachm ent to
the relationship should w ant to share his or her positive experiences with others. Service
custom ers tend to engage in positive word o f m outh w hen they experience satisfaction
with the level o f service they receive (Singh 1990; Sw an and O liver 1989). R eynolds and
Beatty (1999) discovered that custom ers w ho are satisfied with their salesperson engage
in positive w ord o f m outh about both the salesperson and the company. T hey also found
that longer-term custom ers had increased w ord o f m outh.
B itner (1990) states that a consequence o f a com m ercial friendship is positive
word of m outh. Q ualitative research conducted by Price and Arnould (1999) confirm s
this; they found that com m ercial friendships are associated with satisfaction, strong
service loyalty, and positive w ord of mouth. The follow ing is proposed:
H8: There is a direct and positive relationship between com m itm ent
and referral behavior.
A sum m ary o f these hypotheses appears in T able 2.4.
34
Table 2.4
A Sum m ary of Hypotheses in the Theory of Custom er Intim acy
Hypothesis
H I: Perceived custom er intim acy is a m ultidim ensional construct co n tain in g four

com ponents: com m unication, c u sto m er participation, social interaction, and
com prom ise.
H2: Perceived product or service expertise is positively related to c u sto m er intimacy.
H3: C ustom er know ledge is positively related to custom er intim acy.
H4: The perception o f shared values contributes positively to the c u sto m er intim acy
process.
H5: There is a direct, positive relationship betw een perceived cu sto m er intim acy and
trust.
H6: There is a direct, positive relationship betw een perceived cu sto m er intim acy and
com m itm ent.
H7: There is a direct, positive relationship betw een trust and com m itm ent.
H8: There is a direct, positive relationship betw een com m itm ent and referral behavior.
CHAPTER 3
STUDY METHOD
T his chapter is devoted to the creation and developm ent o f the measures used to
capture the custom er intim acy construct as well as the other constructs that appear in the
theoretical model. In addition, details concerning the sam ple fram e and data collection
are also discussed. It begins by providing a description o f how the custom er intimacy
construct is operationalized. The best indicators for each com ponent are selected in order
to test the theory of custom er intimacy. The reflective com binations method of
m easurem ent using the structural equations modeling statistical tool is described and
perform ed on pretest data. T his is followed by a description o f the operationalization of
the antecedents and consequences o f custom er intimacy. Finally, details of data
collection are provided.
Construct Development
The com ponents o f custom er intimacy were developed by follow ing the general
guideline used by Spake (1999). These guidelines are consistent w ith the paradigm
provided by Churchill (1979). The specific steps taken to develop the construct were as
follows:
Step 1. C onducted qualitative research to identify the com ponents.
Step 2. D efined each component.
Step 3. G enerated items for each com ponent that w ere deem ed to reflect
the entire definition of the com ponent as a whole.
Step 4. Judged the content validity of the items.
35
36
Step 5. Judged the internal reliability o f the items.

Step 6. Judged the construct validity o f the scales for each com ponent.
Steps one and two are described in C hapter 2; therefore, they will not be repeated here.
The four com ponents o f custom er intim acy are operationalized in the rest o f this chapter.
Operationalization o f Components
Based on these conceptual definitions, reflective items for each o f the com ponents
were created or adapted from existing scales; these appear in Table 3.1. Each com ponent
has three or more reflective items associated w ith it in order to be able to assess reliability
o f these m easures (B aum gartner and H om burg 1996; C ortina 1993; Churchill 1979). At
least three items are necessary in order to assess internal consistency reliability using
coefficient alpha, which C hurchill (1979) states should be the first measure one calculates
in order to assess the quality o f the m easures. A relatively low coefficient alpha
(Nunnally (1967) suggests a cutoff of around .6 fo r early stages o f research) w ould
suggest that some items do not share equally in the com m on core and should be
elim inated (Churchill 1979).
37
Table 3.1
Survey Items Representing Each Com ponent o f Customer Intimacy
Component
Scale of Reflective Item s1
C om m unication
I . M y attorney is available to talk with me when I need

him/her. (COM M 1)
2. M y attorney is w illing to listen to my concerns.
(COM M 2)
3. M y attorney is responsive to m y needs. (C O M M 3)
4. M y attorney takes tim e to discuss my questions with
me. (COM M 4)
5. I share intim ate, d etailed inform ation with my
attorney. (CO M M 5)
6. In our relationship, my attorney keeps me inform ed o f
the options available to me. (CO M M 6)
7. M y attorney and I share inform ation with each other.
(COM M 7)
8. M y attorney com m unicates with me so that we may
design the best solution for my needs. (C 0 M M 8 )
9. In our relationship, my attorney keeps me inform ed o f
new developm ents. (C O M M 9)
10. M y attorney and I com m unicate well with each other.
(COM M 10)
Social interaction
1. W e know each other on a personal basis. (SO C IA L 1)

2. W e carry on conversations that have nothing to do
with the services that s/he provides me. (SO C IA L2)
3. I enjoy talking with my attorney. (SOCIAL3)
4. I enjoy the com pany o f m y attorney. (SOCIAL4)
5. M y attorney and I talk about com m on interests besides
work. (SOCIAL5)
6. I value the social interaction I have with my attorney.
(SOCIAL6)
7. I like my attorney. (SOCLAL7)
8. M y attorney and I get along socially. (SOCIAL8)
9. I consider my attorney to be a friend. (SOCIAL9)
38
1.
I let my attorney know o f w ays that s/he can better

serve my needs. (P A R T IC 1 )
I make constructive suggestions to my attorney on how
to improve his/her service. (PARTIC2)
3. If I have a useful idea on how to im prove service, I
give it to my attorney. (PA R TIC 3)
4. W hen I experience a problem , I let my attorney know
so s/he can im prove service. (PARTIC4)
5. I am actively involved in the legal decisions my
attorney m akes concerning m y case(s). (PARTIC5)
6 . My attorney and I w ork together to attain a m utually
acceptable outcom e. (PA R TIC 6)
7. I want to be part o f the process. (PARTIC7)
8 . My attorney encourages me to be part o f the process.
(PARTIC8)
Com prom ise
My attorney and I com prom ise with each other in

order to reach my legal goals. (C O M P1)
I am willing to engage in give-and-take" with my
attorney to reach an acceptable outcom e. (CO M P2)
3. If my attorney and I do not agree on som ething, we
work together to find a m iddle course that is agreeable
to both of us. (C O M P3)
4. If I do not like my atto rn ey s advice, we give and
take until a m utual decision is made. (COM P4)
Some decisions m ade involve a trade-off between
what I want to do and w hat my attorney wants me to
do. (COMP5)
6 . My attorney is w illing to engage in give and take
with me in order to reach an acceptable outcome.
(COMP6)
At least three reflective item s are presented for each construct, in order to be able to test
reliability using C ro n b ach s alpha.
2 The term attorney is used here in order to place the survey items in a specific context.
This context fits well w ith the concept of custom er intim acy.
39
Each o f the items presented in Table 3.1 w ere m easured with seven-point scales
ranging from Strongly A gree to Strongly D isagree. Sources o f the survey items are
presented in T able 3.2. As show n in this table, m any items have been adapted from
previous studies; in these cases, the scales perform ed well. Once the item s for each
com ponent w ere generated, evidence o f content validity needed to be established.
Content validity refers to how w ell the items capture the entire content o f the construct o f
interest. E vidence o f the item s content validity w as assessed with the help o f thirteen
expert judges (including attorneys, professors, and senior doctoral students in m arketing).
Each judge w as given the definition for each com ponent and was instructed to rate each
item with respect to how well it captured the w h o le o f its definition. This process
provided m inor w ording changes; these changes are reflected in Table 3.1.
A questionnaire pretest w as adm inistered to 76 respondents. It is from this pretest
that prelim inary statistical analyses were conducted to refine the items to be used in the
creation o f reflective com binations for the cu sto m er intimacy construct. First, internal
reliability for the scales o f each com ponent was assessed. Table 3.3 presents the itemtotal correlations and coefficient alphas for each scale. Alpha levels for the scales ranged
from 0.888 to 0.955evidence that each scale has a high degree of internal consistency.
The next step involves the establishm ent o f construct validity for the scales o f
each com ponent. A reduction o f item s in each scale is needed in order to select those
items that best capture the entirety o f their respective definitions. In order to begin this
item reduction, all items in all o f the four scales w ere subjected to principal com ponents
analysis. V arim ax rotation was used in order to assess the number o f com ponents that
em erged from the data. T hese results are shown in Table 3.4.
40
Table 3.2
Sources o f Survey Item s for the Customer Intimacy Construct
Com ponent
Source(s) of Items
C om m unication
Item s 1-10 new
Social interaction
Item s 1-3 B eatty et al. (1996)

Items 4 -6 E llis (1995)
Items 7-9 new
A dapted from Bettencourt (1997)

Avg. item loading=.799
C o efficien t alpha=.85
C om prom ise
Items 1-6 new
41
Table 3.3
Pretest Results: Reliability Analysis
Item
Item-Total
Correlation
Squared Multiple
Correlation
Com munication
CO M M 1
COM M 2
COM M 3
COM M 4
COM M 5
COM M 6
COM M 7
COM M 8
COM M 9
C O M M 10
.6757
.8943
.8412
.8215
.5014
.8511
.8369
.8927
.6930
.8027
.5336
.8770
.8020
.8283
.3203
.7883
.7335
.8581
.5656
.7400
SO C IA L 1
SO C IA L2
SOCLAL3
SOCLAL4
SO C IA L5
SO C IA L6
SO C IA L7
SO C IA L8
SO C IA L9
.7505
.8319
.8430
.8578
.8688
.8587
.6640
.8690
.8464
.6861
.8107
.8924
.8843
.8666
.8257
.6276
.8468
.8436
P A R T IC 1
PA R TIC 2
PA R TIC3
PA R TIC 4
PA R TIC 5
PA R TIC 6
PA R TIC 7
P A R TIC 8
.7044
.5654
.7895
.7388
.7696
.6503
.5399
.6627
.5353
.5867
.7689
.6239
.6375
.7087
.4305
.6753
A lpha = .9440
Social interaction
A lpha = .9551
Customer participation
A lpha = .8938
42
Item
Item-Total
Correlation
Squared M ultiple
Correlation
Compromise
COM P I
C O M P2
C O M P3
C O M P4
C O M P5
C O M P6
.7528
.7724
.7263
.6854
.5904
.7292
Alpha = .8882
.6805
.6735
.6302
.5801
.3901
.5714
43
Table 3.4
Pretest Results: Principal Components Analysis'
Com ponent
1
COMM1
COMM2
COMM3
COMM4
COMM5
COMM6
COMM7
COMM8
COMM9
COMMIO
SOCIAL1
SOCIAL2
SOCIAL3
SOCIAL4
SOCIAL5
SOCIAL6
SOCIAL7
SOCIAL8
SOCIAL9
PARTIC1
PARTIC2
PARTIC3
PARTIC4
PARTIC5
PARTIC6
PARTIC7
PARTIC8
COMP1
COMP2
COMP3
COMP4
COMP5
COMP6
Component
2
0.713
0.850
0.809
0.798
0.569
0.804
0.805
0.812
0.575
0.786
0.538
0.509
0.674
Component
3
Component
4
Com ponent
5
0.565
0.781
0.840
0.712
0.751
0.894
0.857
0.458
0.824
0.807
0.537
0.819
0.846
0.685
.525
0.460
.526
0.795
0.785
0.565
0.457
0.740
0.575
1 Values of .45 or less w ere suppressed for ease o f interpretation.

n=76
0.629
0.646
0.614
0.553
0.542
44
Ideally, four com ponents w ould have been extracted: how ever, this analysis
produced five com ponents. As can be seen in T able 3.4. the su sp icio u s scale appears to
be the one for custom er participation. PA R TIC 1. PA RTIC2. PA R TIC 3. and PA RTIC4
seem to w ant to separate from PARTIC5, P A R T IC 6 . PA RTIC7. and P A R T IC 8 . This
result m ay be rationalized by more closely exam ining the w ordings o f the item s in this
scale. Items 1 through 4 speak to the idea that the custom er m akes suggestions in order
to participate in the relationship, while items 5 through
speak m ore to the custom er and
service p ro v id er w orking together to attain an outcom e. Upon closer look at the

definition for custom er participation (the extent to w hich a custom er is activ ely involved
in the design an d /o r production o f the firm s product o r service offering), it appears that
items 5-8 capture m ore o f the spirit of this definition that do item s 1-4. In o th er words,
custom er participation means that the custom er helps the service provider to attain the
desired outcom e. This implies an active, tw o-w ay flow of com m unication. This brings
up another problem with the PARTIC scale; som e o f the items (P A R T IC 6 and PA R TIC 8 )
want to load on the sam e com ponent as com m unication. It is probable th at custom er
participation is too sim ilar in nature to properly discrim inate from com m unication. If
such m easurem ent problem s continue, this co m p o n en t may need to be d ro p p ed from
further analysis.
B ecause 33 variables were included in the principle com ponents analysis with
only 76 pretest observations, the same analysis was conducted later with the main study
respondents (n=304). This was done in order to verify the pretest results. As can be seen
in Table 3.5, the sam e type o f problems surfaced w hen these variables w ere tested using
the larger sam ple.
45
Table 3.5
Main Study Results: Principal Components Analysis1
Component
1
Com ponent
2
Component
3
Com ponent
4
.719
COMM1
.803
COM M 2
.819
COM M 3
.799
COM M 4
.623
COM M 5
.808
COM M 6
COM M 7
.799
COM M 8
.818
.742
COM M 9
.803
COMMIO
.809
SOCIAL1
.867
SO CIAL2
.727
.468
SOCIAL3
.754
SO CIAL4
.869
SO CIAL5
.840
SO CIAL6
.558
.548
SO CIAL7
.812
SOCIAL8
.833
SO CIAL9
PARTIC1
PARTIC2
PARTIC3
PARTIC4
PARTIC5
.525
PARTIC6
PARTIC7
PARTIC8
.757
COMP1
.763
COMP2
.770
COMP3
.796
COMP4
.719
COMP5
.744
COMP6
1 V alues o f .45 or less were suppressed for ease of interpretation.
n=304
Component
5
.635
.840
.815
.715
.725
.627
.747
.722
46
Results from the pretest principal com ponents analysis as well as a re

exam ination o f the definitions o f each com ponent w ere used to select the three item s in
each com ponents scale that were deemed to be the m ost reflective of their respective
definition. For exam ple, C O M M 9 was elim inated from consideration as one o f the items
to represent com m unication since it wanted to load tw o different com ponents alm ost
equally. SOCLAL3, SO C IA L4, and SOCLAL7 were not considered for inclusion in the
final item set for social interaction because each w anted to load on two different
com ponents. C O M P4 was no longer a possibility for inclusion in the item s to best
represent com prom ise, since it wanted to load on tw o different com ponents. And as
noted above, the PARTIC scale had many problem s, including the fact that several o f its
items wanted to load on m ultiple components.
The rem aining item s from which to choose the very best to represent each
com ponent were then each carefully compared with its respective definition. Items
selected include C O M M 7, C O M M 8 , and CO M M IO to represent com m unication:
SOCLAL1, SO C IA L 8 , and SOCLAL9 to represent social interaction; PARTIC 1,
PARTIC2, and PA RTIC3 to represent custom er participation; and COM P2, C O M P3. and
COM P4 to represent com prom ise. W hile items 5-8 in the PA RTIC scale seem to better
capture the spirit o f its definition, it is also im portant to establish evidence o f
discrim inant validity betw een the components. T herefore, PA R TIC 1, PARTIC2, and
PARTIC3 were selected because they appear to be significantly different from
com m unication, as evidenced in Table 3.4. A correlation m atrix o f all o f these items
revealed relatively high w ithin-construct correlations and low betw een-construct
correlations; this was encouraging information.
47
Once these item s were identified, the n ex t step was to conduct a confirm atory
factor analysis o f this m odel, w hich is shown in Figure 3.1. Again, this w as perform ed in
an attem pt to establish construct validity o f each o f the scales. The m easurem ent model
was tested using LISR EL 8.3 for W indows. R esults from this analysis appear in Table
3.6. As can be seen, all
loadings are statistically significant, providing evidence o f
convergent validity. A nother im portant indication o f how well the item s perform in
capturing the construct o f interest appears in the squared multiple correlation (SM C )
statistic. The SM C is the percentage o f variance in each item that is accounted for by the
latent construct. Ideally, the researcher w ould certainly like to see over h a lf o f the
variance of each item be attributed to the latent construct with which it is associated. It
appears from Table 3.6 that m ost items m eet this expectation. Problem atic item s are
PA RTIC 1 (this construct show ed problems in the exploratory analysis as w ell) and
COM P2.
Figure 3.1
M easurem ent Model of Custom er Intimacy Com ponents
COMM7
COMM8
Communication
COMMIO
SOCIAL 1
SOCIALS
Social
Interaction
SOCIAL9
PARTIC 1
PARTIC2
Customer
Participation
PARTIC3
COMP2
COMP3
Compromise
COMP4
49
Table 3.6
Pretest Results: Confirmatory Factor Analysis I
Squared
M ultiple
Correlation
T-Value2
'kx
Factor
Loading
Communication
COM M 7
COMM8
C O M M IO
10.27956
9.41537
0.77966
0.79797
0.70751
10.53005
10.35500
0.66683
0.90720
0.87760
1.29181
1.46788
6.49539
6.97366
0.50171
0.63840
0.86458
0.84338
6.82458
1 .0 0 0 0 0
0.87931
0.83526
Social Interaction
SO C IA L 1
SO C IA L 8
SO C IA L9
1 .0 0 0 0 0
1.19110
1.20193
Customer Participation
PA R TIC 1
PA R TIC2
PA RTIC3
1 .0 0 0 0 0
Compromise
C O M P2
C O M P3
C O M P4
|
'
0.52866
0.71709
0.72931
1 .0 0 0 0 0
8.21262
1.08906
.
,,
Reference variables w ere set for each com ponent o f custom er intimacy.
" All t-values are statistically significant, p < 0.001
n=76
D iscrim inant validity is the degree to w hich item s o f different constructs indeed
do not want to load on each other. Evidence o f d iscrim inant validity is revealed in the
m odification indices (M is) provided by LISREL. A m odification index o f 3.84 o r greater
(a chi-square test w ith one degree o f freedom ) indicates problem s with a p articu lar item.
This analysis revealed two M is greater than 3.84 in the A x matrix. PA R TIC 1 had an MI
o f 5.07454, indicating that the item w anted to load on the com m unication construct, and
PARTIC2 had an M I 4.89417; this item w anted to load on the com m unication construct
as well. M is for
reveal whether individual item s have more in com m on than is being
accounted for by the m odel. In this case, six M is for 0 g were found, ail involving items
from custom er participation.
Since it is absolutely essential that no problem s w ith cross-loadings be present in
the m easurem ent m odel in order to properly develop reflective com binations, these
problematic M is w ere cause o f great concern. Since so m any problem s were associated
with the custom er participation construct, a review o f its definition along with its items
was undertaken. U pon further review, it was determ ined that the definition for custom er
participation (the ex ten t to which a custom er is actively involved in the design and/or
production o f the firm s product or service offering) co u ld actually be considered as part
o f the com m unication process (the formal as w ell as inform al sharing o f m eaningful and
timely inform ation betw een two parties). If B O T H parties m ust share m eaningful and
timely inform ation in order for successful com m unication to occur, then by definition the
custom er is part o f the process!
The essence o f the definition o f com m unication can be seen in the w ording o f the
custom er participation items as well. For exam ple, I let my attorney know o f w ays that
51
s/he can better serve my needs, (P A R T IC 1) and I make constructive suggestions to my

attorney on how to improve his/her service" (PARTIC2) both assess how well the
custom er com m unicates with the service provider. O ther participation item s such as I
am actively involved in the legal decisions my attorney m akes co n cern in g m y case(s)."
(PARTIC5) and M y attorney and I w ork together to attain a m utually acceptable
outcom e, (P A R T IC 6 ) assess the im portance o f a two-way flow o f com m unication. So
while cu sto m er participation was included as a com ponent o f cu sto m er intim acy in order
to establish the im portance of an active role taken by the custom er, statistical analyses
failed to dem onstrate discrim inant validity betw een these two constructs.
B ecause o f this insufficient evidence of discrim inant validity, cu sto m er
participation m ust be dropped as a distinct com ponent o f the cu sto m er intim acy process.
However, the item s representing com m unication (My attorney and I share inform ation
with each o th e r, M y attorney com m unicates with me so that we m ay design the best
solution for m y needs, and My attorney and I com m unicate well w ith each other) each
include the tw o-w ay nature of successful com m unication. So, w hile the custom er
participation com ponent was dropped, the spirit o f its definition is cap tu red by the items
used to represent com m unication.
O nce the custom er participation com ponent was dropped, an o th er iteration of
assessing the rem aining com ponents perform ance was conducted. A n o th er review o f all
items along w ith their respective definitions led to the selection o f the variables shown in
Table 3.7. T his table also shows results from the analysis o f the m easu rem en t model
provided by LISR EL. As can be seen, all ^.x loadings are statistically significant, and all
SM Cs are at an acceptable level. T hese should actually becom e stro n g er once the model
52
is tested with the data from all respondents. The M is for Xx and
@5
provide evidence o f
discrim inant validity, and the overall fit of the model is not significant (Chi-square =
28.56239, df = 24, p = 0.23704), which is desirable. T herefore, this is the model from
which reflective com binations were built.
Table 3.7
Pretest Results: Confirmatory Factor Analysis II
A* 1
Factor
Loading
T-Value2
Squared
Multiple
Correlation
Communication
COM M 7
COM M 8
C O M M IO
1 .0 0 0 0 0
0.86425
0.81904
10.4551 1
9.47000
0.80525
9.30400
0.79842
0.78942
0.69667
Social Interaction
SO C IA L 6
SO C IA L 8
SO C IA L9
1 .0 0 0 0 0
0.97186
14.08444
0.92928
6.15262
0.59164
0.94077
0.84415
Compromise
C O M P2
C O M P3
CO M P6
1 .0 0 0 0 0
0.96799
6.78032
0.54142
0.60489
0.69256
Reference variables w ere set for each com ponent o f custom er intimacy.
" All t-values are significant, p< .001.
n=76
53
Introduction o f Reflective Combinations

Now that the com ponents of custom er intim acy have been identified, it is
important to understand how this process o f custom er intimacy as a w hole im pacts
business relationships. H ow ever, in order to em pirically examine a m odel, a researcher
would typically need constructs that are unidim ensional in nature (A nderson and G erbing
1988). In fact, as A nderson and Gerbing point out, unidim ensionality is a crucial
prerequisite for reliable and valid measures. As dem onstrated above, cu sto m er intim acy
is clearly not a unidim ensional construct. B ecause the researcher is interested in the
process o f custom er intim acy as a whole, a w ay is needed to measure intim acy such that
all of its com ponents are represented.
The use of structural equation m odeling has significantly enhanced a research ers
ability to identify m easures that lack unidim ensionality. The Ax and 0 m odification
indices distinguish those indicators that cross-load onto other constructs or have
correlated error with other indicators. The presence o f cross-loadings indicates a lack of
discrim inant validity, w hile correlated errors dem onstrate insufficient co n stru ct validity.
When problem s such as these occur in a m easurem ent model, one thing is certain these
measures lack unidim ensionality.
W hen crafting definitions for latent constructs, it is essential that careful attention
be paid to the level o f abstraction for each construct that we wish to study. T his is
necessary in order to understand how unidim ensional measures are to be draw n from our
definition. T he custom er intim acy construct developed here provides a clear exam ple of
a construct w hich m ay be view ed at a general level o f abstraction OR at a m ore precise
level, depending on the theoretical model o f interest. These levels appear in Figure 3.2.
54
At the m ore specific level, one m ight w ish to study the im p act that
com m unication, social interaction, and com prom ise have on the d ev elo p m en t and
m aintenance o f business relationships. For exam ple, a researcher m ig h t w ant to better
understand the relationship between com m unication and such variables as trust and
com m itm ent. H ow ever, the theory proposed here tests custom er intim acy at the more
general level o f abstraction. As can be seen in Figure 3.2, custom er intim acy is formed
by its three com ponents. Instead o f exam ining the impact o f co m m u n icatio n , social
interaction, and com prom ise separately on variables such as trust and com m itm ent, the
use of reflective com binations allow s the researcher to study intim acy at its m ore general
level of abstraction. In other words, how does the process o f c u sto m er intim acy as a
whole affect consum er-to-business relationships?
For this study, the com ponents of cu sto m er intimacy were c re ate d and em pirically
tested, as presented in the beginning o f this chapter. Since no problem s w ere identified in
the m easurem ent m odel for these com ponents (see Table 3.6), the item s for each
com ponent m ay be sum m ed in a unique way in order to create a global (aggregated)
custom er intim acy construct. Table 3.8 provides an illustration o f h o w this was
conducted. F or each observation, the responses given for C O M M 7, SOCLAL 6 , and
COM P2 are sum m ed to create one indicator for custom er intimacy th at is reflective of
intimacy as a w hole. This process is repeated for the other m easures o f the custom er
intimacy com ponents. Thus, the end result is a m easure of custom er intim acy that
includes its three com ponents: com m unication, social interaction, an d com prom ise.
These new reflective m easures for custom er intim acy (CI1, CI2, and C I3) are used to test
the theoretical m odel in subsequent chapters.
55
Figure 3.2
Levels of Abstraction in the Customer Intimacy Construct
C ustom er
Intimacy
C om m unication
Social
Interaction
C om prom ise
56
Table 3.8
Construction of Reflective Combinations for the Custom er Intimacy Construct
Three reflective indicators o f custom er intim acy may be created as follows:
Sum m ated
C ustom er
Intimacy
M easures'
C om m unication
Social
interaction
C om prom ise
C II =
CI2 =
CI3 =
COMM7 +
COM M 8 +
C O M M 10 +
SO C IA L 6 +
SO C IA L 8 +
SOCIAL9 +
C O M P2
C O M P3
CO M P6
1 CI1, CI2, and CI3 can be treated as reflective m easures o f custom er intim acy and
can be used as indicators o f the construct to test a structural model of its proposed
antecedents and consequences. In order for these indicators to be properly reflective
o f the whole construct o f custom er intimacy, there should be no problems w ith the
prior m easurem ent m odel o f the com ponents, which m eans no cross-loadings for the
lambda-x param eters as well as no correlated error term s. N o m easurem ent problem s
were encountered here.
57
Measures o f the Antecedents

Perceived expertise may be defined as the custom ers evaluation o f relevant
com petencies associated with the service transaction (Crosby et al. 1990). Six item s were
crafted that w ere deem ed to capture the entirety o f this definition. These item s appear in
Table 3.9.
Table 3.9
Items Used to M easure Perceived Expertise
M y attorney:
1.
2.
3.
4.
5.
6.
really understands his/her areas o f the law. (EXP1)

has legal capabilities I have confidence in. (EXP2)
seem s to keep up with current changes in the law. (EXP3)
is com petent as an attorney. (E X P4)
is very know ledgeable about legal m atters. (EXP5)
has a good legal reputation in the com m unity. (EX P 6 )
C ustom er know ledge may be defined as the possession of detailed inform ation of
each custom er that an em ployee serves. Four reflective items were created in order to
measure how w ell the custom er perceives that the service employee understands specific,
individual client needs. These items are found in Table 3.10.
58
T able 3.10
Items Used to M easure Customer Knowledge
M y attorney:
1. really understands me. (K N O W 1)
2. know s about my special legal needs. (KNOW 2)
3. u nderstands my business so s/he is better able to m eet my
legal needs. (KNOW 3)
4. is understanding of my needs as a client. (KNOW 4)
T he final antecedent is shared values, defined as the degree to w hich the value
system /ethics/m orals o f the custom er and service provider are sim ilar in nature. Items
used to m easure shared values in this study w ere taken from C rutchfield (1998), where
the scale perform ed well (composite reliability = .955, average item loading = .953).
These item s a p p ea r in Table 3.11.
T able 3.11
Items Used to M easure Shared Values
T he values that my attorney stands for:
1.
2.
3.
4.
are consistent with my own. (V A LU E 1)

reflect the type of person that I am. (VALUE2)
are com patible with the things I believe in. (VALUE3)
are sim ilar to my own. (V A LU E4)
59
Measures o f the Consequences

T rust is defined as a w illingness to rely on an exchange partner in whom one has
confidence (M oorman et al. 1992). This definition is intended to very broad in order to
be applicable to a wide variety o f business relationships. The trust scale developed by
M organ and Hunt (1994) is based on this definition and is also intended to apply to
general business situations. In their study, the trust scale perform ed well with respect to
the m easurem ent issues of reliability (com posite reliability = .949; coefficient alpha =
.947) and construct validity (average item loading = .849). Therefore, the M organ and
Hunt (1994) scale was used here. Its item s are shown in Table 3.12.
Table 3.12
Items Used to Measure Trust
M y attorney:
1.
2.
3.
4.
5.
is someone that I can rely on. (TRUST 1)

has high integrity. (T R U ST2)
can be trusted. (TRU ST3)
is someone I have great confidence in. (TRUST4)
can be counted on to do w hat is right. (TRUST5)
R elationship com m itm ent is defined as the custom ers psychological attachm ent
to the service firm (Crutchfield 1998). This psychological-based com m itm ent is different
from the actual behavior of relationship continuance in that it refers to the custom ers
w anting to continue the relationship (Johnson 1991). The first three items used to
m easure com m itm ent in the present study were adapted from M organ and Hunt (1994),
while item s four and five were adapted from the Allen and M eyer (1990) affective
60
com m itm ent scale. These item s are presented in Table 3.13. C rutchfield (1998) used
these sam e five items to represent com m itm ent in her study, and the scale perform ed well
(composite reliability = 0.93 1. average item loading = 0.932).
Table 3.13
Items Used to Measure Relationship Commitment
The relationship that I have with my attorney:

1.
2.
3.
4.
5.
is im portant to m e. (C O M M IT 1)
is som ething I care about. (COM M IT2)
is som ething that I am attached to. (C O M M IT 3)
has a great deal o f m eaning to me. (C O M M IT 4)
is som ething that I value deeply. (C O M M IT5)
Referral behavior is defined as the w illingness o f a custom er to recom m end the

service firm to others. Items used to measure referral b eh av io r appear in Table 3.14. The
first three item s are adapted from C rutchfield (com posite reliability = 0.961, average item
loading = 0.957). The fourth item is a new creation.
Table 3.14
Items Used to Measure Referral Behavior
1. I often recom m end my attorney to family and friends.

(REF1)
2. W hen I talk to som eone who is seeking legal advice, I
recom m end my attorney to him/her. (REF2)
3. I like telling others about my positive experiences with my
attorney. (REF3)
4. I say positive things about my attorney to others. (REF4)
61
All of the item s were m easured using self-report m easures o f the resp o n d en ts'
perceptions. The respondents consisted of clients o f attorneys throughout the state o f
Alabama. S even-point scales ranging from Strongly D isag ree" to Strongly A gree"
were used to capture respondents opinions for all o f the co n stru ct measures.
Data Collection
In order to assess the consequences (benefits) o f utilizin g a value-delivery
strategy such as cu sto m er intim acy, the opinions o f custom ers are the key responses to
consider. T herefore, the m odel was tested by obtaining the perceptions o f custom ers.
This is sim ilar to m odels constructed by Crosby et al. (1990): Bettencourt (1997); and
Oliver, R ust, and V arki (1997). all of whom tested a structural model of c ustom er
perceptions in o rd er to exam ine their theories.
For this study, the attom ey-client relationship was chosen because it provides a
clear exam ple o f a highly custom ized service. R elationship m arketing concentrates m ore
on the delivery o f value than on the delivery o f the actual goods and services
(Gum m esson 1996). The legal service which is sought by a client is much less tangible
than other types o f services and truly must deliver value (H art and Hogg 1998). As
custom er intim acy is one proposed method o f value-delivery. the attom ey-client
relationship seem s to be an ideal context in which to test the proposed theory.
D ata collection consisted o f two phases. The first p hase involved providing a
pretest questionnaire to 76 clients. The purpose o f this p hase was twofold: 1) to identify
any problem s w ith the questionnaire regarding item w ording and form at so that any
changes could be m ade early in the data collection process, and
) to provide a reduction
62
o f the items o f the com ponents o f custom er intim acy so that reflective com binations may
be developed.
The second phase involved a m ass-m ailing o f the questionnaire. A total o f 3.000
packets were sent via mail to various groups of people across the state o f A labam a who
were deem ed likely to need the services o f an attorney. Q uestionnaires were sent to
people such as physicians, dentists, insurance agents, real estate agents, college
professors, hum an resource managers, and small business owners.
The questionnaire packet included a letter w hich explained the study and asked
respondents to com plete the questionnaire; a questionnaire involving their relationship
with their prim ary attorney; and a postage-paid, self-addressed, return envelope. The
letter and questionnaire are provided in A ppendix B. T he Dillm an (1978) m ethod for
mail surveys was used. The Dillman m ethod suggests a questionnaire of certain
dim ensions, folded in a specific manner, m ailed with a postage-paid reply envelope, and
promises anonym ity for the respondents. In addition, the D illm an m ethod suggests the
use of follow -up postcards to remind those who received the questionnaire packets to
com plete them. T he postcard provided a phone num ber to request a packet if they failed
to receive the initial m ailing or if they m isplaced it. Three respondents did use the phone
num ber to request a questionnaire because the original m ailing was never received. A
copy of the postcard appears in Appendix C.
As an incentive to com plete and return the questionnaire, a SI donation for each
com pleted questionnaire returned was prom ised to the K ids Chance Scholarship Fund.
Supported by the A labam a Law Foundation, the Kids' Chance Scholarship Fund provides
scholarships to the children o f workers who are killed o r totally disabled on the job. The
63
goal was to obtain a m inim um o f
200
responses from clients o f attorneys throughout the
state of Alabam a.
O f the 3,000 questionnaires m ailed, 39 were returned as undeliverable. This
represents a 1.3% undeliverable rate. T here were 304 com pleted questionnaires returned,
which represents a 10% response rate. W hile this rate is low, it can be explained by the
fact that not all people who received the survey work with an attorney; therefore these
people w ould not be able to com plete it.
Test for Bias Due to Nonresponse and Common Methods V ariance

N onresponse bias was assessed by com paring early and late respondents
(Armstrong and O verton 1977) on the key constructs o f perceived expertise, custom er
knowledge, shared values, custom er intim acy, trust, com m itm ent, and referral behavior.
Early respondents w ere defined as the first ten percent o f those w ho com pleted and
returned the questionnaire, while late respondents were defined as the last ten percent to
return and com plete the questionnaire. The means for the key con stru cts for early versus
late respondents show ed that none were significantly different (p > .05), suggesting that
nonresponse bias is not a problem in this study. These means, along w ith t-values and
significance levels, are shown in Table 3.15.
64
Table 3.15
Comparison of M eans for Early Versus Late Respondents
Key
C onstruct
Early
(first 30
respondents)
Late
(last 30
respondents)
T-value
Sign.
level
Perceived expertise
6.289
6.350
-0.253
0.801
C ustom er know ledge
6 .0 0 0
6.258
-1.137
0.260
Shared values
5.783
6.008
-0.828
0.411
C ustom er intim acy
5.615
5.578
0.143
0.887
Trust
6.533
6.427
0.449
0.655
C om m itm ent
5.713
5.487
0.821
0.415
Referral behavior
6.033
5.808
0.837
0.406
65
In addition to the potential for nonresponse bias, it is possible that com m on

m ethod variance may have biased the results. This is due to the fact that all data were
collected using self-report m easures. Therefore, the Harmon one-factor test was used to
establish the extent to which com m on m ethods variance may have been responsible for
the majority of variance observed in the study (P odsakoff and Organ 1986). This was
done by entering all o f the m easures under exam ination into a factor analysis using the
principal com ponent m ethod o f extraction. C om m on m ethod variance m ay be the
system atic source o f the variance observed in the data if there is only one factor that
em erges in the unrotated solution. C onversely, the greater num ber o f factors extracted in
this process, the less likely that com m on m ethods variance is biasing the results
(Brockm an 2000). W hile this does not allow the researcher to rule out com m on m ethods
bias completely, it is at least suggestive that com m on m ethod variance is not an
overw helm ing influence on the relationships observed. Results for the data collected in
this study revealed that six eigenvalues greater than one were extracted; these six
com ponents explained 80% o f the total variance. Based on these results, com m on
m ethod variance does not seem to be a concern.
Sample Characteristics
Characteristics o f the sam ple are displayed in Table 3.16. W hile slightly over half
o f the attorneys practiced law in the B irm ingham area, numerous sm aller cities
throughout A labam a are also represented by the results.
66
Table 3.16
Respondent Characteristics
Characteristic
Gender o f Respondent
Male
Female
Gender o f Attorney
Male
Female
City of Residence o f Attorney
Birm ingham
M obile
M ontgom ery
Tuscaloosa
Clanton
Alabaster
M ontevallo
Selma
G untersville
Hoover
Pelham
A ndalusia
H om ew ood
H untsville
Oneonta
Foley
Brewton
Troy
Daphne
Bessemer
Number
Percentage
192
63.0
37.0
112
265
39
87.2
159
33
7
52.3
10.9
2.3
21.7
66
5
4
4
4
4
3
3
3
1 2 .8
1 .6
1.3
1.3
1.3
1.3
1 .0
1 .0
1 .0
0 .6
0.3
0.3
0.3
0.3
0.3
0.3
0.3
Type of Firm
Solo practitioner
Two attorneys practicing together
Law firm w ith three or m ore partners
Corporate or governm ent attorney
90
41
157
16
29.6
13.5
51.6
5.2
Reason Attorney is Used

Personal reasons
Business reasons
Both personal and business reasons
98
80
126
32.2
26.3
41.4
1
1
1
1
1
Length o f R elationships Existence

Less than 1 year
1 to 2 years
2 to 5 years
5 to 10 years
O ver 10 years
Main Form o f Communication
Face to face
T elephone
Em ail
R egular mail
Fax
N o response
n=304
31
42
76
66
89
10.2
13.8
25.0
21.7
29.3
83
196
5
7
4
9
27.3
64.5
1.6
2.3
1.3
3.0
C H APTER 4
M EASUREM ENT MODEL RESULTS
Measurement M odel Overview

The tw o-step approach recom m ended by Anderson and G erb in g (1988) was used
to analyze the d ata in the study. U nder this approach, the items used to m easure the
constructs are first assessed for reliability and validity (the m easurem ent m odel phase),
then the m odels hypothesized paths are evaluated (the structural m odel phase). Joreskog
and Sorbom (1993) also advocate this tw o-step process, since testing the initially
specified theory m ay be meaningless unless it is first established that the m easurem ent
model holds. O nly after latent variables are properly defined and properly m easured does
it make sense to exam ine the latent variable relationships in a structural m odel
(Schum acker and Lom ax 1996).
M odel identification refers to w h eth er unique values can be fo u n d for the
param eters to be estim ated in the theoretical model (Schum acker and Lom ax 1996).
Certain constraints placed on the m easurem ent model are necessary fo r identification
purposes. O ne such constraint is that eith er one indicator for each latent construct m ust
have a factor loading fixed to one. or the variance o f each latent co n stru ct m ust be fixed
to one. In the first case, those indicators that are fixed to one are referred to as reference
variables. The reason it is necessary to im pose these constraints by settin g reference
variables is to set the m easurem ent scale fo r each latent construct, m ainly because an
68
69
indeterm inacy exists between the variance o f the latent construct and the loadings of the
observed indicators on that factor (Schum acker and Lom ax 1996). In this study,
reference variables were used to elim inate the problem o f scale indeterm inacy.
M easurement M odel for the Customer Intimacy Construct

T hree reflective measures for each o f the three com ponents o f custom er intimacy
were subjected to a confirm atory factor analysis using LISREL 8.3 for W indow s.
Because these m easures were subsequently used to build reflective com binations of the
custom er intim acy construct, it was im perative that no m easurem ent problem s were
found in this m odel. These problem s m ay m anifest them selves in a variety o f ways,
including a) statistically insignificant loadings (Xx) on the construct w ith which the item
is associated; b) shared common variance with another latent construct, as evidenced by
large M is fo r A x; c) shared com mon variance with other indicators, as shown in the Mis
for 0; and d) a low amount of variance associated with the item that is being explained
by the latent construct, as shown in the SM C values for each item.
A correlation matrix along with the means and standard deviations for each of the
items used to m easure custom er intim acy may be found in Table 4.1. This table reveals
high w ithin-construct correlations and low er betw een-construct correlations. The results
for the m easurem ent model of the custom er intimacy com ponents are presented in Table
4.2. As can be seen in the table, all of the t-values for the param eter estim ates are highly
significant. In addition, the SM Cs for each o f the items are large. T he SM C may be
viewed in a sim ilar manner to an R2 statistic; it is defined as the percentage o f variance in
the item that is being explained by the latent construct. The fact that the SM Cs are large
means that each item did a good jo b of capturing the latent construct o f interest.
70
A dditionally, all o f the Mis for k x w ere low (below 5 is a practical c u t-o ff value),
indicating none o f the items wanted to associate with other latent constructs than their
own.
Table 4.1
Correlation Matrix, Means, and Standard Deviations
for Items in the Customer Intimacy Construct
COM M 7
COM M 8
COM P2
COM P3
COM P6
1.000
0.774
0.785
0.458
0.461
0.475
0.467
0.469
0.518
1.000
0.820
0.474
0.461
0.479
0.454
0.434
0.453
M EANS
5.81
5.97
COM M 7
COM M 8
C O M M IO
S O C IA L 6
S O C IA L 8
S O C IA L 9
COM P2
COM P3 C O M P6
S O C IA L 6
S O C IA L 8
S O C IA L 9
1.000
0.520
0.525
0.532
0.455
0.440
0.499
1.000
0.796
0.781
0.389
0.370
0.415
1.000
0.818
0.389
0.429
0.409
1.000
0.410
0.438
0.409
1.000
0.717
0.691
1.000
0.692
1.000
6.01
5.03
5.26
5.19
5.45
5.49
5.38
1.25
1.85
1.81
1.85
1.23
1.33
1.27
C O M M IO
S T A N D A R D D E V IA T IO N S
1.34
1.25
n=304
71
Table 4.2
Confirmatory Factor Analysis Results for Com ponents o f Customer Intimacy
Loading
T-value1
Standard
Error
Communication
COMM72
COMM8
COMMIO
1.000
0.965
0.995
20.868
21.725
0.046
0.046
0.746
0.795
0.840
Social interaction
SOCIAL62
SOCIAL8
SOCIAL9
1.000
1.017
1.028
21.952
21.585
0.046
0.048
0.762
0.827
0.809
Compromise
COMP22
COMP3
COMP6
1.000
1.087
1.021
16.503
16.210
0.066
0.063
0.707
0.709
0.685
Xx
Component
Squared
Multiple
Correlation
All are statistically significant, p <0.001

These items were used as reference variables in o rd er to set the scale for each o f
the constructs.
n=304
72
One problem did exist in the M is for the 0 g m atrix. The error term for COM P3
wanted to associate w ith the error term for SOCLAL 6 . W ith a M I o f 6.829, this means
that there is som ething m ore in common between these two items than is being accounted
for by the model. An exam ination of the w ordings o f SOCLAL 6 (I value the social
interaction I have w ith my attorney") and CO M P3 ( If my attorney and I do not agree on
something, we w ork together to find a middle course that is agreeable to both of us )
suggests that both item s speak of interaction or w orking together. This may be the cause
o f the common variance. Since the overall model fit is good, this path was not allow ed to
be freed.
G oodness o f fit indices in SEM provide evidence o f how well the model allows
the researcher to reconstruct the input covariance m atrix. H ow ever, there is no one single
statistical test that can identify a correct model given the sam ple data. M odel fit criteria
that are com m only used are the chi-square statistic (x 2). the goodness-of-fit index (GFI),
the adjusted goodness-of-fit index (AGFI). and the root-m ean-square residual (RM R)
(Joreskog and Sorbom 1989). These fit criteria are based on the differences that exist
between the observed covariance matrix and the m odel-im plied o r reproduced covariance
matrix (Shum acker and Lom ax 1996).
Table 4.3 presents results of selected goodness-of-fit criteria. A non-significant
X2 implies that there is no significant discrepancy betw een the covariance matrix im plied
by the model and the population covariance m atrix (K ellow ay 1998). The non
significant x 2 found in this study indicates that the m odel fits the data well. The R M SEA
reflects both model error and sample error by assessing discrepancy in fit per degrees o f
freedom. Steiger (1990) suggests that values below .05 indicate a very good fit to the
73
data. The G FI m easures the amount o f variance and covariance in the observed matrix
that is predicted by the reproduced m atrix, and the A G FI adjusts the GFI for the degrees
o f freedom of the m odel relative to the num ber o f variables (Schum acker and Lom ax
1996). For both o f these indexes, values close to 0.90 indicate a good m odel fit. As can
be seen in Table 4.3. all o f the goodness o f fit criteria suggest that the model fits the data
well.
Table 4.3
Goodness o f Fit Statistics for Model o f Components of Customer Intimacy
M easure
Result
Interpretation
C hi-Square (%2)
27.153
df=24, p=0.297
Nonsignificant;
indicates model
reconstructed the
input matrix well
G oodness of Fit Index (GFI)
0.981
> 0.90; indicates

good model fit
A djusted G oodness of Fit

Index (A G FI)
0.964
> 0.90; indicates

good model fit
R oot m ean error of

approxim ation (RMSEA)
0 .0 2 0
< 0.05, indicates

good model fit
n=304
74
O nce the properties o f the items for custom er intimacy w ere established, the
researcher com bined these items so the custom er intimacy construct co u ld be exam ined at
its higher level o f abstraction. These three reflective measures were created using the
reflective com binations method o f com bining individual com ponents in order to obtain
measures that are truly reflective of the construct at its higher level o f abstraction. W hen
subjected to reliability analysis, this reflective scale yielded a coefficient alpha o f 0.954.
Therefore, the scale contains evidence o f high internal consistency.
Because custom er intimacy is a new concept, it is im portant to establish evidence
of construct validity. M ore specifically, discrim inant validity may be established to
ensure that the m easure does not correlate very highly with another m easure from which
it should differ (P eter 1981). Indeed, if the two constructs correlate too highly with one
another, they m ay be m easuring the sam e thing rather than different things (Churchill
1979). Therefore, a m easurem ent model w hich included the three reflective m easures of
custom er intim acy as well as the eight item scale for the com fort co n stru ct (Spake 1999)
was run with LISR EL 8.3 for W indows. R esults from this model are provided in Table
4.4. Evidence o f convergent validity (the extent to which items o f the sam e construct
want to hold together) is dem onstrated by the highly significant factor loadings and the
high SM Cs. E vidence o f discrim inant validity may be found by observing the
m odification indices for Ax as well as for 5 . Only one problem atic M I w as found in
these m atrices. C O M F O R T 8 wanted to load on the custom er intim acy construct, as
evidenced by the M I o f 6.925. This item for com fort reads " T ro u b le so m e
Peace of
mind. It could be argued that being in a business-intim ate relationship m eans that the
custom er has peace-of-m ind about the relationship; this would explain the item s
75
w illingness to load on the intim acy construct. Discrim inant validity is typically assessed
in SEM by observing the correlation betw een the two constructs in the phi matrix. The
value o bserved here was 0.580. w hich is significantly less than one. A second model was
run in w hich phi was constrained to one: however, this m odel did not convergem eaning
the program could not find a solution with the phi=l constraint placed on the model.
Therefore, evidence of discrim inant validity between custom er intim acy and com fort was
successfully established.
Table 4.4
M easurement Model Results for Customer Intimacy and Comfort
X\
Construct
Loading
T-value1
Standard
Error
Squared
Multiple
Correlation
C ustom er
Intim acy
cn02
CI3
Com fort
COMFORT I2
COMFORT2
COMFORT3
COMFORT4
COMFORT5
COMFORT6
COMFORT7
COMFORT8
1.000
0.993
1.027
1.000
1.094
1.105
1.045
1.002
1.036
0.972
0.952
29.551
30.995
29.174
30.209
29.210
21.208
22.607
20.401
20.192
0.034
0.033
0.867
0.864
0.892
0.038
0.037
0.036
0.047
0.046
0.048
0.047
0.836
0.873
0.891
0.873
0.687
0.726
0.663
0.656
A ll are statistically significant, p < 0.001

" T h e se item s were used as reference variables in order to set the scale for each o f
the constructs.
n= 304
76
Measurement Model for all Constructs

Before items in the m easurem ent model were analyzed with LISREL, reliabilities
o f all o f the constructs w ere assessed. This is particularly im portant to establish, as three
o f the constructs in the m odel (perceived expertise, custom er knowledge, and custom er
intimacy) were m easured w ith newly created scales. T able 4.5 presents the variance
extracted estim ates for each o f the constructs along with reliability estim ates. As can be
seen, there is evidence that each scale contains a high degree o f internal consistency.
Table 4.5
Reliability and Variance Extracted Estimates
Reliability
Estimate
Variance Extracted
Estimate
Perceived Expertise
0.971
0.876
Customer Knowledge
0.944
0.857
Shared Values
0.956
0.886
Customer Intimacy
0.954
0.916
Trust
0.973
0.903
Commitment
0.930
0.790
Referral Behavior
0.926
0.821
Construct
n=304
77
Once evidence o f reliability and validity o f the custom er intim acy construct was
established, all item s for all o f the constructs in the theoretical m odel w ere subjected to a
confirm atory factor analysis using LISREL 8.3 for W indow s. Table 4.6 provides results
from this analysis. W hile all o f the factor loadings are significant, there are som e
problem atic SM C values. Ideally, a researcher w ould like to observe m ore than half of
an item s variance associated with its latent construct. However, this is not the case with
several of the item s, nam ely COM M IT4. C O M M IT 5. REF4. KNOW 1. and V A LU E 1.
Particularly troublesom e are the extrem ely low SM C s for CO M M IT4 and C O M M IT5.
A nother cause for great concern lies in the num erous high M is in both the A x and
0 8 matrices. In the A x m atrix, for exam ple. T R U ST S, EX PERT 1. K N O W 1, and
VALUE1 w anted to load on every other construct present in the m odel. T h ese extremely
high Mis indicate a lack o f discrim inant validity betw een the items. In o th e r words,
m any of the item s have m ore in comm on with each other than is being accounted for by
the model.
Because o f the lack o f discrim inant validity betw een constructs, each o f the m ulti
item scales (except for custom er intimacy) was sum m ed into com posite indicators. The
use o f com posites tends to mitigate these problem s. For each sum m ed m ulti-item scale,
the error variance w as set by using the form ula (1 -reliability)*variance. T he lam bdas for
each composite w ere fixed to one, as reference variables need to be used for each o f the
constructs being m easured.
78
T able 4.6
Measurement Model Results for all M easures
S ta n d a rd
Xx
C o n s tru c t
L o a d in g
T -v a lu e 1
E rro r
S q u a re d
M u ltip le
C o rre la tio n
C u s to m e r I n tim a c y
CI1
CI22
CI3
1.009
1.000
1.038
29.641
0.034
31.281
0.033
0.867
0.860
0.896
1.000
1.082
1.024
1.042
0.976
27.494
26.566
23.225
16.764
0.039
0.039
0.045
0.058
0.778
0.913
0.889
0.798
0.570
1.000
1.124
1.040
0.623
0.640
22.300
20.460
6.490
6.913
0.050
0.051
0.096
0.093
0.710
0.883
0.797
0.136
0.152
1.000
0.933
O.S53
0.S01
28.259
20.67 1
15.179
0.033
0.041
0.053
0.877
0.836
0.659
0.477
1.000
1.464
1.481
1.545
1.533
1.317
17.545
19.5 1 1
19.053
16.434
15.802
0.083
0.076
0.081
0.093
0.083
0.61 1
0.768
0.895
0.865
0.697
0.657
1.000
1.675
1.650
1.397
13.500
13.771
1 1.861
0.1 24
0.120
0.118
0.426
0.835
0.894
0.599
1.000
1.330
1.416
1.350
12.312
1 1.937
12.136
0.108
0.1 19
0.11 1
0.368
0.874
0.785
0.829
T ru st
TRUST l 2
T R U ST2
TRUST3
T R U ST4
TRUSTS
C o m m itm e n t
C OM M IT l 2
COMMIT2
COMMIT3
COMMIT4
COMMITS
R e f e r r a l B e h a v io r
REF l 2
REF2
REF3
REF4
E x p e rtis e
EXPERT I2
EXPERT2
EXPERT3
EXPERT4
EXPERT5
EXPERT6
C u s to m e r K n o w le d g e
KNOW 12
KNOW2
KNOW3
KNOW4
S h a r e d V a lu e s
V A L U E I2
V AL UE2
V A LU E3
VALUE4
All are statistically significant, p < 0.001

"These items were used as reference variables in order to set the scale for each o f the constructs.
n=304
79
Final Measurement Model Using Summated Scales

A correlation matrix of all o f the indicators, along with means and standard
deviations, is found in Table 4.7. Results from the m easurem ent model are provided in
T ables 4.8 and Table 4.9. Results from the com posite m odel indicate a very strong fit.
The overall fit statistics are all well above the acceptable levels, the Xx loadings for the
intim acy construct are statistically significant, and the problem s with the high M is have
im proved significantly. The SM C s for each o f the com posite indicators are sim ply their
respective reliabilities, as the erro r terms were fixed by the (1 -reliability)*variance
form ula. Because of its good fit. this measurement m odel with com posite indicators was
used to test the structural model.
Table 4.7
Correlation M atrix, Means, and Standard Deviations
for Indicators in the Final M easurement Model
C Il
C I2
CI3
TRUST
C O M M IT
REFER
EX PERT
KNOW
VALUE
1.000
C Il
C I2
C I3
TRU ST
C O M M IT
REFER
EX PERT
KNOW
VALUE
0.866
0.879
0.665
0.668
0.581
0.524
0.655
0.568
0.87S
0.689
0.627
0.585
0.624
0.635
0.566
1.000
0.706
0.636
0.588
0.640
0.676
0.601
1.000
0.489
0.669
0.807
0.750
0.639
0.529
0.428
0.481
0.530
0.585
0.590
0.544
0.774
0.485
1.000
0.543
1.000
M EANS
5.429
5.568
5.526
6.266
5.328
5.553
6.253
5.953
5.780
1.183
1.093
1.362
1.429
1.013
1.121
1.221
1.000
1.000
1.000
1.000
S T A N D A R D D E V IA T IO N S
1.169
1.163
C l I, CI2, CI3 = reflective m easures for custom er intim acy. TR U ST = trust, C O M M IT =

relationship commitment, REFER = referral behavior. EX PE R T = perceived expertise,
K N O W = custom er knowledge. VALUE = shared values.
n=304
80
Table 4.8
Confirmatory Factor Analysis Results for Final Measurement Model
Construct
Customer
Intimacy
c ir
CI2
CI3
A.x
Loading
T-value1
Standard
Error
Squared M ultiple
Correlation
1.000
0.989
1.026
29.791
31.761
0.033
0.033
0.870
0.860
0.893
Statistically significant, p < 0.001

~ Used as a reference variable in order to set the scale for the construct.
n=304
Table 4.9
Goodness o f Fit Statistics for Final Measurement Model
Measure
Result
Interpretation
Chi-Square ( x 2)
13.877
dt'= 12. p=0.309

N onsignificant:
indicates model
reconstructed the
input matrix well
G oodness of Fit Index (GFI)
0.990
> 0.90; indicates

good model fit
Adjusted G oodness o f Fit

Index (AGFI)
0.963
> 0.90; indicates

good model fit
Root mean error of

approxim ation (RM SEA )
0.022
< 0.05, indicates

good model fit
n=304
CHAPTER 5
STRUCTURAL M ODEL RESULTS
Proposed Structural Model

The proposed structural model shown in Figure 2.1 was tested with the m easures
provided in the final m easurem ent model listed in T able 4.6. Results from this analysis
are provided in Table 5.1 and in the model show n in Figure 5.1. The overall m odel fit is
poor, as evidenced by the significant chi-square value and values below the acceptable
levels for the GFI, AGFI, and R M SEA . In terms o f the hypothesized paths, all but one
are statistically significant and in the proper direction. T he one path that was not
significant is trust com m itm ent. Since this linkage is w idely supported in the
literature, this finding is particularly troublesom e.
Also problem atic in the results for the proposed m odel are the significantly high
M is that appear for Ay, B, T, T f E, and &. The large M is that appear for B and T
suggest the need for inclusion o f som e paths that had not been specified in the proposed
model. Because o f these problem s, a respecification process was undertaken in order to
determ ine w hether the model could be improved.
81
82
Table 5.1
Proposed Structural Model Results
Path
Gamma
Perceived Expertise > Intimacy
C ustom er K now ledge > Intimacy
Shared V alues Intimacy
Beta
Intimacy > Trust
Intimacy C om m itm ent
Trust > C om m itm ent
Com m itm ent Referral Behavior
Estimate
T-value
0.298
0.336
0.299
4.025
4.603
7.037
0.763
0.941
-0.082
0.626
19.415
10.712
-0.932
11.564
Goodness of Fit Statistics

GFI = 0.792
AG FI = 0.471
RM SEA = 0.289
x l = 308.423
d f = 11
p = 0.000
n=304
83
Figure 5.1
Proposed Structural Model
Perceived
Expertise
T ru st
0.763
1= 1 9.4
-0.082
r=.n
0.336
t=4.603
Customer
Intimacy
Commitment
0.941
t= 10.712
0.626
t=l 1.564
0.299
t=7.037
R eferral
Behavior
84
Respecification o f the Structural Model

Due to the large M is found in the proposed m odel, som e respecification was
conducted as an exploratory assessm ent o f the data (B rockm an 2000). This
respecification approach was consistent with the method proposed by Joreskog and
Sorbom (1990). The M is for B and T helped to identify potential areas for model
respecification, and no changes w ere m ade to the model that w as not consistent with
theory. A sum m ary of the respecification process is given in T ab le 5.2. As this table
shows, each tim e the model w as respecified, the overall fit im proved.
The largest MI found in the proposed model related to the trust construct. This
MI suggested that a path from trust to intim acy would result in a better model fit. This
makes theoretical sense, as the m ore trust a custom er has in a service provider, the more
likely that custom er would be actively involved in the design and developm ent of the
product or service. For exam ple, the m ore trust one has. the m ore likely he or she should
be willing to share personal or sensitive information, the more com fortable and therefore
more w illing to engage in social interaction with the service provider, and the more
willing to agree to com prom ise if the situation arises. Therefore, the first respecification
involved the addition of a path from trust to custom er intimacy.
85
Table 5.2
Summary o f the Structural M odel Respecification Process
Changes m ade from previous

test
Proposed m odel
Added
T rust Intim acy
Added
Trust R eferral Behavior
Added
Expertise > T rust
Shared values C om m itm ent
GFI
AGFI
RMSEA
df
0.792
0.471
0.289
308.423
11
0.900
0.721
0.190
134.007
10
0.974
0.918
0.086
29.755
0.993
0.972
0.015
7.451
R esults from the first respecification still displayed high M is for B and T. The
highest observed MI indicated that a path betw een trust and referral behavior would
improve the fit of the model. In the proposed m odel, the only link betw een these two
constructs existed through the relationship com m itm ent construct. It m akes theoretical
sense that a direct link would be present from trust to referral behavior. If a service
provider can be trusted, that custom er should w ant to spread the good w ord about this
person. T herefore, the second respecification included a path from trust to referral
behavior.
R esults from this second respecification show ed significant m odel im provem ent.
The M is for B are acceptable, as are the M is fo r VF, 0 e, and &-. Problem atic M is still
existed in the V matrix. These revealed that a path between perceived expertise and trust
and a path betw een shared values and relationship com m itm ent w ould significantly
improve the m odel fit. Logically, these paths are theoretically ju stified. The definition o f
86
trust means that a custom er has confidence in a service provider because he o r she
perceives that service provid er to possess a degree o f expertise in a particular area. In
addition, the link betw een expertise and trust is supported in the m arketing literature
(Busch and W ilson 1976; Bendapudi and Berry 1997). The direct path betw een shared
values and com m itm ent can be explained by the fact that they are both affective
constructs. The definition o f shared values represents the degree to w hich a custom er
thinks he or she is psychologically sim ilar to the service provider, and the definition of
commitment represents the degree to which the custom er has a psychological attachm ent
to the service provider. Because both paths could be explained in a theoretical sense,
they were added to the m odel.
This third respecification provided good m odel fit. There is a statistically
insignificant chi-square value and goodness o f fit statistics well above the acceptable
levels. Results from this m odel are presented in T able 5.3. All but one o f the freed paths
are statistically significant. T he path from trust to com m itm ent is m arginally significant,
but it is in the opposite direction from the one hypothesized. As this finding is not
consistent with the current literature, it is still troublesom e. But because o f the sood
overall fit, the statistical significance o f the m ajority o f the paths, and the nonsignificance
of all values in the M I m atrices, this became the final structural model.
87
Table 5.3
Final Structural Model Results
Path
Gamma
Perceived Expertise Intimacy
C ustom er K now ledge
Intimacy
Shared V alues > Intimacy
E xpertise T rust
Shared V alues > Com m itm ent
Beta
Intim acy T rust
Intim acy > C om m itm ent
T rust > Intim acy
Trust C om m itm ent
Trust > R eferral Behavior
C om m itm ent > Referral Behavior
Estimate
T-value
1.126
0.622
0.670
0.311
0.254
4.484
4.034
5.561
3.572
3.674
0.782
0.809
-1.480
-0.174
0.717
0.300
7.757
9.271
-3.803
-1.970
11.179
5.586
Goodness o f Fit Statistics

GFI = 0.993
AGFI = 0.972
RM SEA = 0.015
x 2 = 7.451
df = 7
p = 0.384
n=304
88
Split Sample Analysis

A split sam ple analysis was conducted in order to assess the validity o f the model
respecification. The sam ple was split in half and the proposed model was tested on the
first half o f the sam ple (B rockm an 2000). Results o f the proposed model as tested on the
first half o f the sam ple appear in T able 5.4.
T he same first half o f the sam ple was then subjected to the respecification
process. A sum m ary of this process is provided in Table 5.5. Param eter estim ates and
goodness o f fit statistics for the final structural model as tested on the first half o f the
sample are shown in Table 5.6. The final structural model resulting from the
respecification process on the first h alf of the sam ple was then tested on the second h alf
of the split sample. These results are displayed in Table 5.7. As can be seen in the final
structural model results for both the first half o f the sam ple (Table 5.6) and the second
half of the sam ple (Table 5.7), the path from trust to com m itm ent is statistically non
significant. [t is, how ever, still in the opposite direction than originally hypothesized. A
sum m ary o f hypotheses from the original proposed model is provided in Table 5.8.
89
Table 5.4
Proposed Structural Model Results From First Half of Split Sample
Path
Estimate
T-value
0.419
0.255
0.255
3.687
2.419
4.080
0.805
0.896
-0.116
0.687
15.008
7.051
-0.928
8.228
Gamma
Perceived E xpertise Intimacy
C ustom er K now ledge Intimacy
Shared V alues Intimacy
Beta
Intimacy T rust
Trust >C om m itm ent
C om m itm ent Referral Behavior
GFI = 0.790
AGFI = 0.465
RMSEA = 0.286
X2 = 160.423
d f = 11
p = 0.000
n=152
Table 5.5
Summary of the Structural Model Respecification Process on First Half o f Sample
Changes made from previous

test
*>
GFI
AGFI
RMSEA
df
Proposed model
0.790
0.465
0.286
160.423
p=0.000
11
Added
Trust Intim acy
0.900
0.719
0.182
70.027
p=0.000
10
Added
Trust >Referral B ehavior
0.970
0.908
0.073
16.520
p=0.057
Added
Expertise T rust
Shared values > C om m itm ent
0.976
0.902
0.077
13.444
p=0.062
n=152
90
Table 5.6
Final Structural M odel Results from First H alf of Sample
Path
Gamma
Perceived Expertise Intim acy
C ustom er Knowledge > Intim acy
Shared V alues > Intimacy
Expertise >Trust
Shared V alues > C om m itm ent
Beta
Intim acy Trust
Intim acy > Com m itm ent
Trust > Intim acy
T rust > C om m itm ent
T rust Referral Behavior
C om m itm ent Referral B ehavior
Estimate
T-value
1.391
0.439
0.605
0.260
0.120
2.980
2.040
3.245
1.553
1.161
0.814
0.827
-1.515
-0.145
0.723
0.337
4.016
6.576
-2.244
-1.152
8.024
4.121

GFI = 0.976
AGFI = 0.902
RM SEA = 0.077
x 2 = 13.444
df = 7
p = 0.062
n=152
91
Table 5.7
Final Structural Model Results from Second Half of Sam ple
Path
Gamma
Perceived Expertise Intim acy
Custom er K now ledge > Intim acy
Shared V alues Intim acy
Expertise Trust
Shared V alues C om m itm ent
Beta
Intimacy > Trust
Trust > Intim acy
Trust C om m itm ent
Trust > Referral B ehavior
Com m itm ent > R eferral Behavior
Estimate
T-value
0.959
0.758
0.719
0.363
0.366
3.099
3.230
4.239
3.390
3.746
0.773
0.777
-1.494
-0.197
0.706
0.259
6.765
6.481
-2.991
-1.543
7.669
3.691

GFI = 0.997
AGFI = 0.986
RM SEA = 0.000
x" = 1.893
df = 7
p = 0.966
n=152
92
Table 5.8
A Summary of Hypothesized Findings
Hypothesis
Result
H I: Perceived custom er intimacy is a m ultidim ensional construct

containing four com ponents: com m unication, custom er
participation, social interaction, and com prom ise.
Partially
Supported*
H2: Perceived product or service expertise is required for the process o f

custom er intim acy to develop.
Supported
H3: Perceived custom er knowledge is required for the process o f

custom er intim acy to develop.
Supported
H4: Shared values must be present in order for the process o f custom er
intim acy to develop.
Supported
H5: There is a direct, positive relationship betw een perceived custom er

intim acy and trust.
Supported
H6: There is a direct, positive relationship betw een perceived custom er

intim acy and com m itm ent.
Supported
H7: There is a direct, positive relationship betw een trust and

com m itm ent.
Not
Supported
H8: There is a direct, positive relationship betw een com m itm ent and
referral behavior.
Supported
* The custom er intim acy construct was found to be m ultidim ensional; how ever, only
three dim ensions were revealed, not four.
93
Competing Theoretical Model

In o rd er to more fully understand the benefits (if any) o f using the reflective
com binations approach to measurement, a com peting theoretical m odel of custom er
intimacy w as tested. This com peting model did not com bine the com ponents o f custom er
intimacy; rather, the model was tested at a low er level o f abstraction. Instead o f having
the custom er intim acy construct in the model, three constructs were added in its place:
com m unication, social interaction, and com prom ise. This com peting model is illustrated
in Figure 5.2. From a com parison o f the m odels visually, one can see that the model in
Figure 2.1 is m uch more parsim onious than the model in Figure 5.2. The fact that
degrees of freedom are saved by using reflective com binations provides one initial
benefit.
R esults from the competing structural m odel are given in T able 5.9. W ith a
significant chi-square value and poor goodness o f fit values, it can be concluded that this
com peting m odel does not provide a better fit to the data than the one proposed and tested
in this study. W hen a sim ilar com peting model was run against the final respecified
model, the chi-square statistic was 37.530 (df=10, p=.000), G FI = 0.974, AGFI = 0.884.
RM SEA = 0.093. Problem atic M is also surfaced in the B m atrix. Because of the poorer
goodness o f fit statistics as well as the high M is, this com peting m odel was deem ed
inferior to the final respecified model.
94
Figure 5.2
Com peting Model to Customer Intimacy
C ustom er
K now ledge
Shared
Values
om m unication
Trust
Social
Interaction
Relationship
Com m itm ent
Comprom ise
Referral
Behavior
95
Table 5.9
Competing Structural Model Results
Path
Gamma
Perceived E xpertise Com m unication
Perceived E xpertise Social Interaction
Perceived E xpertise Com prom ise
C ustom er K now ledge Com m unication
C ustom er K now ledge > Social Interaction
C ustom er K now ledge Com prom ise
Shared V alues C om m unication
Shared V alues > Social Interaction
Shared V alues C om prom ise
Beta
C om m unication > Trust
C om m unication > C om m itm ent
Social Interaction Trust
Social Interaction C om m itm ent
C om prom ise Trust
C om prom ise > C om m itm ent
Trust > C om m itm ent
C om m itm ent Referral Behavior
Estimate
T-value
0.468
0.167
0.198
0.438
0.393
0.210
0.121
0.568
0.229
6.702
1.198
1.901
6.345
2.854
2.054
3.012
7.086
3.847
0.670
0.337
0.127
0.346
0.025
0.276
-0.102
0.626
14.783
3.233
4.361
7.464
0.577
4.104
-0.942
1 1.334

GFI = 0.813
AGFI = 0.475
RM SEA = 0.255
x 2 = 292.911
df = 16
p = 0.000
n=304
96
Studying the theory o f custom er intim acy at its lower, com ponent-level o f
abstraction is not w ithout consideration. W hile this study exam ined a m ore global
construct, som e o f the relationships tested in the com peting m odel provoke further
thought. F o r exam ple, results from Table 5.9 show a significant relationship between
perceived expertise and com m unication, but not between perceived expertise and social
interaction. A dditionally, the path betw een com m unication and trust is statistically
significant, w hile the path between com prom ise and trust is not. T hese are interesting
and theoretically plausible relationships. By studying the custom er intim acy process at
its lower level o f abstraction, the researcher may be able to better understand its
com ponents and how they interact with other important constructs.
CHAPTER 6
CO NCLUSIONS AND DISCUSSION
T he purpose of this study was to create a theory o f custom er intimacy, which is

grounded in intimacy theory from social psychology rather than the more commonly used
exchange theory from economics. The theory proposed here not only specifies the relational
process involved in the creation and delivery of highly custom ized services, but it also
suggests both antecedents and consequences o f such an approach.
Three key constructs were determ ined to be components o f the custom er intimacy
process: communication, social interaction, and compromise. These components have been
identified as integral to building intim acy in personal relationships, and they can easily be
applied to a business context as well. A confirmatory factor analysis revealed evidence of
both convergent and discriminant validity between the three com ponents of customer
intimacy. Recent literature in m arketing has stressed the importance o f communication
(Duncan and Moriarty 1998) and social bonds (Price and A m ould 1999) in the development
of business relationships. The model tested here allows for the integration of these concepts
by testing custom er intimacy as a single construct that mediates the relationships between
perceived expertise, customer knowledge, and shared values and trust, commitment, and
referral behavior.
T h e use o f reflective com binations in this study provides an illustration o f how
constructs m ay be studied at different levels o f abstraction. T hrough this new
m easurem ent m ethod of aggregation, the com ponents o f cu sto m er intim acy were
97
98
com bined in order to properly exam ine antecedents and consequences of the entire
pro cess o f custom er intim acy, rather than having to ex am in e the construct at the
com ponent level. This new aggregation m ethod produced a construct that was able to
d iscrim inate between a conceptually sim ilar construct (com fort). T he reflective
com binations method also produced a model that was m uch m ore parsim onious in nature.
W hile this w as the first tim e th at a structural model was assessed using this m ethod, it has
perform ed well in assessing m easurem ent models proposed by Bagozzi and Edw ards
(1998).
By studying a structural m odel, the antecedents o f the custom er intim acy process
w ere better understood. All o f the hypothesized antecedents were statistically supported.
It w as found that perceived expertise, custom er know ledge, and shared values each had
an im pact on the custom er intim acy process. These results suggest that in order to build
business-intim ate relationships, the service provider m ust be com petent relative to his or
her particular area o f expertise. In addition, the service pro v id er should have a w orking
know ledge o f the type o f needs that his or her custom ers have. For exam ple, a claim s
adjuster should hire an attorney w ho is well versed specifically in the insurance industry.
Finally, custom ers should seek out those service providers w ho they perceive as
possessing the same value system or moral code.
In term s of its consequences, custom er intim acy w as found to have a significant
im pact on the formation o f trust and com m itm ent. This indicates the benefits to service
providers for practicing cu sto m er intim acy, as both trust and com m itm ent have a
significant im pact on referral behavior. Particularly in the legal industry, where much o f
an atto rn ey s client base is dependent on referrals, it is im portant to understand how the
99
presence of trust and com m itm ent is established w ithin the custom er. By taking tim e to
ensure active, tw o-w ay com m unication, by developing a type of friendship w ith the
custom er, and by exhibiting a willingness to com prom ise in given situations, a service
provider will foster the developm ent o f trust and com m itm ent in his or her custom ers,
which in turn encourages the custom er to refer others to that service provider.
It is interesting to note the negative but statistically nonsignificant relationship
between trust and com m itm ent that appeared in this m odel. W hile the hypothesized
effect of trust on com m itm ent was not supported, a strong positive relationship betw een
these constructs was found when tested in isolation. Figure 6.1 shows the relationship
that exists between trust and com m itm ent when ju s t these tw o constructs are allow ed in
the model, w hile Figure 6.2 shows how the relationship changes when custom er intim acy
is added to this sim ple model. These results reveal that custom er intimacy, as an
interactive process, m ay be a better predictor o f com m itm ent than trust in close business
relationships. This finding is similar to M oore (1998), w ho found that there w as no
relationship betw een trust and com m itm ent in logistics alliances. In his study, o ther
variables were found to predict relationship com m itm ent. Therefore, further inquiry
about these relationships is necessary.
100
Figure 6.1
Simple Model o f Trust and Commitment
y = 0.626
t = 9.750
T rust
C om m itm ent
Figure 6.2
Model o f Trust and Commitment with Customer Intimacy Added
C ustom er
Intim acy
y = 0.890
t = 10.465
Com m itm ent
T rust
y = -0.048
t = -0.557
101
Major Contributions
There are a num ber of significant contributions o f the proposed study. First,
M oorman and R ust (1999) call for researchers to consider the interface o f m arketing
strategy and consum er behavior: they encourage research that exam ines the key strategic
processes o f a firm and the impact that these processes have on custom ers. In a custom er
relationship m anagem ent framework, the practice o f custom er intim acy is one way in
which firms m ay d eliver value to custom ers. There is currently no academ ic-oriented
research to coincide w ith recent practitioner literature on the developm ent o f "businessintimate relationships. This study conceptually and em pirically estab lish ed the process
o f building such relationships with custom ers. Intim acy theory from social psychology
was used as the basis for the model, rather than the typically used ex ch an g e theory. By
borrowing from intim acy theory, this allow ed for the affective nature o f b usiness-intim ate
relationships to be realized.
The use o f reflective com binations to test both m easurem ent and structural
models will open m any possibilities for researchers w ho want to test th eir theories at
different levels o f abstraction. Previously, the only choice a researcher had if he o r she
wanted to test their theory with the use o f form ative constructs was to run a higher-order
factor model. T his type of model is quite cum bersom e when structural equation
modeling is used as the method for analysis. And often the use o f hig h er-o rd er factor
models leads to statistically insignificant results. If a researcher has a very "clean
m easurem ent m odel at its lowest level o f abstraction, then the com ponents m ay be
com bined in the m an n er presented here in o rd er to properly test the research ers theories
o f interest.
102
Limitations and Suggestions for Future Research

Several lim itations are present in the current study. The first, w hich is likely
present in m any em pirical studies, is the lack o f generalizability o f the findings. Only
one type o f professional service was assessed in this study. W hile the findings in the
study may ap p ly across other professional services such as the accountant-client
relationship o r the physician-patient relationship, it is less likely that they do across all
types o f c o n su m er services. It is probable that in low-risk services, the willingness o f
both custom er and service provider to take the time and effort needed to develop
business-intim ate relationships is m inim al. Additionally, the process o f building such
relationships is probably not w arranted in a service situation w here the goal is not a
unique or custo m ized outcome. H ow ever, by testing the theory o f cu sto m er intimacy in
different service categories, the specific contexts of its application can be revealed.
Therefore, a future research possibility involves testing the theory o f custom er intimacy
in other types o f services that produce a custom ized outcome. E xam ples o f these
professions m ay include accountants, financial planners, insurance agents, physicians,
and hair stylists.
A second lim itation relates to the low response rate from m ailed questionnaires.
This low response rate (10%) may be attributed to the fact that respondents were not pre
screened before a questionnaire was sent to them . W hile care was taken to select groups
of people w ho w ould be likely to use the services of an attorney (including physicians,
dentists, insurance agents, real estate agents, human resource m anagers, and small
business ow ners), there was no guarantee that those people receiving the questionnaire
packet actually had a relationship with an attorney. Therefore, they m ay have been
unable to com plete and return the instrum ent.
A nother lim itation is based on the fact that many o f the individual items could not
discrim inate w ith item s that were supposed to be measuring different constructs. This
lack o f discrim inant validity prom pted the use o f composite indicators in the structural
103
m odel. Because m any of these constructs were so highly correlated, the structural model
had to undergo a series o f respecifications. Before the theory is tested on different
populations, the form at and w ording o f the questionnaire will be refined and subjected to
another sample of clients o f attorneys. Hopefully this refinem ent o f the item s included in
the questionnaire will produce clear evidence o f discrim inant validity. O nce this is
established, the questionnaire may then be adapted to fit other types o f professional
services.
The custom er intim acy construct was initially hypothesized to co n tain four
com ponents: com m unication, social interaction, custom er participation, and com prom ise.
Unfortunately, evidence o f discrim inant validity between custom er participation and
com m unication could not be established. This was due mainly to the extrem e sim ilarity
in item wordings for each o f these tw o components. Interestingly, none o f the
researchers who em pirically exam ined the custom er participation construct (Gruen,
Sum m ers, and Acito 2000; H eckm an and Guskey 1998; B ettencourt 1997; C erm ak et al.
1994) included the com m unication construct in their models. The com m unication
construct modeled here could be m ore specifically and appropriately described as
interactive com m unication, or interactivity. It w ould be interesting and w orthw hile to
m easure other com ponents o f com m unication, such as active listening and self
disclosure, in order to determ ine how these two dim ensions fit in establishing custom er
intimacy.
Since the process o f building business-intim ate relationships is a dyadic process
that develops over time, it w ould be beneficial to pinpoint specific relationships and study
how these evolve, from the point o f initial contact to the various stages throughout the
process o f building intimacy. In addition to this longitudinal tracking, it w ould be helpful
to gauge not only attitudes and opinions from the clients, but also from the attorneys as
well. This would allow the researcher to observe the two-way nature o f relationship
developm ent.
104
A nother avenue for future research involves the assessm ent o f gender differences
relating to the desire fo r business-intim ate relationships. In personal relationships, men
and women differ in th e need to control partners, the tendency to dom inate/subm it to
partners, and the desire to achieve love versus other things in life, such as success,
money, and pow er (S tem 1997). It would be interesting to determine w hether m en and
women perceive the d evelop m en t o f business-intim ate relationships differently as well.
For example, are w om en m ore likely than men to establish intimate relationships with
employees or firms? In addition, it would be interesting to compare results o f the
custom er intim acy m odel for different pairs o f gender groups: male attorney, m ale client:
m ale attorney, fem ale client: female attorney, male client: and female attorney, fem ale
client.
A nother research possibility involves the consideration o f other variables that
were not included here. For exam ple, Price and A m ould (1999) found that com m ercial
friendships are positively associated with satisfaction, strong service loyalty, and positive
word of mouth. The questionnaire in this study also captured whether or not the client and
attorney were friends. Perhaps this could be tested as a moderating variable between the
antecedents o f custom er intimacy and the customer intimacy construct itself. It can be
argued that if the client and attorney are friends, a stronger sense of intimacy will develop.
Another variable not included in the model but captured in the questionnaire relates to
switching costs. Perhaps the client is committed to the relationship even though the
relationship cannot be described as business-intimate; if this is the case, it could possibly be
explained by the high costs associated with finding another attorney to handle the clients
needs.
Other future research possibilities include exam ining the model in different business
contexts. One such context is online products and/or services, whereby a custom er works
closely with a firm via the Internet in order to obtain a custom ized outcome. In this case, the
"social interaction" com ponent o f intimacy is based on technology (such as email
105
correspondence or chatrooms) rather than human contact. It would be very interesting to

note the differences o f the model's paths when com paring a context o f hum an interaction with
a technology-only context.
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115
A P P E N D IX A
PRELIMINARY STUD Y
QUESTIONNAIRE
116
Thank you for participating in this brief survey. You may write your answers to
these questions on this page where appropriate or on another sheet o f paper. Please
be as candid as possible in your responses.
1. Please describe in detail one relationship that you have with a client. In this
description, discuss the process that leads you to provide the client with exactly what he /
she wants. The specific legal situation (estate plan, w ill, specific legal problem , etc.) is
not as im portant as the process involved in delivering the tailor-m ade service to the
client. Please be as specific as possible in describing how your m eetings evolve.
2. W hat is the role o f your client in this process? H ow does he or she help you to
provide exactly w hat is desired or needed?
3. Listed below are som e characteristics that m ay or may not aid in the developm ent of
relationships with your clients with the goal o f providing them with tailor-m ade services.
Please assign a num ber from 1 to 5, where 1 is not at all helpful and 5 is extrem ely
helpful, to each o f these characteristics as it pertains to the developm ent o f close
relationships with your clients.
com m unication - sharing of information betw een client and attorney
cooperation - assistance in achieving goals for your client
trust - a w illingness to rely on someone w ith w hom you have confidence
liking - a general feeling of affection betw een parties
collaboration - jo in t effort, coming together w ith ideas
custom er participation - active involvem ent from the client
attorney expertise in specific area - detailed know ledge attorney holds about the
subject
knowledge o f client - possession o f detailed know ledge about the client
117
Are there any factors you feel are im portant or helpful to relationship developm ent that
have been om itted from this list? Please add any relevant characteristic(s) and briefly
explain w hy you think this is im portant to relationship developm ent betw een you and
your client.
4. Now, please rank the follow ing characteristics in order o f how helpful they w ould be
for you to develop close relationships w ith your clients. The m ost helpful characteristic
should receive a I, the second m ost helpful a 2, the third m ost helpful a 3, the fourth m ost
helpful a 4, and so on.
collaboration
com m unication
cooperation
liking
trust
custom er participation
attorney expertise
know ledge of client
G ender (circle one) M F
A ge (write in) ___
N um ber o f years in practice ___
Thank you for your participation!
118
APPENDIX B
M AIN STUDY QUESTIO NNAIRE
AND COVER LETTER
119
Date
Name
Address
City, State Postal Code
D e a r___________________:
W anting to gain a better understanding o f how clients develop relationships with their
attorneys, The U niversity o f A labam a has created a questionnaire that addresses how
clients w ork w ith their attorneys. The feedback that we receive from questionnaires such
as this one provides us with the know ledge to help attorneys provide better service to
their clients.
You are one o f a group o f people from across the state who are being asked to share
information about how you interact with your attorney. In order that the results represent
a variety o f opinions from throughout the area, it is important that you com plete and
return the questionnaire. W e would greatly appreciate your help by filling out the survey
within the next five days or so and returning it to us in the enclosed postage-paid return
envelope. It should take no more than 15 m inutes o f your time. Please be assured that
the inform ation you provide will be com pletely confidential and the results that we report
will be anonym ous.
In appreciation for your time and effort in filling out this questionnaire, w e will donate
one dollar to the Kids' Chance Scholarship Fund for each questionnaire that is com pleted
and returned to us. Supported by the A labam a Law Foundation, the Kids' C hance
Scholarship Fund provides scholarships to the children o f workers who are killed or
totally disabled on the job. If every questionnaire is com pleted and returned, we will
donate a total o f at least one thousand dollars to this worthwhile charity.
We are happy to answ er any questions that you m ight have. Please write o r call. The
number is (205) 562-1899. If you have never used the services o f an attorney, perhaps
you could pass this survey along to som eone you know who could com plete it. Thank
you so m uch for your time and assistance.
Sincerely,
Nicole H offm an
Project D irector
120
An Alabama Survey o f the Clients Relationship

with their Attorney:
Understanding the Forces that Bind
The Culverhouse College of C om m erce and Business Adm inistration at The University of
Alabama is involved in a project to investigate the working relationship that a client has
with his or her attorney. Therefore, we would like to ask you a few questions concerning
the relationship with the attorney who handles most of your legal m atters. W e ask that you
begin the survey by writing in this attorneys name, and respond to the questions while
thinking about only this attorney. Som e o f the questions may seem a little repetitive, and
others a little strange, but be assured that they all have a purpose. Please remember that
there are no right or wrong answers. Y our name will not be attached to the survey in any
way. If you wish to comment or qualify your answers, please feel free to use the space in the
margins.
In order to thank you for your help, for every questionnaire that is com pleted and returned
we will donate one dollar to the Kids' C hance Scholarship Fund. This m eans that if every
questionnaire we send out is completed and returned to us, a total o f at least one thousand
dollars will be donated to this charity. W e appreciate your contribution to this study.
Department of M anagem ent and M arketing

Culverhouse College of C om m erce and Business A dm inistration
The University o f Alabama
Tuscaloosa, AL 35487
121
Please think of the primary attorney w ho handles your legal m atters. This should be the
person with whom you have the m ost contact.
W hat is your attorney's gender?
Female
M ale
In what city is your attorney's office?

And does your attorney practice law:
by him self/herself
with one other attorney
in a firm w ith m ore than one other attorney

for a corporation or business
You should refer to this person only w hen responding to the survey questions.
Q -l: The following statem ents m easure w hat you think about your attorney's
qualifications. Please indicate your level o f agreement or disagreem ent about the expertise
of your primary attorney:
My attorney:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
STRONGLY
DISAGREE
really understands his/her areas of the law .................... 1
has legal capabilities I have confidence in..................... 1
seems to keep up with current changes in the law......... 1
is competent as an attorney............................................. 1
is very knowledgeable about legal matters................... 1
has a good legal reputation in the community............. 1
really understands me........................................................ 1
knows about my special legal needs............................... 1
understands my business so s/he is better able
to meet my legal needs...................................................... 1
is understanding of my needs as a client........................ 1
respects my opinions......................................................... 1
has a good moral reputation in the community.......... 1
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
4
4
4
4
4
4
4
4
STRONGLY
AGREE
5
6
7
5
6
7
5
6
7
5
7
6
0
6
7
5
6
7
5
6
7
5
6
7
2
2
2
2
3
3
3
3
4
4
4
4
5
5
5
5
6
6
6
6
7
7
7
7
Q-2: Please indicate your level o f agreem ent or disagreem ent to the following group of
statem ents which concern how your prim ary attorney com m unicates with you.
STRONGLY
STRONGLY
DISAGREE
AGREE
I. My attorney is available to talk with me
2
3
4
when I need him/her...................................................... 1
5
6
7
3
4
2
2. My attorney is willing to listen to my concerns.............1
5
6
7
2
3
4
3. My attorney is responsive to my needs............................1
5
6
7
4. My attorney takes time to discuss my questions
2
3
4
with me...............................................................................1
5
6
7
5. I share intimate, detailed information with
2
3
4
my attorney........................................................................ 1
5
6
7
6. In our relationship, my attorney keeps me
3
4
2
informed of the options available to m e......................... 1
5
6
7
2
3
4
7. My attorney and I share information with each other... 1
5
6
7
8. My attorney communicates with me so that
2
3
4
we may design the best solution for my needs........... 1
5
6
7
9. In our relationship, my attorney keeps me informed
2
3
4
of new developments.........................................................1
5
6
7
10. My attorney and I communicate well with
2
3
4
each other...........................................................................1
5
6
7
122
statem ents which concern how you and your primary attorney interact with each other.
1.
2.
3.
4.
5.
6.
7.
8.
9.
STRONGLY
DISAGREE
We know each other on a personal basis........................ 1
We carry on conversations that have nothing to
do with the services that s/he provides me...................... 1
I enjoy talking with my attorney...................................... 1
I enjoy the company of my attorney................................ 1
My attorney and I talk about common interests
besides work........................................................................ 1
I value the social interaction I have with
my attorney..........................................................................1
I like my attorney............................................................... 1
My attorney and I get along socially............................ 1
I consider my attorney to be a friend............................ 1
STRONGLY
AGREE
7
6
5
2
2
2
3
3
3
4
4
4
5
5
5
6
6
6
7
7
7
2
2
2
2
3
3
3
3
4
4
4
4
5
5
5
5
6
6
6
6
7
7
7
7
statem ents which concern your level o f involvement in the relationship you have w ith your
prim ary attorney.
STRONGLY
STRONGLY
DISAGREE
AGREE
I. I let my attorney know of ways that s/he can
2
4
7
better serve my needs................................................... . I
3
6
5
2. I make constructive suggestions to my attorney
2
7
1
3
4
on how to improve his/her service.............................
5
6
3. If I have a useful idea on how to improve service,
2
4
7
I give it to my attorney.................................................. 1
3
5
6
4. When I experience a problem, I let my attorney
2
know so s/he can improve service............................... ...1
3
7
4
6
5
5. I am actively involved in the legal decisions
2
my attorney makes concerning mv case(s)............... . . 1
3
4
7
5
6
6. My attorney and I work together to attain a
2
3
7
1
4
mutually acceptable outcome......................................
5
6
2
7. I want to be a part of the process ..........................
3
7
1
4
5
6
8. My attorney encourages me to be a part
2
of the process...............................................................
3
7
1
4
5
6
Q-5: Please answer the follow ing questions about your attorney:
STRONGLY
DISAGREE
1. He/She provides me with services
that I could not receive elsewhere..............................
1
2
2. I feel that I could find another attorney who
would offer the same quality work
as this one.......................................................................... 1
2
3. Other attorneys would fit my needs as well as
this attorney...................................................................... 1
2
STRONGLY
AGREE
1 23
Q-6: Please indicate your level of agreement or disagreem ent to the follow ing group of
statements which concern how you and your attorney handle com prom ise in your
relationship.
STRONGLY
AGREE
STRO NG LY
DISAGREE
1. My attorney and I compromise with each other

in order to reach my legal goals................................
2. I am willing to engage in give-and-take with my
attorney to reach an acceptable outcome..................
3. If my attorney and I do not agree on something,
we work together to find a middle course
that is agreeable to both of us....................................
4. If I do not like my attorneys advice, we
'give and take until a mutual decision is made.......
5. Some decisions made involve a trade-off
between what I want to do and what my
attorney wants me to do.............................................
6. My attorney is willing to engage in give and take
with me in order to reach an acceptable outcome__
Q-7: My attorney:
STRONGLY
AGREE
STRONGLY
DISAGREE
Is capable of taking care of all of my legal needs.

Can handle any request that I make.......................
Is someone that I can rely on..................................
Has high integrity....................................................
Can be trusted...........................................................
Is someone I have great confidence in..................
Can be counted on to do what is right...................
Will recommend someone if s/he is not an expert
2
2
2
2
2
2
2
9
3
3
3
3
3
3
3
3
4
4
4
4
4
4
4
4
Q-8: The relationship that I have with my attorney:

STRONGLY
DISAGREE
1.
2.
3.
4.
5.
6.
7.
8.
is important to m e.................................................... ....... 1

Is something I care about....................................... ....... 1
Is something that I am attached to......................... ....... 1
Has a great deal of meaning to me........................ ....... 1
Is something that I value deeply............................ ....... 1
Is something I cherish............................................. ....... 1
Is something that I would hate to lose................... .........1
will continue in the future...................................... ........ 1
5
5
5
5
5
5
5
5
6
6
6
6
6
6
6
6
7
7
7
7
7
7
7
7
STRONGLY
AGREE
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
4
4
4
4
4
4
4
4
5
5
5
5
5
5
5
5
6
6
6
6
6
6
6
6
7
7
7
7
7
7
7
7
124
Q-9: Please indicate your level of agreem ent or disagreem ent with the follow ing statements
regarding your w illingness to recommend y o u r prim ary attorney to others:
STRO NG LY
STRONGLY
DISAGREE
AGREE
I often recommend my attorney

to family and friends...........................................................1
When I talk to someone who is seeking
legal advice, I recommend my attorney
to him/her........................................................................... 1
3. I like telling others about my positive
experiences with my attorney.............................................1
4. I say positive things about my attorney
to others................................................................................ 1
1.
Q-10: If I w ere to sw itch attorneys, it would:

STRONGLY
AGREE
STRONGLY
DISAGREE
1.
2
2
2
2
2
2
take a lot of time and effort........................
2 . require more time than I want to put forth.
3. cost me very' little if I wanted to leave......

4. be expensive..................................................
5. be very frustrating........................................
6 . be a great big hassle....................................
4
4
4
4
4
4
3
3
3
3
3
3
5
5
5
5
5
5
6
6
6
6
6
6
7
7
7
7
7
7
Q -ll: Next you w ill see pairs of words that m ight describe the relationship you have with
your attorney. Please circle the number w hich corresponds to how you feel when you meet
with your attorney:
1.
2.
3.
4.
5.
6.
7.
8.
uncomfortable
very uneasy
very tense
insecure
worried
distressed
turbulent
troublesome
1
1
1
1
1
1
1
I
2
2
2
2
2
2
2
2
3
3
3
3
3
3
3
3
4
4
4
4
4
4
4
4
5
5
5
5
5
5
5
5
6
6
6
6
6
6
6
6
comfortable
very much at ease
very relaxed
secure
worry free
calm
serene
peace of mind
7
7
7
7
7
7
7
7
Q-12: The values that my attorney stands for:

STRONGLY
DISAGREE
1.
2.
3.
4.
are consistent with my own..................................... 1

reflect the type of person that I am............................1
are compatible with the things I believe in
1
are similar to my ow n............................................. 1
STRONGLY
AGREE
3
j
3
3
4
4
4
4
5
5
5
5
6
6
6
6
7
7
7
7
125
Q-13: For background purposes, please an sw er the following regarding the nature o f the
relationship betw een you and your attorney:
1.
I use my attorney for:

personal reasons only (examples would be wills, estate planning, or criminal charges)
business matters (including any legal issues related to your work)
BOTH personal and business-related matters
2. How did you initially find your attorney?

a friend or relative referred me
my business has used this attorney in the past
my attorney is a friend or relative
found his/her name in the Yellow Pages
s/he was court appointed
Other (write in )_________________________
3. Check one:
I currently only utilize the services o f the attorney for which I filled out this survey.
I currently have more than one attorney whoprovides me with legai services.
If you have more than one attorney, approximately what percentage of your total legal needs does
this attorney provide for you? ___________ %
4. Approximately how long have you had a working relationship with your attorney?
Less than 3 months
3 to 6 months
6 months to a year
a year to two years
two to five years
five to ten years
over 10 years
5. How likely are you to stop using this attorney within the next:
VERY
UNLIK ELY
2
six months
1
3
4
2
year
1
3
4
2
two years
1
3
4
5
5
5
6. How often do you talk to your attorney on the telephone?

more than once a week
once a week
once every two weeks
once a month
less than once a month
VERY
LIKELY
6
7
6
7
6
7
126
7. How often do you meet to your attorney face-to-face?

more than once a week
once a week
once every two weeks
once a month
less than once a month
8. Have you ever used the internet/email to communicate with your attorney?
Yes
No
9. What is the MAIN form of communication that you and your attorney use in order to
communicate?
face-to-face meetings
telephone
email
regular mail
fax
other (write in )___________________________________________________
10. How satisfied were you with the outcome of the LAST matter on which your attorney
worked?
NOT AT A LL
VERY
SATISFIED
1
2
3
4
5
6
7
SATISFIED
11. About how far must you travel in order to arrive at your attorneys office?
less than 5 miles
5 to 15 miles
15 to 30 miles
30 to 60 miles
over 60 miles
12. Are you
Male
____ Female
Is there anything else that you would like to tell us about your relationship with your
attorney? If so, please use this space for th at purpose. Also, any com m ents you wish to
make that you think may help us in future efforts to understand the various aspects of the
attorney-client relationship will be greatly appreciated.
Thank you so m uch for your contribution to this research!
127
APPENDIX C
REM INDER POSTCARD
The University o f Alabama

A few weeks ago a questionnaire was mailed to you asking your opinions about
your attorney. If you have already completed and returned the questionnaire to us.
please accept our sincere thanks. If you have not, please do so today. It is very
important that your opinions be included in this study.
If you do not use the services o f an attorney, feel free to pass the questionnaire
along to som eone who is able to com plete it. If by chance you did not receive the
questionnaire or it got m isplaced, please call me (205-562-1899) or email me at
nhoffman@cba.ua.edu and I will send a new one to you today.
Sincerely,
N icole Hoffman,
Project Director

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UMI Microform 3027353

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Subm itted by Nicole Ponder H offm an in partial fulfillm ent

Sharon E. B eatty, Ph.D.

RoberE*MT M orsanV h.D

Carl E. Ferguson, 94., Ph.D.

Ronald E. D ulek, Ph.D .

S tatem ent o f the P roblem ....................................................................................

Purpose and C ontribution o f S tu d y ..................................................................

O rganization o f the D issertation.......................................................................

B rief O verview o f the M odel..............................................................................

Sum m ary o f M ethod ............................................................................................

C H A PTE R 2: LITER A TU R E R EV IE W AND

G eneral T heories o f R elationship M ark etin g.................................................

The Fit o f C ustom er Intim acy in the R elationship M arketing Literature

Intim acy T heory in Social P sy ch o lo g y ............................................................

The P rocess o f C ustom er Intim acy....................................................................

Q ualitative R esearch F indings............................................................................

The C u sto m er Intimacy C o n s tru c t....................................................................

Social In te ra c tio n ..........................................................................................

C u sto m er P a rtic ip a tio n ...............................................................................

M easurem ent Model for All C onstructs............................................................................ 76

CH APTER 6: C O N C L U SIO N S AND D ISC U SSIO N ............................................................. 97

R elationship M arketing in the A cadem ic Literature................................. 13

D efinitions for Components o f the C ustom er Intimacy C o n stru ct....23

D efinitions for Constm cts in the T heoretical Model o f C ustom er

Survey Item s Representing Each C om ponent of C ustom er Intim acy.. 37

Sources o f Survey Items for the C u sto m er Intimacy C o n stru ct............... 40

Pretest Results: Reliability A n aly sis................................................................41

Pretest Results: Principal C om ponents A nalysis......................................... 43

M ain S tudy Results: Principal C om ponents A nalysis................................ 45

Pretest R esults: Confirm atory F actor A nalysis 1..........................................49

Pretest Results: Confirm atory F actor A nalysis II.........................................52

C onstruction o f Reflective C om binations for the C ustom er Intim acy

Items U sed to Measure Perceived E x p e rtise .................................................57

Items U sed to Measure C ustom er K n o w led g e............................................. 58

Items U sed to Measure Shared V a lu es........................................................... 58

Items U sed to Measure T ru st.............................................................................59

Items U sed to Measure R elationship C om m itm ent..................................... 60

Items U sed to Measure Referral B eh a v io r................................................... 60

C om parison of Means for Early V ersus Late R espondents...................... 64

C orrelation M atrix, M eans, and Standard Deviations for Item s in the

C onfirm atory Factor A nalysis R esults for Com ponents o f C ustom er

G oodness o f Fit Statistics for M odel o f Com ponents o f C u sto m er

M easurem ent Model R esults fo r C ustom er Intimacy and C o m fo rt.... 75

R eliability and Variance E xtracted E stim ates.............................................. 76

M easurem ent Model R esults for all M easures............................................. 78

C orrelation M atrix. M eans, and Standard Deviations for Indicators

C onfirm atory Factor A nalysis R esults for Final M easurem ent

G oodness o f Fit Statistics for Final M easurem ent M o d el...................... 80

Proposed Structural M odel R e su lts.............................................................. 82

Sum m ary o f the Structural M odel Respecification P ro cess................... 85

Final Structural Model R e s u lts ..................................................................... 87

Sum m ary o f the Structural M odel Respecification Process on First