Abstract
Purpose - This study aims to examine the Arab practice of wasta (personal networks) and its potential interface with relationship marketing to enable firms to optimize their recruitment and retention of customers in societies where personal ties drive business relationships. It explores whether relationship marketing influences customer retention when a personal contact leaves.
Design/methodology/approach - Empirical data were gathered from 305 customers introduced to Egyptian small and medium-sized enterprises via wasta. Multiple-item scales were adopted, drawn from previous empirical studies. Quantitative analysis was used, including confirmatory factor analysis. Structural equation modeling was used to test the hypothesized relationships posited.
Findings - Wasta plays a significant role in attracting customers, nurturing early relationships and enhancing relationship quality, but does not influence the retention of customers. Practicing relationship marketing post wasta can enhance customer loyalty, even if the business was developed through the wasta contact who left to join a rival firm.
Research limitations/implications - Potential limitations arise from cultural differences in other Middle Eastern countries. Future studies could also validate the results in different sectors/industries and explore managers and employees' perspectives.
Practical implications - Several recommendations emerge for managerial practitioners, including the use of wasta to attract business, but more significantly, the need for the effective use of relationship marketing to retain business. The study suggests that if relationship marketing is practiced well, customers are likely to remain loyal to the firm, even if the business was developed through a personal wasta relationship with an employee who subsequently moved to a competitor firm.
Originality/value - This study is the first to develop a unified model connecting the Eastern notion of wasta (personal ties) with relationship marketing. The study enhances the knowledge of wasta and relationship marketing. It is among the first to suggest that should employees with personal connections to customers leave to join a competing firm, there is still a strong likelihood that if relationship marketing is effectively practiced, then customers will remain loyal to the firm (rather than to the former employee).