Determinants and mediators of the intention to upgrade the contract in buyer–seller relationships

This study presents a dynamic model of a business-to-business relationship aimed at explaining the motivation to upgrade a contract. It considers social and economic factors, and focuses on satisfaction, trust, loyalty (affective and cognitive) and relational identity. A model of the evolution of the relationship from the early stages of satisfaction and trust to the advanced stages of loyalty is developed and empirically tested using individual-level data. The empirical context of this study is given by the relationships between small non-food retailers and their financial providers. Affective loyalty emerges as a key mediator that helps increase the intention to upgrade: overall, economic and social factors will influence the intention via this key mediator. However, under different conditions these factors play a very different role, as relationship seniority, supplier size, and criticality of the service to the buyer moderate the development of the relationship. The research demonstrates the superiority of these elements in explaining the development of the relationship and understanding the drivers of the intention to upgrade a contract. The authors argue and show that trust and satisfaction reverse their relative importance in affecting upgrade intention, as one moves from less to highly critical services, whereas loyalty switches from active to passive when modeling the supplier size. The research also shows a different driver of loyalty as one moves from younger to older relationships.

► We present a model of B2B relationships aimed at explaining the motivation to upgrade a contract. ► The empirical context is given by the relationships between small non-food retailers and their bank. ► Affective loyalty emerges as a key mediator that helps to increase the intention to upgrade the contract. ► The size of the bank, the seniority of the relationship and the criticality of the service act as moderators.