Multilevel Effects of Leadership Styles on Selling Approaches and Customer Outcomes

This paper examines how different leadership styles (transformational versus transactional) of sales managers cascade downwards into corresponding (relational versus transactional) selling approaches of salespersons, thereby affecting customer-level outcomes. Results of multilevel analyses of a multisource data set on 517 customers, 265 sales representatives, and 111 sales managers of a financial services company show that a sales manager's transformational leadership style translates into increased satisfaction, loyalty, and cooperation on the part of customers by shaping salespersons' selling approach towards a relational style. In contrast, a sales manager's transactional leadership style appears to translate into decreased customer satisfaction, loyalty, and cooperation by shaping salespersons' selling approach towards a transactional style.