Increasing Salesperson Performance through Relational Penetration Capability: The Implementation of Insurance Service Company Distribution

Abstract

Purpose: This research aims to analyze the influence of relational penetration capability on salesperson performance and the influence of customer orientation, customer knowledge accessibility, and salesperson-customer relationship quality on the relational penetration capability of the insurance service industry in Central Java. Research design, data, and methodology: This explanatory research involved 211 respondents. Path analysis was used to analyze the primary data obtained. Results: The customer orientation positively influences relational penetration capability and customer knowledge accessibility which can improve salesperson performance. The salesperson-customer relationship quality shows a positive impact on the salesperson's relational penetration capability, salesperson performance, and relational penetration capability which will lead to an improved salesperson-customer relationship. Higher knowledge levels of customer necessity have important implications for a salesperson's capability of finding potential customers and of fulfilling customers' requirements through careful analysis of necessity. Conclusions: The salespeople should be capable of building and maintaining a good relationship with their customers as an indication that salespeople of Insurance Service Company Distribution in Central Java have good performance.

1.Introduction

Firms in the insurance industry vary along many dimensions, including product distribution systems. A wide variety of distribution methods are used in the industry. Insurance distribution systems span the spectrum from the use of a professional employee sales force to contracting with independent sales representatives, to direct response methods such as mail and telephone solicitation (Aqmala & Ardyan, 2019). The ongoing competitive and technological revolution in the financial services industries has resulted in greater segmentation of distribution by product market and to greater use of multiple distribution methods by firms, including the establishment of marketing relationships and alliances with non-insurance concerns (Arun et al., 2020).

Currently, the insurance market is immersed in a process of regulatory changes in different geographic areas. The adaptation of the regulations to the new environment takes into account the incorporation of agents and technological advances that significantly save time and costs in improving customer satisfaction. Thus, the increasing number of online transactions has led to the consideration of the Internet as an ideal distribution channel for standardized product marketing rather than investment products, which require specialized advice. Therefore, emerging technology-driven innovations in the insurance industry are a recent trend (Chamidah et al., 2020).

The current process of change favours the strong development of banks as channels of distribution of insurance products in different markets. On the other hand, a new flow of revenue is stemming from the commissions from the insurance companies for the distribution of their products. Therefore, these products represent a source of complementary profit for the banking sector that compensates for the lower turnover caused by the continuous fall of the Euribor, which is the interest rate of reference in the operations involving banking assets and liabilities (Guillem, 2020).

The service marketing mix is concerned with two main issues, namely accessibility and availability. Accessibility refers to the ease and convenience of purchasing or using a service. Availability refers to the extent to which a service is obtainable or capable of being purchased or used. Both criteria must be met in order to achieve successful service marketing (Yeo et al., 2019). Delivering a service to customers involves decisions about where, when, and how. The rapid growth of the internet and broadband wireless communications means that service marketing strategies must address issues of place and time, paying at least as much attention to speed scheduling and electronic access as to the more traditional notion of physical location. The important part of a service model is the distribution of core and supplementary service elements through selected physical and electronic channels (Lee, 2020).

Industrial life ‘Home Service’ assurance, developed in the nineteenth century by specialist new insurers and friendly societies to provide affordable life insurance for the working-class, operated with teams of full-time employed agents visiting the homes of policyholders weekly to collect small premiums and sell new policies. ‘The man from the Pru’ became not only an essential distribution system but also the public face of the industry for many people. It was, however, a very expensive method of distribution that raised insurers’ expenses and made returns to policyholders far worse than those available on ordinary life policies (Rosendo-Ríos & Martín-Dávila, 2015). Branch offices continued to be a key element in the distribution systems of both life and non-life insurance companies. Branches and their teams of inspectors provided companies with the means of selling direct to the public, for handling claims and for generally servicing both policyholders and their networks of part-time agents and brokers who supplied them with most of their business. Early in the twentieth century one of the attractions for the major companies of acquiring specialist insurance companies had been to secure their branch networks (Fernández & Pinuer, 2016).

Sales is a key activity that operates in both manufacturing and trading companies. Sales activities significantly influence corporate income, finance various operating activities, and ensure the company’s survival. This important role is executed by the company’s salespeople who are required to achieve the designated target and short-term and long-term business objectives (Oh & Lee, 2020). Market orientation is an important factor that influences corporate performance. With a market-oriented service, a producer will know the customer desire, competitors’ products, and link between marketing functions in the industry. Market orientation is a company’s most effective culture to create consumer behavior and values and to improve business performance. If a producer wants to perform a product innovation process, the market condition must be taken into consideration in order to know customers’ and competitors’ characteristics (Terho et al., 2015).

Sales professionalism is the key to successful marketing. Aiming at fulfilling customer satisfaction, many companies encourage their salespeople to be customer-oriented to make more sales. Salesperson’s ability is the spearhead for the company’s success in building a relationship with consumers. Customer orientation has a positive effect on the salesperson performance. Customer orientation shows to what extent salespeople practice the marketing concept by helping customers make purchase decisions that will satisfy their needs and desire. With a higher customer service orientation level, a service provider will commonly work in a manner that will bring long-term satisfaction to customers (Bawa & Chathha, 2016).

Customer orientation has a high concern for others and is defined as a selling approach emphasizing the importance of satisfying consumers’ needs. Therefore, customer orientation positively influences salesperson performance. A salesperson’s customer orientation will give a solution that brings values needed by the customer, responsively help the customer identify, evaluate, and choose the best alternative (Kim & Youn, 2020). The two antecedents of salesperson performance, customer orientation, and adaptive sales are used as the research footing, stating that a salesperson with a high customer orientation level will surely be concerned about customers and treating customers with respect, such as listening to customer’s feedback and solving customer’s problems (Choi & Chen, 2020).

Salesperson’s quality and performance is the major issue in salesperson management and must be the priority for sales managers. The most important things in the sales strategy development process are salesperson and sales performance. Therefore, it needs an appropriate, effective, and efficient strategy to attain the company’s desired business objectives (Lin, 2020).

For a company, the expertise possessed by a salesperson is a determining instrument to find customers. Many sales management experts and salespeople discuss that a company must be capable of designing a mechanism and strategy to improve salespeople’s skills for sales activities (Usman et al., 2020). The most successful salesperson is the one who applies communicative, appropriate, and customer-oriented selling activities. The salesperson expertise in sales activities can be seen from how good the salesperson informs customers about the company’s product or services. From the managerial perspective, a sales organization clearly considers the expertise aspect as the vital determiner of effective salesperson performance, while product knowledge is an investment that easily can be absorbed in all sales training programs (Lestari et al., 2020).

The research conducted by Singh & Venugopal (2015) shows that a salesperson is required to be capable of facing any sales condition and situation. Sales expertise must be possessed by and instilled in a salesperson. The salesperson expertise aspect in sales activities here is the highest achievement of an expected sales performance. Another study conducted by Yazdanpour and Maroofi (2015) finds that the more customer-orientated a salesperson, the more he uses adaptive selling practices. This finding also presents a test to extend previous research findings to a culturally different environment. In addition, the relationship between strong customer orientation and adaptive selling behavior should not be disregarded in connection with successful salespeople and employee turnover reduction.

Qureshi et al. (2017) find that customer orientation is positively related to buyer-seller relationship development. Their finding also shows that a company may have a big impact on salesperson performance if it is customeroriented. Success in sales sets higher expectations, confidence, and dynamism. Besides, it provides physical benefit and necessary motivation for more efforts and higher stability in a competitive environment. Meanwhile, research conducted by Baek and Kim (2020) declares salesperson performance as an absolute benchmark to enhance sales performance significantly. Salesperson performance is characterized by the effectiveness of selling activity or smart selling. Therefore, a salesperson who applies smart working orientation will achieve higher levels of performance. Research conducted by Khoa (2020) shows that for retail salespeople, the working environment is critical to their success and influences a salesperson’s consumer orientation and selling orientation level. On the other hand, strict corporate policy may result in a negative salesperson’s approach impacting customer satisfaction.

This research will discuss the role of relational penetration capability in improving a salesperson’s capability of entering a market-oriented organization to build customer relationships. The empirical modeling research will test the relationship of customer orientation, customer knowledge accessibility, salesperson-customer relationship quality, and relational penetration capability with the salesperson performance of insurance sales agents in Indonesia.

2. Literature Review

2.1.Relational Penetration Capability and Social Penetration Theory

The Social Penetration Theory states that individuals have strong bonds from shallow to intimate relationships. The relationship bond will get deeper and increase each party’s trust. The more intense interaction between parties in a relationship, the more information can be revealed (Lee & Kim, 2021). The Social Penetration Theory has 4 basic assumptions (Obodoechi et al., 2020): (1) relationship develops from non-intimate to intimate; (2) interpersonal relationship develops systematically and is predictable; (3) relational development moves backward, causing depenetration and dissolution; and (4) self-expression is the key to facilitating relationship development. A salesperson’s capability of social penetration is greatly needed to obtain information comprehensively from the target market so that sales programs can be applied effectively and efficiently (Park, 2020). A salesperson needs basic information, for instance, about formal products and emotional needs which influence someone to buy not only due to product usefulness but also emotional satisfaction. Therefore, a salesperson needs to have effective and efficient communication skills to be comprehensively involved in a social environment (Kim & Yang, 2020).

If an individual feels that the cost of sharing information in a community is higher than the reward he receives, he will reveal no information to the community. The bigger the reward-cost ratio, the more information will be revealed. The assessment pattern characteristic of cost and potential benefit to the community can develop social relationships (Cho, 2021). Relational penetration capability is a way for a salesperson to use a relationship-oriented market penetration with his ability to quickly understand customers’ desire, build a good relationship with consumers, have flexibility in giving service to customers, and give solution to customer’s problem (Calixto & Ferreira, 2020).

2.2. Customer Orientation

Marketing should use the concept of how to know customers/consumers' desires and to put customer satisfaction and transaction as a priority and the basis of analysis. Marketing concept as a philosophy has limited practical value. To be useful in practice, the marketing concept needs to be mediated by an operational definition. An operational definition is the implementation of marketing philosophy and market orientation set by corporate management. Since market orientation is the implementation of a marketing concept, we may conclude that a market-oriented company’s decisions are always consistent with the marketing concept. For a company to consistently achieve higher than normal performance, it requires continuous competitive advantage (Baber et al., 2020). The competitive advantage can be achieved if a company, in serving consumers, is capable of giving superior value to consumers. The desire to reach a competitive advantage encourages a company to create and maintain a culture that may result in necessary attitudes (Dos Santos et al., 2020).

Customer orientation can be identified by monitoring employee’s commitment to customers and be improved by developing competitive strategies based on the necessity and management understanding of how business may create customer value. Customer orientation appears as a result of the intensity of market-oriented policy in which the company has the opportunity to form customer perception, develop customer values that result in customer satisfaction (Zhang & Yang, 2016). Further, the concept of a customer portfolio should be developed. Customer growth will be the basis to generate various advanced marketing performance, such as having good knowledge of customers’ needs and understanding competitor’s capability to help the company design a more appropriate product policy and produce products that meet and satisfy customers’ specific needs, and developing management norms to realize superior customer satisfaction (Lu & Zhang, 2016).

2.3. Customer Knowledge Accessibility

Consumer knowledge is all information and knowledge regarding various kinds of products and services such as their functionality that a consumer has (Sihvonen et al., 2021). In addition, customer knowledge is related to the company’s understanding of present and future customer’s necessity and preference that is developed independently by the organization and focuses on inter-department integration. The customer knowledge here is also related to customers’ understanding of the company, the company’s objective, the tendency, and necessity (Falasca et al., 2017). Companies that are able to integrate information and understand their cross-business will reach success. Companies may also use basic data and data mining tools to integrate marketing and product knowledge to explore customer knowledge. This knowledge may supply distributors and retailers with information on new products to improve the company-customer relationship. In other words, the company will use the existing information to gain more information about their customers by improving customer knowledge, which will then improve customer benefit (Aghamirian et al., 2015).

Customer knowledge is divided into several aspects: (1) Customer knowledge, constituting knowledge given to customers to satisfy and fulfill their needs, (2) customer service program, such as customer knowledge to optimize customer profiles, market segmentation, and management process, and (3) knowledge from customers, constituting knowledge derived from customers regarding product innovation by having company-customer interactions (An, 2017). Customer knowledge has four dimensions, namely internal and external knowledge, theoretical and practical knowledge, individual and collective knowledge, and tacit and explicit knowledge (Jannang & Jabid, 2016). A salesperson who works for a customer-oriented company should comprehensively understand the shopping behavior of the target market in order to produce sales according to or even exceeding what is designated effectively and efficiently. A reliable salesperson should have great communication skills to increase market penetration by knowing the brand or corporate product before offering it to the customer. Therefore, a salesperson needs to have access to the brand or product knowledge before offering the product to customers (Muluka et al., 2015).

Customer knowledge is divided into 3 types, namely knowledge for customers, knowledge about customers, and knowledge possessed by customers. The research focuses on knowledge possessed by customers, in which a salesperson easily understands what customers need and desire based on their level of product or brand knowledge (Pakurár et al., 2019).

2.4. Salesperson-Customer Relationship Quality

The CRM concept cannot be separated from the Relationship marketing concept. According to Tunggal, this concept conveys that the main objective of all CRM strategies is an economic motive. A company is capable of managing consumer baseline to identify, satisfy, and successfully maintain their most profitable consumers and customer loyalty. At the application level, CRM is applied to marketing activities, such as market segmentation, customer acquisition, maintenance of consumer loyalty, sales campaign management, and business opportunity management. However, at the strategic level, CRM may be used as a technological tool to support corporate missions in an effort to improve a customer-oriented organization (Panni & Hoque, 2017). Customer Relationship Management (CRM) is a business strategy that integrates internal factors and external factors by analyzing customer data using information technology to attract customers’ attention and achieve lifetime value. Thus, the company and customers will obtain advantages and benefits (Udayana et al., 2019).

Customer Relationship Management (CRM) has three interrelated main aspects, namely employee, process, and technology. An individual possesses the capabilities of organizing CRM. Human is the leading factor since CRM is about how to manage the human relationships that need “humane or personal touch”. Business players’ attitude and spirit are needed to proactively explore and know their customers more deeply in order to satisfy them better. The best measure to change employees’ behavior and improve success in CRM is effective training. A company that applies CRM needs to have a leader who can clearly and appropriately explain and instill correct values of the importance of customer loyalty (Ul Zia & Akram, 2016). A salesperson of a customer-oriented company greatly needs the capability to build a good relationship with customers, both rationally and emotionally. Hence, customers as buyers not only prioritize the brand or product offered but also consider the salesperson who always builds a good relationship with them (Azigwe et al., 2016). Positive relationship quality between salesperson and customers will give a positive impact on corporate sales since it supports the company in achieving its designated objective. Currently, the complexity of customers’ buying decisions also greatly depends on the emotional relationship. Thus, it is very important to help salespeople successfully maintain the company’s relationship with customers (Trejo et al., 2016).

2.5. Salesperson Performance

Salesperson performance is a part of work productivity in order to explore the potential commodity to achieve the company’s designated target. Performance is also the actual indicator of success at work or work achievement of an individual or organization because of his/its hard work in fulfilling duties. The work reference is certainly an achievement resulting in a comparison with the company’s applied standards. Salesperson performance covers two concepts: (1) Salesperson behaviors, (2) Salesperson sales results (Mullins et al., 2014). According to Tabasum et al. (2014), a salesperson’s behavioral performance is the evaluation of various strategies used to complete his responsibility. Meanwhile, result performance, according to Ahmad & Akbar (2020), is the evaluation of a salesperson’s contribution to achieving the organization’s objective in the form of sales results. Salesperson’s capability of achieving designated target and giving contribution needs to be taken into consideration in the effective sales organization. Salesperson’s involvement in interaction and communication influences the salesperson’s performance. A salesperson uses a structure to approach customers, and the sales presentation can sufficiently influence the customers’ desire to buy the product offered (Tran & Nguyen, 2020).

Salesperson performance can be measured through the capability of achieving high market share for a company, boosting sales, and selling products at a high profit margin. In an effort to improve salespeople’s performance and competence, a company needs to organize various relevant programs to support the employees to achieve the designated targets (Donassolo & De Matos, 2014). Product or market knowledge is often regarded as the necessary expertise in sales activities (Li et al., 2020).

There are several factors to measure salesperson performance. The first factor is technical knowledge, such as knowledge of the products, customers, and market, knowledge of the corporate ownership procedure, and product line knowledge. The next factor is interpersonal capability, such as to what extent a salesperson can solve customers’ problems and conflicts, understand, persuade, and listen to customers. The third factor is selling capability, such as performing steps in the sales process and sales prospe, opening conversation, presenting sales, closing sales, and serving customers (Wardoyo et al., 2019).

2.6. Regulator’s Role in Distribution Agency 

The regulatory changes that have been implemented in the past two years including ULIPs regulation that brought in price control have taken flexibility away from life insurers. This is influenced by the distributors' commission. In fact, India has the lowest commission rates for agent advisors. In order to build a career agency model, adequate compensation is critical. IRDA has also tightened the performance criteria for agents in efforts to improve the persistency ratio in the industry (Gwon, 2020).

Improving the productivity and quality of distribution networks will be the core challenge for the industry if it is to successfully overcome the continued pressures relating to growth and profitability. There are three categories of channels to be considered for action by insurers – the agency network, bancassurance partnerships, and finally the third leg; comprising in-house sales force, digital, corporate agents and brokers (Putra et al., 2020). Agency contribution to new business premium for private life insurers has nearly halved during the last five years, without any meaningful improvement in profitability – indicative of a serious risk vis-à-vis sustainability. In contrast, while bank assurance has registered significant growth in new business premium in the past, with better economics, growth is now tapering off despite low penetration. Scaling up the third leg is critical for life insurers to build a more diversified and stable distribution mix – however, the challenges and priorities differ by specific channels (Marano, 2019).

A mutual re-alignment of expectations and business models of channel players and insurers is required to maintain relevance for the channel, whereas in the case of digital, the priority is to build and execute against a roadmap geared to delivering multi-fold growth. Trends vary within the group-while the broker channel continues to face pressure, digital has made a strong start. Life insurers need to scale up this third leg combined with a focus on business quality to create a more stable distribution mix (Nguyen et al., 2018).

While the agendas differ across distribution channels, incremental moves will not be enough to rediscover growth and drive profitability. The time is to be bold, to make hard choices, to partner optimally, and to innovate. To ensure that customer service is prompt, courteous, complete and accurate, an insurer from time to time needs to amend its ways and methods and ensure effectiveness in dealings. Providing complete service is sometimes a challenge, especially when service requests cover a variety of transactions or when transactions are complicated or unusual. The system that a company invests in must have the ability to handle future predictive models and applications, and allow to increase market share, internal productivity, and gain competitive advantage (Kim & Mo, 2018).

2.7. Hypotheses

Therefore, based on the literature review, the hypotheses for this study are as follows:

Customer orientation is different from sales orientation, in which sales orientation emphasizes more on manipulative and high-pressure selling techniques. Customer orientation aims at giving maximum satisfaction to customers (Guillem, 2020).

H1: Customer orientation significantly influences relational penetration capability.

The research conducted by Benet-Zepf et al. (2018) finds that, with regard to marketing communication capability, export salespeople should be wiser to do promotion activities to improve their performance.

H2: Relational penetration capability significantly influences salesperson performance.

The research on the influence of customer knowledge accessibility on relational penetration capability conducted by Arun et al. (2020) finds that the better the customer knowledge, the higher the customers’ involvement level in customer relationship management, in which customer knowledge possessed by salesperson allows the company to utilize the existing market opportunities and improve the competitive advantage of salesperson’s capability to extend market share.

H3: Customer knowledge accessibility significantly influences relational penetration capability.

Adhilla (2015) finds that if a company applies an individual marketing program to its salespeople in which each employee must be friendly and polite to customers, and capable of responding to customer complaints individually, they will improve corporate competitive advantage in the aspects of good relationship capabilities and quality with the market.

H4: Salesperson-customer relationship quality significantly influences relational penetration capability.

The research result was obtained by Azzam (2014) from 24 respondents who are salespeople at National Alliance company. Another study conducted by Ahmad & Akbar (2020) finds that customer knowledge not only provides information on customers’ necessity and purchase history but also contains information on customer knowledge of the product, brand, service, and market. The better the customers’ product knowledge, the better the salesperson's performance in selling the product.

H5: Customer knowledge accessibility significantly influences salesperson performance.

The research conducted by Terho et al. (2015) with 816 salespeople as the samples finds that building a quality relationship with customers through CRM program will help a salesperson have good assessment and performance. Groza, Krishnan, Peterson, & Sullivan (2012), involving 1.699 respondents, find clear evidence that the capability of building a quality buyer-customer relationship significantly improves companies’sales performance.

H6: Salesperson-customer relationship quality significantly influences salesperson performance.

3. Data and Methodology

This research aims to analyze the effect of customer orientation, customer knowledge accessibility, salespersoncustomer relationship quality on relational penetration capability, and salesperson performance in the insurance industry. This is classified into explanatory research since it intends to explain the causal relationship between variables through a hypothesis test. According to the Indonesian General Insurance Association, there are 65 private insurance companies in Indonesia, while life insurance companies listed in the Indonesian Life Insurance Association are 51. The research population is 211 insurance salespeople in Central Java. The primary data of the research was directly obtained from the respondents through questionnaires and observation. The research’s primary data was respondents’responses concerning the variables studied.

The sampling method to determine the insurance companies was purposive sampling by following some requirements:

1. Insurance companies are members of the Indonesian Life Insurance Association.

2. . Insurance companies are listed in the 2013 insurance directory according to the Financial Services Authority.

3. Insurance companies have been operating before 1998 (during the monetary crisis in Indonesia).

4. . Insurance companies have been included in the top 10 best Life Insurance by Infobank magazine (2014).

5. Insurance companies have been included in the top 10 best Life Insurance by Investor magazine (2014).

Based on the criteria, there are 5 suitable insurance companies, namely Prudential, Manulife, AIA Financial, Bumiputera 1912, and AXA Mandiri. This research used two kinds of analysis techniques: confirmatory factor analysis to confirm the most dominant factors in variable groups and regression weight to examine the extent of influence between variables.

Figure 1 : Theoretical Framework (Modified)

Based on the table above, there are 51 life insurance companies in Indonesia with an unknown total number of salespeople. Therefore, sampling is carried out using the Lemeshow Formula:

\(\mathrm{n}=\frac{\mathrm{Z}^{2} \mathrm{P}(1-\mathrm{P})}{\mathrm{d}^{2}}\)

Information:

Z = 1,96

P = Maximal Estimate = 0,5

e = Alpha (0,05)

n = \(\frac{1,96^{2} \cdot 0,5(1-0.5)}{0,05^{2}}=384\)

4. Results and Discussion 

4.1. Results

A validity test is used to test whether the indicators are able to represent/measure the variables. This was conducted by testing the factor loading, Average Variance Extracted, and determinant validity. The factor loading and AVE values must be higher than 0.5. The factor loading is between 0.636-0.790 for customer orientation items, 0.784- 0.840 for relational penetration capability items, 0.664- 0.822 for customer knowledge accessibility item, 0.771- 0.833 for salesperson-customer relationship quality item, and 0.704-0.900 for salesperson performance item. Table 1 also explains that all AVE values are higher than 0.5, thus we may conclude that each item developed in this research is valid. The determinant validity was measured by comparing the square root of AVE with a correlation between variables, in which the AVE square root value must be higher than the correlation between variables. Table 2 shows that the AVE square root value is higher than the correlation between variables. Thus, we may conclude that the item developed is valid.

Table 1: The List of Indonesian Life Insurance Companies

Table 2: Validity and Reliability Test

Reliability was used to test the consistency of the items proposed. The reliability test used was the composite reliability and Cronbach’s alpha. The composite value of reliability must be higher than 0.7 and the Cronbach’s alpha value must be higher than 0.6. Table 2 shows that the composite values of reliability and Cronbach’s alpha correspond with the requirements. Thus, we conclude that the items developed are reliable.

There are 6 hypotheses tested. The test results can be observed in Table 3. This study finds that customer orientation is positively associated with relational penetration capability (β= 0.239; ρ<0.001); relational penetration capability is positively associated with salesperson performance (β= 0.468; ρ<0.001); customer knowledge accessibility is positively associated with relational penetration capability (β= 0.447; ρ<0.001); salesperson-customer relationship quality is positively associated with relational penetration capability (β= 0.318; ρ<0.001); customer knowledge accessibility is positively associated with salesperson performance (β= 0.174; ρ=0.005); and salesperson-customer relationship quality is positively associated with salesperson performance (β= 0.163; ρ=0.008).

Table 3: Validity of the Determinants

Table 4:Hypothesis Testing Results

Table 5:SEM Analysis Results

The indirect effect of customer orientation on salesperson performance through the relational penetration capability has a significant value of 0.181. These findings indicate that in the process of improving sales force performance, insurance agents must have a high customer orientation within themselves to have high relational penetration capabilities.

The indirect effect of the customer knowledge accessibility variable on salesperson performance through relational penetration capabilities was found to be more influential than the direct effect of customer knowledge accessibility on sales force performance. On statistical calculations, the coefficient value of the indirect effect of the customer knowledge accessibility variable on the salesperson performance through relational penetration capability is significant with a value of 0.170. This finding means that to improve the salesperson performance, a salesperson needs to have the relational ability to provide all information that customers need regarding the product offered. Thus, the salesperson must be able to offer products according to consumer needs.

The indirect effect of salesperson-customer relationship quality variable on salesperson performance through relational penetration capability was found to be more influential than the direct effect of salesperson-customer relationship quality on salesperson performance. On statistical calculations, the coefficient value of the indirect effect of salesperson-customer relationship quality variable on salesperson performance through relational penetration capability is significant with a value of 0.262. This means that a salesperson will be able to improve salesperson performance by having quality relationships with customers and strengthening relational penetration capability so that the salesperson can gain customer’s trust and more easily offer products.

4.2.Discussion

The results of this research show that customer orientation positively influences relational penetration capability. Customer orientation is an important aspect that a salesperson must possess. Some research explains that customer orientation will improve customer satisfaction and trust and eventually improve a good relationship with customers. A corporate salesperson must be capable of giving customers necessities and attempting as best as possible to fulfill them according to the company’s prevailing system and procedure (Falasca et al., 2017). They must look for information related to customers and competitors as much as possible so that the products offered meet the customer needs and stop them from switching to competitors. A salesperson is expected to have access to extensive and broad information about customers’situations, market conditions, and competitors’ products. Further research conducted by (Lu & Zhang, 2016) states that customer orientation directs to a salespeople’s stronger skill and expertise since they have a higher level of knowledge of customer’s necessity. Higher knowledge level of customer’s necessity has important implication in salesperson’s capability of finding potential customers and of fulfilling their requirements through careful analysis of necessity.

This research result shows that relational penetration capability can improve salesperson performance and build an in-depth and intimate relationship with customers. This capability is taken from the social penetration concept, in which individuals have a strong bond that moves from shallow to intimate relationships (Baber et al., 2020). Insurance salespeople must be capable of building a strong and intimate relationship with their customers. This builds customer trust and boosts sales as customers will also recommend their family or friends to buy the same insurance product from the salesperson. A salesperson’s relational penetration capability will improve his performance. The more a salesperson has knowledge of his customers, the easier for him to build an in-depth relationship with them. A dynamic environment makes insurance salespeople difficult in predicting their consumers' buying patterns, especially when they have financial problems. The companies must be able to examine customer knowledge. The capability of understanding customers will lead to an approach towards building customer relationships. Understanding customers’ minds will help insurance salespeople to build intimate relationships with them (Calixto & Ferreira, 2020).

This research finds that customer knowledge accessibility can improve salesperson performance. Knowledge of customers covers customer knowledge related to product/service, customer commitment, and customer loyalty (Obodoechi et al., 2020). A salesperson must be able to manage such knowledge and utilize it to make an effective strategy. Insurance salespeople who are capable of managing customer knowledge attempt to offer insurance products as needed. This effective strategy will affect customer purchase decisions and improve sales performance (Ahmad & Akbar, 2020).

This research result shows that improved relational penetration capability will lead to improved salespersoncustomer relationships. Relational penetration capability enhances insurance agents-customers bonds. A stronger bond will lead to the quality of their relationship. Relationship quality is reflected through commitment, trust, and satisfaction. An insurance sales agents’ capability in building bonds will lead to customers’ satisfaction, commitment, and trust (Aqmala & Ardyan, 2019).

Relationship quality can improve salesperson performance. Well-maintained relationship quality will be capable of improving customer loyalty. Customers will attempt to recommend the insurance salesperson to other people and use other insurance products offered. For example, customers may initially only take health insurance but later they will buy other products for other family members. Customers may also to-pup unit link product that will lead to insurance salesperson’s improved performance (Yeo et al., 2019).

5. Conclusions

Based on the tests and discussion, it is found that customer orientation positively influences relational penetration capability. The relational penetration capability and customer knowledge accessibility are capable of improving salesperson performance, salesperson-customer relationship quality positively influences salesperson’s relational penetration capability, salesperson-customer relationship quality positively influences salesperson’s performance, and improved relational penetration capability will lead to an improved salesperson-customer relationship. The research limitation is that the survey was conducted only in Central Java due to the Covid-19 pandemic, making it impossible to survey multiple provinces. The research findings prove that relational penetration capability is capable of strengthening the relationship of customer orientation with salesperson performance. A good relationship between salespeople and their customers indicates that salespeople are capable to build and maintain customer relationships. It will have a positive impact on insurance salesperson performance in Central Java when salespeople have good relationships with customers. They may emphasize the importance of the insurance they offer and make customers feel the significance of having the insurance.