Investigation of agency agreement formation: new opportunities for marketing relationship development in service industries

This paper examines agent–principal agreements that prevail in marketing structures. Structural equation modeling reveals a new positioning of the relative importance of antecedents in agreement formation for two agency contexts (recruitment consultants and real estate agents). The insignificance of negotiation in agreement formation deviates from services marketing relationship models in which negotiation pre-empts commitment. A close coupling of agent attributes and information disclosure similarly positions business and consumer exchanges, contrary to sales literature. As agreement formation is not directly determined by any single event, management should not focus on outcome-based metrics for process refinement.