Impact of relations between employees and customers to the customers’ positive word-ofmouth in real estate industry

 Journal of Science Ho Chi Minh City Open University – No. 4 (16) 2015 – December/2015 17 
IMPACT OF RELATIONS BETWEEN EMPLOYEES AND 
CUSTOMERS TO THE CUSTOMERS’ POSITIVE WORD-OF-
MOUTH IN REAL ESTATE INDUSTRY 
Phan Nhat Nam
1
, Nguyen Minh Ha
2
, Nguyen Huu Dung
3
1, 2
 Ho Chi Minh City Open University 
3
 University of Economics Ho Chi Minh City 
(Received: 08/11/2015; Revised: 02/12/2015; Accepted: 07/12/2015) 
ABSTRACT 
The study aims to explore and measure the relationship between employees and customers 
impacting positively to the word-of-mouth of customers who bought house from the real estate 
developers in Ho Chi Minh City. The study was based on survey data from 300 customers who 
bought house from the real estate developers in Ho Chi Minh City and using techniques of 
Cronbach Alpha analysis and Exploratory Factor Analysis (EFA). The study shows 4 factors of 
customer relationship affecting positively customers’ word-of-mouth, including: (1) Familiarity; 
(2) Personal connection; (3) Care; (4) Trust. From the findings, the study suggests some policy 
implications to the real estate developers to improve the customers’ positive word-of-mouth. 
Keywords: Caring, Familiarity, Relationship between Employee and Customer, Personal 
connection, Trust, Word-of-Mouth. 
1. Introduction 
For the real estate developers, customer is 
the most important factor affecting the 
survival and development of enterprises. 
Building a good relationship with customers 
is an important factor in building up 
enterprise’ revenue and brand-name. 
Customers often carefully do research before 
buying; beside the information from 
consultants, websites, media, getting the 
review from friends, relatives has a huge 
influence on purchasing decision. According 
to the statistic of National Association of 
Realtors (NAR) about the effective marketing 
channels in real-estate transactions, the most 
successful and effective channel is through the 
introduction and word-of-mouth which 
account for over 48%. Based on the study of 
W&S Ltd Company (Japan) in surveying 200 
buyers in Ho Chi Minh City and Hanoi 
conducted in 2012, there are 80% of 
respondents get information from family, 
relatives and 72% from asking friends and 
colleagues to buy their own home. 
Currently, many real estate enterprises in 
Ho Chi Minh City do not fully realize the 
importance of former customers’ word-of-
mouth but mainly focus on advertising media 
to increase sales, potential customers and 
company image. The study gives an overview 
to the leaders of the real estate enterprises on 
the issue of the relationship between 
employees and customers positively affect 
word-of-mouth. Moreover, it also proposes 
the policy implications to improve the 
relationship between employees and 
18 Impact of relations between employees and customers to the customers’ positive... 
customers which create positive word-of-
mouth, with the purpose of getting more 
customers and revenue for those enterprises, 
as well as building brand’s reputation on the 
market. 
2. Literature review and hypothesis 
Word-of-mouth (WOM): Johan Arndt et 
al. (1967) defined the word-of-mouth: "Direct 
verbal communication between a recipient 
and a communicator relating to a brand, a 
product or a certain service and the recipient 
aware that the message from sender is non-
commercial". Therefore, the element from 
person to person is not the only verbal 
communication method when electronic 
technologies, social network...in today’s 
modern world are also considered as a mean 
for verbal communication (Buttle, 1998). 
According to Kirby and Marsden (2006), 
word-of-mouth is the speech, communication 
between persons, between the recipient and 
sender related to a brand, a product, service or 
information on the market, or a conversation 
between two or more person related to the 
products and service, independently to any 
enterprise. 
The relationship between employees and 
customers creates positive word-of-mouth 
There are four structural hypothesis 
components of the relationship between 
employees and customers which affect word-
of-mouth, shown in Figure 1. 
Caring in the relationship between 
employees and customers: According to 
Gremler et al. (2000), Caring is customer’s 
awareness to the employees who have 
customer service. The level of caring shown 
in the case between customers and employees 
can be explained by the principle of 
ownership relations. The interpersonal 
interaction between individuals tend to help 
those who helped them. The level of caring 
leading to trust is the motivation for the 
employee to execute customer service. The 
caring is as customer’s awareness about the 
employees who really care about customers. 
The level of caring leading to trust is likely to 
be based on the employee's motivation shown 
by the acts of caring. The Trust is an 
important factor in the development of the 
relationship between customers and 
enterprises in the future (Gremler et al., 
2001). So, hypothesis 1 is given as follows 
H1: Caring has a positive influence on 
customer's trust in the employees. 
The familiarity in the relationship 
between employees and customers: 
Familiarity is defined as the customer’s 
perception of the employee having personal 
feeling towards the customer and understands 
about their needs. (Gutek, 1999). The 
familiarity of customer with a service or an 
employee is as a synonym of the concept 
"Customers’ knowledge first". This means 
that due to being influenced by familiarity 
from the previous collaboration with 
employees and enterprise lead to customers 
making decisions (Alba and Hutchinson, 
1987). Also according to Alba and 
Hutchinson (1987), familiarity leads to better 
personal confidence and in some situations 
reduce the hesitation possibly causes 
customers’ embarrassme ... y F6 .627 
I am familiar with the procedure of enterprise F7 .660 
Personal Connection PC 0.781 
I can feel the friendship between the employee and me PC1 .769 
I want to work/communicate with this employee when I 
come to the enterprise 
PC2 .786 
I have many things in common with this employee PC3 .625 
The employee takes me to the benefits when buying the 
product 
PC5 .582 
I often discuss the issue outside of work with the employee 
PC6 .637 
Care C 0.748 
The employee makes me feel cared. C1 .735 
I feel comfortable when interacting with enterprises’ 
employees. 
C2 .729 
When there are updated news relating to products and 
enterprise, the employee supplies for me in time. 
C4 .566 
The employee takes care of me before, during and after 
buying the enterprises’ products. 
C5 .666 
24 Impact of relations between employees and customers to the customers’ positive... 
4.4. Regression analysis result 
The equation of relationship between 
employee and customer 
As can be seen from table 4,, the result 
shows that R
2
 = 0.51, meaning that about 51% 
of variance on customer trust is explained by 
three independent variables which are care 
(C), familiarity (F) and personal connections 
(PC). In ANOVA analysis table, sig. value is 
very small (sig = 0.00), so the regression 
model fits the data set and can be used. 
Table 4. Overall fit of the estimated model about the relationship 
between employee and customer 
Model R R Square Adjusted R Square 
Std. Error of the 
Estimate 
Durbin-Watson 
 .717
a
 .515 .510 .31156 1.929 
The regression results show that 
independent variables: Care (C), Familiar (F) 
and Personal Connection (PC) have sig below 
0.05, so variables are at the trust level of 95%. 
Therefore, at 95% trust, independent variables 
affect the dependent variable (T) and the 
index system has positive signal and variables 
affect positively the customer's trust. 
Table 5. Results of regression model about the relationship between employee and customer 
Model 
Unstandardized 
Coefficients 
Standardized 
Coefficients 
t Sig. 
Collinearity 
Statistics 
B Std. Error Beta Tolerance VIF 
 Constant .805 .203 3.958 .000 
Care .210 .051 .204** 4.088 .000 .659 1.517 
Familiarity .362 .044 .413*** 8.185 .000 .644 1.553 
Personal Connection .235 .049 .244*** 4.795 .000 .635 1.574 
Dependent Variable: T 
Note:**: Regression coefficients is significant at the 0.01 level (2-tailed). 
The importance of the independent 
variables on the dependent variable is 
demonstrated by the standardized Beta. If the 
bigger the absolute value of the beta factor is, 
the more it influence on the loyalty of 
customers for the company. Therefore, the 
most important impact on customers’ trust is 
friendly factor (Beta = 0.413), followed by the 
factor of personal connection (Beta = 0.244) 
and finally, the care factor (Beta = 0.204). 
The equation relationship between the 
trust of employee and customer with the 
positive customers’ word-of-mouth 
The result of regression model about the 
relationship between employee and customer 
to the customers’ word-of-mouth came out 
relatively appropriate with the level of 
significance 0.05. R
2
 = 0.508 means that 
about 50.8% variance of customers’ trust is 
explained by the independent variable Trust. 
 Journal of Science Ho Chi Minh City Open University – No. 4 (16) 2015 – December/2015 25 
Table 6. Overall fit of the estimated model about the trust of employee and customer 
towards the positive customers’ word-of-mouth 
Model R R Square 
Adjusted R 
Square 
Std. Error of the 
Estimate 
Durbin-Watson 
1 .714
a
 .510 .508 .32544 2.064 
Independent Variable: T 
Dependent Variable: WOM 
In Table 7, the regression results show 
that the independent variable Trust 
(Relationship between employee and 
customer) has sig below 0.05, so it has 
meaning at 95% trust. Therefore, at 95% trust, 
independent variable Trust (T) affects the 
dependent variable (WOM) and the index 
system with positive signal so it affects 
positively customer's trust. 
Table 7. Results of regression model of the trust between employees and customers to the 
positive customers’ word-of-mouth 
Model 
Unstandardized Coefficients 
Standardized 
Coefficients t Sig. 
B Std. Error Beta 
 Constant -.215 .249 -.861 .390 
Trust 1.038 .059 .714*** 17.599 .000 
Dependent Variable: WOM. 
Note:***: Regression coefficients is significant at the 0.01 level (2-tailed). 
Discussions of regression results 
The regression results demonstrate the 
role of these factors in contributing to the 
increase of trust of customers, assigned 
distinctively by hierarchy, in which the 
familiarity plays the most important role. The 
familiarity has positive influence on the trust 
of customers. The study of Gremler et al. 
(2001) shows that in the field of banking, the 
familiarity has a positive impact on the trust 
of customers, but for the field of dentistry is 
the opposite: The familiarity has opposite 
relationship with the trust of customers. For 
the real estate sector, customers have a long-
term liaising process with the enterprise tend 
to work with the employees who they feel 
friendly and understand how they do their 
jobs. Especially for cases when customers buy 
products repeatedly or new customers are 
introduced by old customers, they do not want 
to spend more time to work with new 
employees who have not known them clearly. 
The regression result shows that personal 
connection factor has the second degree of 
influence on customer trust in relationship 
between employee and customer. Personal 
connection has positive influence on the trust 
of customers. The research of Gremler et al. 
(2001) in both fields of banking and dentistry 
totally shows personal connection has a 
positive relationship to the customer trust. 
Customers tend to trust the employee when 
26 Impact of relations between employees and customers to the customers’ positive... 
they see the similarities. There are many kinds 
of similarities, such as living place, home 
town, hobby, member of a club, the same idol 
... or deeper such as similarities in personality: 
Introvert or extrovert...When personal 
connection increases, customers often 
recommend employee for their relationships 
such as friends, relatives, business partners for 
the purpose of work and all close 
relationships. Meanwhile, employee will pay 
more attention to the interests of customers: 
asking for the sale promotion for customers, 
advising ways of working to reach the most 
economical way for customers. Thus, the trust 
of customers will increase and the level of 
personal connection between employees and 
customers continue to be developed. 
The last element according to the 
regression results impact on customer 
confidence is care. Care has a positive 
influence on the trust of customers. The study 
of Gremler et al. (2001) in both fields of 
banking and dentistry shows that care has a 
positive relationship on the trust of customers. 
The care of employee to customers in the 
process before, during and after the customer 
purchases the product. When the real estate 
market becomes more transparent, the 
competition between enterprises increases, the 
customer care factor is considered one of the 
most preferred categories in enhancing 
enterprises’ reputation and brand. 
The study results show that the trust has 
a positive influence on customers’ positive 
word-of-mouth. The study of Gremler et al. 
(2001) in both fields of banking and dentistry 
has the same result. Housing is an asset of 
great value to customers. The creation of the 
trust from customer to employee and 
enterprise must be experienced through a 
long-term working process, and must be 
guaranteed for the expectations and desires of 
the customers. Along with the transparency of 
the housing market growing up, the trust of 
customer plays more and more important role 
for the success of the enterprise. 
Figure 2. Results of regression model 
Familiarity 
Care 
Personal 
Connection 
Trust WOM 
Relationship between employee and customer 
 Journal of Science Ho Chi Minh City Open University – No. 4 (16) 2015 – December/2015 27 
5. Conclusion and managerial 
implications 
5.1. Conclusion 
The study results show that the 
customers’ word-of-mouth for real estate 
developers in Ho Chi Minh City is relatively 
high with an average of 4.16 in the five-level 
Likert scale. 
In the relationship between employee and 
customer, in terms of each factor separately, 
the customer has the highest satisfaction with 
employee’s familiarity, followed by personal 
connection and finally the employee’s caring. 
When considering the relationship between 
employee and customer with observant 
variables, we can see the variable "Customers 
familiar with the procedure of enterprise” in 
element of familiarity is evaluated at an 
average of 4, the variable "I have close 
relationship with employee" is evaluated at an 
average of 4.05. This shows that customer still 
get difficulties in the process of working with 
enterprise due to the processes and procedures 
when purchasing the house. 
Linear regression analysis helped 
determine the intensity of three factors 
affecting customers’ trust in the relationship 
between employee and customer. Therein, the 
familiarity has the greatest impact, followed 
by personal connection and finally care. The 
regression results show that the relationship 
between employee and customer to give 
positive word-of-mouth prove the model 
explaining 50.8% on the variation of 
customers’ positive word-of-mouth factor. 
5.2. Managerial implications 
For familiarity: Enterprises still have 
difficult or inappropriate procedures to 
customers when buying a home. Enterprises 
need to have a standard procedure applicable 
to all their projects with ISO standards, this 
method should be expanded to apply for 
enterprises operating in the field of real estate. 
For personal connection: Employees 
need make customers feel familiar with them 
during the working process, give the analytics 
to customer for their best choice. Enterprises 
need to train employees with basic knowledge 
in the relevant fields. Employees will create 
the trust of customers due to their sufficient 
knowledge which customers can rely on those 
consultancies to make their decision. 
For care: Housing is a huge asset to 
customers so consulting information and 
advice must be truthful, accurate and detailed. 
Enterprises need to train employees to have 
more professional ethics besides the 
professional ability, avoid providing false 
information in order to serve the interests of 
employees and affect the interests of 
customers as well as enterprises’ image. It’s 
necessary that enterprises have policy and 
train employees to take good care of the 
customer even if the customer had already 
bought the product of enterprise. 
Creating the trust of customers: The real 
estate developers should issue the principles to 
attach interests of sales to obligations and 
professional ethics. After-sales service, 
customer care need to be improved greatly. 
Trust brings superior and more sustainable 
benefits than conventional approaches, such as 
introducing or using other sales, communication 
techniques. Employee and enterprise should 
consult correctly about the product, avoid 
inflating to gain immediate profit. 
One of the most popular reasons that 
make customers abandon enterprises is 
because they are not respected by the 
employees. It should be realized that the cost 
to keep an old customer and turn him/her into 
loyal customers is lower than searching for 
new customers, employees need to make 
effort to please and build the trust from 
customers. 
28 Impact of relations between employees and customers to the customers’ positive... 
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