PRDV217: Introduction to Sales

In today's heightened ethical awareness and highly competitive environment in the financial services industry, the ability of a financial institution to compete on price has become increasingly difficult. Therefore, most service marketers recognize today the importance of initiating and maintaining enduring relationships with customers. This is particularly true in services contexts such as financial services, characterized by continuous exchange activity and considerable purchase uncertainty.

For a bank to maximize its long-term performance in such aspects as customer retention and loyalty, it must build, maintain and enhance long-term and mutually beneficial relationships with its target customers. However, in this era of strategic customer relationship environment, business ethics has become a significant boardroom topic. The implications for financial institutions are that it is of increasing importance that new, non-price factor, such as ethical sales behavior of salespeople is used as a means of differentiation, to achieve higher revenue growth and improved market share.

The focus on building successful customer relationships puts salespeople in a critical strategic position relative to the customer. Furthermore, ethical sales behavior can play a critical role in the formation and maintenance of long-term relationships with customers. However, in the financial services context, the salesperson's ability to affect customer's loyalty and dependency on the financial institution may be determined largely by the behaviors they implement when interacting with the customer. Furthermore, the pressure toward unethical behavior may be even stronger among sales representatives.

Meeting quotas and competing successfully in relatively weak economic times may have caused an increase in unethical behavior among sales representatives toward customers. However, financial services are highly abstract services characterized by credence attributes and consequently difficult for consumers to fully understand. Furthermore financial institutions are vulnerable to many legal and ethical abuses and very expensive forms of corruption. Hence, the customer must rely on the salespeople for correct information and proper guidance. Because ethics is a central issue in financial services, and to avoid deceptive sales practices, ethical sales behavior can play a critical role in the formation and maintenance of long-term relationships with customers.

Therefore, retaining customers and maintaining customer loyalty demands that banks must listen to their customers and understand their needs. Researches indicate that salespeople who act in an ethical manner are more effective at building strong customer relationships and their customers are more satisfied with them, more trusted and/or committed to them. If good ethics is good business, the consequences of such initiatives should be enhanced business results. Taking the "high road" with more ethical strategies should translate into greater market share and return on investment, which leads to long-term sustainability of organizations. However, findings of Vegholm and Silver study imply that banks must encourage behaviors that will increase customers' confidence in the bank organization.

These suggestions are in line with the thoughts of Llewellyn, who argues that it is important for financial institutions to set guidelines for individual bankers on how to act fairly, and to develop appropriate training and reward mechanisms. Although many related topic articles were published, Liljander and Mattson posited that further studies are required regarding the effect of employee ethical behavior and particularly salesperson behavior on customer loyalty. Moreover, despite a general recognition that ethical sales behavior plays a critical role in the relationship development process, there have been limited empirical demonstrations of this reality. Accordingly, the purpose of this study is to better understand the relationships among the ethical sales behavior, relationship quality and customer loyalty to bank. More specifically, study aims to empirically investigate the mediating effect of customers' trust and customer commitment in ethical sales behavior - customer loyalty relationship.

Such understanding could contribute to improving the ethical behavior of the salespeople and consequently enhance the opportunity to build long-term profitable customer relationships in the context of Jordanian banking industry. Furthermore, this study is of great value to the banking sector since it shows bank managers how to gain customers' trust, commitment and loyalty to the bank through the ethical behavior of their frontline employee