Ethical Sales Behavior, Relationship Quality, and Customer Loyalty
When you think about sales as developing and maintaining relationships, the ethical demands on your practices are at a premium. Read this journal article on the connections between ethical sales behavior, relationships, and customer loyalty. Ethics in the sales profession is essential to long-term success.
Hypotheses Tests
A structural equation modeling was conducted to test the hypotheses in order to assess the effect and the significance level of each path in the model. The model shown in Figure 1 was examined and tested using AMOS7.
Tests of the hypotheses were performed using a structural equations modeling (SEM). Model fit determines the degree to which the structural equation model fits the sample data. The model was tested and provided good indicators of fit: Chi square / d f = 2.834, (it should be between 0 and 3 with lower values indicating a better fit) with the comparative fit index (CFI) was 0.881, Tucker-Lewis coefficient (TLI) was 0.868, ( RFI) was 0.810 (a value of 1.0 indicates perfect fit) and the root mean square error of approximation (RMSEA) was 0.092, indicating a good fit between the theoretical model and the data. The analysis then proceeded to examine the causal relationships between these variables.
The results were as expected and provided support for all hypotheses,
except H6. The results of the structural model showed that ethical behavior had no significant direct effect on
customer loyalty to the bank. Properties of the causal paths, including standardized path coefficients of the
research model was shown in Table 5.
Table 5. Result of structural equation modeling: standardized direct, indirect and overall effects
| To From |
Customer trust | Customer Commitment | Customer Loyalty | |
|---|---|---|---|---|
| Direct Effect |
Ethical sales behavior | .663 | .120 |
-.134 |
| Customer trust | .000 | .812 |
.580 | |
| Customer Commitment | .000 | .000 |
.288 | |
| Indirect Effect | Ethical sales behavior | .000 | .539 | .574 |
| Customer trust | .000 | .000 | .234 | |
| Customer Commitment | .000 | .000 | .000 | |
| Total Effect |
Ethical sales behavior | .663 | .659 | .440 |
| Customer trust | .000 | .812 | .814 | |
| Customer Commitment | .000 | .000 | .288 |
Figure 2 illustrates path analysis of the structural model. Standardized path coefficients are provided; numbers
on the construct indicate total variance explained (R2). Standardized structural path coefficients and R 2 values
are presented in Figure 2.
Figure 2. Result of structural equation modeling
In this model the path from ethical sales behavior to customer trust, customer commitment and customer loyalty
was calculated, and the standardized coefficient that obtained from ethical behavior to trust and commitment to
the bank was positive and highly significant (Standardized coefficient = .663; p < .01 And 12; p < .05). Thus,
there is support for H1 and H2. However, the standardized coefficient that obtained from trust and commitment
to customer loyalty was positive and highly significant (Standardized coefficient = .580 and .288; p < .01).
Therefore, there is support for H4 and H5. As predicted by H3, the standardized coefficient that obtained from customer trust to customer commitment was also positive and highly significant (Standardized coefficient = .812; p < .01). Thus, there is support for H3. Unfortunately, the standardized coefficient from ethical behavior to customer loyalty was negative but non-significant (-.134; p >.05).
Therefore, H6 not supported. That is to say,
when trust and commitment was not considered, ethical behavior had a strong and direct effect on customer
loyalty to the bank, otherwise if trust and commitment was included in the model, ethical behavior did increase
customer loyalty to the bank; yet this effect was not direct, but mediated by trust and commitment. The effects of
ethical sales behavior on customer loyalty, therefore flow only through customer trust in and customer
commitment to the bank and highly significant (indirect standardized coefficient = .574; p < .01). Therefore H7
supported. The results concerning the testing of hypotheses are summarized in Table 6.
Table 6. Hypotheses testing results of the structural equation model
| Hypothesis | Causal path | Standardized Coefficients | Test result |
|---|---|---|---|
| H1 | Ethical sales behavior → customer trust |
0.663** | supported |
| H2 | : Ethical sales behavior → customer commitment | 0.120* | supported |
| H3 | customer trust → customer commitment |
0.812** | supported |
| H4 | customer trust → customer Loyalty | 0.580 ** | supported |
| H5 | : customer commitment → customer Loyalty | 0.288** | supported |
| H6 | Ethical sales behavior → customer Loyalty | - 0.134 | not supported |
| H7 | Ethical sales behavior → customer Loyalty Indirect effect through customer trust and customer Commitment as mediator |
0.574** | supported |
Note: ** indicates p<0.01: * indicates p<0.05.
As depicted in figure 2, coefficient of determination (R2) values show that, ethical sales behavior account for 44% of variance in customer trust; ethical sales behavior and customer trust, account for 80% of variance in customer commitment; ethical sales behavior, customer trust and customer commitment account for 58% of variance in customer loyalty. The results are depicted in Figure 2, which show a structural equation modeling. These results suggest that the model is a reasonable basis upon which to test the research hypotheses.