PRDV217: Introduction to Sales

Discussion

The study provides a model that explains how banker's ethical sales behavior is able to generate higher customer loyalty. Therefore, the paper contributed to the ethical sales behavior – customer loyalty relationship literature by empirically validating the role of ethical sales behavior as perceived by the bank customer in developing customer loyalty through customer trust in and customer commitment to the bank.

Consistent with previous study, ethical sales behavior was significant predictor of customer trust, customer commitment, and customer loyalty. Moreover, consistent with Chen and Mau; Hansen and Riggle; Roma'n and Ruiz's and Roma'n's study the ethical sales behavior positively affects customer trust. This means that when the ethical sales behavior is perceived to be high, the customer will have more trust in the bank. Likewise, different exploratory studies have shown that customer trust in the salesperson can be earned by the honest actions of sales representatives, as well as low-pressure selling techniques. According to Chen and Mau, "if the customers think their salesperson's sales behaviors are ethical then they would tend to trust the salesperson as well as the company".

The results also show that ethical sales behavior indeed plays a major role in affecting customer trust in and customer commitment to the bank as it has positive effects on customer trust and positive effects on customer commitment. However, the effect on customer trust is stronger than its effect on customer commitment.

This result however is inconsistent with the finding of Hansen and Riggle study. They indicate that the relationship between ethical sales behavior and customer commitment to the salesperson is completely mediated by customer trust in the salesperson. They found that the effects of ethical sales behavior on buyer commitment to the salesperson flow only through buyer trust in the salesperson. Moreover, consistent with Hansen and Riggle, Anderson and Narus, Ganesan, Garbarino and Johnson, finding of this study indicate that, customer trust in the bank has positive effects on customer commitment to the bank.

Finally, research analyses indicate that, both of customer trust and customer commitment make positive contributions to customer loyalty. Indeed, the effect of customer trust on customer loyalty is stronger than the effect of customer commitment. These results are in line with Chen and Mau and Reichheld and Schefter's observation that 'to gain the loyalty of customers, you must first gain their trust'. Once there is customer trust, customer loyalty comes naturally. 

Customers who perceive the sales behavior to be ethical are more likely to trust the bank and therefore, hold commitment toward the bank. Consequently, customer who trust in the bank and hold commitment to the bank are in turn more likely to exhibit desirable behaviors i.e. more loyal. The finding of this study positions customer trust and customer commitment as the primary mechanism through which the beneficial effects of ethical sales behavior are realized, and supports those who have previously noted the critical role ethical sales behavior plays in facilitating a sense of trust and commitment on the part of the bank customer.

The study implies that banks must emphasize the importance of ethical behavior of individual bankers, and encourage behaviors that will increase customers' confidence in the bank. These findings are in line with the finding of Vegholm and Silver and 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 an reward mechanisms. The finding is also consistent with those of Seal, who argues that a trustworthy organization starts by building confidence into its internal processes, through training and educating its own employees.

Therefore, as argued by Llewellyn treating customers fairly is a major corporate issue about the responsibility of individual employee. Building upon Llewellyn's proposed model, the present study has shown that it is indeed in the best interest of financial institutions to strive for corporate fairness. Although this study finding partially replicates previous research, but the other one represent new contributions to the research body. However, it is an attempt to occupy the gab in interrelationships that were uncovered between ethical sales behavior, relationship quality (customer trust and customer commitment) and customer loyalty. The study indicate that the effects of ethical sales behavior on customer loyalty is completely mediated by relationship quality i.e. customer trust and customer commitment.

Managerial Implications

This research represents an important step in testing and understanding the dynamics of the relationship between ethical sales behavior and customer loyalty in banking industry. As such it contributes to the limited research exploring the mediating effect of customer trust and customer commitment in this relationship. Results show that perceived ethical behavior has a major impact on the development and maintenance of the customer-bank relationship. Results also reveal that customer trust and customer commitment are an important mediating determinants between the ethical sales behavior and customer loyalty in the bank industry. The managerial implications of study results are quite clear.

Thus banks that value the critical importance of long term relationships with their customers, should achieve an environment where the potential for unethical behavior is at a minimum. From a managerial perspective, the ethical sales behavior is a vital determinant of customer trust and customer commitment, which in turn influences customer loyalty in the bank services. Therefore, for those banks wishing to establish a long-term relationship with their customers, how to encourage their employees to uphold ethics when making sales to customers is very important. Bank managers should emphasize that, unethical behavior in any way is not acceptable so long bank attempt to convey trust to their customers so as to build successful relationship with their customer.

Studies indicate that an organization's ethical climate influences the ethics of its employees. Therefore, creating, implementing, monitoring, and enforcing new codes of ethics represents a positive first step in encouraging ethical salesperson behavior. Furthermore, the empirical results of this study strongly support the implementation of previous studies findings and suggestions which indicates that an organization's ethical climate influences the ethics of its employees. In addition to the results of Valentine, study which imply that, ethics training, operating through ethical context can enhance perceptions that the organization has ethical standards.

An emphasis on ethical behavior is therefore much more important than selling activities. It's critical for the survival of an organization in a highly competitive market. In other words, salespeople should be managed from an ethical standpoint so that positive long-term customer relationship can be established, and repeat purchases are encouraged from a loyal and established customer base.