Exploring the Relationship between Ethical Sales Behavior, Relationship Quality, and Customer Loyalty

Abstract

In today's heightened ethical awareness and increased competitive pressure, the implications of ethical behavior for fmancial institutions have become a vital determinant of customer loyalty. The purpose of this study is to develop a conceptual framework to investigate the relationship between ethical sales behavior, relationship quality, and customer loyalty. The proposed model is tested on data collected from 217 bank customers. Stmctural equation modeling technique was employed using AMOS 7.0 to verify the reliability and validity of the multi-item scales and to test the hypothesized relationships. Result indicates that ethical behavior did increase customer loyalty to the bank; yet this effect was not direct, but mediated by customer trust and customer commitment to the bank. Findings also indicate that, customer tmst in the bank has positive effects on customer commitment to the bank. The result of this study positions customer trust and customer commitment as the primary mechanism through which the beneficial effects of ethical sales behavior are realized. However, the study show that perceived ethical behavior has a major impact on the development and maintenance of the customer-bank relationship. Bank manager, which 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.