Relational Trust and Firm Performance

Abstract

Marketing executives, especially in the services industry, invest effort and money in building trust by being customer oriented, ensuring managerial continuity, and rewarding long standing customers. Documenting the positive effect of marketing efforts aimed at building customer trust in terms of firm performance helps marketing executives gain a better understanding and control of their firm’s value creation role. In this study, we establish that relational trust is a key intervening construct that explains the impact of customer orientation and managerial continuity on a firm’s return on assets (ROA) and customer switching behavior.