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EJM 44,1/2

Interpersonal trust in commercial relationships

Antecedents and consequences of customer trust in the salesperson
Paolo Guenzi
Department of Management, Bocconi University and SDA Bocconi School of Management, Milan, Italy, and

114
Received November 2006 Revised January 2008, May 2008

Laurent Georges
IUT TC Tarbes, University of Toulouse III, Toulouse, France

Abstract
Purpose This paper seeks to explore drivers and consequences of customer trust in the salesperson in the nancial services industry. Its theoretical foundations are based on literature on customers interpersonal relationships with salespeople and front-line employees, as well as on literature in the area of customer trust. Design/methodology/approach A conceptual model, specifying a set of hypotheses linking a salespersons behaviours to customer trust, and the latter to behavioural loyalty intentions, was tested using partial least squares (PLS) on a sample of 150 customers in the Italian banking industry. Multiple models were compared in order to evaluate the mediating role of customer trust. Findings The results of the empirical study show that both salespersons customer orientation and expertise positively inuence customer trust in the salesperson. Conversely, selling orientation has a negative impact on it. Moreover, a salespersons likeability does not inuence customer trust. Finally, trust in the salesperson positively inuences a customers intentions to re-buy/cross-buy and to recommend, while it decreases a customers intention to switch to competitors. Research limitations/implications The study suggests that different relational antecedents may have different impacts on different relational mediators and outcomes. Since the mechanisms of interpersonal relationship formation and development are multifaceted, to understand fully the complexity of relational phenomena researchers should develop and test models incorporating multiple relational antecedents and outcomes. Practical implications The study provides sales managers with some evidence of the behaviours that salespeople should adopt to inuence successfully the creation of long-term relationships, especially in the context of credence services. The ndings suggest that the optimal behaviours of salespeople may vary, depending on the ultimate goal of the sellers relational strategy. The authors suggest drivers that managers can leverage to stimulate salespeople to perform the desired behaviours. Originality/value The model tested in the empirical study highlights the mediating role of customer trust and incorporates a broad set of drivers and consequences of interpersonal trust. As such, it improves knowledge of trust-building processes in the context of credence services, where trust and interpersonal relationships are very relevant. Keywords Trust, Interpersonal relations, Financial services, Sales force, Regression analysis Paper type Research paper

European Journal of Marketing Vol. 44 No. 1/2, 2010 pp. 114-138 q Emerald Group Publishing Limited 0309-0566 DOI 10.1108/03090561011008637

Introduction For Gundlach and Murphy (1993, p.. 41) trust is the most universally accepted variable as a basis of any human interaction or exchange. Trust is especially relevant in the relationship marketing perspective (e.g. Morgan and Hunt, 1994). Service industries are particularly suited for the analysis of relationship marketing theories and practices (Bitner, 1995). In service environments, the importance of trust has been identied by Berry (1996, p. 42), who states that the inherent nature of services [. . .] positions trust as perhaps the single most powerful relationship marketing tool available to a company. Nevertheless, as recently underlined by Harris and Goode (2004), within service dynamics trust has been understated, overlooked or ignored. Importantly, encouraging customers to trust the rm is a top priority among the goals of service rms, and developing trust with customer-contact employees is one of the most cited practices in building long-lasting customer-to-rm relationships (Claycomb and Martin, 2002). In fact, in many service environments, the rms relational intent and ability are, to a great extent, personied and expressed in practice by the front-line employees (Price and Arnould, 1999), and interpersonal relationships are considered a key element of the offering (Czepiel, 1990) because they provide social and condence/trust benets (Goodwin and Gremler, 1996). Although the topic of the contribution of interpersonal relationship in building customer relationships and loyalty with service providers has attracted increasing attention in the last few years (Bove and Johnson, 2001), less is known about how interpersonal relationships with customers are created and nurtured (Witkowski and Thibodeau, 1999). In this perspective, understanding interpersonal trust-building processes is particularly important (Gwinner et al., 1998). In keeping with this evidence, in the present study trust is used as the focal construct for analysing interpersonal loyalty-building processes in the context of service selling. The goal of our research is twofold: (1) to explore what factors explain customer trust in salespersons; and (2) to investigate the consequences of trust on the customers behavioural loyalty intentions. These issues are analysed in the context of the nancial service industry, which is particularly well suited to the topic under examination. In fact, we argue that studying the contribution of interpersonal relationships to trust-building processes implies the choice of a setting where: . interpersonal relationships are relevant to the customers overall evaluation of the service; and . trust is important. With regard to the rst aspect, the importance of interpersonal relationships varies across different service industries (Iacobucci and Ostrom, 1996). In general terms, this importance increases in the types of service industry that are characterised by a high level of people focus, customer contact time per interaction, degree of customisation and discretion, and process focus (Silvestro et al., 1992). Financial consulting, similar to most professional services, strongly ts these characteristics. With regard to the second aspect, we argue that, in a relational perspective, trust is particularly important in credence services, because in such services perceived risk is

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higher compared with search and experience services (Mitra et al., 1999). In fact, in credence services, such as the nancial industry, the quality of the offering cannot be evaluated accurately and efciently even after the service has been used extensively, because the consumer lacks technical expertise or feels that the cost of acquiring accurate information is greater than its expected value (Powpaka, 1996). Our model integrates and broadens previous research by incorporating three drivers of customer trust namely, the salespersons customer-oriented selling, expertise and likeability and exploring the impact of customer trust on three behavioural loyalty intentions customer intention to recommend, to purchase and to switch to competitors. The article is organised as follows. After a short overview of the literature on interpersonal relationships, the trust concept is examined, with a specic focus on customer trust and interpersonal relationships with salespeople in the context of nancial services. Then the conceptual model is presented, specifying the determinants and consequences of trust. This is followed by the development of a set of hypotheses linking a salespersons behaviour to customer trust and the latter to behavioural loyalty intentions. Next, the method used to test our model is explained, followed by a presentation of the results of the analysis. Finally, theoretical and managerial implications, limitations of the study, as well as future research opportunities are examined. The contribution of interpersonal relationships in building and developing relationships with customers The contribution of interpersonal relationships in building customer-to-rm relationships has been thoroughly investigated in the service literature. However, to date, most of the research on the topic has focused on the impact of front-line employee characteristics, attitudes and behaviour on customers perceived quality, satisfaction, commitment and loyalty while, unfortunately, little attention has been devoted to the analysis of the specic role played by contact personnel whose main activity is selling services (Gounaris and Venetis, 2002). Hence, in order to examine this topic, the personal selling literature is a second relevant eld of research. Here it is widely recognised that the interaction between the salesperson and the customer can have a substantial impact on important relational outcomes for the rm (Doney and Cannon, 1997; Foster and Cadogan, 2000). However, a major limitation of this stream of research is that most studies are focused on industrial or channel relationships (e.g. Beverland, 2001) and business-to-business services (e.g. Haytko, 2004). In contrast, consumer services have been overlooked. A third, relevant research stream is the literature on retailing, where the contribution of sales associates in fostering customer relationships with the store has been consistently demonstrated (Beatty et al., 1996; Wong and Sohal, 2003). However, this literature typically analyses the relationship-building role played by salespeople who are selling goods, not services. In short, we argue that all the above-cited streams of research have strong limitations. This suggests the opportunity to investigate the role played by salespeople in fostering customer relationships in consumer services markets.

Customer trust and interpersonal relationships in the context of nancial services In the context of customer relationships with salespeople, trust is a key construct (Jolson, 1997). More specically, customer trust has a future risk contingency orientation as customers place themselves at some risk of undesirable outcomes if the salesperson lacks the competence necessary to provide valid information or the motivation to protect the customers interests (Swan et al., 1999, pp. 94-5). Credence services necessarily imply risk, uncertainty and vulnerability; hence, they are an appropriate context in which to study trust-building processes. Financial services are highly abstract services characterised by credence attributes, technical complexity, information asymmetry and long-term return on investment: all these factors emphasize the importance of trust in the nancial services ` industry (e.g. Roman and Ruiz, 2005). Moreover, compared with pseudo-relationships, where different employees perform the service from one occasion to another, in the case of nancial services, customers usually interact with a single, dedicated service representative, which fosters the importance of trust (Gutek et al., 1999). In the context of nancial services relationships, vulnerability and uncertainty arise for several reasons. First, the exchange process is complex and requires a large amount of information sharing. However, customers generally lack precise information and sufcient expertise. In these circumstances the salesperson becomes a key source of information. Consequently, customer trust in the salesperson is mandatory for the exchange to take place and continue in the long term. Second, once a nancial service is acquired, it is almost impossible to change, should the customer dislike it. Under these circumstances, a salesperson might be opportunistic and knowingly sell services the customer does not really need. A trusted salesperson is not expected to be opportunistic. Third, many users experience difculty in evaluating the quality of the nancial services. Hence, in this context, they must rely on the salesperson to ensure a level of information quality. Finally, in nancial services the desirability of long-term relationships is heightened by the long time period over which costs and benets can be spread and shared among counterparts. In fact, it is often only over the long run that economic evaluations can be made by both parties. Therefore, building a climate of trust becomes very salient in order for the relational exchange to develop. However, there is evidence that personal advisers in consumer banking often adopt hard-selling approaches (Verhallen et al., 1997). Moreover, the existence of a relationship manager does not provide, per se, benets to the customer: these benets depend on how the relationship is implemented (Colgate and Lang, 2005). Consequently, an in-depth examination of trust and loyalty-building processes in interpersonal relationships with salespeople in the consumer-banking nancial services industry is needed. Conceptual model and hypotheses Several models have been proposed to explain customer trust in salespeople. Our framework mainly builds on the extensive meta-analysis reported by Swan et al. (1999), which is the most comprehensive study on the antecedents and consequences of trust in the salesperson. The authors showed that, among salesperson-related drivers, only benevolence, competence and likeability/similarity signicantly affect customer trust. Hence, a salespersons expertise (i.e. competence), likeability, as well as selling orientation and customer orientation (i.e. a proxy of benevolence[1]) were included as potential drivers of trust.

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As for the consequences of trust in the salesperson, Swan et al. (1999) identied four categories i.e. customer satisfaction, positive attitudes, intentions and behaviours all of which are signicantly affected by trust. As understanding that the formation of loyalty remains a crucial management issue, in the present study we focus our attention on customer loyalty intentions (Pritchard et al., 1999). Our model is consistent with Olivers (1997) comprehensive conceptualisation of a four-phase, sequential loyalty chain. In fact, we posit that customers develop, in sequence, cognitive responses (e.g. perceptions about salespeoples behaviours and attitudes), affective responses (which we synthesise as trust), conative responses (i.e. behavioural intentions) and action responses (that is, actual behaviours), which we do not analyse here. Our model is also consistent with the recent meta-analysis on relationship marketing (Palmatier et al., 2006), since it incorporates relational antecedents, relational outcomes and one relational mediator (i.e. trust). Figure 1 depicts the model that is proposed and tested in the study. Antecedents of customer trust in the salesperson Customer orientation. The SOCO scale developed by Saxe and Weitz (1982) includes questions aimed at evaluating the following characteristics of the interaction process with customers: . a desire to help customers make satisfactory purchase decisions; . helping customers assess their needs; . offering products that will satisfy customers needs; . describing products (and services) adequately; . avoiding descriptive or manipulative tactics; and . avoiding the use of high pressure selling.

Figure 1. Antecedents and consequences of customer trust in the salesperson in the context of nancial services

It is generally recognised that customer orientation increases performance (e.g. Saxe and Weitz, 1982; Boles et al., 2001). However, with few notable exceptions (e.g. Langerak, 2001), existing empirical research has not investigated the impact of customer orientation on trust, although a large body of evidence links customer orientation to relational outcomes like customer satisfaction (e.g. Goff et al., 1997) and the customers perceived quality of the buyer-seller relationship (e.g. Beverland, 2001). Building on the above-cited theoretical and empirical foundations, we hypothesise that: H1. A salespersons customer orientation is positively related to customer trust in the salesperson. Selling orientation. Interestingly, it has been pointed out that the SOCO scale consists of two distinct, although related, subscales (Thomas et al., 2001). Nevertheless, very few studies have simultaneously examined the separate impact of customer orientation, on the one hand, and selling orientation, on the other, on selected outcome variables. Among these studies, Goff et al. (1997) posited and partially supported the existence of opposite consequences of customer orientation and selling orientation on customer satisfaction. Tam and Wong (2001) demonstrated that customer orientation positively affects both customer satisfaction and customer trust, while selling orientation has a negative impact on both outputs. Hence, we hypothesise that selling orientation, compared with customer orientation, will have an opposite (i.e. negative) effect on customer trust in the salesperson: H2. A salespersons selling orientation is negatively related to customer trust in the salesperson. Expertise. Expertise is dened as the salespersons knowledge, technical competence and ability to provide answers to specic questions. Thanks to his/her expertise the salesperson can reduce the customers uncertainties and feelings of vulnerability during the encounter. Consequently, perceived expertise should be a predictor of customer trust in the salesperson (Crosby et al., 1990). Swan et al.s (1999) meta-analysis supports this argument. In the specic context of services, Hennig-Thurau (2004) has recently shown that the technical skills of service employees (i.e. their competence, knowledge and expertise) drive other relational outcomes, such as customer satisfaction, commitment and retention. Hence: H3. A salespersons expertise is positively related to customer trust in the salesperson. Likeability. Likeability is the extent to which a salesperson is perceived as friendly, courteous and pleasant. Research carried out in the context of channel relationships shows that interpersonal liking is a key driver of customer trust (Nicholson et al., 2001). In service contexts social skills can foster customer satisfaction, commitment and retention (Hennig-Thurau, 2004). The general ndings provided in the meta-analysis by Swan et al. (1999) suggest the following hypothesis: H4. A salespersons likeability is positively related to customer trust in the salesperson.

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The impact of customer trust in the salesperson on behavioural loyalty intentions We analyse loyalty in terms of behavioural intentions, i.e. as the customers intention to perform a diverse set of behaviours such as recommending the salesperson to a friend, remaining loyal to the salesperson or doing more business with the salesperson, which signal a motivation to maintain and develop a relationship with the salesperson (Zeithaml et al., 1996). Such intentions may include the likelihood of a customer repurchasing and/or making more purchases, providing positive word of mouth and staying in the relationship with the service provider, as opposed to switching to competitors (Wong and Sohal, 2003). Foster and Cadogan (2000) found that customer trust in the salesperson positively affects the customers anticipated future interaction with the salesperson, repurchase intentions and willingness to recommend the supplier to other potential buyers. Similarly, Kennedy et al. (2001) showed that customer trust in the salesperson motivates repurchase intention and the anticipation of future interaction. Crosby et al. (1990) demonstrated that customer trust in the salesperson stimulates relationship continuity and customer willingness to refer. Finally, Patterson and Smith (2003) showed that the risk of losing a social relationship is the switching barrier which has the strongest impact on the customers propensity to stay with their present service provider. To sum up, in the literature many different conceptualisations and measures of behavioural intentions have been suggested and tested (Curasi and Kennedy, 2002). In keeping with the classication of behavioural intentions suggested by Zeithaml et al. (1996), we argue that this construct incorporates different dimensions. The multifaceted nature of behavioural intentions has been recognised in many studies (e.g. Bendall-Lyon and Powers, 2004). Smith et al. (1999) argue that behavioural intentions can be grouped into two categories: (1) economic behaviour; and (2) social behaviour. The former impact the nancial performance of the rm and can include repeat purchase behaviours and switching behaviour. The latter impact the response of other existing and potential customers of the rm, and may include complaint behaviours and word-of-mouth communications. We argue that, unfortunately, despite this multifaceted nature, most studies have only explored one dimension, such as intention to recommend the salesperson to other customers (Mittal et al., 1999), repatronage intentions (Wakeeld and Blodgett, 1996), repurchase intentions (Jones et al., 2000), intentions of future interaction (Tam and Wong, 2001) and propensity to stay (Patterson and Smith, 2003). We see this as a major limitation in the extant literature. As a consequence, consistently with the arguments provided by Smith et al. (1999), in our model we incorporate as consequences of trust two measures of economic behavioural intentions (intention to repurchase and to switch) and one measure of social behavioural intention (i.e. intention to recommend). Hence we hypothesise that: H5. Customer trust in the salesperson is positively related to customers intention to recommend. H6. Customer trust in the salesperson is positively related to customers intention to re-buy/cross-buy. H7. Customer trust in the salesperson is negatively related to customers intention to switch to competitors.

Study method Questionnaire development As all the constructs used in our research were based on studies carried out in English-speaking countries, the questionnaire was originally developed in English. Following Brislins (1976) recommendations, this was translated into Italian by one expert professional translator. Then, a second bilingual blindly translated the material back into English. Finally, under the supervision of the research team, both translators reconciled any differences. At this point, to assess face validity, three experts, all university professors in marketing, reviewed the measures in cooperation with the rst author to make a preliminary judgement about the quality of the translation. To rene the wording of items, the questionnaire was pre-tested on ten graduate students who had recently purchased nancial services. Based on their comments some minor modications were made. Data collection procedure and sample To test our hypotheses, a survey was conducted on a sample of individual customers of different banks located in a major city in Northern Italy. Since the goal of our study was to obtain data reasonably generalisable to the whole population while capitalising on the advantages of personal interviews, we used the approach suggested by Erffmeyer et al. (1999): we adopted quota sampling and used a variety of locations over a wide range of days and times. This resulted in us obtaining a sufciently large and demographically representative sample using a technique that allows for the clarication and explanation of ambiguous or potentially confusing questions. Importantly, personal interviews are by far the best contact method to minimise non-response problems (e.g. Yu and Cooper, 1983). In fact, for example, compared with mail and telephone interviewing, satiscing and social desirability response bias are lower when face-to-face respondents are used (Holbrook et al., 2003). In short, face-to-face interviewing increases response quality and response rate (De Leeuw, 1992). Furthermore, research shows that response rate increases when the study is conducted by a university (as in our case) (e.g. Greer et al., 2000). For each of eight different branches of the banks, 20 respondents were selected and interviewed outside banks at different times and days during a two-month period. Sudman (1980) suggests using quota sampling based on age and gender as a means of reducing potential biases in personal intercept-based data collection. The quota sample constructed for this study was gathered so that it was representative of Italys population based on age and gender distribution. Hence, when selecting respondents, interviewers focused mainly on gender, which is self-evident, and on the approximate age of people. Table I shows the Italian population and the sample breakdown by gender and age categories, and demonstrates that the quota sample obtained is reasonably representative of the Italian population. In addition to this, the breakdown by education level in our sample is compared with the ndings of a nationwide survey on a representative sample of consumers of banking nancial services. Importantly, in this survey, the breakdown by education level of respondents stating that the nancial advisor is the key inuence when they choose investment opportunities is reasonably similar to our samples breakdown.

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Gender Male Female

Sample 56 44 1.3 44.7 34 20 28.7 42.7 28.6

Italy (ISTAT ofcial census data) 49.6 51.4 0.7 34.8 32.7 31.8

Eurisko Multinanziaria 2006a

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Age 18-20 21-40 41-60 Over 60 Education Less than high school High school College degree

39.8 39.1 21.1

Table I. Description of the sample

Notes: Figures shown are percentages. aBreakdown of respondents in the survey stating that the nancial adviser is the key inuencer when they choose investment opportunities

In fact, in answering the questions, our respondents were asked to refer to a specic nancial advisor they had bought nancial services from. Respondents participated voluntarily without any compensation. Overall, 160 questionnaires were collected, but since ten had to be eliminated because they were not complete, 150 usable questionnaires were obtained. Measures We used multi-item scales starting from measures adopted in the literature. For the salespersons customer orientation and selling orientation, the ten items of the SOCO scale, as proposed by Thomas et al. (2001), were used. Measures for the salespersons expertise and likeability were taken from Doney and Cannon (1997). Customer trust in the salesperson was measured by using a subset of the scale used by Doney and Cannon (1997). In keeping with Swan et al. (1999), this subset incorporates items at different levels of abstraction, i.e. items which refer to behaviours of the nancial adviser (e.g. this salesperson does not make false claims), to attributes broader than a specic behaviour (e.g. this salesperson does not seem to be concerned with your needs) and to one general trust measure (this salesperson is not trustworthy). For customer behavioural loyalty intentions, customers intention to recommend, to re-buy/cross-buy and to switch to competitors were measured through three-item scales adapted from Zeithaml et al. (1996). Our measures are reective as opposed to formative. In fact, in keeping with the suggestions provided by Jarvis et al. (2003), the constructs used in this research relate to individual attitudes or behavioural intentions, not to managerial aspects, and the items are better interpreted as manifestations, not characteristics of the underlying constructs. Model estimation The structural equation model, represented in Figure 1 as well as the alternative models (Models 2, 3 and 4), were estimated using the partial least squares (PLS) latent

path model available in SmartPLS software. PLS is a non-parametric estimation procedure (Wold, 1982) that can accommodate small samples (Wold, 1982) and provides measurement assessment, which is crucial to our study as we have a rather limited sample size. In addition, it avoids some of the restrictive assumptions imposed by LISREL-like models (Dawes and Lee, 1996). For instance, most authors (Anderson and Gerbing, 1988; Chin, 1998b; Fornell et al., 1990) recommend that there should be at least ten to 20 times as many observations as variables, otherwise the estimates of LISREL are probably very unstable. Since our model contains 30 manifest variables, we needed a minimum sample size of 300. With a sample size of 150, PLS was better suited to our study. In addition, compared with LISREL, the component-based PLS avoids two serious problems: (1) inadmissible solutions; and (2) factor indeterminacy (Fornell and Bookstein, 1982). Using the resampling procedures (i.e. bootstrap and jackknife), the standard deviation can be calculated and an approximate t-statistic generated. This overcomes the disadvantage of non-parametric methods having no formal signicance tests for the estimated parameters. According to Chin (1998b), compared with jackkning, the bootstrap technique offers two advantages: (1) the possibility of calculating condence intervals others than those calculated from a normal distribution; and (2) the possibility of using a larger number of samples. Consequently, we adopted the bootstrap technique. Bootstrapping was used to draw a random bootstrap set. The process was repeated 200 times to obtain stable standard errors and low differences between entire sample estimates and means of subsamples (Leger et al., 1992). Analysis and results The PLS results are interpreted in two stages: (1) By assessment of its measurement model. (2) By assessment of its structural model (Fornell and Larcker, 1981). Moreover, a path model can be evaluated at three levels: (1) the quality of the measurement model; (2) the quality of the structural model; and (3) each structural regression equation. Measurement model The properties of the measurement model are detailed in Table II. All factor loadings are at least 0.79. For all constructs, Cronbachs a and composite reliability are well above the 0.70 threshold. For each indicator, standard deviation and mean are also available in Table II. Convergent validity is conrmed as the average variance in manifest variables extracted by constructs (AVE) is at least 0.73, indicative that more variance is

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Constructs and indicators Customer orientation How often this salesperson (1 never; 9 always): Tries to determine your needs Has your best interest in mind Takes a problem-solving approach in selling products or services to you Recommends products or services that are best suited to solving your problems Tries to nd out which kinds of products or services would be most helpful to you Selling orientation How often this salesperson (1 never; 9 always): Tries to sell as much as he/she can, rather than satisfying you Finds it necessary to stretch the truth in his/her sales presentations Tries to sell as much as he/she can to convince you to buy, even if it is more than wise customers would buy Paints a too rosy picture of the products or services to make them sound as good as possible Makes recommendations based on what he/she can sell and not on the basis of your long-term satisfaction Salespersons expertise (1 strongly disagree; 9 strongly agree): This salesperson is very knowledgeable This salesperson knows his/her product line/services very well This salesperson is not an expert Salespersons likeability (1 strongly disagree; 9 strongly agree): This salesperson is friendly This salesperson is always nice to you This salesperson is someone you like to have around Customer trust in the salesperson (1 strongly disagree; 9 strongly agree): This salesperson has been frank in dealing with you This salesperson does not make false claims This salesperson does not seem to be concerned with your needs People who know him/her do not trust this salesperson This salesperson is not trustworthy

Factor loadings Mean SD

CR AVE

0.90 0.91 0.86 0.92 0.88 0.93 0.95 0.96 4.88 3.68 5.04 4.95 4.99 2.07 2.23 2.10 2.27 2.30 0.92 0.92 0.88

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0.95 0.91

4.77 3.51

2.42 2.43

0.93 0.94

4.48 5.61

2.45 2.51

0.94

4.97

2.50 0.89 0.93 0.82

0.94 0.86 0.92

6.38 6.34 5.78

2.05 1.65 2.28 0.90 0.93 0.83

0.87 0.91 0.92

3.53 5.94 5.08

2.34 2.25 2.65 0.86 0.87 0.85

0.94 0.90 0.91 0.86 0.91

4.15 4.36 5.68 6.32 5.60

2.14 1.99 2.21 1.95 2.30 (continued)

Table II. Model 1: scale properties and PLS measurement model

Constructs and indicators Customers intention to recommend How likely it is that you will (1 not at all likely; 7 very likely): Say positive things about this salesperson to other people Recommend this salesperson to someone who seeks your advice Encourage others to do business with this salesperson? Customers intention to re-buy/cross-buy How likely it is that you will (1 not at all likely; 7 very likely): Do more business with this salesperson in the future Buy new products/services offered by this salesperson Buy more products/services from this salesperson? Customers intention to switch to competitors (1 not at all likely; 7 very likely): How likely it is that you will Switch to a competitors salesperson, paying the costs that this action implies Switch to a competitors salesperson, in case this action implies no costs Take some of your money managed by this salesperson to a competitors salesperson?

Factor loadings Mean SD

CR AVE

0.82 0.85 0.86

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0.94 0.88 0.95

3.59 3.81 3.00

2.15 1.90 1.99 0.81 0.84 0.84

0.93 0.91 0.89

3.59 3.43 3.00

1.59 1.93 1.87 0.81 0.89 0.73

0.79 0.90 0.85

2.10 3.98 3.41

1.46 2.09 1.88 Table II.

explained than unexplained in the variables associated with a given construct. One criterion for adequate discriminant validity is that the correlation of a construct with its indicators (i.e. the square root of the AVE) should exceed the correlation between the construct and any other construct. The ndings shown in Table III suggest discriminant validity, since all diagonal elements are greater than the non-diagonal elements in the corresponding rows and columns.
Construct 1. 2. 3. 4. 5. 6. 7. 8. Customer orientation Selling orientation Salespersons expertise Salespersons likeability Customer trust Intention to recommend Intention to rebuy/crossbuy Intention to switch 1 0.93 20.79 0.68 0.83 0.85 0.85 0.82 20.76 2 0.94 20.72 20.81 20.82 20.73 20.82 0.80 3 4 5 6 7 8

0.90 0.70 0.72 0.71 0.65 2 0.66

0.91 0.76 0.76 0.79 20.76

0.92 0.79 0.75 2 0.79

0.93 0.80 20.77

0.92 2 0.81

0.85

Note: Figures in italics on the diagonal show the square root of the AVE; numbers below the diagonal represent construct correlations

Table III. Model 1: discriminant validity

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Structural models As one of the objectives of this study is to test a causal order between relational constructs, it is necessary to examine whether customer trust in the salesperson acts as a mediating variable between perceived behaviours/traits (i.e. customer orientation, selling orientation, expertise and likeability) and customer intentions (i.e. intention to recommend, intention to re-buy/cross-buy and intention to switch to competitors). After presenting the results for our initial model (i.e. Model 1), we address this issue by comparing our baseline model to alternative model formulations (Models 2 and 3). Finally, based on these results, an alternative model formulation, called Model 4, is discussed. Results for the initial model (Model 1) Table IV reports the standardized parameters obtained from bootstrap simulation. Bootstrapped standard deviations and t-values (Chin, 1998a) conrm that hypotheses H1, H2, H3, H5, H6 and H7 are supported. One hypothesis (H4) is not supported: there is no signicant relationship between salespersons likeability and customer trust. Selling orientation has the strongest, negative impact on customer trust (B 20:41). Customer trust positively affects all types of customer intentions.

Construct

Model 1a

Model 2 ( ) ( ) ( ) ( ) (4.21) * (4.00) * (2.01) * (0.03) ( ) (1.09) (5.03) * (1.71) * (0.88) ( ) (3.38) * (3.00) * (3.26) * (0.88) ( )

Model 3 0.28 2 0.41 0.16 2 0.12 0.27 2 0.21 0.04 0.06 0.42 0.04 0.37 2 0.09 0.03 2 0.53 0.16 2 0.05 0.13 0.17 0.54 (2.16) * (2.63) * (1.67) * (0.84) (3.23) * (1.98) * (0.92) (0.66) (3.99) * (0.35) (3.29) * (1.00) (0.29) (5.08) * (2.38) * (0.53) (2.80) * (2.07) * (8.12) *

Model 4 0.23 2 0.36 0.15 0.31 2 0.25 0.43 0.37 2 0.54 0.17 0.13 0.19 0.55 (1.70) * (2.46) * (1.67) * ( ) (3.77) * (2.95) * ( ) ( ) (4.20) * ( ) (4.10) * ( ) ( ) (5.24) * (2.52) * ( ) (3.05) * (2.93) * (9.60) *

Dependent variable: customer trust Customer orientation 0.28b (1.97c) * Selling orientation 20.41 (2.69) * Expertise 0.16 (1.75) * Likeability 20.12 (0.82) Dependent variable: intention to Customer orientation Selling orientation Expertise Likeability Trust 0.78 Dependent variable: intention to Customer orientation Selling orientation Expertise Likeability Trust 20.78 Dependent variable: intention to Customer orientation Selling orientation Expertise Likeability Trust 0.83

cross-buy/rebuy ( ) 0.39 ( ) 20.38 ( ) 0.11 ( ) 0.01 (15.60) * switch ( ) ( ) ( ) ( ) (18.29) * 20.13 0.62 20.17 0.11

Table IV. Parameter estimation of the PLS causal Models 1, 2, 3 and 4 by the bootstrap method

recommend ( ) 0.31 ( ) 20.27 ( ) 0.22 ( ) 0.10

Notes: aModel 1, original model; Model 2, customer trust excluded; Model 3, saturated model; Model 4, nal model. bStandardized path coefcients. ct-values. *Signicant if above 1.64 for one-tailed test

The indices for explained variance (R 2), redundancy and communality are shown in Table V. Redundancy and R 2 are not computed, of course, for exogenous constructs. The structural model demonstrates strong predictive power as the variance explained (R 2) in key endogenous constructs was 0.45 for trust in the salesperson, 0.70 for intention to recommend, 0.61 for intention to re-buy/cross-buy and 0.60 for intention to switch to competitors. The ndings show that our initial model (i.e. Model 1) explains a large part of the variance in the endogenous variables with an average global R 2 of 0.59. Communality and redundancy coefcients can be used essentially in the same way as the R 2, since they reect the relative amount of explained variance for latent and manifest variables. An important part of model evaluation is the examination of t indices reecting the predictive power of estimated inner and outer model relationships. As pointed out by Tenenhaus et al. (2005, p. 173), differently from SEM-ML, PLS path modeling does not optimize any scalar function so that it naturally lacks of an index that can provide the user with a global validation of the model (as it is instead with x 2 and related measures in SEM-ML). The GoF represents an operational solution to this problem as it may be meant as an index for validating the PLS model globally. A general criterion for evaluating goodness-of-t (GoF) is to calculate the geometric mean of the average communality and the average R 2 (Tenenhaus etp 2005). According to the results in al., Table V, the GoF index is satisfactory: GoF 0:84 0:59 0:70 (Tenenhaus et al., 2005; Ringle et al., 2008). The blindfolding approach, proposed by Wold (1982), was followed to calculate the cross-validated (CV) communality and redundancy (see Table VI). The CV-communality index (H 2) measures the quality of the measurement model for each block of variables. The mean of the CV-communality indices can be used to measure the global quality of the measurement model if they are positive for all blocks of variables. The quality of each structural equation is measured, instead, by the CV-redundancy index (i.e. Stone-Geissers Q 2, which Tenenhaus et al., 2005, p. 174, call F 2). The mean of the CV-redundancy indices (F 2) related to the endogenous blocks can be used to measure the global quality of the structural model, if they are positive for all endogenous blocks. For Model 1, the quality of both the measurement model and the structural model is satisfactory (see Table VI). In fact, average CV-communality (H 2 0:76) and average CV-redundancy (F 2 0:49) indexes are well above the recommend standard of 0.30 (Tenenhaus et al., 2005). The mediating role of customer trust in the salesperson: comparing alternative models To test the mediating role of customer trust, we compared Model 1 with Model 2 and Model 3. In Model 2, customer trust was excluded and customer orientation, selling orientation, expertise and likeability were directly linked to intention to recommend, intention to re-buy/cross-buy and intention to switch to competitors. As indicated in Table IV, all but four path coefcients are signicant: salespersons likeability has no signicant impact on the three exogenous variables, and salespersons customer orientation has no signicant impact on customers intention to switch to competitors. In comparison with our initial model (i.e. Model 1), excluding customer trust resulted in a drop of R 2 for customers intention to recommend and customers intention to switch to competitors (see Table V). Conversely, there was an increase of R 2 for intention to re-buy/cross-buy. The GoF increased slightly from 0.70 (Model 1) to 0.72 (Model 2). Moving to the blindfolding results (Table VI), Model 2 has lower

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Construct 0.45 0.70 0.61 0.60 0.59 0.70 (0.85) (0.86) (0.84) (0.73) (0.87) (0.88) (0.82) (0.83) (0.84e) 0.22 0.60 0.51 0.43 0.44 0.65 0.68 0.56 0.63 0.72 ( ) (0.86) (0.84) (0.72) (0.86) (0.88) (0.82) (0.83) (0.83) 0.32 0.38 0.10 0.26 0.45 0.82 0.78 0.69 0.68 0.76
b c d

Trust Intention to recommend Intention to rebuy/cross-buy Intention to switch Customer orientation Selling orientation Expertise Likeability Average GoF indexg

Notes: aModel 1, baseline; Model 2, customer trust excluded; Model 3, saturated; Model 4, nal model. bExplained variance. cCommunality: communality coefcients are equal to the squared correlations between manifest variables and their associated latent variables. dRedundancy: redundancy coefcients reect the joint predictive power of the inner and outer model relationships. eComputed as a weighted average of the different communalities with the weights being the number of manifest variables per each construct (see Tenenhaus et al., 2005, p. 180). fCannot be calculated as all the blocks are not p positive (Tenenhaus et al., 2005). g GoF average communality average R 2)]. Average communality is computed as a weighted average of the different communalities with the weights being the number of indicators per latent variable (Tenenhaus et al., 2005)

Table V. Explained variance (R 2), communality, redundancy and GoF index for Models 1, 2, 3 and 4 Model 1a Model 2 (0.85) (0.86) (0.84) (0.73) (0.86) (0.88) (0.82) (0.83) (0.84) Model 3 0.22 0.18 0.29 2 0.03 f 0.45 0.82 0.78 0.69 0.68 0.76 Model 4 (0.85) (0.86) (0.84) (0.73) (0.86) (0.88) (0.82) (0.83) (0.84) 0.19 0.19 0.33 0.27 0.22

Construct Trust Intention to recommend Intention to rebuy/cross-buy Intention to switch Customer orientation Selling orientation Expertise Likeability Average

Model 1 0.85b 0.82 0.64 0.73 0.78 0.88 0.60 0.83 0.76 (0.37)c (0.59) (0.59) (0.42) () () () () (0.49)

Model 2 0.67 0.84 0.44 0.78 0.81 0.60 0.61 0.67 ( ) (0.55) (0.38) (0.34) ( ) ( ) ( ) ( ) (0.42)

Model 3 0.85 0.82 0.64 0.73 0.78 0.88 0.60 0.82 0.76 (0.37) (0.69) (0.63) (0.48) () () () () (0.54)

Model 4 0.76 0.68 0.65 0.45 0.78 0.88 0.60 0.82 0.70 (0.37) (0.69) (0.63) (0.47) ( ) ( ) ( ) ( ) (0.54)

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Table VI. Blindfolding results: CV communality and CV redundancy for Models 1, 2, 3 and 4

Notes: aModel 1, baseline; Model 2, customer trust excluded; Model 3, saturated; Model 4, nal. bCV communality H 2. cCV redundancy F 2

average CV-communality (H 2 0:76 in Model 1 and H 2 0:67 in Model 2) and average CV-redundancy (F 2 0:67 in Model 1 and F 2 0:42 in Model 2). These results suggest that, compared with Model 1, Model 2 has a lower quality of both measurement and prediction. Model 3 includes both indirect and direct paths. Thus, it is a saturated model. Just as in Model 1, hypotheses H1, H2, H3, H5, H6 and H7 are supported and one hypothesis (H4) is not supported (see Table IV). On the contrary, several differences exist between Model 3 and Model 2. For instance, whereas in Model 2 salespersons expertise had a signicant impact on intention to re-buy/cross-buy (B 0:11) and intention to switch to competitors (B 20:17), in Model 3 these paths become not signicant (B 0:04 and B 20:09, respectively). In addition to this, whereas in Model 2 salespersons likeability had no signicant impact on intention to recommend (B 0:10), in Model 3 this path became signicant (B 0:17). As shown in Tables IV and V, average explained variance, average CV-communality and average CV-redundancy are higher in Model 3 than in Model 1 and Model 2. Owing to the higher R 2, the goodness of t index (GoF 0:75) is also higher. Thus, Model 3 shows a better quality in terms of both measurement and prediction. Starting from these results, we evaluated the mediating role of customer trust in the salesperson. According to Baron and Kenny (1986), to establish mediation the following conditions must be satised: . in Model 2, the exogenous constructs (i.e. customer orientation, selling orientation, expertise and/or likeability) must have a signicant effect on the dependent variables (i.e. intention to recommend, intention to re-buy/cross-buy and/or intention to switch); . in Model 3, the exogenous constructs must have a signicant effect on customer trust; . in Model 3, customer trust must have a signicant effect on intention to recommend, intention to re-buy/cross-buy and/or intention to switch; and . the effect of the exogenous construct on intention to recommend, intention to re-buy/cross-buy and/or intention to switch must be lower in Model 3 than in Model 2. There is full mediation if the direct effect is not signicant in Model 3.

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Looking at the results presented in Table IV, trust partially mediates the relationship between: . customer orientation and intention to recommend; . customer orientation and intention to re-buy/cross-buy; . selling orientation and intention to re-buy/cross-buy; . selling orientation and intention to switch to competitors; and . expertise and intention to recommend. Trust fully mediates the relationship between: . selling orientation and intention to recommend; . expertise and intention to re-buy/cross-buy; and . expertise and intention to switch to competitors. Finally, customer trust does not play a mediating role between: . customer orientation and intention to switch; . likeability and intention to recommend; . likeability and intention to re-buy/cross-buy; and . likeability and intention to switch to competitors. The nal model Figure 2 depicts our nal model (Model 4), as well as the path coefcients, t-tests and R 2. It incorporates the conclusions of the above-cited analysis and includes only signicant direct and indirect paths. Scores regarding communality, redundancy, goodness-of-t, CV-communality and CV-redundancy are satisfactory and presented in Tables IV and V. Discussion Our study focused on drivers and consequences of interpersonal trust in commercial relationships. Four different models have been tested and compared. Our ndings shed further light on the loyalty-building process in interpersonal relationships in the context of a consumer service industry. More specically, results of this study indicate that customer trust in the salesperson signicantly inuences loyalty intentions both positively (i.e. intention to recommend and intention to re-buy/cross-buy) and negatively (i.e. intention to switch to competitors). Our research also shows that the adoption of customer-oriented selling, as well as salespersons expertise, can contribute to the creation of strong and long-lasting positive relationships with customers, by increasing customer trust and hence by fostering loyalty intentions. On the other hand, our study also demonstrates that a selling orientation can negatively affect the development of customer trust in the salesperson. Salespersons likeability has no signicant direct effect on customer trust, but it has a direct, positive impact on the customers intention to recommend. Therefore, it seems that salespersons likeability may be helpful in gaining new customers but not in developing long-lasting relationships with existing ones. The relatively high average evaluation provided by respondents on this construct (see Table II) may also indicate that, in the nancial industry, likeability is a necessary prerequisite for playing the game, but it is not a driver of trust. In other words, customers

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Figure 2. Final model

apparently recognise (or possibly take for granted) their nancial advisers likeability. However, they do not feel secure that he/she has the necessary motivation or expertise to be trusted. This may be because of recent nancial scandals, as in the cases of Parmalat and Argentina Bonds, which have undermined Italian investors condence in nancial ` organizations fairness and ethical credibility. As recently demonstrated by Roman and Ruiz (2005), in the context of nancial services, perceived ethical behaviours and expertise are major drivers of customer trust in the salesperson. Obviously, this topic deserves special attention in future research. Theoretical contribution The theoretical contribution of our research to current knowledge can be summarised as follows.

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Generally speaking, our ndings conrm an important foundation of relationship marketing theory: trust is a key relational mediator between relational drivers and consequences (Morgan and Hunt, 1994; Palmatier et al., 2006). More specically, our study suggests that customer trust plays a mediating role between customer orientation, selling orientation, salespersons expertise and the customers loyalty intentions. Importantly, compared with previous studies on similar topics, which mainly focused on one or few determinants or consequences of customer trust in the salesperson, our research took into account a relatively broad set of both drivers and consequences of trust. As pointed out by Palmatier et al. (2006), customer relationships do not equally inuence all exchange outcomes, and different relational antecedents may have different impacts on different relational mediators and outcomes. Interestingly, for example, our ndings suggest that salespersons social competence (expressed by his/her likeability) only affects the customers intention to recommend, which is a social behavioural intention, while it does not inuence economic behavioural intentions. Conversely, selling orientation (i.e. opportunistic behaviour) has a direct impact on the latter intentions, but no effect on the former. From a theoretical standpoint, these ndings suggest that the mechanisms of interpersonal relationship formation and development are multifaceted: hence, researchers tendency to examine only one type of relational antecedent and outcome, and to use only aggregate measures of salesperson performance or behavioural intentions, makes it difcult to understand fully the complexity of relational phenomena. In addition to this, our study has contributed to extant knowledge in many ways. First, our ndings ll a gap in the literature on personal selling, where there is a lack of empirical research specically investigating the contribution of salespeoples behaviours in fostering customer trust and loyalty intentions in the context of consumer services. Second, our ndings ll a gap in the service literature, where studies on interpersonal relationships, especially in consumer services, have mainly focused on frontline employees who are not involved in selling. In fact, compared with frontline employees, salespeople play a different role in developing relationships with customers: hence, their contribution to customer trust and loyalty intentions needed to be investigated. Third, we used customers as respondents: this is relevant, because many empirical studies on the topic used salespeople as key informants, thus incurring the risk of bias in relying on self-reported measures of customer-based outcomes. Furthermore, this is one of the very few empirical studies on selling behaviours carried out in non-English speaking countries. Since cross-cultural validation of constructs has sometimes led to controversial ndings (e.g. Herche et al., 1996), this contribution will hopefully be appreciated. Finally, our study tests separately distinct hypotheses for the two dimensions of the SOCO scale, and nds evidence of opposite impacts on trust. This is important because there is a lack of knowledge concerning the drivers of mistrust and the negative drivers of trust (Swan et al., 1999). Managerial contribution This study provides sales managers with some evidence of the behaviours that salespeople should adopt to inuence successfully the creation of long-term relationships, especially in the context of credence services. The general managerial implication is that companies willing to build and foster long-term

relationships with their accounts should encourage their salespeople to adopt these behaviours. Our goal here was to develop and test a comprehensive model that incorporated multiple attributes and behaviours of salespeople, which can act as relational drivers, i.e. as operational means of improving customer trust and behavioural intentions. Importantly, our ndings suggest that the optimal behaviours of salespeople may vary, depending on the ultimate goal of the sellers relational strategy. For example, salespersons likeability may not be relevant when the main objective of the organisation is to develop business with the existing customer base, but it may become important if the company strategy is strongly aimed at acquiring new customers by leveraging on the current customer bases willingness to recommend the seller to new potential customers (this could be the case of member-gets-member programmes). There are many drivers that managers can leverage to stimulate salespeople to perform the desired behaviours. First, companies should carefully select candidates for sales positions, investigating their attitudes and skills. Second, companies should design training programmes specically aimed at helping salespeople develop the skills, abilities and competences that are necessary for successfully adopting a customer orientation and developing a strong expertise. Such programmes should also emphasise the negative consequences of cultivating a selling orientation when the main goal is to increase customer loyalty. Third, when designing reward systems for salespeople, sales managers could, at least in part, take into account their behavioural performance as well as indicators of relational performance, such as customer retention rate or customer trust (Sharma, 1997). Fourth, companies may change the sales departments organisational structure, as well as their sales force control systems. For example, managers may decide to create two separate sales forces (a transactional one opposed to a relational one) (Schultz and Good, 2000). Similarly, rms may shift from an independent to an employee sales force or from outcome-based to behaviour-based sales force control systems, in order better to control the actual implementation of relational behaviours on the part of their salespeople. Limitations and directions for future research This study has several limitations. First, the sample size is relatively small. Using larger samples would allow subsample analysis. However, by using statistical methods that are well suited for small samples (e.g. PLS and the bootstrap method), complex models can still be stably estimated. Second, because this study is cross-sectional, one should be cautious about assigning causality. Since it is focused on a dynamic phenomenon (i.e. relationships), a longitudinal study would be more appropriate (Frankwick et al., 2001). Third, our study is limited to a single industry: hence, cross-validation across different service industries (e.g. search, experience and credence services) is required. Fourth, future research should ideally focus on actual customer behaviours (Garland, 2002). Finally, the measurement scales adopted in this study, although in most cases successfully used in previous research on the topic, may not fully capture all the facets of the underlying constructs. Hence, measures that are more comprehensive would be welcome. Future studies on the topic should broaden our framework by including other relational behaviours and possibly transactional behaviours (e.g. using hard sell

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techniques) which may lower customer trust (Hawes et al., 1996). We also suggest investigating the moderating effect of selected variables (e.g. length of the interpersonal relationship between the salesperson and the customers, sellers brand reputation, etc.) on the paths included in our model. In addition, different measures of performance may be considered to compare the impact of relational behaviours on long-term versus short-term performance indicators. In fact, relational behaviours may pay off only over the long run, while being even detrimental to immediate sales. Moreover, there is a need to understand better both the organizational factors (e.g. sales force control systems and training programmes) and the personal variables (e.g. personality traits and skills) that encourage the salesperson to adopt relational behaviours. Furthermore, future research should investigate the interdependencies between customer trust in a salesperson and in the selling organisation. Future studies may also incorporate satisfaction in addition to trust. Finally, we underline the importance of making international comparisons, by means of replications and extensions of research in different cultural contexts.
Note 1. Customer orientation can be interpreted as a substitute for benevolence because it reects non-opportunistic behaviour that stresses customer-focused solutions and mutual benets (Schwepker, 2003).

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