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abstract

This paper, based on transaction cost theory and from the customer’s perspective, examines the relationships between a salesperson’s ethical sales behavior, the customer-perceived confidence benefits, and customer satisfaction, thereby considering to which party the customer is loyal. The results show that in consideration of transaction cost, the confidence benefits customer perceived from salesperson’s ethical sales behavior are found a critical factor affecting customer satisfaction/loyalty, and that customer satisfaction has a significantly direct effect on loyalty to the salesperson but has no significantly direct effect on loyalty to the firm, in contrast to the results of previous studies. The finding indicates that the salesperson plays a key role in retaining customer loyalty to the firm.

Keywords: ethical sales behavior, confidence benefit, customer satisfaction, customer loyalty

INTRODUCTION

In the present competitive environment, one of the most important goals that service marketers must achieve is that of acquiring, maintaining and enhancing their existing market shares, and further retaining customer loyalty in order to develop sustainable competitive advantage through marketing efforts. Therefore, in terms of marketing management, it is critical to ensure customer loyalty and obtain the benefits from extending customer life. Particularly in the service context, customer loyalty is becoming recognized as one of the most critical factors in business operations. In the service industry, transactions are usually conducted through the customer-salesperson interactions, and thus the salesperson is regarded as a major channel to communicate with customers. However, such a relationship may be destroyed by the salesperson‟s dishonest and untrustworthy behaviors (Kelly and Schine, 1992). An unethical sales behavior may hurt customer satisfaction and trust. Dissatisfaction and distrust will induce customers to take actions to protect themselves, and customer loyalty will be lost. Previous studies in this field have focused mainly on the sales supervisor‟s perceptions with the salesperson‟s ethical sales behavior in firm side (e.g., Ramsey et al.; Strout, 2002). On the contrary, from customer‟s perspective, customers are concerned about their perceptions of the salesperson‟s ethical sales behavior, what their intention to maintain a relationship with the salesperson is, and what kind of purchase behavior will be followed. Service firms have yet to develop and understanding of this issue, and there are few related studies.

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