Sellers and customers not just exchange services and money but also often create ongoing, and even trusting, relationships of mutual benefit as suggested in the marketing relationship approach (Johnson & Selnes, 2004; Mohr, Fisher, & Nevin 1996; Mohr & Nevin, 1990; Morgan & Hunt, 1994; Palmatier, 2008; Sheth & Parvatiyar, 1995; Vargo & Lusch, 2004; Ward & Dagger, 2007). Although a large number of conceptualizations of “relationship marketing” have been proposed, marketing researchers seem to agree that (a) relationship marketing focuses on the individual customer–seller relationship; (b) both parties in a relationship must benefit for the relationship to continue; (c) the relationship is often longitudinal in nature; (d) the focus of relationship marketing is to retain customers (Bejou, 1997; Cox & Walker, 1997; Grönroos, 1994; Hunt, Arnett, & Madhavaram, 2006; Peterson, 1995). Especially social exchange theory (Thibault & Kelley, 1959) and relational contracting (Macneil, 1974, 1980) have been employed to model and understand customer–seller relationships. Social exchange theory holds that interactions between people often are of mutual interest to both parties and that they are likely to continue interacting as long as they both believe that it is beneficial (Thibault & Kelley, 1959). Relationships are assumed to grow, deteriorate, and dissolve as a consequence of such interactions. In a similar vein, relational contracting holds that exchange behavior is often characterized by whole person relations, extensive communications and significant elements of noneconomic personal satisfaction (Macneil, 1974). The application of these theories has resulted in a strong focus on variables such as trust, satisfaction, and loyalty within the relationship marketing approach (e.g., Hunt, Arnett, & Madhavaram, 2006; Morgan & Hunt, 1994; Mohr & Nevin, 1990; Nijssen, Singh, Sirdeshmukh, & Holzmoeller, 2003). Drawing on previous marketing relationship research a baseline model is initially developed (in the following referred to as the “STL baseline model”) comprising the marketing relationship constructs satisfaction (S), narrow-scope trust (T), and loyalty (L; Figure 1).
The STL (satisfaction, narrow-scope trust, and loyalty) baseline model is consistent with prior research (Johnson & Selnes, 2004) suggesting that satisfaction and loyalty constitute main competitive advantages that may be gained from developing relationships with customers. On a similar note, satisfaction, narrow-scope trust, and loyalty can be seen as dimensions indicating “relationship quality,” that is, the strength of the relationship between customer and seller (Huang, 2008). The main purpose of the present research is not to investigate and discuss linkages between the three relationship constructs. Instead, a baseline model is utilized, which comprises what is generally believed to be among the most important relationship marketing constructs as well as specifies the most broadly recognized interconstructs relationships (e.g., Anderson & Srinivasan, 2003; Eisingerich & Bell, 2007; Homburg & Giering, 2001). Similar to previous research concerning context effects in customer–seller relationships (Nijssen et al., 2003), the STL baseline model is then used as a basis for modeling the effects of BST by investigating the direct and moderating effects of BST on the relationships included in the STL baseline model.
By maintaining that “consumers enter into relational exchanges with firms when they believe that the benefits derived from such relational exchanges exceed the costs” (Hunt, Arnett, & Madhavaram, 2006, p. 76), marketing relationship theory basically takes a value-approach to marketing. Gaining value will improve customer satisfaction and stimulate repurchasing (or loyalty). Since the value is more connected with ongoing exchanges than with a specific transaction, relationship marketing is most reasonable applied when there is an ongoing desire for the product or service in question. Thus, although relationship marketing is not appropriate for all consumer markets, it is argued that the relationship marketing approach is particularly applicable to the financial services sector, as financial services can be characterized as highly intangible, complex, high-risk, and often long-term service-based offerings, wherein relationship participation is central to service delivery (e.g., Devlin, 1998; Guenzi & Georges, 2010; O'Loughlin, Szmigin, & Turnbull, 2004). Moreover, consistent with the relationship marketing approach, recent empirical results suggest that customers are often loyal to their financial service provider (Finextra, 2009), confirming the presence of ongoing relations. In the following, the STL baseline model constructs are further conceptualized and the expected interconstruct relationships are discussed. Also, the type of BST (i.e., formal vs. informal BST) considered in the present study is clarified.
Satisfaction has attracted attention for many years (e.g., Fornell, Johnson, Anderson, Cha, & Everitt, 1996; Homburg, Koschate, & Hoyer, 2006). Research suggests that satisfaction has impact on Return on Investment (ROI) (Anderson, Fornell, & Lehmann, 1994), shareholder value (Ittner & Larcker, 1996), higher marketshare and profit (Homburg & Rudolph, 2001), and overall firm performance (Anderson & Sullivan, 1993). Although previous research results are mixed concerning the relationship between satisfaction and narrow-scope trust (e.g., Grayson, Johnson, and Chen  found that narrow-scope trust positively influenced customer satisfaction), in the baseline model satisfaction is expected to positively influence narrow-scope trust. This expectation reflects the proposition that trust is an aggregate evaluation at some higher level than satisfaction (Ravald & Grönroos, 1996; Selnes, 1998). As suggested by Selnes (1998) and Sabel (1993), narrow-scope trust is derived not only from experiences or episodes within the relationship but also from a type of cultural context of how business partners are expected to behave. Moreover, the expectation concerning the relationship between satisfaction and narrow-scope trust is based on past research suggesting that satisfaction antecedes trust (Aurier & N'Goala, 2010; Bearden & Teal, 1983; Omar, Wel, Musa, & Nazri, 2010; Ouyang, 2010; Zboja & Voorhees, 2006), that satisfaction develops in the initial stages of marketing relationships and trust develops in the intermediate stages (Geyskens, Steenkamp, & Kumar, 1999; Leisen & Hyman, 2004), and that satisfaction positively influences narrow-scope trust because it increases consumers’ confidence that they will be treated fairly and that the seller cares about their interests (Ganesan, 1994). In the STL model, satisfaction is also expected to positively influence loyalty. Past research suggests that loyalty is difficult to achieve without customers having some degree of satisfaction (Omar et al., 2010) and that satisfied customers are more motivated to continue the relationship with the supplier (Halimi, Chavosh, & Choshali, 2011; Selnes, 1998; Sharma & Patterson, 2000). Satisfaction may be conceptualized as a facet (attribute-specific) or as an overall (aggregate) characteristic. Also, the characteristic can be viewed as transaction-specific (encounter satisfaction) or as cumulative (satisfaction over time). Similar to past relationship and service-related research (Dimitriades, 2006; Levesque & McDougall, 1996), satisfaction is in the present study conceptualized as an overall, cumulative customer evaluation toward a financial service provider.
Narrow-scope trust is being regarded as one of the most critical variables for developing and maintaining well-functioning relationships (Moorman, Deshpande, & Zaltman, 1993; Morgan & Hunt, 1994; Sharma & Patterson, 2000) and is likely to be especially important in financial customer–seller relationships because financial companies have an implicit responsibility for the management of their customers’ funds and the nature of financial advice supplied (Harrison, 2003). Moreover, financial services are high in credence properties since even in the usage situation they can often not be evaluated by the customer because of their long-term nature (Darby & Karni, 1973) and because customers may lack the competencies to confidently evaluate the financial consequences of the services, thus elevating the potential importance of trust in financial customer–seller relationships. While a large body of research exists within the concept of narrow-scope trust, with different points of view being advocated, this study adapts the often-cited definition proposed by Sirdeshmukh, Singh, and Sabol (2002) and conceptualizes narrow-scope trust as “the expectation held by the consumer that the service provider is dependable and can be relied on to deliver on its promises” (p. 17). Past research has recognized narrow-scope trust as an important determinant of relationship loyalty (Eisingerich & Bell, 2007; Morgan & Hunt, 1994; Ouyang, 2010). When a service provider builds consumer trust, the perceived risk associated with the specific service provider is likely reduced since the consumer can more confidently predict the future behavior of the service provider (Sirdeshmukh, Singh, & Sabol, 2002). In a similar vein, Gwinner, Gremler, and Bitner (1998) suggest that consumers may receive psychological benefits (e.g., reduced anxiety), among other benefits, as a result of having developed a trustful relationship with a particular provider. Such benefits may motivate customers to continue the relationship with the supplier.
It is predicted that satisfaction is positively influenced by BST. When BST is low, it means that not every service provider can be trusted to deliver satisfying services and therefore the consumer faces the problem of avoiding pitfalls in the marketplace (Tan & Vogel, 2008). However, this problem might not be easily solved. Several research results and financial reports point to the fact that many consumers possess highly limited knowledge about financial products (e.g., Estelami, 2005; N'Goala, 2007; OECD, 2006; Perrin, 2008). Thus, the consumer risk that her/his interests are currently not being properly served. On a similar note, Sjöberg (2001) found that lack of trust in the general honesty of people was positively associated with risks perceived. In such incidents, past research suggests that in order to maintain self-confidence and to avoid cognitive dissonance the consumer will assign external blame (Blount, 1995; Gotlieb, 2009; Shaver, 1985; Todd & Gigerenzer, 2003), which may reduce relationship satisfaction. In contrast, high BST means lower general uncertainty about the service outcome, which reduces potential cognitive dissonance and the need to assign external blame. This expectation is consistent with past research. In a study of the role of trust in medical relationships Hall, Camacho, Dugan, and Balkrishnan (2002) found that general physician trust relates positively to satisfaction with individuals’ personal physician. Thus, the following hypothesis is presented.
H 1a. BST has a positive influence on relationship satisfaction.
Two competing views on the relationship between BST and narrow-scope trust can be identified (Grayson, Johnson, & Chen, 2008; Luhmann, 1979; Rousseau, Sitkin, Burt, & Camerer, 1998). Both views are based on sociologically oriented theories. (1) Functionalism seeks to explain the relationship between different parts of a social system and how these parts relate to the system as a whole (Davis & Moore, 1966; Parsons, 1951, 1967). The functionalist perspective holds that in all social systems there are a number of functional prerequisites—such as allocation and performance—that must be met if the system is to function effectively and to survive. All roles must be filled and according to the functionalist perspective, they will be filled by those best able to perform them. In order to accomplish this, all complex societies need some mechanism that reduces uncertainty and ensures effective role allocation and performance. In that respect, BST serves as an uncertainty reducing mechanism, which facilitates successful negotiations among economic parties. The roles taken on by the parties and the institutions of a social system are regarded as interdependent. A change in one part of the social system therefore means that other parties of the system may need to modify their behavior. In incidents where broad scope is insufficient (i.e., at a low level), economic parties may therefore compensate for this by developing narrow-scope trust. In other words, narrow-scope trust is formed where it is needed (Luhmann, 1979) suggesting the existence of a negative relationship between BST and narrow-scope trust. This view on trust is also consistent with the perspective found in neoclassical economics in which people only trust others if needed and if it is in their own self-interest to do so (Fetchenhauer & Dunning, 2009). (2) The institutional perspective argues that the processes and structures that are established within a society, or a community, act as authoritative guidelines for social behavior. Social behavior needs to be legitimized by the rules and norms that exist in the broader social environment (Scott, 2004). In a similar vein, Meyer and Rowan (1977) argue that institutional rules function as myths, which organizations incorporate in order to gain legitimacy, stability, and enhanced survival prospects. Also, DiMaggio and Powel (1983) suggest that organizations that operate outside of accepted norms in the organizational field face isomorphic pressures. According to DiMaggio and Powel organizational legitimacy is therefore closely linked with survival. Thus, if trust is common within a business type, it encourages the development of trust in customer–seller relationships suggesting the existence of a positive relationship between BST and narrow-scope trust. In their recent empirical study Grayson, Johnson, and Chen (2008) found that BST positively affected narrow-scope trust, thus providing support to the institutional perspective. Consistent with this finding, Pennington, Wilcox, and Grover (2003) found that system trust positively influenced perceived trust in a vendor. These findings are adapted in this study.
H 1b. BST has a positive influence on narrow-scope trust.
Many financial services are experiential in nature, characterized by technical complexity, information asymmetry, and may even contain credence properties (Darby & Karni, 1973; Guenzi & Georges, 2010; Romàn & Ruiz, 2005). Thus, the information available for decision making may be too vague, or too imprecise, to calculate the probabilities of different outcomes of switching to another service provider and because of this choice complexity a customer may perceive considerable risk in switching to an alternate service provider. In this regard, past research indicates that BST may be applied as a choice heuristics (Siegrist, Gutscher, & Earle 2005; Sjöberg 2001), which can be regarded as “inferential rules of thumb” (Allison, Worth, & King, 1990). This is because consumers may rely on BST to reduce the complexity they are faced with when choosing among various services (Siegrist & Cvetkovich, 2000). Thus, high BST is likely to facilitate consumers’ consideration of alternate service providers without having extensive knowledge about individual service providers (Hall et al., 2002). On the other hand, when BST is low, it means that consumers cannot just rely on all services having satisfying outcome characteristics. That is, when BST is low consumers are faced with a higher choice complexity, which in turn increases costs of switching (Sharma & Patterson, 2000), when considering switching to an alternative service provider than when BST is high (Siegrist, Gutscher, & Earle, 2005). Hence, while high BST may facilitate consumer considerations of other service providers, low BST may prevent consumers from considering switching to another service provider. In line with these considerations, the following hypothesis is proposed.
H 1c. BST has a negative influence on relationship loyalty.
The specification of the moderating effects of BST on the relationships in the STL model draws on attribution theory. Specifically, it is suggested that BST will negatively moderate the relationships in the STL model. Attribution theory describes consumers’ evaluation of causality in a postbehavior context on the basis of different situational contexts (Fiske & Taylor, 1991; Tomlinson & Mayer, 2009; Weiner, 1985, 1986). Weiner (1986) suggests that an individual's perception of an outcome leads to a general emotional reaction of pleasure, or displeasure, which causes the individual to identify the outcome's cause. Kelley (1967) has conceptualized this as the “process by which an individual interprets events as being caused by a particular part of an environment” (p. 193). Weiner (1985) states that the causes of all outcomes can be decomposed into a set of points on three orthogonal continua, or causal dimensions. These continua are (a) locus—the prior outcome's causal agent relative to the decision maker; (b) stability, stable to unstable—the likelihood that a prior outcome's causal agent will persist in the future; and (c) controllability, controllable to uncontrollable—the decision maker's degree of influence over the causal agent. Attribution research can be useful in exploring how consumers explain experiences within customer–seller relationships. Locus of causality relates to the location attributed to the cause of an outcome. It could be an internal position (the cause is located in the consumer her-/himself or in one of her/his decisions), external (located in the company that offers the service), or situational (located in environmental effects) (Oliver, 1993; Ryu, Park, & Feick, 2006). In that respect, consumers will distinguish between causes that are internal, external, and situational. Locus of causality is in particular relevant in the present study because it explicitly distinguishes between situational causes (i.e., BST) and causes (i.e., satisfaction, narrow-scope trust) that are more directly related to the individual seller that offers the service. Attribution theory suggests that consumers will try to understand success or failure in terms of locus of causality indicating that BST may be taken into account by consumers when attributing the cause of their relationship experiences (Cox & Walker, 1997).
Attribution theory predicts that consumers are more likely to evaluate a supplier positively when they make higher external attributions and lower situational (or internal) attributions toward a positive experience (Weiner, 1986). This is because the supplier is viewed as more responsible for the positive experience when external attributions are made, whereas the supplier is perceived to be less responsible for the positive experience when situational (or internal) attributions are made. Several insightful studies have investigated trust using an attribution theory approach. As an overall conclusion, these studies indicate that trust in a relationship is enhanced to the extent that the other's trustworthiness can be ascribed to factors that are internal to the trustee, rather than situationally driven (Kruglanski, 1970; Malhotra & Murnighan, 2002; Strickland, 1958; Tomlinson & Mayer, 2009). For example, in a study of the effects of contracts on interpersonal trust Malhotra and Murnighan (2002) found that the use of binding contracts to promote or mandate cooperation will lead interacting parties to attribute others’ cooperation to the constraints imposed by the contract rather than to the individuals themselves, thus reducing the likelihood of relationship trust developing. Their results also suggest that contracts not only impeded the development of trust but also diminished existing trust. The use of binding contracts seems to have kept interacting parties from seeing each other's cooperative behaviors as indicative of trustworthiness. In a similar vein, empirical findings concerning the behaviors of team members suggest that if an individual is deemed not to be responsible for her/his unfavorable behavior (i.e., the unfavorable behavior can be attributed to situational effects) then prosocial behavioral responses from peers are more likely (Weiner, 1985).
Drawing on such insights, it is predicted that in an environment where BST is low, consumers should be expected to be more likely to attribute negative experiences to situational causes and less likely to attribute negative experiences to external causes (i.e., poor performance by the company that offers the service) compared with environments where BST is high. In a similar vein, when BST is low, consumers should be expected to be less likely to attribute positive experiences to situational causes and more likely to attribute positive experiences to external causes (i.e., good performance by the company that offers the service) compared with environments where BST is high. Specifically, in trying to assess the causes for their level of satisfaction, customers may evaluate their experiences in the light of the perceived trustworthiness of available alternative choices (i.e., other banks or insurance companies). In incidents where BST is low, attribution theory suggests that consumers would be more inclined to attribute positive experiences to their current bank or insurance company, which in turn may enhance narrow-scope trust and loyalty; and vice versa when BST is high. Thus, it is expected that BST would negatively moderate the relationships between satisfaction and narrow-scope trust and between satisfaction and loyalty, respectively. It is also argued that BST should be expected to negatively moderate the relationship between narrow-scope trust and loyalty. This is because when BST is low, the consumer should be expected to be more likely to attribute trust to the customer–seller relationship than to a situational cause; and vice versa when BST is high. Thus, the consumer would probably be more likely to convert narrow-scope trust into relationship loyalty under conditions of low BST than under conditions of high BST. In sum, the following hypotheses are proposed.
H 2a. The influence of satisfaction on narrow-scope trust is negatively moderated by BST, such that satisfaction has a greater positive effect on narrow-scope trust when BST is low compared to high.
H 2b. The influence of satisfaction on loyalty is negatively moderated by BST, such that satisfaction has a greater positive effect on loyalty when BST is low compared to high.
H 2c. The influence of narrow-scope trust on loyalty is negatively moderated by BST, such that narrow-scope trust has a greater positive effect on loyalty when BST is low compared to high.