Building Customer Trust and Loyalty: Does Salesperson Empathy Matter?

Abstract

Customer orientation is the central element of market orientation and a precursor of organizational success and performance. This manuscript demonstrates that salesperson’s empathy increases the positive impact of customer orientation on customer satisfaction and trust. The manuscript also shows that supplier customer orientation is a key factor in developing a relationship of quality with customers and a critical antecedent of customer loyalty. A conceptual model is tested using survey responses from 300 customers from two Chilean banks.

Model hypotheses were tested with hierarchical regression analyses. Results indicate that both satisfaction with the supplier (β = 0.19, p < 0.01) and supplier trust (β = 0.27, p < 0.01) partially mediate the link between customer orientation with the supplier and customer loyalty. Results also demonstrate that supplier customer orientation also affects loyalty directly (β = 0.34, p < 0.01). Supplier customer orientation, satisfaction with supplier and supplier trust explained 43 % of the variance in supplier loyalty.

Manuscript findings also show that salesperson empathy has a direct effect on both customer satisfaction with the supplier (β = 0.23, p < 0.01) and supplier trust (β = 0.26, p < 0.01). Customer orientation is directly related to customer satisfaction (β = 0.43, p < 0.01) and supplier trust (β = 0.44, p < 0.01), even after salesperson’s empathy is controlled for.

Finally, research findings demonstrate that empathy augments the positive effect of customer orientation on customer satisfaction (β = 0.13, p < 0.01) and customer trust (β = 0.12, p < 0.01). Customer orientation and salesperson’s empathy explain 33 % of the variance in satisfaction with a supplier and 37 of the variance in supplier trust. Moderating hypotheses were tested by evaluating the significance of the interaction term formed by multiplying the moderator (i.e., empathy) and the predictor (i.e., customer orientation). Both empathy and customer orientation were first mean centered to avoid multicollinearity.

Manuscript findings demonstrate that both customer orientation and salesperson’s empathy play a critical role in influencing customer’s opinions about their relationship with a firm and eventually lead to supplier loyalty. These results highlight the importance of instilling a customer oriented culture and the need of hiring empathetic salespeople who are genuinely interested in serving the customer. With regards to the limitations of the study, it can be seen that the influence of time is not considered in the application of the model and the results obtained. Moreover, as possible future research, it would be interesting to capture the effect of the variables in the models proposed in different industries.