IMPACTS OF ETHICAL SALES BEHAVIOUR ON CUSTOMER LOYALTY: AN EMPIRICAL STUDY IN THE LONG-TERM INSURANCE INDUSTRY

Abstract

Amidst increasing competition, insurance companies are looking for ways to differentiate their services in the eyes of their customers and to attain high levels of customer satisfaction and loyalty. From the customer’s perspective, the determinants of customer satisfaction are thought to include factors such as trust, good relationship, and salesperson’s ethics. Therefore, the salespeople of business need to be perceived as ethical, trustworthy, and pleasant by their customers. This study focuses on how a salesperson's ethical sales behavior can build customer trust in the salesperson, which in turn influences customer satisfaction and loyalty in the long-term insurance industry. This research represents an initial step in analyzing the role of ethical sales behavior, as perceived by long-term insurance customers, in developing and maintaining satisfaction and loyalty among the customers. A pretested structured questionnaire was administered with a randomly selected sample of long-term insurance policyholder (n=126). A Linear Regression and Correlation Analysis were carried, using the SPSS Software (Version 17). The findings revealed that a salesperson’s ethical behavior leads to higher customer trust and satisfaction, which in turn, enhances loyalty to the insurance company that the salesperson represents. The outcome of analysis provide insights to understand how salespersons behavior influence on formation of long-term relationships with customers in insurance industry in Sri Lanka and how it can be used by marketers to plan their promotional decisions on insurance products.