Consumer Trust in Service Companies

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Consumer trust in servicecompanies: a multiple mediating

analysisRoland Kantsperger

Allianz Private Krankenversicherungs-AG, Munich, Germany, and

Werner H. KunzCollege of Management, University of Massachusetts Boston, Boston,

Massachusetts, USA

Abstract

Purpose The concept of trust has gained considerable importance in the field of marketing

during the last decades and is seen as a key mediator of customer relationship marketing. But upon acloser look at the literature, the construct trust is conceptualized and measured very differently.Based on a literature review and theoretical work, the purpose of this paper is to develop a conceptualmodel of consumer trust in a service company, which distinguishes two fundamental dimensions.Using these dimensions, it is possible to detect different mediating effects of trust in the customerrelationship to the service company.

Design/methodology/approach Antecedents and consequences of trust are studied in abusiness-to-consumer services context in the banking industry. To test hypotheses, empirical dataare collected from a sample of 232 retail bank customers with checking accounts. By means of a LISRELapproach, two rivalling measurement models of trust are compared and show various mediating effects.

Findings The empirical data support the two-dimensional model of trust. Further, the twodimensions of trust are mediating the effect of customer satisfaction (CS) differently. In particular, it isshown that benevolence has a significantly greater influence on customer loyalty than credibility.

Finally, beside CS, the customers propensity to trust also influences trust.Research limitations/implications Findings are limited to the cross-sectional design of thestudy and the financial industry.

Practical implications For the management of consumers trust perception, the adequateconceptualization and measurement of trust is central. The aspect of benevolence is crucial for creatingconsumer loyalty and trust as well as the building of customer relationships. Consequently,management should foster activities to signal customers to be benevolent partners (e.g. serviceguarantees and branding) to ensure a high-quality service experience.

Originality/value In previous research, trust has been often conceptualized and measured in aninconsistent and unequivocal way. In the proposed approach, the two facets of trust are theoreticallyconceptualized and measured separately. Thus, differentiated effects of antecedents as well asconsequences of trust can be detected.

KeywordsTrust, Customer satisfaction, Customer loyalty, Service industries

Paper typeResearch paper

IntroductionWith the growing importance of relationship marketing during the past two decades,the construct of trust has become increasingly important in many industries. Whileclassical transactional-based marketing put a clear emphasis on isolated and discretetransactions, relationship marketing views trust as an instrument to develop and

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Managing Service Quality

Vol. 20 No. 1, 2010

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q Emerald Group Publishing Limited

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DOI 10.1108/09604521011011603


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maintain profitable relationships for the mutual purposes of the parties involved(Palmatieret al., 2006). Some authors even state that relationship marketing is built onthe foundation of trust [. . .] (Berry, 2000, p. 242) and that [. . .] trust is central tosuccessful relationship marketing [. . .] (Morgan and Hunt, 1994, p. 22). Hence, trust is

widely accepted as a key mediating variable in the service relationship (Ganesan, 1994;Palmatier et al., 2006).

Despite the unquestionable importance of trust, the construct is conceptualized andmeasured very differently, and no unequivocal definition exists. In previous research,trust is often conceptualized and measured in different ways and therefore encompassesdiverse aspects such as credibility, confidence, reliability, honesty, or benevolence(Moormanet al., 1993; Ganesan, 1994; Morgan and Hunt, 1994; Garbarino and Johnson,1999; Sirdeshmukhet al., 2002; Graysonet al., 2008). A consistent conceptualization isimportant for analyzing the contribution of the different trust components for theservice relationship. Furthermore, the reference object of customer trust can vary and berelated to an individual person as well as to an entire company. The second category hasincreased recently in relevance with the emergence of big service chains, which is alsoreflected by the growing number of articles related to this field (Sirdeshmukh et al., 2002;Schlosseret al., 2006; Grayson et al., 2008; Brodie et al., 2009).

Therefore, the goal of this paper is to use a theory-based conceptualization of trustthat considers distinct and relevant dimensions and is well applicable for customerrelationships to service companies. Based on such a multi-dimensional approach, it ispossible to detect effect differences of the trust components in the service relationshipof the customer.

We begin by giving a brief overview of the different conceptualizations of trust inthe literature and describe the specifics of consumer trust in service industries. In thenext section, we present a theoretical-based, two-dimensional conceptualization oftrust, which distinguishes between credibility and benevolence. We then develop a

framework of the mediating characteristics of the two dimensions and relate them todifferent performance and personality factors. Based on empirical work conducted inthe retail banking industry, we can show different mediating effects of the dimensionsof trust for the customer satisfaction (CS)-loyalty link. Finally, we discuss our majorresults and derive implications for the management of service relationships.

Prior research on trust in relational exchangeDuring the last decades, the notion of trust has received a great deal of attention in thefields of marketing and management. Additionally, with the emergence of therelationship-orientated marketing paradigm, many research studies have focused ontrust as a central variable of relationships (Moorman et al., 1992; Morgan and Hunt,1994; Doney and Cannon, 1997; Palmatier et al., 2006).

Prior conceptualizations of trustSeveral researchers have presented various attempts to define and conceptualize trust.Many of these approaches are influenced by Rotter (1967, p. 651), who defined trust asan expectancy held by an individual [. . .] that the word, promise, verbal or writtenstatement of another individual [. . .] can be relied upon. This definition reveals thattrust encompasses two requirements in a business context. First, the customers beliefor expectancy about specific characteristics of the relationship partner; and second, the

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customers intention to rely on that partner, based on the developed belief. Mostresearchers agree that trust can be understood as a relationship variable, which relatesto the future and implies a certain vulnerability of the trustee (Moorman et al., 1993;Morgan and Hunt, 1994; Garbarino and Johnson, 1999; Grayson et al., 2008). Table I

presents an overview of empirical studies with different conceptualizations anddefinitions over the last decades. To indicate the industry specifics of the empiricalwork, the sample and focus of the analysis is also noted.

In prior research, a large number of studies have proposed different characteristics oftrust (Moorman et al., 1993; Doney and Cannon, 1997; Garbarino and Johnson, 1999;Sirdeshmukh et al., 2002). Many of these characteristics were inspired and derived byinterpersonal research studies (Deutsch, 1960). The most commonly used characteristicsare honesty, reliability, fulfillment, competence, quality, credibility, and benevolence.

Trust in honesty is the belief that the partner is open and always telling the truth inbusiness communication (Kumra and Mittal, 2004). Reliability is by definition a criticalfactor for the customers confidence in the exchange partner (Rotter, 1967;

Delgado-Ballester, 2004). Reliability indicates the characteristic of the relationshippartner to stand by its words. Fulfillment of given promises is seen as an indicator ofthe partners reliability (Schurr and Ozanne, 1985; Anderson and Weitz, 1989).Essential for being reliable is the partners competence. Competence describes thecustomers belief that the relationship partner has the required abilities to perform the

job efficiently and effectively (Sirdeshmukh et al., 2002). Trust in the competence is aprerequisite for the viability of any repeated transaction (Sako, 1992, p. 43). Close toreliability and competence is the customers confidence in the quality of the outcome.Garbarino and Johnson (1999) stress the importance of quality and propose it as anessential component of trust. Besides, these characteristics, credibility and benevolencehave also been proposed as components of trust (Ganesan, 1994; Doney and Cannon,1997). Credibility is based on the customers belief that the provider has the requiredexpertise to perform the job effectively and reliably. Credibility focuses on theexpectancy that service personnel can be relied upon. Benevolence is based onthe extent to which the customer believes that the partner is motivated to act in theinterest of the customers welfare and that the partner is motivated to seek joint gain,subordinating self-interest to the long-term aims of the relationship (Kumar et al.,1995). Benevolence includes also the intentions of the provider to act beneficiallytowards the customer when new conditions arise, for which a commitment was notmade (Ganesan, 1994). Delgado-Ballester and Munuera-Alemn (2001) stress the role ofthe partners favorable and positive intention in the relationship, and that it is reflectedin an emotionally secure feeling of the customer.

The different conceptualizations of trust indicate that trust is not seen in an

univocal way, and a clear distinction of the relevant components is often missing(Table I). On one hand, the different conceptualizations propose very differentdimensions of trust, but on the other hand, the full meaning of the notion of trust is notalways covered (Swan et al., 1999). Furthermore, the elements of the trust dimensionare often intermixed in the measurement approaches. For instance, Ganesan (1994)defines credibility in the sense of reliability, but the items of its measurement alsoreflect honesty and benevolence, such as being frank and open as well as not makingfalse claims. Further, reliability is sometimes equated with competence and expertise

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Author

Definition

Focusof

analysis

Sample

Understandingoftr

ust

SchurrandOzanne(1985

)

Thebeliefthatapartysword

or

promiseisreliableandthata

partywillfulfillitsobligations

in

anexchangerelationship

Individual

103industrialco

mputer

customers

Confidenceinreliab

ilityand

fulfillment

AndersonandWeitz(198

9)

Onepartybelievesthatits

needswillbefulfilledinthe

futurebyactionstakenbythe

otherparty

Individual

95salesdyads

Confidenceinfulfillment

Crosbyetal.(1990)

Confidencethatsalesperson

willservelong-terminterestof

consumer

Individual

151lifeinsuranc

ecustomers

Confidenceinlong-term

reliability,honestyand

benevolence

Moormanetal.(1992)

Willingnesstorelyonan

exchangepartnerinwhomone

hasconfidence

Individual

779dyadsofma

rketing

managersundresearchers

Trustasbeliefand

intentionto

rely

MorganandHunt(1994)

Existingwhenonepartyhas

confidenceinanexchange

partnersreliabilityand

integrity

Individual

204automobiletire

manufacturers

Confidenceinreliab

ilityand

integrity

Ganesan(1994)

SameasMoormanetal.(1992)

Individual

Dyadsof125retailbuyers

and52vendors

Differentiationoftrustin

credibilityandbene

volence

Andaleeb(1996)

Willingnesstorelyonthe

behaviorofothers,especially

whenthesebehaviorshave

outcomeimplicationsforthe

partybestowingtrust

Individual

72salesmanagers

Nocautionaboutth

e

relationshipoutcomeis

necessary

DoneyandCannon(1997

)

Perceivedcredibilityand

benevolenceofatargetoftrust

Individualand

company

200purchasingmanagers

Confidenceincredib

ilityand

benevolence

GarbarinoandJohnson(1999)

SameasMoormanetal.(1992)

Company

401customersofatheater

StructuralEquationModel

Confidenceinqualityand

reliability

(continued)

Table I.Different

conceptualizationsoftrust


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Author

Definition

Focusof

analysis

Sample

Understandingoftr

ust

Sirdesmukhetal.(2002)

Expectationheldbythe

consumerthattheservice

providerisdependableandca

n

bereliedontodeliverthe

promises

Individualand

company

264retailcustom

ers,113airline

customers

Confidenceinemplo

yeeand

managementpractice

Delgado-Ballesterand

Munuera-Aleman(2001),

Delgado-Ballester(2004)

Confidentexpectationsofthe

brandsreliabilityandintentio

ns

insituationsentailingrisktot

he

consumer

Company

173childcarecu

stomers272

personalcarecustomers

Confidenceinreliab

ilityand

intentionofthecom

pany

KumraandMittal(2004)

Feelingsofconfidenceand

securityonthepartofcustomers

thattheycanhavesome

assurancethatthecompanyw

ill

lookafterthem

Company

192bankingcustomers

Confidenceinhones

tyand

reliability

Graysonetal.(2008)

Beliefthatanexchangepartn

er

isbenevolentandhonest

Individualand

company

586financialcus

tomersinUK

750financialcus

tomersin

Taiwan

Broad-scopeandnarrow-scope

trust

Brodieetal.(2009)

Experiencebasedandreflects

thecustomersinteractionswith

thecompanyandemployeesin

deliveringtheservice

experience

Individualand

company

464airlinecustomers

Confidenceinemplo

yeeand

company

Table I.

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(Delgado-Ballester and Munuera-Alemn, 2001); however, absence of reliability mightbe caused by assumed opportunistic behaviour (Williamson, 1985).

Beside the components of trust, trust can be differentiated by its reference object(Table I). Thus, trust can refer to an individual person (e.g. my financial consultant)

or an entire company (e.g. my favourite fast-food chain). The role of the individual trustrelationship to a specific exchange partner, such as a salesman or account manager,has been often investigated in the past (Schurr and Ozanne, 1985; Andaleeb, 1996;Doney and Cannon, 1997). Since an individual trust relationship needs ongoinginterdependent exchange experiences, many of these studies have been conducted inbusiness-to-business areas. Trust in the company is a topic that has recently receivedincreased attention from a management and research perspective (Garbarino and

Johnson, 1999; Sirdeshmukh et al., 2002; Delgado-Ballester et al., 2003; Garbarinoand Lee, 2003; Kumra and Mittal, 2004).

Consumer trust in relational exchange of service chains

The previous section raises the question of the true conceptualization of trust.Although different conceptualizations of a construct cannot be right or wrong ingeneral, they might be more or less useful in a given context (Chalmers, 1978). Thegiven context of this study is the relationship of a consumer to the service company,and we propose that different dimensions of trust can result in different outcomes forthe service relationship.

In relational exchange of service industries, trust plays a major role in managing theservice companies (Gronroos, 1994; Gummesson, 1994). From a customer perspective,trust becomes crucial in many relational exchange situations and reduces the perceivedrisk of the service outcome (Darby and Karni, 1973; Berry, 2000; Laroche et al., 2004).For instance, the results of surgery cannot be inspected in advance. Often the outcomeis irreversible, and in some cases, the customer faces the risk of negative long-term

consequences. Hence, the customer must have trust in the expertise of the surgeon.With the emergence of big service chains (e.g. retail banking, fast-food chains, and

rental car agencies) in consumer service industries, it becomes more and more difficultfor the customer to build a personal relationship with the service employee. On onehand, these consumer services are characterized by high-rotation rates at the serviceencounter. On the other hand, encounters with service personnel are continuouslyreplaced with various self-service technologies (e.g. the banking industry) (Meuter et al.,2000). Thus, the possibility of building relational trust towards individuals is limited inthis context.

Trust in the entire company becomes particularly relevant in industries, where theservice is performed by different and changing service personnel like service chains(Kandampully, 2002). The customer generally has to trust the company to employ

well-trained employees only, who are capable of fulfilling his needs and expectations.From an institutional point of view, trust serves as a means to reduce transaction costsin terms of search, information, or bargaining costs in the relational exchange betweencustomer and service company (Williamson, 1985).

In this paper, we build a theoretical foundation of trust that covers the meaning oftrust in service relationship and based on this, we derive two central dimensions oftrust. In an empirical study, we show that the different dimensions of trust playdifferent roles in the service relationship, which supports the importance of using


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in the integrity, benevolence, and honesty of the partner. This aspect primarilyconcentrates on a more affective understanding of trust and can be seen as thebenevolence part of customer trust (Ganesan, 1994).

Both components are distinct but essential for trust. It is conceptually different when

someone has trust in the credibility of an exchange partner, whether he or she has trustin someones benevolence or whether he or she has trust in both issues. A company canbe completely upright and benevolent in the sense of a customers needs, but does nothave the right capacities to deliver the right quality for the customer (e.g. a small bankmay strive to advise a customer honestly but have a lack of competence regardingcertain topics). On the other hand, a company can have the capability to deliver therequired outcome in the right quality, but has selfish reasons or motivation for notacting optimally in the sense of the customer (e.g. a huge bank is capable of offering awide range of financial products, but offers only the products with the biggest profitmargins for the company). Thus, the two components of trust are conceptually distinct.

However, both components are important for the customers trust, and if one ofthem is missing, it can jeopardize the relationship with the customer. Thus, if a

company is capable of doing the best service but avoids doing so because of selfishreasons, it will adversely affect the confidence of the customer in that company (e.g. acar dealer who is not offering the best deal for the customer). If a company is highlywilling to fulfill a service but not capable to do it, the customer cannot rely on thatcompany (e.g. a doctor who wants to perform a surgery for which he is not trained in).Thus, we conceptualize trust as a two-dimensional construct with credibility andbenevolence as necessary components.

In prior research, trust was related to a wide variety of different constructs. In thecontext of commitment-trust theory, trust is described as a key mediating variablewithin customer relationships (Morgan and Hunt, 1994; Palmatier et al., 2006).As illustrated in conceptualization above, trust reduces the risk of opportunistic behaviorby the service provider and therefore reduces the transaction costs between the differentexchange partners (Williamson, 1985). A customer who has trust in his service provider ismore likely to stay in and be committed to the relationship. The mediating role of trust forthe link between satisfaction and loyalty has been shown in prior research (Garbarino and

Johnson, 1999; Hennig-Thurauet al., 2002; Palmatieret al., 2006).Further, because credibility as well as benevolence are both central aspects of trust,

we believe that credibility and benevolence also mediate the relationship between CSand customer loyalty (Garbarino and Johnson, 1999; Delgado-Ballesteret al., 2003). If acustomer is satisfied with the performance of a service provider, this implies that theservice provider performed successfully service delivery as well as is reliable in termsof honesty and acting in the interest of the customer. Therefore, we assume a positiveeffect of CS on credibility as well as benevolence. Both components of trust deliver a

good reason for the customer to stay in the relationship; thus, we propose:H1a. Credibility mediates the link between CS and customer loyalty.

H1b. Benevolence mediates the link between CS and customer loyalty.

A two-dimensional conceptualization of trust can lead to more differentiatedunderstanding of the customers service relationship. On one hand, we know fromprevious research that trust entails a certain degree of commitment, which is centralto working relationships (Berry and Parasuraman, 1991; Morgan and Hunt, 1994).


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Commitment generally implies that one party is willing to excuse single mistakes andis motivated to maintain the relationship, even if something goes wrong one time dueto a lack of competence (Moorman et al., 1992). This implies that credibility can beweakend in some cases without harming the loyalty of the customer.

On the other hand, fruitful and long-lasting relationships are based on the norm ofreciprocity (Gouldner, 1960). Obviously, the norm of reciprocity is violated by showingopportunistic behavior and a lack of benevolence. If the customer knows that theservice provider is following a hidden agenda not in his interest, the basis of his trust issignificantly harmed, and the customer feels being treated unfairly (Gregoire andFisher, 2008). We would assume that such a violation of the reciprocity would alwayslead to lower customer loyalty. Consequently, we assume that benevolence has agreater impact on customer loyalty than credibility, and we propose:

H2. The mediating effect of benevolence between CS and customer loyalty isbigger than the mediating effect of credibility.

We assume that, besides the service performance, personality traits of the consumeralso influence the perception of benevolence and credibility, and therefore control theeffect of satisfaction on trust. We consider propensity to trust as such a generalpersonality trait. From the social psychology perspective, propensity to trust describesthe general tendency and willingness of a person to rely on other persons or parties(Rotter, 1980; Kennedyet al., 2000). Many scholars have shown that propensity to trusthas a positive effect on the individual trust level (Sitkin and Pablo, 1992; Greed andMiles, 1996). Further, the influence of propensity to trust is not necessarily limited tothe interpersonal level; it may also be important in the context of trust in organizations(Fukuyama, 1995; Yang, 2006).

The effect of propensity to trust is especially important when information aboutanother partys trustworthiness is rarely available, which is the case in many service

contexts (Mayeret al., 1995; Gillet al., 2005). In our context, this exchange partner is theservice company. Following the underlying conceptualizations trust is atwo-dimensional construct. Therefore, it is reasonable to assume that propensity totrust should also have a positive effect on credibility as well as on benevolence.Considering the controlling effect of the consumer personality, we hypothesize:

H3a. Propensity to trust has a positive effect on credibility.

H3b. Propensity to trust has a positive effect on benevolence.

The proposed relationships between the different constructs are also shown in Figure 2.

Methodology

Sample and data collectionWe used a survey in a service industry to collect primary data to test the proposedhypotheses. We selected retail banking as the application field of our study because itis offered by service chains, and customer trust in such a company plays a significantrole. The services usually consist of offering a checking account with typical featureslike online banking and credit line. Additionally, most customers have long-termrelationships with banks, which is also formally established by contract for checkingaccounts. Furthermore, the underlining relationship is dominated by routine services,

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such as money transfers, withdrawals, or investments on a low and routine level. Theservices are usually performed by different employees, and several services are offeredas self-services (e.g. ATMs and online banking). Complex and customized services(e.g. specialized consultation on options and future warrants) do not play a significantrole in retail banking. Therefore, the relationship is not very individualized and isusually not associated with a particular employee. Hence, we believe that trust in onesretail bank is an adequate application field for testing the role of trust in a servicecompany in this customer context.

Based on our conceptualization of trust as well as on previous literature, wedeveloped a questionnaire and adapted it to the field of mass retail banking services.In a pre-study with a student sample, the initial item pool of trust was reduced bymeans of exploratory factor analysis. The main data collection took place in a majorcity in Germany. Ten interview teams consisting of two students each were instructedto ask people randomly on the streets to participate in the survey. Before the survey,the participants were asked if they had a current banking account, with which bank,and what kind of banking relationship they have. Only people with checking accountsat a retail bank, who primarily use this service of their bank on a regular basis and donot have a personal financial consultant, were selected to participate in the survey.We thereby ensured that all participants evaluated the relationship to the entirecompany and not to a personal financial consultant. Furthermore, this ensured that allevaluations were based on the same type of service. Every participant was asked toevaluate his own banking relationship.

By means of this, we obtained 232 completed questionnaires of banking customers

(male, 51 percent; female, 49 percent; age: up to 20 years, 1.3 percent; 20-30 years,74.6 percent; 30-40 years, 20.3 percent; 40-50 years, 2.2 percent; above 50 years,1.7 percent; bank type: 46.6 percent bank in private ownership, 37.6 percent bank inpublic ownership, and 15.8 percent mutual savings bank). The gender and bank typedistribution is representative, while the age distribution is in general younger than thebasic population. The missing value rate was below 2 percent per item and no missingvalue pattern was detected. Hence, we assumed them to be missing at random andestimated the values by means of the EM-algorithm (Schafer and Graham, 2002).

Figure 2.Framework of the

hypothesis

Trust

Propensity

to trust

Performance evaluation

Personal trait

Satisfaction Loyalty

Benevolence

Credibility


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MeasurementMulti-item scales were generated on the basis of previous measures, a review of therelevant literature, and our theoretical foundation (see the Appendix, Table AI). Since weassumed the observed variables as manifestations of underlying constructs, we used

reflective multi-item-scale models for construct measurement (Bagozzi and Baumgartner,1994). All measures were rated on seven-point-Likert scales (anchored by strongly agreevs strongly disagree). Negatively worded items were reversely coded.

Trust encompasses two different dimensions: credibility and benevolence. We definecredibility as the belief of the customer in the expertise and abilities of an exchangepartner,while benevolence is seen as the customers perception that a supplier is fair, has goodintentions, and is acting without opportunistic behaviour. The scales for both constructswere developed based on existing scales (Moormanet al., 1992; Garbarino and Johnson,1999; Sirdeshmukh et al., 2002; Delgado-Ballester et al., 2003; Young and Albaum, 2003) aswell as on our conceptualizations. After purifying the item-pool by means of exploratoryfactor analysis and Cronbachs alpha, we identified the proposed two dimensions of trust.For the measurement of CS, we used a reduced form of Olivers and Swans (1989)

satisfaction scale. We define customer loyalty as a relativeattitude-behaviour relationship,where a favorable correspondence between relative attitude and repeat patronage exists(Dick and Basu, 1994). It is therefore measured based on items referring to the attitudetowards the relationship (e.g. perceived fit between the brand and the customer, enjoymentof being a customer, the subjective impression of being in good hands) as well as topractical action intentions (e.g. repurchase intention and recommendation intention) basedon Dick and Basu (1994) and Oliver (1999). Finally, the propensity to trust scale wasdeveloped by means of the personality research form by Jackson (1974), the measuredeveloped by Rotter (1967) and the findings of Mayer et al.(1995).

To assess the quality of the measurement approach, conventional methods such asCronbachs alpha, item-to-total correlations, and exploratory factor analysis were used(Churchill, 1979). Reliability and validity were assessed using confirmatory factoranalysis (CFA). We analyzed measurement issues for each factor individually. Thecorresponding results are shown in Table II and indicate acceptable psychometricproperties for all constructs. Only the root mean square error of approximation(RMSEA) is partially above the critical threshold proposed by the relevant literature.This could be caused by minor problems with multi-normality distribution of the data(Hu and Bentler, 1999; Kline, 2005). To show stability of results of the ML-estimator,we confirmed all results by means of a bootstrapping analysis (Byrne, 2001).A complete list of all items is presented in the Appendix, Table AI.

Construct Items x2 df Alphaa AVEb CRc RMSEAd SRMRe GFIf CFIg

Credibility 5 39.2 5 0.91 0.67 0.91 0.172 0.033 0.940 0.956Benevolence 6 15.3 9 0.88 0.54 0.87 0.072 0.020 0.978 0.989Satisfaction 5 10.0 5 0.92 0.92 0.72 0.066 0.014 0.984 0.994Loyalty 7 57.6 14 0.93 0.68 0.94 0.116 0.031 0.929 0.966Propensity to trust 4 5.4 2 0.60 0.47 0.50 0.070 0.038 0.986 0.980

Notes: aCronbach alpha; baverage variance extracted; ccomposite reliability; droot mean square errorof approximation; estandardized root mean residual; fgoodness of fit index; gcomparative fit index

Table II.Reliability of themeasurement

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Discriminate validity was assessed by using Fornell-Larcker criteria andx2-difference-tests. The squared correlations of the constructs were mostly smallerthan the assigned average variances extracted (Fornell-Larcker criteria; x2 702.84;df 314; goodness of fit index (GFI) 0.81; comparative fit index (CFI) 0.92;

RMSEA 0.073; standardized root mean residual (SRMR) 0.051) and allx2-difference were above the critical threshold (Dx2 . 8) (Fornell and Larcker,1981) (see the Appendix, Table AII).

ResultsAfter the verification of the reliability of the measurement model, the proposedhypotheses were tested using CFA, linear structural relationships (Joreskog andSorbom, 1993). To show stability of the results of the maximum-likelihood-estimator,we confirmed all results by means of a bootstrapping analysis.

Dimensionality of trust

Before we test the proposed hypotheses, we want to ensure that the data supports theproposed two-dimensional conceptualization of trust. To verify the dimensionality oftrust, we tested two different measurement models of trust. To measure trust as aone-dimensional construct (trustone), we used all indicators of the two encompassed scales(benevolence and credibility) to build up a one-dimensional first-order measurement model(Figure 3). For the two-dimensional construct of trust (trusttwo), we applied a second-orderCFA model with the two dimensions, benevolence and credibility (Byrne, 2001).The results of the model comparison are presented and Table III.

Considering the x2-criterion, the two-dimensional model of trust presented a betterfit to the data than the one-dimensional model. The x2-difference test underlines the

Figure 3.Dimensionality of trust

Trustonex1

Credibility

x1

Benevolence

x2

V31

V32

V33

V34

V37

V41

V38

V42

V43

V44

V45

V31

V32

V33

V34

V37

V41

V38

V42

V43

V44

V45

0.63

Note:All path coefficients are standardized and significant (p< 0.001)

0.76

0.68

0.67

0.64

0.72

0.81

0.81

0.86

0.79

0.79

Factor

loadings0.70

0.80

0.74

0.70

0.70

0.75

0.83

0.82

0.86

0.79

0.81

0.89

Factor

loadings


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advantage of the two-dimensional model and shows a significant improvement of themodel fit by applying the two-dimensional model. The other indicator values supportthe two-dimensional model as well, particularly GFI, RMSEA, SRMR, and CFI.

Mediating effects of trustWe used linear structural equation models to test the mediating role of trust with theproposed procedure by Baron and Kenny (1986). The results of the various requiredmodels are depicted in Table IV.

To show the mediating effect of trust on the satisfaction-loyalty link, we have toverify the three conditions of Baron and Kenny (1986). For this, we test the effect of CSon customer loyalty without any mediator. Model 0 represents this analysis. Thestandardized effect of CS on customer loyalty is 0.85 and highly significant (p , 0.001).

To test H1a and H1b, we specify two further models, where satisfaction isadditionally mediated by benevolence (Model A) or credibility (Model B). The influenceof CS on both components of trust (0.69 and 0.81) is significant as well as the impact ofthe two constructs on customer loyalty (0.39 and 0.37). The integration of benevolenceas well as credibility significantly decreases the direct effect of CS on customer loyalty(benevolence:D 0.27,t 52.2, p , 0.001; credibility:D 0.30,t 49.2,p , 0.001),but does not completely disappear.

Considering Model A, the direct standardized effect of CS on customer loyalty is0.58, and the indirect mediation effect via trust is 0.27 ( 0.69 *0.39). In total, theinfluence of satisfaction on loyalty is 0.85. By means of the proposed test of Sobel(1982), we can show the significance of the mediation of trust (Sobel significant test ofmediating effects SST 5.31, p , 0.001). Considering Model B, the indirectmediation effect is 0.30 and also significant by the Sobel test (SST 4.50,p , 0.001).Thus, benevolence and credibility are mediators of the satisfaction-loyalty link andconsequently our hypothesesH1a and H1b are supported by the data.

To compare the different mediating effects of benevolence and credibility, it isnecessary tointegrate both mediating effectsin onemodel.Thisis specifiedin ModelC. Thefit measurements of the model indicate acceptable psychometric properties for the model,and all path coefficients are significant (at least at the level of 0.1). The influence ofcredibility on customer loyalty is relatively low. The total effect of CS on customer loyaltyis 0.87, and the model as a whole explains 0.80 of the variance of customer loyalty(viz. squared multiple correlation (SMC)). Model C also revealed the relative role ofbenevolence and credibility as mediators of the satisfaction-loyalty link. The mediatingeffect of benevolence (0.21) is almost twice as high as compared with credibility (0.11), andit is highly significant in contrast to credibility (p 0.11).Thus, the data supports ourH2.

Controlling for personal traits

As mentioned above the level of trust can also be influenced by personality traits.Therefore, in the analysis we control for the effect of general personal traits to rely on

Model n x2 df p RMSEA SRMR GFI CFI

Trustone 232 147 42 0.00 0.106 0.050 0.90 0.94Trusttwo 232 113 41 0.00 0.087 0.035 0.92 0.96D 34 1 0.00

Table III.Model comparison of trust

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Model0

ModelA

ModelB

ModelC

Nomediator

Benevolenceasmediator

Credibilityasmediator

Benevolenceandcredibilityasmediators

Independentvariable

Model

CS

CS

Benevolence

CS

Credibility

CS

Benevolence

Credibility

Dependentvariable

Benevolence

0.69**

0.73**

Credibility

0.81**

0.84**

Customerloyalty

0.85**

0.58**

0.39**

0.55**

0.37**

0.55**

0.29**

0.13*

Fitmeasurements

x2

159.60

404.23

289.99

662.81

Df

53

1

32

116

225

RMSEA

0.093

0.094

0.081

0.092

CFI

0.95

0.92

0.95

0.91

SRMR

0.039

0.054

0.037

0.072

SMCofloyalty

0.72

0.80

0.77

0.80

Effectofsatisfactiononloyalty

Directeffect

0.5

8**

0.55**

0.55**

Mediatingeffect

0.2

7**

0.30**

0.21**

0.11

Totaleffect

0.8

5**

0.85**

0.87**

SSTofthemediatingeffect

5.31

4.50

4.21

1.61

p-value

0.00

0.00

0.00

0.11

Notes:*p#

0.1,**p#

0.001;allcoefficientsarestandardizedcoefficients;afactorloadingofthe

second-ordermeasurementmodel;C

S,customer

satisfaction;SST,Sobels

ignificanttestofmediatingeffects;SMC,squaredmultiplecorrelation

Table IV.Mediating models of trust


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other persons or parties. We integrate propensity to trust in the final model of themediating analysis (Model C) as a counterpart to the more performance-basedconstruct of CS. The results of the model are shown in Figure 4.

The fit statistics show, in total, an adequate fit of the model with the data

(x2/df 2.46, SRMR 0.066, RMSEA 0.080, CFI 0.90), and the x2-difference testindicates significant improvement in comparison to Model D (Dx2 155.99,Ddf 7,p , 0.001). Propensity to trust and CS are almost completely independent (f12 0.06)and therefore influence trust from two completely different perspectives(personal-based vs performance-based).

The influence of propensity to trust on the two components of trust is different.We can show a significant effect on benevolence (0.17), but no remarkable effect oncredibility (0.07). Thus, propensity to trust influences customers trust only withrespect to the benevolence component. Thus, we can sum up that the data supportsH3a, but there is no support for H3b.

A significant difference in the mediating mechanism of benevolence and credibilityby integrating propensity to trust cannot be identified. Thus, the detected mechanismcan be seen as general in our context and is independent from personal traits of theconsumer.

DiscussionAlthough customer trust has gained a great deal of attention in the field of marketingduring the last decade, the construct has still remained a somewhat fuzzy construct.This is due to differences in the conceptualization and measurement of trust, as well asdifferences in the reference object of trust in the literature. Especially, in serviceindustries, and here in the segment of mass services, the consumers trust in the entirecompany is of utmost importance. The target of this paper has been to develop, basedon theoretically based conceptualization of trust, a better understanding how the

components of trust affect the customer relationship to the service firm. Based on

Figure 4.Mediating role of trust

Benevolence

h1

0.56

g22 = 0.07 (n.s.)

b13=0.30*

Loyalty

h3Satisfaction

x1

g31= 0.54*

0.80

Credibility

h2

0.71

g21 = 0.83*

b23 = 0.13(p= 0.09)

Propensity

to trustx2

g11 = 0.72*

g12 = 0.17 (p= 0.006)

f12= 0.06 (n.s.)

Performance evaluation

Personal traitAll path coefficients are standardized

*p< 0.001

squared multiple correlation

n= 232

c2 = 778,81 df = 316CFI = 0.90

RMSEA = 0.080

SRMR = 0.066

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empirical, work we could show that the two dimensions possess different effects on thesatisfaction-loyalty link of the customer relationship.

Managerial implicationsFrom a managerial point of view, companies should systematically work to fostercredibility and benevolence. Both aspects are essential for building trust.

Credibility in service industries is mainly related to the capability to offer rightquality reliably. To ensure the desired service outcome, the company has to invest inan efficient and effective service delivery processes, which should be well understoodand practiced by all employees. Thus, the appropriate employee education plays animportant role here. In the context of mass services, characterized by customer contactwith changing employees, the company should introduce clear and strict servicestandards. Inconsistent service encounters with different employees might erodecustomer trust. This standard helps to assure that customers are served in an identical,fair, and high-quality manner. Furthermore, the perceived intelligence during the

service performance is important. If the service success is attributed to external factors(i.e. luck), the company cannot benefit from its performance. Therefore, employees haveto be trained and prepared for tasks beyond the daily business. This delivers a chanceto build trust based on credibility in the so-called moments of truth. A good examplefor this strategy is the advertising campaign of the hotel chain Marriott, whichcommunicates actively and vividly in their commercials that their service employeeswill find a solution for almost all of their guests wishes.

Benevolence emphasizes the customer perception of the good intentions by thecompany in doing the service. The aspect of benevolence is crucial for the trust-buildingprocess, and our findings suggest that the mediating effect of benevolence iscomparably higher than the effect of the credibility in our low-relational customercontext. From a managerial perspective, this means that signalling credibility without

benevolence in the sense of honesty and integrity in the daily business can be a majorpitfall. An negative example is a statement by the chief executive officer of DeutscheBank made during a press conference several years ago. He stated that Deutsche Bankwill concentrate, in the future, on the financial investment business and that the retailbusiness and its customers are no longer focus of the business strategy. This statementalienated a high percentage of retail customers, and they questioned the integrity andbenevolence of Deutsche Bank in the retail business. Although no one doubts thecompetence of Deutsche Bank, the benevolence in the retail business has been damagedsince that time and has resulted in a considerable number of customer switches to otherbanks. Consequently, the customer wants to be valued and treated fairly. If an exchangepartner perceives the norm of reciprocity is being violated, the positive effects of a goodperformance evaluation might be destroyed.

Perception of benevolence is mainly a result of the previous experience the customer hasmade with the service company, but it can also be actively indicated by specificcommunication strategies of the company. Here, in particular, advertising and brandingplay major roles. Thus, advertising campaigns should not only focus on credibilityarguments, they should also explicitly consider aspects of benevolence. In the context offinancial services, thebank could, forinstance, stress that it always offersthebest conditionsavailable. Furthermore, the bank could underpin its benevolence by offering a certainguarantee regarding conditions for several transactions (Hogreve and Gremler, 2009).


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In the early stage of a customer relationship, a strong brand is a important tool to lower riskand impute trust. Further, the companys good reputation works as a signal for itsbenevolence and good intentions. This illustrates the importance of public relations in thetrust-building process. From an institutional point of view, the companys reputation serves

as a pledge for the absence of opportunistic intentions. A strong brand and an excellentreputation are apparently more important if the customer cannot build a personalrelationship with a service employee. This is especially the case in service chains where trustin the entire company is at the centre of interest.

Limitations and further researchAlthough some interesting implications can be derived from our study, our findingsare nevertheless limited. The results are limited to the characteristics of the serviceindustry where the survey was conducted. Besides, mass services and low-relationalcustomers, it would be interesting to expand our research to other types of serviceswith very individualized offers and close personal relationships. Particularly, it couldbe examined whether the dominant role of benevolence is supported in this setting, too.Maybe different patterns in the creation and outcomes of trust could be detected.

Another limitation is the cross-sectional design of our study. Further research couldbenefit from testing the model in a longitudinal design. Here, it is interesting to seewhether low-relational customers can be transformed into high-relational customersand which components of trust play more important roles.

In our study, we controlled the mediating effect of trust in the satisfaction-loyalty-link by the customer propensity to trust. Although our findings suggest thatpropensity to trust has an influence on benevolence, while credibility is notsignificantly affected, we could not find any impact of propensity to trust on themediating effect of trust. On one hand, this means that the detected mediating effect isstable across customers. On the other hand, there might exist other personal traits that

have impact on the mediating strength of trust.Our study considers CS as the main influence factor for loyalty. Aside from this, itwould be interesting to integrate additional influence factors (e.g. perceived quality,risk awareness, and familiarity) to examine their effects on the two components of trustand loyalty. Based on this, it would be possible to detect diverging effects of credibilityand benevolence.

The analyses and discussion of the results showed the significance of the proposedconceptualization of trust. If companies better understand the true nature of consumertrust, they have better chances to build trust more systematically. There is still a broadfield to discover and to foster a deeper understanding of consumer trust.

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Appendix

Construct ID Item

Fac.

load t-value

Benevolence V31 I believe that my bank is honest to me 0.73 11.936V32 I think my bank is trustworthy 0.77 12.924V33 My bank is very thoughtful about my well-being 0.75 12.520V34 In critical situations I can rely on my bank 0.69 11.058V37 I believe that my bank will point out the best alternative for

me at any time 0.73 11.893V38 The employees of my bank are strongly encouraged to solve

my problems 0.72 11.795Credibility V41 My bank is capable to satisfy my needs 0.83 15.158

V42 My bank knows its business 0.84 15.439V43 My bank can solve my problems 0.82 14.983V44 In critical situations I feel well-advised by my bank 0.84 15.428

V45 I believe that my bank employs well-educated employees 0.77 13.595Customer V21 Overall Im satisfied with this bank 0.93 18.342satisfaction V22 The products and services of this bank meet my expectations

completely 0.91 17.883V23r I did not have good experiences with this bank (r) 0.75 13.269V24 My decision for this bank was right 0.84 15.739V25 This bank offers exactly what I need 0.79 14.087

Customer V51 I can highly recommend this bank 0.91 17.577loyalty V52 I like to be a customer of this bank 0.90 17.400

V53 If I could decide again, I would choose this bank again 0.83 15.258V54 I think this bank fits to me 0.84 15.716V55 In the future I will use further services from this bank 0.71 12.087V56 I can identify myself with this bank 0.77 13.735

Propensity to V71 When Im depressed, I look for friends who can prop me up 0.84 10.926

trust V72 I keep my problems in (r) 0.59 7.531V73 Im interested in the opinion of other people about my

problems 0.67 9.048V74 Its difficult for me to take a decision without getting advice 0.59 7.538

Table AI.Scale items for theoreticalmeasures

Squared correlation (x2-difference)/AVEa

Construct 1 2 3 4 5 Variance

1. Benevolence 0.67 1.102. Credibility 0.74 (26.7) 0.54 1.173. Customer satisfaction 0.48 0.66 (14.4) 0.92 1.494. Customer loyalty 0.62 0.67 (15.9) 0.72 (8.9) 0.68 2.665. Propensity to trust 0.03 0.01 0.00 0.02 0.47 1.54

Notes: n 232; x2 702.84; df 314; CFI 0.92; RMSEA 0.073; SRMR 0.051; aaveragevariance extracted on diagonal; squared correlation on lower triangle. In brackets are the results of thex2-difference-test, if necessary. All differences are significant

Table AII.Fornell-Larcker-criteriafor discriminant validityand covariance matrix

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About the authorsRoland Kantsperger is a Project Manager and Executive Assistant at the Allianz PrivateKrankenversicherungs-AG in Munich, Germany. At the Allianz Private Krankenversicherungs-AG, he is responsible for the strategic development of the company. Prior he was an Assistant

Professor at the Department of Marketing at the Ludwig-Maximilians-University in Munich. Hereceived his Doctoral Degree and Master Degree from the Ludwig-Maximilians-University inMunich. His research interests are in the area of customer relationship management, call centermanagement, and empowerment.

Werner H. Kunz is an Assistant Professor of Marketing at University of Massachusetts inBoston. At the University of Massachusetts Boston, he is responsible for service marketing andsocial media and teaches both undergraduate and graduate courses. Prior he was a Post-DoctoralAssistant at the Humboldt University in Berlin. He received his Doctoral Degree from theLudwig-Maximilians-University in Munich and Master Degree in mathematics from theHumboldt-University of Berlin. His research interests are in the area of service marketing,E-services, consumer innovation, social media, and social networks. Werner H. Kunz is thecorresponding author and can be contacted at: [email protected]

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