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Relationship marketing: The impact of emotional intelligence and

trust on bank performance

Article in International Journal of Bank Marketing · April 2008

DOI: 10.1108/02652320810864652

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Relationship
Relationship marketing marketing
The impact of emotional intelligence and trust
on bank performance
Troy Heffernan 183
The Plymouth Business School, The University of Plymouth, Plymouth, UK
Received September 2007
Grant O’Neill Revised December 2007
School of Marketing and Management, Charles Sturt University, Accepted January 2008
Bathurst, Australia
Tony Travaglione
Curtin University, Perth, Australia, and
Marcelle Droulers
School of Marketing and Management, Charles Sturt University,
Bathurst, Australia

Abstract
Purpose – The two aims of this paper are to explore the development of trust for relationships
between staff and customers in the banking sector and to investigate possible links between financial
performance of relationship manager and their levels of emotional intelligence (EI) and trust.
Design/methodology/approach – An internet survey was undertaken, where respondents were
asked to complete an EI test and questions relating to trusting behaviour. These data were integrated
with financial performance data supplied by the bank. Exploratory and confirmatory factor analysis
and correlation analysis was used to identify links.
Findings – Trust was found to be made up of three components: dependability; knowledge; and
expectations. Further, there were significant correlations between both trust and EI, when compared to
the financial performance of a relationship manager.
Research limitations/implications – The methods used by the bank to collect performance data
have limited the analysis that could be conducted.
Practical implications – Increased awareness by the relationship managers of their own emotions,
and how they perceive and act upon the emotions of others, should favourably impact financial
performance.
Originality/value – This paper is an important initial step in highlighting the significance of EI and
trust in the relationship marketing/selling arena.
Keywords Emotional intelligence, Relationship marketing, Banks, Financial performance, Trust,
Australia
Paper type Research paper

Introduction International Journal of Bank

The banking sector is becoming increasingly competitive around the world. This is Marketing
Vol. 26 No. 3, 2008
particularly true in the area of small-medium business banking. Further, the core and pp. 183-199
actual product being offered to business customers could be considered reasonably q Emerald Group Publishing Limited
0265-2323
homogenous. Consequently, there is an increased need for banks to differentiate DOI 10.1108/02652320810864652
IJBM themselves from competitors at the augmented product level. One way that this might
26,3 be achieved is to develop longer-term relationships with their key customers. But what
are the key constructs that enhance bank employees’ ability to develop successful
relationships with their customers? This paper examines the link between two
important relationship commodities possessed by the relationship manager (that is,
trust and emotional intelligence (EI)) and their impact on financial performance.
184 In the banking industry the importance of relationship development and maintenance
with key customers has previously been investigated (Madill et al., 2002). Some of the
benefits of strong relationships with key customers include increased profit through
reduced risk, improved communication links, and referrals (Hawke and Heffernan, 2006)
and an increase in customer satisfaction leading to more loyal customers (Petersen and
Rajan, 1994; Binks and Ennew, 1997; Ennew and Binks, 1999; Tyler and Stanley, 1999).
Further, studies of the banking sector in different corners of the world have highlighted
how the development of effective relationships has led to increased customer satisfaction
(Armstrong and Seng, 2000; Jamal and Naser, 2002) and commitment (Abratt and
Russell, 1999). Probably the most researched component of successful relationships is the
development of trust (Morgan and Hunt, 1994). Consequently, the first agenda of this
research is to explore the concept and dimensions of trust when dealing with customers
in the banking sector. A second agenda is to investigate the relationship between
financial performance and trust for relationship managers that deal with the banking
needs of small to medium size business customers.
Further, this research examines the link between the emotional intelligence of
relationship managers and their financial performance. As we discuss below, EI relates
to the ability to understand and harness the emotions of the self and others. Over the
past 15 years, considerable research into EI and its effects has been undertaken.
Businesses have increasingly recognised the importance of EI, however, very little
research has examined EI in the relationship marketing arena. More particularly, there
is a scarcity of research linking EI to performance in a business relationship setting.
Consequently, after indentifying and definition the trust construct, the key aim of
this paper is to identify the impact of trust and emotional intelligence on the
performance outcomes of relationship managers in the banking sector. In an attempt to
achieve the above, this paper is divided into the following sections. First, the research
into relationship marketing, trust and emotional intelligence will be reviewed, leading
to the identification of three research questions. This is followed by an explanation of
the methodology adopted. Third, findings for the three research questions are
presented. Fourth, managerial implications are given and finally, limitations of the
research and conclusions are offered.

Literature review
Relationship marketing
Relationship marketing is concerned with establishing, maintaining and enhancing
relationships with customers and other partners in an effort to sustain and improve an
organisation’s customer base and profitability (Gronroos, 1994, p. 9). The importance of
relationship marketing was clearly articulated by Dwyer et al. (1987, p. 12):
[. . .] both business marketing and consumer marketing benefit from attention to conditions
that foster relational bonds leading to reliable repeat purchase.
Further, research has shown that an organisation’s level of relationship marketing Relationship
activities is positively correlated to its performance, staff satisfaction (Buchanan and marketing
Gillies, 1990; Reichheld and Kenny, 1990; DeSouza, 1992; Berry, 1983; Reicheld, 1993,
1994, 1996; Sharma and Sheth, 1997), new product success (Gemunden et al., 1996;
Campbell and Cooper, 1999), and the level of strategic competitive advantage that is
achieved in the market place (Kraljic, 1983; Ganesan, 1994; Sharma and Sheth, 1997;
Germain and Droge, 1997; Reck and Long, 1988). Relationship marketing activities 185
have also been shown to be critical in the banking sector; for instance:
To continue to be successful in the corporate sector, small banks must invest in the long-term
relationship marketing infrastructure to support a customer orientated approach (Adamson
et al., 2003, p. 347).
However, to date there has only been limited research conducted within this context.
There are a number of components, which have emerged from the literature, that
lead to the successful functioning of a business-to-business relationship (Wilson, 1995).
Included are trust, commitment, communication, shared values, co-operation and social
contacts (Wilson, 1995). However, trust is widely acknowledged as the most critical
component in the successful functioning of a relationship (Nicholson et al., 2001).
Further, in Table I, a cross-section of the research into the components that lead to the
success of a business-to-business relationship is presented. As can be seen, trust is a
critical component of these studies. Consequently, the development of trust in
business-to-business relationships will be an agenda for this research.

Trust
Trust is seen as a critical construct in a range of discipline areas (Nicholson et al., 2001).
Further, within the realm of relationship marketing, trust has been recognised as an
important variable for the success of relationships in the supplier literature (Ganesan,
1994; Morgan and Hunt, 1994), the channel literature (Anderson and Narus, 1990; Weitz
and Jap, 1995), end consumer relationships literature (Czepiel, 1990; Berry, 1995), and
lateral relationships literature (Webster, 1992). Consequently, numerous
conceptualisations of trust exist. Nevertheless, common to most definitions of trust
is a confidence between the parties that the other party is reliable (Morgan and Hunt,
1994); and that the parties will act with a level of integrity when dealing with each
other (O’Malley and Tynan, 1997).
Three common components of trust emerge from an examination of the literature
(Sako, 1992; Mayer et al., 1995; Sirdeshmukh et al., 2002):
(1) a credibility component – whether the partner has the capability and expertise
to undertake the purpose of the partnership (Ganesan, 1994);
(2) an integrity component – whether the partner will adhere to written or verbal
promises (Nicholson et al., 2001); and
(3) a benevolence component – whether the partner will be accommodating and act
with equity when new conditions relating to the relationship arise (Ganesan, 1994).

Sako (1992) identified these components of trust as competency trust, contractual trust
and goodwill trust. Competency trust refers to the expectation that a partner can
perform at a set level. It is defined as “that group of skills, competencies, and
characteristics that enable a party to have influence within some specific domain”
 26,3

186
IJBM

Table I.

relationship
for the success of a
literature that are critical
Variables identified in the
Researcher Industry Relationship success variable

Adobor (2002) Business-to-business Trust, communication

Anderson and Narus (1990) Man/distrib Satisfaction, cooperation, Trust, communication
Barnes (1994) Services Communication, care, honesty, trust, commitment, satisfaction, no bonds
Blenkhorn and Mackenzie (1996) Buyer-seller Interactions, investments, satisfaction, trust, commitment
Czepiel (1990) Services Trust and commitment
Doney and Cannon (1997) Buyer-seller Trust increases the likelihood of a long-term relationship
Dwyer et al. (1987) Buyer-seller Trust, commitment
Ganesan (1994) Retail/supplier Commitment, trust, and satisfaction
Garbarino and Johnson (1999) Customers Commitment, trust, communication
Gummesson (1996) Buyer-seller Collaboration, trust, risk, longevity, closeness
Halinen (1996) Services Attraction, trust, and commitment impact on satisfaction
Han et al. (1993) Industrial Mutual Trust, commitment, and satisfactory role performance
Handfield and Bechtel (2002) Supply chain Trust
Hunt et al. (2002) Business-to-business Cooperation, trust, commitment, communication
Mohr and Spekman (1994) Retail/supplier Coordination, commitment, participation, and trust
Morgan and Hunt (1994) Retail/supplier Cooperation, trust, commitment, communication
Simpson and Mayo (1997) Retail/supplier Commitment, trust, satisfaction
Verhoef et al. (2002) Customer Trust, commitment, satisfaction
Wilson (1995) Buyer-seller Commitment, trust, satisfaction, adaptation, bonds, communication
(Mayer et al., 1995, p. 717). Contractual trust refers to each partner adhering to specific Relationship
written or oral agreements. Further, contractual trust is shown when partners uphold marketing
an ethical standard, namely that of keeping promises (Sako, 1992). Goodwill trust
refers to a willingness to do more than is formally expected. Consequently, goodwill
trust grows when a partner commits to be responsive to certain requests outside the
norm (Sako, 1992; Sirdeshmukh et al., 2002). Moreover, goodwill trust can be defined as
a behaviour from one partner to place the other partner’s interest ahead of his or her 187
own interest (Sako, 1992).
Whilst the body of literature on trust has grown over recent years, little research has
explored trust in the banking sector. Moreover, the types of trust that is relevant and
important for the banking sector. Consequently, this research will firstly ascertain
whether a three factor model of trust is appropriate in the banking sector and secondly,
how these components of trust are correlated to a relationship manager’s financial
performance. Therefore, the following hypotheses are proposed:
H1. A three factor model of trust is applicable for the banking industry.
H2. A relationship manager’s level of trust will positively influence their financial
performance.

Emotional intelligence
Emotional intelligence has its roots in social intelligence, the science defined by the ability
to understand and manage individuals (Mayer and Salovey, 1990). EI is the management
of the emotions of the self and of others. It is now considered to be as imperative to an
individual’s success at work and in other social contexts as general cognitive intelligence
or technical skills (Goleman, 1998; Dulewicz and Higgs, 1999, 2000). Popularized by
Goleman’s (1995) bestseller Emotional Intelligence. Why It Can Matter More than IQ,
research into EI in the management field has been increasing at an exponential rate;
however EI research in the realm of marketing has been slower to take off.
Mayer and Salovey (1990) presented a three-part model for EI. They postulated that
EI involves appraisal and expression of emotion, in the self and in others. This includes
awareness of verbally and non-verbally expressed emotions. The second component
involves regulation of emotions in the self and in others. The third component involves
utilizing emotions so as providing flexibility in planning, creativity in thinking,
motivation and the ability to redirect attention. The original model was revised to
include cognitive components previously neglected. It consists of:
.
perception, appraisal and expression of emotion;
.
emotional facilitation of thinking;
.
understanding, analyzing and employing emotional knowledge; and
. reflective regulation of emotions to further emotional and intellectual growth.

The model allows for mastering these and their sub-components in sequential order,
and promotes the concept that EI can be learned.
One area where the influence of relationship marketing has impacted customary
practice is personal selling. Weitz and Bradford (1999, p. 241) stated that:
[. . .] changes in the traditional personal selling and sales management activities are needed to
support the emergence of partnering role for salespeople.
IJBM In certain selling situations, like in the B2B banking environment, salespersons’ roles
26,3 are changing in style so that they are becoming relationship managers, where their
main goal is to develop long-term relationships with key customers (Cravens, 1995).
One of the critical skills needed for these relationship managers is interpersonal
communication and the ability to manage conflict in the relationship (Weitz and
Bradford, 1999). EI has been shown to develop the communication and interpersonal
188 skills needed to develop and improve relationships with key customers
(Deeter-Schmelz and Sojka, 2003).
Whilst EI has been identified as a critical component of effective selling (Goleman,
1998), research linking EI to relationship marketing and selling is limited (Sojka and
Deeter-Schmelz, 2002; Deeter-Schmeiz and Sojka, 2003; Rozell et al., 2004). Of the
research that has been conducted, EI has been shown to increase a salesperson’s level
of customer-orientation (Rozell et al., 2004) and sales performance (Deeter-Schmeiz and
Sojka, 2003; Higgs, 2004). However, there are some important limitations to these
studies. These include the use of self-reporting scales, or qualitative assessment
measuring EI, customer orientation and performance (Rozell et al., 2004).
The importance of developing relationships with business partners in the banking
sector is evident. However, one would assume that a person’s ability to manage their
emotions and the emotions of others would help in the relationship development
process. Surprisingly however, very few studies have tried to develop a link between
relationship marketing/selling, emotional intelligence and performance. Consequently,
the following hypothesis is proposed:
H3. Relationship managers’ emotional intelligence is positively associated with
their financial performance.

Methodology
Procedure
Both bank managers (in charge of the day-to-day running of the branch and the
development of relationships with residential customers) and relationship managers
(dealing one-on-one with the banking needs of small-to-medium business customers) at
branches of a major international bank in Australia were e-mailed an information sheet
explaining the study. The e-mail contained two hyperlinks, one to an online version of
the MSCEIT (described below). The other led the respondent to an online questionnaire
designed to explore elements relating to the development of trust. The MSCEIT
assessment took approximately 30 minutes to complete. Scores and detailed resource
reports were then generated by the test administrator, Multi-Health Systems (MHS).
The trust questionnaire took about 20 minutes to complete. A high response rate was
achieved for this sample (77 per cent). Respondents were geographically spread across
regional Australia. No emphasis on tenure or performance of the respondents was
exhibited. The data was collected in November 2004.

Participants
The original sample was made up of both relationship managers (n ¼ 92) and branch
managers (n ¼ 129). This sample of (n ¼ 221) was used to examine the first
hypothesis. The increased statistical power was needed to perform exploratory and
confirmatory factor analysis. After a solution had been identified for the components of
trust, analysis was conducted for hypotheses two and three on the sample of
relationship managers only. Some characteristics of the sample are illustrated below in Relationship
Table II. The relationship managers surveyed ranged in age from 25-66 years. There marketing
were a higher proportion of males (88 per cent) than females (12 per cent).

Measures
Emotional intelligence. The instrument employed to test the managers’ emotional skills
was the Mayer-Salovey-Caruso Emotional Intelligence Test (MSCEIT) V.2. The 189
MSCEIT provides an aggregate EI score and four Branch scores:
(1) perception of emotion;
(2) integration and assimilation of emotion;
(3) knowledge about emotions; and
(4) management of emotions.
The advantage of using the MSCEIT over other measures of EI is that it measures each
manager’s actual ability to perform tasks and solve emotional problems. In contrast,
other EI measures take a subjective assessment (self-report) of emotional skills based
on the manager’s perception of his or her emotional ability (Goleman, 1995; Bar-On,
1997). Because self-report measures lack psychometric support (particularly
discriminant validity from the Big Five personality dimensions), Conte (2005)
comments that ability-based EI measures are likely to receive continued attention.
Furthermore, the MSCEIT is considered by the researchers to be one of the most
accurate measures of EI available. In a recent study by Mayer et al. (2003), the
reliabilities of the total scale and branch levels were all above 0.75. For all scales in the
MSCEIT, the average internal consistency reliability was 0.68 for consensus scoring
and 0.71 for expert scoring. That is, it is a highly reliable test at the Branch, Area and
Total scale levels according to Mayer et al. (2002). Additionally, a number of other
studies have found support for the MSCEIT’s fit with the four-factor EI model (Day
and Carroll, 2004; Palmer et al., 2005).
Trust measures. The items for the trust scale were adapted from a number of previous
studies (Sako, 1992; Mayer et al., 1995; Sirdeshmukh et al., 2002). Whilst there is no
consensus in the literature, the general view is that trust is made up of three constructs,
sometime described as competency trust, contractual trust and goodwill trust (Sako,
1992). A total of 15 items (seven-point scale, strongly agree to strongly disagree) were
included to ascertain whether a three factor model held for relationship managers.
Performance measures. Performance data were supplied by the banking organization
and collected as part of their biannual management performance review. Performance
measures for both bank managers and relationship managers were presented as a
number calculated between 1 and 5. For the relationship managers this number came
from the profit made for the bank in the first six-month period of 2004.

Male (n) Female (n) Total

25-34 17 4 21 Table II.

35-44 44 2 46 Distribution of
45-54 17 4 21 respondents by age and
55-70 3 1 4 gender (n ¼ 92)
IJBM Findings
26,3 Some interesting findings emerged from this study. Whilst this research was
exploratory in nature, there were still some significant results that enhanced our
understanding of the development of trust and the links between trust, EI and a
relationship manager’s financial performance.
The first hypothesis explored the dimensionality of the trust concept in relation to
190 bank managers (both branch and relationship). The object was to identify the factors
that made up total trust in a banking context. SPSS 11 was used to perform factor
analyses (Principal Components, using Varimax rotation) with the trust items
generated in the scale development phase. A three-stage approach was adopted for
eliminating items. Items were taken from the scale that:
(1) cross-loaded at 0.4 or more on two or more factors;
(2) loaded less than 0.4 on any factor; and
(3) were included in factors comprising less than three items.

From the factor analysis a three-factor solution emerged as was theorised. Following
on from the exploratory factor analysis, a confirmatory factor analyses was performed
using structural equation modelling (EQS 6.1). Model 1 (in Table III) met almost all
benchmarks for the fit indices. While the standardized residuals did not reveal any
particular variables to be problematical, it was noted from the exploratory factor
analysis that the loadings for trust item 3 and trust item 15 were lower than for other
variables in all the scales, as were the communalities on extraction. In view of this, a
model was tested that excluded these variables. This resulted in a substantial
improvement in the fit indices as can be seen in model two (shown below). The second
model was symmetrical, more parsimonious than the first and provided a better fit to
the data, so it was preferred over the original version.
Consequently, a three-factor solution was identified for trust in a banking context.
The three factors were titled Dependability trust, Knowledge trust and Expectations
trust, as can be seen in Table IV. For these factors all Cronbach Alpha’s exceeded
minimum acceptable levels (Hair et al., 1992). Dependability was seen to relate to the
bank/relationship manager delivering on customer requests. Dependability is about
delivering on the contract between the manager and the customer, whether the contract

Index Benchmark Model 1 value Model 2 value

Ratio to degrees of freedom 2 1.359 1.066

Bentler-Bonett Normed Fit Index (NFI) 0.90 0.893 0.937
Bentler-Bonett Nonnormed Fit Index (NNFI) 0.90 0.958 0.994
Comparative Fit Index (CFI) 0.90 0.969 0.996
Bollen Fit Index (IFI) 0.90 0.969 0.996
McDonald Fit Index (MFI) 0.90 0.969 0.997
Lisrel Goodness of Fit Index (GFI) 0.90 0.957 0.976
Lisrel Adjusted GFI (AGFI) 0.90 0.930 0.955
Table III. Root mean squared residual (RMR) 0.05 0.016 0.016
The structural models: Standardized RMR 0.05 0.049 0.044
goodness-of-fit Root mean sq. error of approximation (RMSEA) 0.08 0.039 0.017
comparisons 90 per cent confidence interval of RMSEA Or includes 0.05 (0.000, 0.063) (0.000, 0.056)
 Relationship
Factors Variables Cronbach (a)
marketing
Dependability Do what I say I am going to do 0.70
Deliver on promises made
Follow up on customer requests
Knowledge Have a knowledge of (the Banks) products 0.63
Have a thorough knowledge of the rural and regional 191
banking industry
Have a knowledge of the customer’s business
Exceeding expectations Do more than is formally expected 0.63 Table IV.
Help with additional requests that are outside the Trust construct for the
normal Deliver beyond my customer’s expectation banking industry

is written or verbal, big or small. It is whether the manager follows through on requests
made. The second construct relates to the knowledge the manager has in all areas of
the financial business, not only the products of the bank, but also knowledge of the
banking industry and the customers business. The final factor of the trust construct is
exceeding expectations of the customer. This relates to doing more than is expected in
the relationship, “going the extra yard”. The items that made up these factors are
shown in Table IV.
The second hypothesis examined the link between trust and performance. For this
hypothesis only the relationship managers sample was analysed. The reason for this is
two-fold; firstl the way financial performance was estimated by the bank is different
for bank managers in comparison to relationships managers. Second, relationship
managers have a greater opportunity to develop long-term relationships with their
business customers where trust and emotional intelligence would be more relevant.
Correlation was used to establish significant relationships between trust and financial
performance. Both total trust and the three factors of total trust were examined to
ascertain their impact on the financial performance of the relationship manager. As can
be seen in Table V, total trust is significantly correlated with the relationship
manager’s financial performance (0.352 *, 0.022). However, when the factors are
examined, only Knowledge Trust was shown to have a significant correlation with the
financial performance of the relationship manager (0.514 * *, 0.000).
The third hypothesis examined the link between relationships managers’ financial
performance and their level of emotional intelligence. A correlation analysis was run to
identify which of the eight task constructs, the two area constructs (experiential EI and
strategic EI), and the total EI construct, are associated with financial performance. The
results of this correlation analysis are shown in Table VI.

Financial performance of relationship managers

Dependability trust 20.020

Knowledge trust 0.514 * *
Expectations trust 0.245
Total trust 0.352 * Table V.
Correlation between trust
Notes: * * Significant at the 1% level; * significant at the 5% level and performance
IJBM
Performance of relationship managers
26,3
Faces 0.183
Pictures 0.327 *
Sensations 0.142
Facilitation 0.366 * *
192 Changes 0.096
Blends 2 0.042
Emotion management 0.383 * *
Table VI. Emotional relations 0.118
Correlation analysis Experiential EI 0.353 * *
showing association Strategic EI 0.150
between performance and Total EI 0.292 *
the eight emotional
intelligence constructs Notes: * * Significant at the 1% level; * significant at the 5% level

The results indicate that, for relationship managers, three of the emotional intelligence
constructs (pictures, facilitation and emotion management) have moderate correlations
with financial performance. Further, when grouping these variables, experiential EI
had a significant positive correlation with performance, however strategic EI did not.
The most noteworthy finding is that total EI had a significant positive relationship
with financial performance (0.292 *).

Discussion and implications

The strategic shift towards relationship marketing strategies in the financial services
sector is based on the assumption that customers who are engaged in a stable
relationship will experience higher switching costs over time. In the context of
technological advancements that give customers more power over their financial data
it is imperative that financial service providers find new ways to address customer
needs, develop a competitive advantage and inspire customer loyalty. The
development of liking has already been shown to enhance relationship development
in the banking sector (Hawke and Heffernan, 2006), now trust and emotional
intelligence have been highlighted as components in development of successful
relationships in a business-banking context.
Relationship marketing works by stimulating emotional linkages such that a
high-trust relationship can be built, within which an array of products and services can
be sold. The concept of trust is particularly salient in the context of the financial
services sector because customers are not in a strong position to make objective
assessments of service quality. But multi-dimensional models of trust such as Johnson
and Grayson’s (2005) indicate that emotionally based trust has a cognitive component.
Cognitive trust is a customer’s confidence or willingness to rely on a service provider’s
competence and reliability. Johnson and Grayson (2005) found that the service
provider’s expertise (assessed in terms of a service provider’s level of knowledge and
experience concerning the focal service) is an antecedent of cognitive trust. Our
research seems to be consistent with this finding by first, observing the existence of
three elements of trust in this situation and second, by revealing that the relationship
manager’s level of competency based trust was strongly correlated with performance.
 The findings relating to H1 furthered the notion of this multi-dimensional nature of Relationship
trust by identifying that trust in the financial sector is comprised of three constructs:
dependability, knowledge and exceeding expectations. This is in keeping with this
marketing
study’s previously cited research that highlights that various types of trust that exist.
Blois (1999) points out that “blanket trust” is seldom applied to another party. That is
we trust someone within a specific context and/or for a particular purpose. Similarly,
Johnson and Grayson (2005) have shown that differing dimensions of trust can be 193
empirically distinguished and have both common and unique antecedents.
Understanding trust as a multi-dimensional multi-faceted concept has important
managerial implications which are further revealed by considering the findings of H2.
The results of the second hypothesis showed that total trust has a significant but
weak correlation to performance. However, knowledge (or competency based trust) has
a strong correlation to performance. This finding helps address a central question in
relationship marketing, that is, can trust and trustworthiness be created (Blois, 1999)?.
Clearly, not all efforts to build trust will have equal outcomes in terms of performance
when little attention is paid to what aspects of trust are relevant to the specific business
relationship context. An important implication is that the simplistic view that payoffs
from efforts to build trust are inevitable should be rejected and also, that managers
need to be alerted to the types of behaviours that build and erode consumer trust
(Sirdeshmukh et al., 2002).
The bank may see that its challenge is to help relationship managers build total trust
relationships with their clients (Hart and Johnson, 1999) yet it is an irony that efforts to
build trust may have the unintended consequence of diminishing trust when motives
may be questioned. Blois (1999) argues that it is impossible to create trust because of the
practical issue that the more a person tries to demonstrate their trustworthiness, the
more they are likely to arouse suspicion that they are behaving with manipulative intent.
For example, a common technique for building affective trust is for the financial advisor
to recommend a product that involves no personal gain or commission and to articulate
this in order to win the customer’s confidence. If the customer was aware of such a
technique, trust could be damaged. Yet if the advisor understood that it was his or her
expertise that the customer primarily relied upon he/she would focus more on
communicating such expertise than winning affective trust.
While it is not possible to make one party trust another, it is possible to create the
context within which trustworthiness might be perceived (Halliday, 2003). That is, in
contexts where those involved demonstrate the capability of being able to fulfil a
promise. The relationship manager needs to be able to provide evidence of those
capabilities and competencies, which his or her clients believe to be relevant as a
prerequisite to being regarded as trustworthy. Entering into contracts that can be
fulfilled is one way of demonstrating trustworthiness.
Another way to harness the power the relationship manager’s expertise is in
building the organisation’s reputation for trustworthiness. For example, Hart and
Johnson (1999) make the following practical suggestions:
.
establishing a mentoring program that leverages the expertise of its more
experienced agents;
.
stepping-up product training programs; and
.
establishing “product expertise centres” that provide specialised information to
agents and their customers when they need it.
IJBM Further, the financial services provider can demonstrate knowledge or expertise by
identifying latent financial problems that the customer is unaware of. That is, financial
26,3 service providers can change their attitude towards business from that of selling
loosely-linked products to selling individualised solutions based on a relationship
approach.
Training in the enhancement of trust is recognised as important for relationship
194 managers but further research is required that assists firms in identifying training
requirements specific to their needs. It would be logical that in an effort to build
trusting relationships between the financial adviser and the client, firms would
increase their training in interactive/people skills. But in the light of the importance of
competency based trust it may be wiser to adhere to the old adage: hire people skills
and train technical skills whenever possible (Chambers and Craft, 1998).
The third hypothesis in this study explored the link between relationship
marketing/selling activities and EI. Findings suggest that the higher the level of EI a
relationship manager possesses, the higher their profitability for the bank. Consequently,
this study adds to the limited research into the area of EI and relationship marketing. Of
the research that has been conducted, Sojka and Deeter-Schmeiz (2002) qualitative study
of 11 sales professionals and Higgs’ (2004) quantitative study of employees in a call centre,
had similar findings to this study. However, this study uses an ability test for EI
(Mayer-Salovey-Caruso Emotional Intelligence Test, MSCEIT V.2). Further, this is the
first study of its type to be conducted in the banking sector.
A number of other studies have found links between EI and performance. Further,
EI has been linked to transformational leadership (George, 2000; Prati et al., 2003; Daus
and Ashkanasy, 2005), career success (Daus and Ashkanasy, 2005) and team
performance (Feyerherm and Rice, 2002). Research has also shown a positive
relationship between EI and individual job performance. Evidence from recent studies
indicates that EI skills are important in predicting job performance for at least some
types of jobs. In particular, a study by Lopes and colleagues in 2004 (Daus and
Ashkanasy, 2005) of 44 analysts and clerical employees demonstrated the relationship
between EI and work outcomes (dependent on job performance). However, the question
of whether there is a clear link between EI and work performance is a contentious one
(Antonakis, 2005) and it is possible that trust and its relative importance within the
work context could be a mediating factor.
These findings have a number of implications for business practice. First,
relationship managers should be aware of the concept of EI, their level of EI and how
they can improve the various elements of EI. This is because an increase in EI should
result in enhanced relationship management capability and may in turn increase
profitability. While (Mayer et al., 1999) offer caution with regard to expecting too much
of EI, for many people, little has been taught about emotions and even some basic
learning about emotional reasoning and emotional management can provide a great
deal of pay-off in improved social functioning.
Further, the human resource management departments of banks should consider EI
when recruiting staff to the position of relationship managers. Staff with high EI, and
an awareness of its importance, should be better able to generate effective
relationships, particularly in customer service positions (Mayer et al., 2004a).

Limitations and conclusions

Two main limitations are associated with this study. First, there was an issue with the
performance data that had been collected by the bank. As we had not collected this
data, we had no real way of determining the reliability and validity of the data. Whilst Relationship
this study did find significant links between trust, EI and financial performance it is marketing
expected that more reliable and valid performance data would have increased the
significance of the findings and the statistical techniques that could have been utilised.
The second limitation related to the sample. Whilst the total sample was appropriate
(n ¼ 221), the sample size for the relationship managers was limited (n ¼ 92). Further,
the sample came from a range of branches of one major international bank in regional 195
Australia (regional Australia refers to all of Australia except the major capital cities).
As a consequence, the generalisability of results is in question. Subsequently, it is
suggested that further research be conducted in other banks and also across cultures.
Relationship marketing and relationship selling are critical to most, if not all,
organisations if they are going to be successful in the marketplace. One of the most
important skills in relationship marketing/selling is the ability to be able to develop the
relationship. Consequently, one would assume that a person’s ability to develop trust
and to manage their emotions and the emotions of others would help in the relationship
development process. However, the research linking EI to relationship marketing and
selling is limited (Sojka and Deeter-Schmeiz, 2002; Deeter-Schmeiz and Sojka, 2003;
Rozell et al., 2004).
This paper is an important initial step in highlighting the significance of EI and
trust in the relationship marketing/selling arena. Findings suggesting that the level of
relationship managers’ EI and trust building potential is positively correlated to their
financial performance have important implications for the banking sector. However, as
stated, this is a tentative first step into this field in the banking industry and as such,
further research is needed.

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Further reading
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Corresponding author
Troy Heffernan can be contacted at: troy.heffernan@plymouth.ac.uk

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