Risk as moderator of the trust-loyalty relationship

Abstract

Purpose – The purpose of this paper is twofold: first, to investigate the role of perceived risk as a moderator of the key relational mediators of satisfaction and trust, and second, to test the influence of perceived product value and social bonding as antecedents of brand satisfaction and brand trust to understand their effectiveness under different risk conditions. Palmatieret al.(2006) call for the study of moderators of relational mediators, such as trust and satisfaction, which may determine the effectiveness of different relationship marketing strategies. Design/methodology/approach – This study investigates business-to-consumer relationships between a car brand and its customers, applying structural equation modeling. Findings – Results show that perceived risk moderates the mediating role of both brand trust and brand satisfaction on relationship outcomes. When perceived risk is low, brand satisfaction alone determines brand loyalty, whereas when perceived risk is high, brand trust exclusively determines brand loyalty. Thus, the effectiveness of social bonding tactics as a prime determinant of trust is contingent on consumers’ risk perceptions. Research limitations/implications – A limitation of the present research is its focus on one product category. Further investigations should be conducted to expand the findings’ generalizability. Practical implications – The often-recommended social bonding between boundary spanner and customers is only an effective relationship marketing strategy in situations of high perceived risk. Originality/value – This study clarifies the role of perceived risk in marketing relationships by testing alternative models.

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