Requirement of trust in Relationship Marketing
“Trust can be conceptualized as existing when one party has confidence in an exchange partner’s reliability and integrity.” (Morgan, R.M. & Hunt, S.D., 1994). Of course there is a process to come towards gaining the party’s trust. Therefore a customer relationship must be developed.
Successful Relationship Marketing is launching your activities for building up a relationship with your customer and he/she must be willing to put confidence in your business and commit himself towards it. Therefore a lot of factors must be taken into account.
The KMV (Key Mediating Variable) Model of Relationship Marketing
Source: Morgan, R.M. & Hunt, S.D., 1994
This module shows the importance of Relationship Commitment and Trust in a customer relationship, with its involving elements, the antecedents (highlighted in yellow) and the outcomes (highlighted in red).
Create trustworthiness in your company policy
In general, companies use loyalty programmes in their company policy to create trustworthiness. If we go further into detail, we can state that trustworthiness can be used as a moderator in loyalty programmes.
“In customer loyalty programme context, Trustworthiness is defined as the extent to which a consumer believes that a retailer offers a loyalty programme for the purpose of rewarding its best consumers.” (Journal of Customer Behaviour, 2008)
There are reasonable effects on the consumer-retailer relationship when it comes to the perceptions of the consumer towards trustworthiness of the retailer’s loyalty programme. People are more affected by a loyalty programme if they believe it is reward-driven instead of sales-driven. When there is a return on customer loyalty, perceptions of trustworthiness are higher. In addition the perceive fit, loyalty intention, relationship quality and relationship investment for the consumer-retailer relationship is enhanced.
Trustor VS Trustee
By giving the example of using a loyalty programme we can say that it is an efficient way to create trustworthiness in your company. But what are we trying to say when we are talking about trustworthiness? How can you make sure you are trustworthy towards you customers?
There is no definition to explain trustworthiness. Why not? Trustworthiness is not only one ‘word’. It is made of many different characteristics. According to Mayer et. al, the three main characteristics of trustworthiness are ability, benevolence and integrity.
- Ability: The group of skills one party has in a certain domain.
- Benevolence: The way in which the trustee wants to do ‘good’ towards the trustor, not only with a profit motive.
- Integrity: The quality of being honest and have strong moral principles.
Trust is being created between a trustor and a trustee. Before there can be trust, the trustor has to check if the trustee can be trustworthy or not. The best way to accomplish this is to perceive the ability, benevolence and integrity aspects of the trustee. This is the main link between trust and trustworthiness. Once the trustor is convinced, he will have the propensity to trust the trustee and they can start their relationship. The following figure explains this theory.
Source: Mayer et al., 1995
Trust and trustworthiness between companies and people already exist for a long time, but what about trust and trustworthiness through the Internet?
(Dis)advantages of E-commerce
Nowadays, with the immense use of the Internet, more and more companies are going online. For some companies it has become an indispensable tool to sell their products or services. They create their own websites, insert product-info and give customers the opportunity to buy their products online. E-commerce has become an advantage, as well for the companies as for the consumers.
Customers:
- The internet is a mass source of information about products.
- Products have the ability to be cheaper over the internet as in the store
- You get the opportunity to let the product be delivered at your doorstep. The products will come to you, not the other way around.
- …
Companies:
- You have the opportunity to reach more potential customers as you had before
- Your customer database is easier to maintain
- …
But there is still one major question which every consumer has: “Can I TRUST this?”. The quality and state of the product is one thing. Often pictures are missing and there are no guarantees that the products is not fake or looks like what the customer has in mind. Even if pictures are available, you can only judge the product by seeing it. (Hanai, T., & Oguchi, T., 2009).
Thereafter, if the order is placed it still needs to be delivered. What happens if the client is not at home, where will the product be shipped too? When will it be delivered? Amazon f.e. gives the product to your neighbors when you are not at home, but what if you don’t trust them?
For online delivery, you need to give your VISA number. What are the chances that other people will abuse this sort of information? And finally the most important question: Will I receive my product?
Some contextual cues, such as location, appearance of the store, etc. may be missing on the web. However, online there can be cues too, for example a set of hypertext links that surround a company.
Companies know that customers are more influenced by the content of trust-assuring arguments when the price of a product is relatively high than when it is relatively low. (Dongmin, K., Izak, B., 2009) So customers should be careful and share information with eachother.
Can you trust online user reviews?
Everybody can write an online review of a product on comparison websites like Amazon, Dell, Yelp and many others. But can online product reviews be really trusted?
People who work for the company that make the product can write misleading positive reviews. Besides that there is also the possibility that people just have limited knowledge about the product. Beau Brendler, director of consumer Reports’ Webwatch website said in an interview: “ Fake reviews happen all the time, but proving it, quantifying it, is very hard. However online consumer reviews are among the most trustworthiness sources of production information. A study done by Nielsen Company showed that the top three most trusted sources are (Luhn, Robert, 2009):
- Recommendations from consumers
- Newspapers
- Consumer opinions posted online
Creating fake positive reviews usually involve creating multiple accounts to generate a positive online conversation on a website. Another trick is to pay bloggers or send them incentives in order to get a positive review of a product in return. Amazon’s spokesman of corporate communications Patty Smith believes that there is no way 1000 of reviews can be manipulated. When potential customers read 25 negative reviews, one outstanding good review won’t change their mind.
Nowadays there is software that can track suspicious patterns in online users reviews. There are even review panels that are being hired by websites who screen reviews before they are being published.
As a consumer you should keep the following in mind when reading a review:
- Beware of illogical positive reviews.
- Consider multiple sources.
- Check for consensus.
- Look for a personal touch in reviews.
Hanai, T. and Oguchi, T. (2009) ‘How do consumers perceive the reliability of online shops?’. Journal of Psychosocial Research on Cyberspace, 3(2), article 6
Dongmin, K. and Izak, B. (2009) ‘Trust-Assuring Arguments in B2C E-commerce: Impact of Content, Source, and Price on Trust’. Journal of Management Information Systems Winter 10, Vol. 26, No. 3, 175–206
Stewart, K. J. and Malaga, R. A. (2009). ‘Contrast and Assimilation Effects on Consumers’
Trust in Internet Companies’. International Journal of Electronic Commerce. Spring, Vol. 13 Issue 3, 71–93, 23
Luhn, R. (2009) ‘Can You trust online user reviews?’. PC World. Jan, Vol. 27 Issue 1, 30–32
Ha, S. and Stoel, L. (2008) ‘Promoting customer-retailer relationship building: influence of customer trustworthiness of customer loyalty programme marketing’. Journal of Customer Behaviour. Vol. 7, No. 3, 215–229
Mayer, C.R., Davis, J.H. and Schoorman, F.D. (1995) ‘An Integrative Model of Organizational Trust’. Academy of Management Review 20(3), 709–734
Morgan, M.R. and Hunt, S.D. (1994) ‘The Commitment Trust Theory of Relationship Marketing’. Journal of Marketing 58, 20–38
6 comments:
Hi! I like the well developed arguement, the positives and negatives of Internet shopping and also the disadvantages of feedback as a tool for trust. You spoke about the possibility for online loyalty, do you think it is possible for a website to have a loyalty scheme/ programme for example Boots, the chemist, has one of the most popular loyalty cards in the UK but it is undeveloped for use on it's website. What recommendations could you offer them?
The article clearly explained how companies can gain consumer trust and used the scenario of a loyalty program to show how organisations can boast their trustworthiness... hence what are the factors of a loyalty program that fosters trustworthiness?
Thanks for your findings!
We would like to answer you both as it concerns both your questions.
As we look at your example given of the chemist 'Boots', their online loyalty programme can maybe be less marketing oriented, but more company policy judged, for example providing the consumer with interesting information. And in a way it can be looked at as being rewarded for choosing the Boost website to find information.
Every company, like multinational firms with elaborate budgets or an SME with limited budget, uses loyalty programmes. However, it can be different in approach.
As we look at gaining trustworthiness, it can also affect every reward-driven factor such as simply responding to your customer on a friendly, informative way as expected by your customer. It can also be seen as a marketing activity and literally reward your consumer with for instance material things, for example some bonus points which they can collect for complementary consumer goods or a reduction given on a product.
Both the personal approach as the more marketing-oriented approach has the purpose to attract new consumers and create loyalty amongst them. Additionally, trust is achieved through loyalty programmes.
I hope this contributes to the understanding of how big and relatively simple this subject can be looked at.
Do you think Mayer et al.'s (1995) work is dated now? and why?
Husni
There is no doubt that everything Mayer et al. have said is still dated. After all these years, trust is still one of the most important factors to take in account in your company. Without trust between the employees and members of your company, there can be no good cooperation, which leads to bad results for your company. Especially the relationship between trust and risk is still a much-discussed point nowadays. These days, with the current crisis, companies are more suspicious than before. They won’t trust anyone or anything before they are sure there is no risk of failing or having problems, after they have made their decision.
According to Mayer et al., confidence between the trustor and trustee is a very important factor, and it still is. How could you start a ‘business’ relation without having confidence in each other?
Of course, when Mayer et al.’s article was written, they were talking about personal, face-to-face relationships. Nowadays with the immense use of the Internet, there are being set up more and more online relationships. Especially when we are talking about companies, who are using the Internet, trust is very important. If you want to start an online relationship with a company, e.g. buy their product, you have to be sure you can trust them. It’s more difficult to finally decide if you can trust someone or something online, than personal.
Like we said, the article is still up to date when we are talking about personal relationships. But with the upcoming use of the Internet, online relationships are becoming more and more important, which means the article could use a little adjustment.
Obviously, there are lot ways to build traffic on your site. Moreover, we can even build traffic offline through having POP sign displays outside our establishments. This makes great traffic and do effective conversion too.
Post a Comment