Trust and trustworthiness are two terms whose role in the growth and success of relationships cannot be ignored. It becomes even more critical when one makes reference to the relationship that exists between an online business and its customers. Particularly, at a time when relationship marketing has been thought to establish, develop, and maintain successful and mutually beneficial long term relational exchanges with customers, they cannot be overemphasised.(Morgan and Hunt 1994) In this article, the concept of trust and trustworthiness are highlighted and explained in detail. However, one of the two is considered more crucial to online businesses.
Trust, according to Mayer et al (1995), ‘is the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party’. In this definition, the term, ‘trustor’ refers to the party who is exposed to the actions of another party (trustee). The trustor (customer) recognises and analyses the risks involved when exposed to the actions (products and services) of the trustee(online business) but chooses to be vulnerable all the same whether there is a control system that ensures that his expectations are met or not. People’s ability to trust varies due to the differences in their personality and experiences when a risk is perceived.
Risk is the ‘culprit’ here because without it, the need to build trust in customer - online business relationship would not be necessary. Khan et al (2009), identifies types of risk to include functional risk, physical risk, financial risk, social risk, and time risk. Functional risk involves the uncertainty in a product’s ability to satisfy the need or want for which it is bought. Physical risk is about the safety of the customer using a product. Here, the customer is also at risk of being hurt if the personal information given out goes into the wrong hands. Financial risk has to do with high involvement products where a customer would have to pay a high price for a product. This includes the fact that customers are paying online and can be duped or have their credit card information accessed by fraudsters. Social risk is the risk of being ridiculed or coming to some disrepute by using a particular product or brand. While time risk looks at when a customer is at risk of being forced to keep a product bought because of wrong choice.
Due to these risks perceived and involved in online transaction, online businesses must be able exhibit attributes that make them worthy of their customers trust. This will not only ensure repeat purchases but will also make them loyal to the brand. Kharouf and Sekhon (2008) assert that this loyalty can be attitudinal or behavioural. Attitudinal loyalty can be described as a type of loyalty where a customer develops a strong emotional attachment to a brand and buys the brand no matter what the competition has to offer. While behavioural loyalty is about repeated purchases that does not depict any form of attachment. Rather, it may mean that it is more convenient to buy the brand or because an incentive has been offered.
Trustworthiness has been defined by Ben-Ner et al (2009), to mean ‘the willingness of a person B (on-line business) to act favorably towards a person A (consumer), when A has placed an implicit or explicit demand or expectation for action on B’. Consumers have expectations they want met. Where this is absent, trust is undermined. Hardin (2002:1) says that ‘to ask any question about trust is implicitly to ask about the reasons for thinking the relevant party to be trustworthy'. Mayer et al (1995) argues that the attributes that a trustee exhibits will determine how great or small the level of trust will be. They are of the view that the factors that lead to trust can be summarised in three attributes: ability, benevolence, and integrity, which they referred to as the ‘factors of trustworthiness’. These three characteristics determine how much an online shop is perceived as being trustworthy.
Ability: This refers to the competence of the online business to deliver its promises. The consistency and the competence with which they satisfy and exceed their customers’ expectations in the kind of service and product they deliver will cause their customers to perceive them as being trustworthy. This will in turn engender trust in the mind of their customers.
Benevolence: Online communities must never be seen as being exploitative and only interested in making profits. But should be seen as aware and sensitive to their customers needs, and interested in their welfare. They must be perceived as caring and customer-oriented.
Integrity: This has to do with the online businesses being consistent in following a set of principles and values that are in alignment with those of their customers. They should be seen as reliable, open in communication and honest such that customers do not see them as deceptive. A survey of 1,600 customers on their changing attitudes to financial services reveals that more than 71% do not trust the industry, while one out of every ten totally distrust marketing information given by banks.(Fund Strategy,2009). This stresses the need to build a relationship based on organisational trustworthiness.
In addition, because customers may have questions about products and services online, exhaustive information must be provided to address these concerns.
In conclusion, it is important to note that the risks involved in online transactions make it necessary that online businesses should have trustworthiness attributed to them, if they are perceived to be worthy of trust. This will go a long way to encourage the intention to buy and actual financial risk taking (purchase) by consumers, as well as attitudinal loyalty in the long run.
References
Ben-Ner, A. and Frey, H. (2010) ‘Trusting and Trustworthiness: What are they, How to Measure them, and What Affects them’. Journal of Economic Psychology 31 (1), 64-79
Fund Strategy (2009) ‘SCAM- Second Coming Asset Management’. Fund Strategy 19 October, 39
Hardin, R. (2004) Trust and Trustworthiness. New York: Russell Sage Foundation
Khan, B. M., Shahid, S. A., and Akhtar, A. (2009) ‘Role of Trust: Brand Equity’. SCMS Journal of Indian Management, 12-22
Kharouf, H., Sekhon, H. (2008), Trustworthiness within the Hotel Sector: A structural Model, IIMA conference proceedings: India
Mayer, R. C., Davis, J. H., and Schoorman, F. D. (1995) ‘An Integrative Model of Organizational Trust’. The Academy Review 20 (3), 709-734
Morgan, R. M., and Hunt, S. D. (1994) ‘The Commitment-Trust Theory of Relationship Marketing.’ Journal of Marketing 58, 20-38
Hi,
ReplyDeleteIn 500 words can you please summarise Sirdeshmukh article on Trust and trustworthiness? and how can you apply it online or how it fits with what you wrote?
Sirdeshmukh, D., Singh, J., and Sabol, B. (2002). Customer trust, value, and loyalty in relational exchanges. Journal of Marketing, 66, 15-37.
Husni
@E-heros, Thank you for the comment.
ReplyDeleteConsumers trust, as well as, the trustworthiness of online businesses is crucial to the success of online businesses. Many customers take risk in buying online because over time they have formed a bond (trust) with the company to give adequate service on time, without any complications or fraudulent activity, thus making the customer loyal to the service provider.
The ability of a company to give quality service online and also provide everything stated on the website will gain them more trust and customer loyalty. Companies should not be seen as profit oriented by the customer because it will make them not come back again.
In relation to the question asked, in this era of relationship marketing, the place of trust and trustworthiness in online business can not be overemphasised. Berry (1996) explains that trust is the only tool of relationship marketing that is available to companies. Sirdeshmukh (2002), in their work, distinguished between trustworthiness and trust. They developed a multidimensional model where they recognised operational competence, operational benevolence and problem-solving orientation of frontline employees and management policies and practices as behaviours that enhance or reduce consumer trust in service providers like online business. They also tried to examine how the trust for frontline employees and managerial policies and practices enhance consumer trust, and as a consequence, consumer loyalty.
They examined the relationship between the trust for frontline employees and the trust for management policies and practices. They assert that when a customer trust and have a strong relationship with the frontline employees they are more likely to trust the management. The relationship a customer has with frontline employees will determine how the management is perceived by the customer
The online business is most at times the point of call. Customers go on line to search for information about products they want to buy. Therefore how they are attended to and the competence of those frontline employees in delivering on their promises is vital if the business is to be perceived as trustworthy.
Consumer loyalty, is crucial in the competitive world of the internet. This is because, it is the notion that an e-business is trustworthy that determine the level of trust consumers have for them. And more importantly, it is consumer trust that determines customer loyalty.