Managing for Total Trust

Requires

- Understanding trust building process

- Examine current processes, systems and align with total trust ethic

- Asking the right questions

Road to Total Trust

• Measuring and managing relationship benefits

• Shared values and opportunistic behaviour

• Effective communication

• Relationship investment

• Problem recovery

• According to C. Hart and M. Johnson

Road to Total Trust

• Claims: - commitment , being there when customers interact with firm- genuine concern, being able to communicate with customers to find their genuine concerns for the business

• Evert Gummesson, 2008, Total Relationship Marketing

Road to Total Trust

• Trust = Environmental Uncertainty

+ Own dependence + Partner’s coercive power use

+ Communication + Economic Outcomes

+ Satisfaction + Long Term Orientation

Claims external factors play a role in building trust relationships, therefore it is not just the sole responsibility of the company. Uncontrollable factors such as environment, economic outcomes and own dependence are outside the control of a companies marketing department.

(I Geyskens, J.. Steenkamp, N Kumar, 1998)

Measuring and Managing Relationships

• Greater the relationship with the customer the stronger the potential for a trust relationship

• Measure customer satisfaction

• What customers want now and in the future

• Prevent switching to competitors

• Difficulty with rebuilding trust relationships

Shared values and opportunistic behaviour

• Requires acting in customer best interests, and not taking advantage of customer vulnerabilities

• Very important when customer purchase risk is high

• Helps company image (ethical, moral, honourable etc)

Effective Communication

• Every interaction with a customer is a trust building opportunity

• To provide information

• To gather information on needs and preferences

• Use the data to find how they can most effectively build a trust relationship

Making the Relationship Investment

• Extent to which actions are interpreted as being well intentioned, meaningful and adding value and favourably impressed

• Willingness to take on risk, using resources and the risk of receiving nothing in return

Handling Problem Recovery

• Requires going the extra mile to solve customer issues, even if they are not responsible for the problem

• helps to build trust equity -> trust relationship

• If supplier is at fault, then quick action plans are necessary to recover form trust defects

Customers value of trust relationships

• Claims companies need to remove assumptions about what customer expect from them

• Bruce Lee – empty the cup before it filling it

• Certain customers may value trust relationships and seek suppliers that are most proficient at providing it

• “for a long period caring for existing customers was second to attracting new customers” (E Gummesson, 2008)

Challenges

• Not all companies have the resources to commit to trust building

• May impede other objectives such as performance objectives, commission based sales and company policies

• Relationship marketing is evaluated based on company profits, however profits also depend on variables outside the scope of marketing activities (T. Hennig-Thurau, K. P. Gwinner, D. Gremler, 2002)

Example

I’m not happy about my overdrawn fee

You’ve been a loyal customer for years, so I think we can waive that fee

I will continue to do business with your company because you treat me well

Example 2

I’m not happy about my overdrawn fee

Unfortunately Sir, company policy prevents us from wavering any fees this year. You’re going to have to pay it

In that case, my next loan is going to be with a different bank

Results

Companies that place short term goals ahead of customer relationships may lose out from gaining total lifetime benefit from a customer.

Example 1 – the Bank waived a small fee in favour of retaining a customer’s loyalty

Example 2 – the Bank chose to collect the fee but instead lost any future business from that customer