Trust

Trust in e-business: A key factor for your e-business?

A lot of research has been done so that the term trust to be defined. Scholars from variety of backgrounds, including psychology, sociology and marketing, have tried to identify its meaning - as a word, and as a factor that influences relationship between individuals (Buttner and Goritz 2008).

Trust has been described by Mayer et al. (1995) in two dimensions. Firstly, they consider it as willingness for risk to be undertaken. Therefore, it is a prerequisite for the trustor to be vulnerable and not having control over the action of the trustee. Secondly, trust is being examined with respect to its relationship with trustworthiness. In this point of view, trust represents trustor’s beliefs as to whether the trustee possesses certain qualities or not.

As it concerns the relationship trustor - trustee, three dimensions have been outlined as crucial ones so that this relationship to be established and transformed to a long term one. These are as follows: competence (is the trustee competent to fulfil what they have promised); Integrity (do they adhere to principles desired by the trustor); and benevolence (is the trustee interested in the trustor’s well-fare).

In addition, Mayer et al.(1995) also claim that trustworthiness depends on the level of trust, which on its turn defines the intention of a person to engage themselves in a market transaction and buy or not. So, the more a transaction is perceived to be a risky one, the more trust should have been possessed by the buyer if he / she is to be won as a customer.

This is in force in the off-line transactions. However, it is even of greater importance in the online space. Trust is a significant factor of an online relationship with customers because they ‘’live in a dangerous environment of privacy invasion and identity theft’’ (Chaffey and Smith 2008).

In a research implemented by Morgan and Hunt (1994), trust has been identified as one of the main factors for a relationship marketing to be built; it refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges.

Furthermore, the authors have stated that there are some different prerequisites that lead people to trust each other, or not, during interaction. The following have been presented as ones of necessity for trust to be built:

• People only trust those who have demonstrated their trustworthiness.


• Different people, with different background and experiences, personalities and cultures have different levels of propensity to trust.


• People trust people because of their behaviours.

Similarly, taking into consideration a b2b relationship in the online world, trust is difficult to be achieved, firstly because buyers have incomplete information about the suppliers. The only way, in which the supplier could gain customer’s trust successfully, is filling in the information gaps which customers can find (Koh, Fichman and Kraut 2009). Buyer’s trust towards the supplier can also be built through the accumulation of knowledge about the supplier; knowledge is developed through direct and repeated interaction between the buyer and supplier (Koh, Fichman and Kraut 2009).

Online purchase differs from a typical purchase experience ‘in a real life stores’. The typical purchase store offers costumer something tangible which eases the process of buying. On the other hand, the purchase online is more elaborated, users compare products, characteristics, prices, other people’s opinion and comparison with numerous of different web sites before coming up with a final purchase decision.

As this online purchase is rather more complicated companies have access to different online tools in order to attract customer. Some of these different tools are: social networks, blogs and word of mouth. One example of this marketing strategy is the one that Ford used to promote the ford fiesta and re-earn the trust of the American public.

In any case, trust is something difficult to be built, it takes a long time for customers to engage themselves with a company; much effort should be put on communication so that clients to be motivated to repeated the buying decision . However difficult might be for trust to be built, it is very easy to be lost; a simple mistake or a company getting bad reputation can cause the customers to switch off to a competitor, that is more trustworthy and better satisfy their needs. Additionally as Ofuonye et al (2009) figured on their research there are some critical factors that affect trust inside an e-commerce website. Whoever successfully deals with these factors then more easily can attract people on his e-business:

• Usefulness. How relevant is a website helping users to achieve their goal?


• Ease of use. Are the costumers able to find the product they want to buy?


• Benevolence. Will the website act according to the user’s best interest?


• Competence. Is the website author possesses adequate skills, knowledge and abilities to perform the tasks that the users request?


• Integrity does the website exhibit honesty and ethical behaviour?


• Risk. Is there any potentially negative impact on using the website services?


• Reputation. Do external parties have relevant opinion about the website or their previous experiences?

Moreover there are also some significant factors that are crucial in order to build trust. Factors such as:

• Security.


• When user’s purchases on the site are their personal details expose to third parties?


• Credibility. Is the website adhering to organisations with a good reputation?


• Reliability. Are the website authors doing what they promise?


• Communication. Are there attempts in order to communicate with the customer?


• Consistency. Is the company delivering the service regular and with the same or better service to the customer?

Much research has been focused on the trust-building strategies; But what role trust plays when a negative feedback about your business need to be repaired? A recent study examine this fact and what where the implications for the company ebay that suffered of bad reputation due to its customers’ feedback. The authors found that reparation of trust is possible. Apologies were more successful than denials because these weren’t perceived as believable. Even short apologies can convince customers to trust the company again (Utz, Matzat and Snijders 2009).

To conclude it can be said that online markets are noisy and face serious problems of trust between buyers and sellers. Consumers only see the products, but they can’t touch them. If they need support or have any questions the ability to respond them is limited. Because of this is very easy to switch off and go to another online shop (Hanai and Oguchi 2009).

REFERENCES

Buttner, O. and Goritz, A. (2008) ‘Perceived Trustworthiness Of online Shops’, Journal of Consumer Behaviour 7, 35 - 50

Chaffey, D. and Smith P. (2008) E Marketing Excellence. Oxford: Elsevier Ltd

Hanai, T., and Oguchi, T. (2009) How do consumers perceive the reliability of online shops?. Cyberpsychology: Journal of Psychosocial Research on Cyberspace, [online] 3(2). Available from<http://cyberpsychology.eu/view.php?cisloclanku=2009111002&article=6>[12 March 2010]

Koh, T, Fichman, M. and Kraut, R 2009. Trust Across Borders: Buyer-Supplier Trust In Global B2B e-commerce. Academy of Management Proceedings, [online], 1-6. Available from <http://web.ebscohost.com/ehost/pdf?vid=11&hid=13&sid=94b0dcfa-f6fd-42d9-9c71-d97889555c27%40sessionmgr4>[10 March 2010]

Mayer, R., Davis, J. and Schoorman, D. (1995) ‘An Integrative Model of Organisational Trust’, Academy of Management Review 20 (3), 709 – 734

Morgan, R. and Hunt, S. (1994) ‘The Commitment-Trust Theory of Relationship Marketing’, Journal of Marketing 58 (3), 20 - 39

Ofuonye, E, Beatty, P, Reay, I, Dick, S, Miller, J. (2008). How Do We Build Trust into E-commerce Web Sites? IEEE Software, [online] 25 (5), 7-9. Available from <http://www.computer.org/portal/web/csdl/magazines/software#4 >[10 March 2010]

Utz, S., Matzat, U., and Snijders, C. (2009) ‘On-line Reputation Systems: The Effects of Feedback Comments and Reactions on Building and Rebuilding Trust in On-line Auctions’, International Journal of Electronic Commerce, 13, (3), 95–118.