Trust + Value + Loyalty = Successful Relational Online Exchange

Consumer Trust, Value, and Loyalty in Relational Exchanges

Sirdeshmukh, Singh and Sabol (2002) conducted a survey to develop a framework on how companies can build or deplete consumers trust depending on the services and mechanisms they use on developing a relationship with customers, in order to provide value and gain loyalty.

How these can be gained online is revealed further down.

The authors defend the argument that trust exist when one part has confidence in the exchange partner’s reliability. When it comes to online business, at the beginning is a difficult to transmit confidence to the stakeholder, but it can be gained with a good website.

Customers also make judgments about the frontline employee (sales persons) and management policies and practices during the exchange services. Applied online, the frontline employees disappear and what it makes their function is the website, its distribution, how attractive it is for internet user, the facilities it gives them to surf on the page. While the management policies and practices are the interaction with stakeholders if they have inquiries, the payment options or the service provided on the delivery.

The authors also argue that the satisfaction is mostly sensitive to interactional factors, which contributes uniquely for trust relationship to be built.

There are different relationship with the organization, Interpersonal relations with sales person and stores loyalty. The authors support that sales person are more trusted than store for those people who have strong interpersonal ties, on the other hand, people who don’t have interpersonal ties, are more loyal to stores. People who are price sensitive will care more about stores where they can buy things cheaply rather than other people who care more about quality and services.

The same pattern can be applied online as well - there are also people who care more about price than quality or service.

The overall satisfaction with a service has three different facets: the contact person (online is the website), core service (online the facilities provided to customers) and the organization.

Dimensions of trustworthy Behaviours and Practices and Their Effects on Trust

Operational competence is a visible behaviour; it is an indicator of service actions, degree to which partners perceive each other as having the skills, abilities, and knowledge necessary for effective task performance.

In the online world the operational competences is based on the interaction with customers, trying to solve their problems interacting online.

Operational benevolence is the underlining motivation to place the consumer's interest ahead of self-interest. Online this is difficult to transmit, the only way to do it is developing a good relationship and accomplishing the deals with customers offering them the service requested, the customers will perceive the companies "goodwill" which can be transmitted from customer to customer using blogs for example or word of mouth.

Problem-solving orientation is the management motivation to anticipate and resolve problems in a satisfactory way, to resolve problems during and after the service. Online this means to solve customers’ problems to find what they want, its delivery, payment or technical issues. And then find a solution not to repeat them again.

Consumer trust and loyalty

In conclusion, when providers act in a way that consumer trusts, the perceived risk with the specific service is likely to be reduced and thus enable consumer to make confident predictions about the provider's future behaviours.

Trust also influences loyalty by affecting the consumer's perception of congruence in values with the provider. When there is perceived similarity between the firm and the consumer values, the relationship is enhanced, promoting reciprocity and contributing to long-term commitment.

Loyalty is regulated by the consumer's goal of value, and the authors posit that trust will effects loyalty through its influence in creating value.

Trust and loyalty are vitally important for company’s reputation to be built both off and online. However, building them online is more difficult because of the lack of face-to-face communication but could be overcome with a useful and interactive website.

References:

Sirdeshmukh, D., Singh, J., and Sabol, B. (2002). Customer trust, value, and loyalty in relational exchanges. Journal of Marketing, 66, 15-37.