Companies seem to agree that trust by the customer is the holy grail of customer relationship. All companies that measure customer attitudes are measuring trust either explicitly or implicitly. The researchers identified in the previous blog have noted that the main benefit of trust is customer loyalty which then leads to longer term relationships, greater share of wallet and higher advocacy of word-of-mouth. Their survey results indicated that trust drives between 22 and 44 percent of customer loyalty. The other major driver of customer loyalty is the satisfaction with previous experiences with the company.
The idea that trust has two components makes sense; especially as they are defined:
Rational trust is based on the process the customer follows to assess an organization’s intention and ability to keep promises, by identifying guarantees in term of competencies, and predictability of behaviors. Rational trust would include the following aspects: Knowledge, Competence, Ability, Reliability, Predictability, Creditability and Dependability.
Emotional trust is based on the process the customer uses to evaluate a company according to the qualities and characteristics that show concern and care as well as their willingness to compromise beyond the profit motive. Emotional trust would include the following aspects: Empathy, Feelings of security, Benevolence, Good will, Personal beliefs and Altruism.
Many sales and marketing executives have noted in non-published discussions that many decisions are not rational. In fact, customer decisions probably consist of both rational and emotional trust. A good example is the decision to purchase a car. The basic need is transportation and yet the emotions often lead us (including me) to add many options that are not easy to rationalize. The care of the salesman or the understanding of the service manager will often play a significant role in supporting the trust. Thus, the trust developed during the purchase of the car includes components of both rational trust (knowledge, reliability, etc.) demonstrated by the product and dealership and emotional trust (feelings of security, empathy) provided by the salesman.
The bottom line is that trust is, as previously stated, the holy grail of relationship management that every company seeks. We can call it customer satisfaction, loyalty, or any of a number of names but it all boils down to trust. Do my customers trust me? That is the real question we need to answer.
William H. Bleuel, PhD, is a professor of decision sciences at the Graziadio School of Business and Management at Pepperdine University. He specializes in the measurement and analysis of operations, customer satisfaction, customer loyalty and customer retention. He has held senior positions in engineering, marketing, and service management at Xerox, Taylor Instrument Company, and Barber Colman Company. Dr. Bleuel has also had experience as general manager in two start-up companies that he co-founded. His most recent textbook, After the Sale, was published in 2000. He has been the Franz Edelman Award winner for The Institute of Management Sciences, he received the Armitage Medal from the Society of Logistics Engineers, and the Patton Publication Award. He became a Luckman Distinguished Teaching Fellow at Pepperdine in 1996.
This post was originally published on Dr. Bleuel’s blog, The Customer Institute.