The Interplay Between Business and Personal Trust on Relationship Performance in Conditions of Market Turbulence

Link: https://link.springer.com/article/10.1007/s11747-020-00722-6

The June 2020 edition of the CMO survey suggested that 29.3% of customers considered trust to be a top priority in their relationship
with salespeople, a significant rise from the 19.9% reported in February 2009. An increasingly large number of customers place an emphasis on trusting relationships with business vendors, outpacing factors like superior innovation, product quality, and price.

Marketing scholars have studied both interorganizational trust, which emerges from interactions between firms, and interpersonal trust, which develops from interactions between individuals. The latter is often described in terms of the partner’s reliability, integrity, honesty, and credibility in business exchanges.

Interpersonal trust is made up of two layers:

1. Business trust, which includes expectations of reliability and integrity related to business interactions and activities, and
2. Personal trust, which consists of the willingness to rely on an individual outside of business interactions.

Salespeople invest time and energy outside business hours to build deeper relationships with their clients. Consider a salesperson asking a customer how their family is doing, leading to a discussion on the customer’s daughter wedding, the stresses of paying for a wedding, and how proud they are of their child.

Over the next few months, the customer updates the salesperson about the wedding and eventually invites them to attend. Later, having met the couple and discussed their professional interests, the salesperson helps the groom find a better job opportunity. Sharing information and building both business and personal trust within the relationship allowed the salesperson to bond with the customer at a personal level. The customer feels the salesperson cares about them as an individual beyond their role in the business relationship.

A recent paper studies an under-examined element of business relationships: the personal relationship between the buyer and seller. The researchers identify personal trust as the willingness to rely on and confide in an individual outside of business interactions and illustrate that it can promote and interact with business trust on key performance outcomes and serve as a unique resource particularly when customers experience volatile environments.

The methodology they follow begins with demonstrating the direct effect of personal trust on performance in the relationship. Next, they assess the interactive effect of business and personal trust on performance in the relationship. Finally, they test how market turbulence impacts the direct effect of personal trust as well as how market turbulence impacts the interactive effect of personal and business trust on performance in the relationship.

The findings provide several key insights for Chief Sales Officers:

1. Individually, business trust and personal trust have a positive impact on performance, but in times of market turbulence, their combined effect is negative. Under conditions of high perceived market turbulence, salespeople have to choose one form of interpersonal trust or the other based on the customer’s openness to having a personal relationship with the salesperson. If salespeople have not developed both forms of interpersonal trust from the beginning, they could lose out on positive outcomes without turbulence, and have fewer options to help customers during times of perceived high market turbulence.
2. When a salesperson is moved from one territory to another, the interpersonal trust between parties disappears and the new salesperson takes time to make up for the loss. Managers must weigh the risks of severing salesperson–customer relationships when the parties enjoy both business and personal trust.
3. Under the condition of perceived high market turbulence, personal trust has a positive effect on performance in the relationship, which reinforces the need to build personal relationships with customers.