Why are Trust and Commitment so Important in B2B?

“Commitment and trust, rather than (or at least in addition to) power and dependence, are now central to discussions of business relationships. Researchers and practitioners have come to view most interactions between business parties as events that occur over the course of a relationship between two or more partners.”

The funny thing about business-to-business (B2B) is that it’s less about business and more about relationships. In fact, B2B is really P2P – person-to-person.

What I mean by that is that people buy from people. In large organisations, the decision to go with one particular service provider over another is often down to the answer to one simple question:

“Do I really want to work with this person?”

And the answer to that question is usually based on the perception of whether the individual can be trusted or not.

Even in business situations where a large contract is put out to tender and a clear set of evaluation criteria is prepared to help guide the choice of service provider, the decision is often made on softer and often unwritten criteria. Sometimes decisions are made on the basis of price, sometimes on the basis of functionality. But when it comes to making the final choice to award the contract, subtle psychological elements come into play.

“OK, I know these guys seem to have the [INSERT: ‘best product’, ‘lowest price’, ‘most innovative solution’] but what if it all goes wrong? Will they sort out the issues? Or will they leave me in the lurch? Will I lose my job?”

Fundamentally, we like to buy from people we think are honest, who will treat us fairly and who will act with integrity. In other words, people we trust.

Two American scholars figured this out two decades ago. In 1994, Robert Morgan and Shelby Hunt wrote a seminal paper on what really drives a long-term relationship between two business partners. The Commitment-Trust Theory of Relationship Marketingquickly became a hit, not just in academic circles, but among senior business executives who were trying to identify why people were likely to do business with you.

Essentially, what Morgan and Hunt realised all those years ago is that long-term business relationships are built on a mutual and cooperative working relationship between two partner firms, and that to foster and nurture such a relationship, Trust and Commitment are the two critical elements to focus on.

Trusted Relationships = Consistently Good Service

At Deep-Insight, I spend a lot of my time trying to help our clients figure out how to build strong trusted relationships with their B2B (Business-to-Business) customers. Trust is all about honesty, fairness and acting with integrity. It’s one of the most basic elements of human interaction. And perhaps the most basic element of good account management. As they say:

“People buy from People” and
“You don’t buy from a person you don’t trust”

B2B is all about establishing strong people-to-people relationships. Trusted, committed relationships. And yet, here’s an interesting statistic. When we look at the correlations* between the various drivers of customer retention in our Customer Relationship Quality (CRQ™) methodology, guess what the strongest correlation is?

It’s between Service Performance and Trust.

When I first noticed this correlation, I was somewhat puzzled. It didn’t surprise me that Trust was strongly correlated with Service Performance. But why is it the strongest link of any of the elements in our model? Why does the level of service have such a strong impact on the degree of trust between the client and a service provider?

The answer is actually straightforward, when you think about it in real life. Many – no, most – of our clients operate complex businesses where their interaction with customers is based on a complex (and sometimes bewildering) array of services. Even manufacturing companies are heavily service-orientated these days. As an account manager or account director, you might like to spend your time having meaningful conversations with senior executives about where their business is going and how you can help, but the reality of day-to-day interaction is often explaining why that critical piece of machinery has not been delivered on time, or why the network that manages their business has fallen over again.

When the basic delivery of service is a constant issue and source of frustration for customers, account managers find the trust built up with key client contacts erodes quickly. Responses like “I’ll sort that out for you” are fine, as long as the service issue really is sorted out. But ongoing service problems can be notoriously problematic, particularly when processes or technology need to be changed in order to fix what’s broken. It’s frustrating for the client and it’s frustrating for the account manager but, most important of all, it’s damaging to the long-term relationship and ultimately the revenue stream from that customer.

Trusted relationships are based on consistently good service delivery. That’s what the data says. And that’s why getting the service right (and right first time) is so critical.

Correlations based on tens of thousands of customer responses over more than a decade. Service – Trust R-Squared = 0.74