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Denise D. Schoenbachler DENISE D. SCHOENBACHLER is

an Associate Professor and
Geoffrey L. Gordon GEOFFREY L. GORDON is a
Professor in the Department of
f Marketing, Northern Illinois
University, DeKalb, Illinois.

As organizations continue to embrace the concept of building
customer relationships as a way of creating a competitive
advantage, they seek to understand what makes a customer
relationship successful. This article reports the results of a survey of
consumers that explores one constructtrust in the organization
and its role in customers perception of their relationship with an
organization. In addition, trust in the organization and its influence
on customers willingness to provide the information necessary to
help build a strong relationship is examined. The findings provide
some support for the role of trust in building relationships, as well
as identifying which factors are important in building that trust.

2002 Wiley Periodicals, Inc. and

Direct Marketing Educational Foundation, Inc.


Published online in Wiley InterScience (
DOI: 10.1002/dir.10033


INTRODUCTION keter before revealing information. Trust,

however, may be a function of several related
In todays competitive business environment,
antecedent constructs including risk percep-
more and more marketers are embracing a re-
tion (Doney & Cannon, 1997), credibility
lationship marketing orientation, where the
(Gundlach, Achrol, & Mentzer, 1995), past
aim of the seller is to have a long-term, broad-
experience (Rempel, Holmes, & Zanna,
based relationship with the buyer in which the
1985), reputation (Ganesan, 1994), and per-
occurrence of a particular transaction is only a
ceived dependability (Smith & Barclay, 1997).
minor event in a long history. The goal is to
The purpose of this research is to look at the
gain loyal customers to whom a marketer can
role of trust as a driver of database-driven
provide a variety of goods and services (Tomer,
relationship marketing in a consumer con-
1998). Although conceptually appealing, mar-
text. Sheth and Parvatiyar (1995) noted that
keters have been frustrated when faced with the
although there has been a great deal of re-
task of implementing relationship marketing.
search on relationship marketing in a busi-
An effective relationship in a marketing context ness context, very few studies have focused on
suggests that consumers are willingly reducing relationship marketing with respect to con-
their available market choicessomething mar- sumer products. This work explores the rela-
keters must give customers a good reason to do tive importance of a number of trust anteced-
(Sheth & Parvatiyar, 1995). A relationship by ents, identified in earlier research on trust
definition requires two-way interaction and and relationships, in formulating trust be-
communication. Thus marketers have to deter- tween consumers and the organization in a
mine how to create a dialogue and then how to database relationship context. It then exam-
maintain that dialogue so it is beneficial to both ines whether the establishment of trust drives
the marketer and the customer. customer perceptions of a relationship and
Many marketers have turned to the data- customer willingness to provide information
base as the source for creating a dialogue and to a company for further database-driven re-
thus developing relationships with customers. lationship marketing efforts. As marketers
The database, which at its core is a collection better understand the importance and nature
of information about customers, helps mar- of trust in developing relationships, they can
keters identify customer needs, customer better serve customers and better respect cus-
wants, and customer preferences that can tomers concerns and rights to information
then be better served in the long run. privacy.
Through modeling, loyalty programs, CRM
(Customer Relationship Management) pro-
grams, and some trial and error, the database LITERATURE REVIEW
marketer learns who his/her customers are
and how best to communicate with them. The Database-Driven Relationship
database, however, is only as good as the in- Marketing and Trust
formation it contains. Obtaining personal in- Marketers efforts to develop closer relation-
formation about customers creates concerns ships with customers have led them to the data-
for privacy and the potential for abuse of base as a tool to identify and serve customer
information by marketers. Customers have to needs. Database marketing continues to grow
feel comfortable enough with the marketer to and with it more and more opportunities to
reveal information, which in turn helps the conduct transactions that do not even require
marketer better serve the customer. the physical presence of a buyer and seller. The
One factor proposed as a potential driver of growth of database marketing has also gener-
database-driven relationship marketing is trust ated increased concerns for consumer privacy
(Milne, Rohm, & Boza, 1998). Customers of information. Punch (1996) found that almost
must have feelings of trust toward the mar- 85% of respondents to a survey expressed con-



cern about threats to personal privacy. This shift Database-Driven Relationship

toward remote transactions and the need for Marketing and Personal Information
more and more personal information sets up Although building trust seems a plausible strat-
the need for trust as an increasingly salient egy to enhance customer relationships, data-
concept. base marketers must overcome customer vul-
Previous marketing literature views trust as a nerability concernsspecifically consumer
factor that affects the overall relationship qual- privacy concerns. Although privacy has been
ity between a marketer and customer (Moor- defined a number of ways, there has been no
man, Zaltman, & Deshpande, 1992). Moorman, real consensus. Young (1978, p. 2) concluded
Deshpande, and Zaltman (1993, p. 82) defined that privacy, like an elephant, is more readily
trust as a willingness to rely on an exchange
recognized than described. Efforts to protect
partner in whom one has confidence. In fact,
customer privacy tend to be either legalistic or
when strong relational bonds exist between
behavioral (Goodwin, 1991). Legalistic ap-
marketers and customers, trust and commit-
proaches either limit the number of marketing
ment become the primary predictors of future
intrusions, educate consumers, or allow con-
purchase intentions, whereas in transaction-
sumers to protect themselves through legal
based relationships, overall satisfaction is more
mechanisms. The behavioral approaches sug-
important (Garbarino & Johnson, 1999). Thus,
gested include preference checkoffs that will
customers perceiving a strong relationship with
allow consumers to make their own privacy
a marketer are willing to look beyond a less than
tradeoffs with respect to a particular firm, prod-
satisfactory experience, if trust is high. Market-
ers attempting to implement relationship mar- uct, and/or service. For example, most legiti-
keting and build partnerships with consumers mate e-mail marketers provide a clear and sim-
must consider how consumer trust factors into ple opt-out option for consumers. The
the relationship (Fournier, Dobscha, & Mick, behavioral approaches recognize the diversity
1998). of consumer preferences about privacy. For ex-
Within the database marketing literature spe- ample, some consumers, such as the catalog
cifically, trust is identified as a potential mech- shopper, use mail as a convenience, and these
anism to build relationships (Campbell, 1997). individuals may perceive the gain of conve-
Database marketers are completely dependent nience to be worth the price of privacy. Other
on customer information to more efficiently consumers may be willing to provide informa-
target those customers desired products and tion in an anonymous survey for some form of
services (Parsons, Zeisser, & Waitman, 1998). compensation.
Thus, database marketers are able to strengthen Petrison and Wang (1995) note that the
their information resources through relation- construct of privacy includes numerous di-
ship-building practices (Milne et al., 1998). mensions, including (1) controlling access to
Milne and Boza (1999) provided support for information about oneself (informational pri-
this notion with their study in the database mar- vacy); (2) being alone (physical privacy); (3)
keting context, in which they found that, across not being bothered by others (interactional
industries, building trust is a more effective privacy); (4) living away from others (seclu-
marketing strategy in the context of managing sion). In the database relationship marketing
consumer information than is an effort to sim- context, the primary dimension of privacy
ply reduce customers concerns. They also that causes concern among customers is infor-
found that trust has a positive effect on pur- mational privacy.
chase levels. In theory, then, marketers who can Nowak and Phelps (1995) pointed out that,
build long-term customer relationships and mu- from a legal perspective, it is individual-level
tually beneficial customer databases through information (rather than group-level informa-
trust development should foster greater loyalty tion) such as credit and financial histories,
and, in the long run, firm profitability. license applications, and personal demo-



graphics, that is relevant. In addition, they Trust, Relationship Marketing, and

suggest that some dimensions of consumer Willingness to Provide Personal
information have more relevance than others. Information
Consumer attitudes about use of personal in- Morgan and Hunt (1994) noted that any abuse
formation seem to vary depending on the of information can result in a loss of trust be-
situation, the company using the information, tween exchange partners. Moorman and col-
the type of marketing context where the in- leagues (1993) suggested that trust reflects a
formation is used, the specificity of informa- reliance on a partner and involves vulnerability
tion requested, and certain customer demo- and uncertainty on the part of the trustor. With-
graphics (Nowak & Phelps, 1992; Wang & out vulnerability, trust is unnecessary. This per-
Petrison, 1993). Consumers, in general, be- spective also suggests that some element of un-
lieve they are asked to provide excessive certainty is critical to trust since there is no need
amounts of personal information and that for trust if the trustor has control over or com-
they have little control over what happens to plete knowledge about the actions of the ex-
the information collected (Nowak & Phelps, change partner. In the database marketing con-
1992). Many express high levels of concern text, customers can be perceived as vulnerable
about the ways companies use personal infor- in that they do not control or have complete
mation and would like to have the opportu- knowledge of the use of personal information.
nity to have more control over information Although the marketers intent may not be to
collection and use (Phelps, Nowak, & Ferrell, withhold knowledge or control, many custom-
2000). ers are not aware of the amount, type, or use of
In a cross-cultural look at privacy concerns, personal data. Certainly, then, firms that follow
American consumers, as compared to British short-run, opportunistic practices may risk
consumers, are more likely to object to use of alienating their relationships as well as sources
personal information only when the revela- of information for the database and future
tion of that information has a strong potential growth. Ganesan (1994) found that establishing
to lead to some sort of specific negative con- trust could help reduce perceptions of risk of
sequences. For example, consumers are less opportunistic behavior by a partner in an ex-
willing to provide credit history information if change relationship.
it is likely to lead to the denial of credit. It appears that trust is a major driver of rela-
Similarly, consumers are more reticent about tionship marketing derived from database mar-
providing a phone number to a retailer if they keting. Much of the literature on relationship
believe it will lead to the receipt of unwanted marketing addresses the issue and importance
direct mail or telephone solicitations (Petri- of trust. In terms of implementing trust-build-
son & Wang, 1995). Specifically, consumers ing strategies appropriate to the database-mar-
indicate they are most willing to provide gen- keting scenario, little guidance is offered. The
eral demographic information (such as age or concern for database marketers is that existing
marital status) and lifestyle information (such trust and relationship marketing research does
as hobbies), and least willing to provide finan- not directly relate to the potentially high-risk
cial information and personal identifiers interactions taking place in database marketing.
(Phelps et al., 2000). Thus, the key to success Because the marketer has access to and use of
in developing a database-driven relationship, consumers personal information, there is in-
personal information, raises concerns among herent risk that such information could be used
consumers, and the success of the relation- inappropriately or shared inadvertently. In ad-
ship is predicated on building customer con- dition, because many database marketing trans-
fidence so they are willing to provide the actions take place without face-to-face interac-
individual-level information needed to build a tion or without actually seeing or trying the
relationship. product or service, consumers may perceive a



greater transaction risk. In the consumer con- keting may actually help manage customer pri-
text, most transactions are for personal use vacy issues (Campbell, 1997; Shaver, 1996). The
rather than organizational use and, thus, the information in a marketing database is the key
perceived risk may be greater. to identifying and successfully serving key cus-
Relationship marketing requires an invest- tomers. As the relationship is established, using
ment of energy, time, and attention to develop information, the customer is more likely to pro-
and sustain a bond between buyers and sellers. vide additional information and to feel less vul-
A partnership between the provider and cus- nerable. The development of the relationship,
tomer also involves a mutual commitment to however, is dependent on establishing trust.
doing business with each other. Thus, there is a
willingness of both to forsake alternative trans- Trust and Its Antecedents
actions offering opportunities for short-term fi- Marketers must balance customers perception
nancial advantage. Relationship marketing also of the positive effects of relationship marketing
involves continuous communication between with the negative concerns about abuse of pri-
buyers and sellers. Communication fosters vate information. Developing stronger trust re-
learning, and thereby the improvement of lationships with customers may provide that bal-
goods and services in terms of their ability to ance. Interorganizational trust exists when an
satisfy the needs of the customer (Tomer, exchange partner has confidence in another
1998). Generally, relationship marketing is exchange partners reliability and integrity
viewed as a win-win situation for both parties. In (Morgan & Hunt, 1994). It is the generalized
an ideal relationship marketing context, the expectancy that the word of another can be
partners (buyers and sellers) utilize the best of relied on. On an interpersonal level, trust is
todays flexible information technologies to aid defined as having clear, mutually agreed upon
the learning and customization processes. expectations (Gabarro, 1978).
How, then, do sellers develop this relation- Although related, the interorganizational
ship to provide what customers really need? and interpersonal trust literature streams do
Panelists from several large relationship market- not address the relationship between the end-
ing supporting firms suggest that identifying consumer and an organization. These relation-
top customers through a quality database is a ships are somewhat different from the tradi-
first critical step of any program. Even though a tional contexts because of the power
programs objectives may be to drive consumer asymmetry between the two parties (Milne et
loyalty, recency and frequency, increase reve- al., 1998). Thus the trust needed to establish a
nues, and increase market share for the brand, relationship whereby consumers are comfort-
incentives do not drive a relationship-marketing able enough (or trusting enough) to provide
program. Rather, it is the databases quality, the personal information to further the relation-
information itself and how it is used and ob- ship is not firmly defined.
tained, that drives the program and targets cus- Within the trust literature, several constructs
tomers (Relationship Marketing, 1998). emerge across studies that may be key in the
The key to successful relationship marketing, development of the personal-organizational
the quality database, comes with the increased trust critical in a database-driven relationship.
vulnerability customers may feel because their Perceived risk, for example, is often a factor
personal information is being used without affecting a trust relationship (Doney & Cannon,
their real control or knowledge. Thus there is a 1997). Within the context of database market-
risk that customers will perceive the potential ing, a customer has to weigh the costs and ben-
for abuse of their personal information. The efits of providing personal information to an
move toward relationship marketing, albeit ap- unknown person or organization. The database
pealing to both marketers and consumers in marketing relationship is basically impersonal
theory, is dependent on information. Some sug- and uncertain and therefore perceived risk is
gest, however, that a focus on relationship mar- likely to be higher than in traditional exchange



relationships. Rieck (1999) noted that people database during bankruptcy proceedings dem-
want to avoid risk. Although customers want to onstrate the effect media can have on firm rep-
pursue gain, the urge to avoid loss is even more utation. Database-driven marketers must have a
powerful. In a database-driven marketing con- strong firm reputation that in turn builds trust.
text, customers often cannot see the product/ Customers are often being asked to purchase
service or even the salesperson. Thus, there is and provide personal information without a
an inherent level of suspicion that must be over- substantive physical presence. The firms repu-
come that is not as prevalent in a traditional tation, developed primarily through media and
retail context. In the database context, this issue word of mouth, becomes a major factor in de-
is compounded by the fact that most customers veloping trust.
do not really understand how the database and Customers perception of firm dependability
a database-driven business operate (Rieck, may also influence the trust in a database mar-
1999). keting relationship (Smith & Barclay, 1997). If
Similarly, credibility is a factor influencing customers perceive that a company will deliver
trust (Gundlach et al., 1995). A firms credibility on its specific promises and claims, their per-
may be critical particularly where the only rela- ception of dependability increases as does over-
tionship or interaction is with the organization all trust. Perceptions of dependability can be
by name. In direct and database-driven market- developed through experience, claims, market-
ing, it is likely the interaction is directly with the ing communications, and ties with other de-
organization, rather than with a salesperson. pendable entities. For example, promoting
The organizations messages, statements re- next-day delivery service may increase percep-
garding privacy, guarantees, and even product tion of dependability on the part of a customer.
descriptions must be credible to foster the de- It is further enhanced when the delivery pro-
velopment of trust. Rosenspan (1999) sug- vider is named and has a reputation for provid-
gested that, today more than ever, it is essential ing next day service.
to create credibility among prospects and cus- Based on the preceding overview of the rele-
tomers. Westphal (1998) affirmed that market- vant literature, Figure 1 presents a model that
ers today are having a more difficult time gain- proposes relationships between the antecedents
ing credibility, and it is taking longer. Database- of trust posited to be relevant in the database-
driven marketers who do create credibility have driven marketing context and trust in the orga-
an enormous advantage over those that do not. nization. Trust in the organization is then pur-
Prior interactions or past experience may ported to influence customers willingness to
also foster (or detract from) the trust necessary provide personal information and the custom-
to build database-driven relationships (Rempel ers perceptions that they have a relationship
et al., 1985). Continued positive experiences with the organization. This model specifically
with a company can help strengthen ties with an draws on the literature to propose the nature of
organization, further encouraging provision of trust relationships in a database-driven context
personal information. As customers learn that a where personal information is needed and used
company uses information responsibly to mar- to market effectively. It assumes that most ex-
ket more effectively to them, they are more changes will be dependent on the database and
likely to develop trust. that these exchanges will likely be directthat
Firm reputation can also contribute to is no salesperson will serve to facilitate the trans-
greater trust and perception of a customer action or to act as an agent in building the trust
company relationship (Ganesan, 1994). Cus- or relationship.
tomers are becoming less tolerant of ethical
errors, particularly when concerns of privacy
are at risk. Amazon.coms announcement that METHOD
its database is counted as an asset and therefore A national survey of 5,000 direct mail response
saleable, and failed E-toys attempt to sell its consumers was used to explore the relation-



Trust in a Database-Driven Relationship

ships proposed in Figure 1. The sample was has either used hypothetical scenarios (e.g.,
drawn from a list of recent (12-month) mail Wang & Petrison, 1993) or survey questions
order buyers by a major list brokerage firm of about relationships and/or use of personal in-
U.S. consumer names and addresses. Mail order formation in general (e.g., Nowak & Phelps,
buyers were chosen because this type of trans- 1992; Phelps et al., 2000). Asking respondents
action requires provision of personal informa- to consider an actual purchase situation consid-
tion (at a minimum name, address, phone num- ers the situational impact of a purchase on re-
ber, credit card), and no face-to-face interaction lationships and willingness to provide informa-
with a salesperson. Respondents were asked to tion.
consider and describe a recent direct mail pur- The survey instrument consisted of multi-
chase. They were asked to indicate the prod- item scale measurements of each of the trust
uct(s) purchased, the brand name purchased, components (credibility, past experience, repu-
the marketer (or direct mailer) of the product, tation of the company, perception of depend-
nature of the solicitation (catalog, mail, direct ability, and perceived risk), a measurement of
response to advertisement, online), price paid overall trust, willingness to provide personal in-
for the product, and when it was purchased. formation for marketing use, and a measure of
Respondents were then asked to complete a respondents perception of the relationship be-
survey based on the direct mail purchase iden- tween the organization/seller and the cus-
tified. Most prior research on trust, relation- tomer. Respondents were also asked a series of
ships, and willingness to provide information demographic classification questions.



Constructs and Sample Survey Items*

Construct Coefficient Alpha Sample Items

Perceived Risk 3 items .70 The product/service I purchased from this company is NOT very
important to me.
I do NOT think there is much risk involved with purchasing a
product/service from this company.
Credibility 3 items .82 This company is honest.
This company is one I can believe in.
Past Experience 3 items .88 My experiences with this company in the past have been good.
I have done business with this company often in the past.
Reputation 4 items .76 This company has a good reputation in the market.
This company is NOT well known in its industry (reverse
Dependability 3 items .84 I know I can depend on this company to follow through.
This company keeps promises it makes to customers.
Overall Trust 4 items .72 I can trust this company to keep my best interest in mind.
I find it necessary to be cautious with this company (reverse
Willingness to Provide .87 I am willing to provide this company with information about me.
Information 5 items
I am willing to provide this company with information about my
product needs.
Perception of a Relationship .81 I plan to do business with this company in the future.
4 items
I feel that I have a good relationship with this company.

* On a 6-point scale anchored with 1 strongly disagree and 6 strongly agree.

The items measuring the antecedents to trust all trust measure was also pretested using the
and the overall trust measure were derived from same criteria because the items, although
existing scales measuring these constructs, and adapted from existing scales, were changed sig-
adapted to a 6-point Likert-type scale anchored nificantly to apply to the consumer, direct mar-
by strongly disagree and strongly agree. keting context. Items with correlations below .5
Where necessary, the items were also adapted to were discarded. A second round of pretesting
a consumer purchase context and to refer to was used to again assess measure reliability and
the specific company and purchase situation. item-total correlations. The final measures of
Willingness to provide personal information willingness to provide information consisted of
and the relationship perception measures were five items (coefficient alpha .87), perception
specifically designed and pretested for this re- of a relationship consisted of four items (coef-
search. Table 1 contains sample items for each ficient alpha .81), and overall trust consisted
measure and reliability estimates for each. of four items (coefficient alpha .72).
The willingness to provide personal informa- A pre-notification postcard mailing was sent
tion and relationship perception measures were two weeks prior to the actual survey mailing to
developed using multiple items derived from notify recipients that a survey would be forth-
related research, pretesting the measure on a coming and the importance of its completion.
sample of consumers, and calculating overall Of the 5,000 cards and surveys sent, the U.S.
reliability and item-total correlations. The over- Postal Service returned 398. A total of 1,338



completed, usable product data points were ob- TABLE 2

tained and used in the analysis for a 29% re-
Relationship between Elements of Trust and
sponse rate. Organization Trust
The survey asked respondents to provide
some personal demographic information. This Independent Significance
may have introduced response bias since those Variable Beta T of T
individuals that are willing to provide personal
Perceived Risk .006 .061 .951
information in response to a survey may be
Credibility .124 1.045 .301
more willing to provide personal information to
Past Experience .057 .577 .566
a marketer. To check for such bias, a conve-
Reputation of
nience sample of 200 consumers was asked to
Company .271 2.424 .019*
complete the survey. One half of the surveys
Perception of
contained the same request for demographic Dependability .571 4.444 .000*
information as the original survey and one half
did not ask for any personal demographic in- * Significant at the .05 level.
formation. The response rates and responses to
the measures of willingness to provide informa- tween perceived risk and organization trust is
tion, trust in the organization, and perception not supported. Similarly, the antecedent credi-
of a relationship were compared for the two bility of an organization and past experience
groups. There were no significant differences in with a company were not significantly related to
response rates for the two groups and there overall trust in the organization. There is, how-
were no differences in response to the depen- ever, a positive relationship between the repu-
dent variables for the groups. The convenience tation of a company and trust and the percep-
sample providing demographic data was tion of dependability and trust.
younger, more educated, and had lower income Milne and Boza (1999) found differences in
than the general sample. perceptions of trust by industry. To test if this
A second test of the potential bias associated were the case in this research, two independent
with asking respondents for personal informa- coders coded products named by respondents
tion was a comparison of responses between by industry. The products purchased fell into
respondents completing all information and seven industry categories: credit card issuers,
those electing not to complete all or part of the telephone/telecommunications companies, ap-
demographic items. Almost 20% of the sample parel, computers/home electronics, books/
did not complete the income item, and a CDs, catalog companies, and other industries.
smaller percentage did not complete one or Table 3 summarizes findings by industry cate-
more of the remaining demographic items. gory.
This groups responses were compared to the When the relationship between the trust an-
remainder of the sample (those completing all tecedents and overall trust are viewed by indus-
items) and no significant differences were try, the importance of reputation and percep-
found between the groups. tion of dependability in developing trust are
confirmed. Reputation is a significant factor in
trust in all but two industries (telephone/tele-
RESULTS communications and other) and perception of
dependability is important in all but the credit
Antecedents to Trust card industry. In addition, the antecedents that
Table 2 summarizes the results of the regression were not significant across industries were sig-
analysis used to test for the relationship be- nificant in specific industries. For example, past
tween the proposed antecedents to trust and experience with a company was a significant
the trust construct in a database-driven context. antecedent to trust in telephone/telecommuni-
It indicates that the proposed relationship be- cations, apparel, computer, and catalog indus-



Relationships between Trust Antecedents and Trust by Industry (Betas Reported)

Perceived Past
Industry Risk Credibility Experience Reputation Dependability

Credit card .02 .07 .01 .09* .001

Telephone .02 .06 .11* .07 .10*
Apparel .04 .02 .21* .08* .09*
Computer .17* .03 .09* .24* .11*
Books/cds .06 .04 .002 .09* .18*
Catalog .01 .02 .13* .16* .08*
Other .12* .05 .04 .06 .14*

* Significant at .05 level.

tries. These results support Milne and Bozas and two dependent variables, willingness to pro-
(1999) findings that concern and trust differed vide information and the perception of a rela-
somewhat by industry. tionship with the company. Once trust is estab-
The importance of the antecedents to trust lished, customers should be more likely to
may vary by the method consumers use to make provide information than when trust is not
purchases. Consumers may use telephone, mail, present. Similarly, the customer trusting the or-
or online methods to actually purchase many ganization should be more likely to perceive a
mail order items. When consumers order by relationship with the company. The table sug-
telephone, there is a person-to-person contact gests that a customers feelings of trust in a
not present in online or mail order that may company do influence his/her willingness to
influence the antecedents to trust. Online pur- provide information to the company as sug-
chasing is relatively new and may be perceived gested. In addition, customers with higher lev-
as more risky. Thus, the antecedents to trust els of trust also perceive that they have a rela-
may be more important. Surprisingly, there tionship with the organization, rather than just
were no significant relationships between the engaging in transactions with that organization.
method of purchase and each of the trust ante- Given the differences by industry in the im-
cedents. portance of trust antecedents, it is possible that
the relationship between trust in the organiza-
Trust and Relationships tion and willingness to provide information and
Table 4 presents the findings exploring the re- perception of a relationship with a company will
lationship between overall organizational trust differ by industry. Table 5 summarizes the re-

Relationship between Trust in an Organization and Perceptions of a Relationship with an Organization and Willingness
to Provide Information

Dependent Variable Beta T of T

Willingness to Provide Information .317 2.546 .014*

Perception of a Relationship with the Organization .328 2.640 .011*

* Significant at the .05 level.



Trust in an Organization and Perceptions of a IMPLICATIONS
Relationship and Willingness to Provide Information by The findings from this study provide some sup-
Industry (Betas Reported) port for the model proposed in Figure 1. Based
Willingness Perception of on the premise that trust in the organization is
to Provide Relationship a key to developing successful relationships with
Industry Information with Company consumers in a database-driven context, the
model suggested that five factors acted as ante-
Credit card .09 .27* cedents to developing that trust in an organiza-
Telephone .19* .31* tion. This premise was tested based on consum-
Apparel .24* .19* ers evaluation of the importance of the
Computer .31* .24* antecedents in a specific, self-generated, mail
Books/cds .37* .15* order context. In this context, only two of the
Catalog .11* .29* five antecedents to trust are significant in this
Other .22* .32* model across industries, suggesting that trust in
* Significant at the .05 level.
an organization may be more dependent on a
companys reputation and dependability than
sults of these constructs by industry. The find- on the actual purchase situation. That is, con-
ings in Table 5 suggest that the relationship sumers evaluate reputation and their percep-
between trust and willingness to provide infor- tion of a companys dependability when devel-
mation and the perception of a relationship oping trust in that company. Thus, direct
with a company hold across industries. The only marketers wanting to establish a trust relation-
nonsignificant relationship is between trust and ship with consumers would be best served em-
willingness to provide information in the credit phasizing their reputation and dependability.
card industry. Fortunately for marketers, both reputation and
Willingness to provide information and the dependability are perceived by consumers as
consumers perception of a relationship with a characteristics or attributes of a company and
company may also differ by the method of pur- can be developed and maintained through
chase (telephone, mail, or online) used by the strong communication efforts. Reputation can
consumer. For example, consumers may feel be enhanced through brand or image advertis-
more confident providing information to a per- ing in addition to strong word of mouth. Online
son on the telephone as compared to providing marketers can attest to the importance of brand
information online, where security of informa- promotion and advertising to develop a reputa-
tion remains a consumer concern. On the other tion and perception of dependability to gain
hand, consumers may actually be more willing consumer trust.
to provide information online where the com- Creating and maintaining both reputation
panys privacy policy is clearly stated and con- and dependability require more than just a
sumers are regularly assured that there is a se- good communication strategy, though. Market-
cure connection. Comparison of mean ers must be vigilant in protecting reputation
willingness to provide information revealed a and perceptions by providing excellence in cus-
significant difference for those using mail to tomer service, product quality, fulfillment, and
purchase and both online and telephone. Con- customer communication. The best developed
sumers ordering through the mail are more communication strategy to build reputation can
likely to be willing to provide information than be rendered useless through poor fulfillment or
those purchasing using other means (t 4.5; p customer service. Toys R Us learned this les-
.05). Comparison of mean perception of a son during its entry online a few years ago when
relationship with the company did not differ by it could not fulfill orders in time for Christmas.
method of purchase. Perhaps as interesting as the finding that rep-



utation and dependability may be key to gaining pany. This finding may be a function of the
consumer trust in a mail order context, is the nature of the study. In this study, respondents
finding that the remaining three proposed an- completed the questions based on a specific
tecedentsperceived risk, credibility, and past mail order purchase they had made. It is likely
experience with the companywere not signif- that this purchase was either a first-time pur-
icant in building trust. Perceived risk may not chase from a company and thus the respondent
have been significant in forming trust in this had no past experience, or if the respondent
study because the specific purchase context was did have past experience, it would most likely be
not dictated. Respondents may have described positive experience or the consumer would not
less risky purchase scenarios for the study and have returned to the company to order. Thus,
thus, perceived risk was low. Perhaps consumers in hindsight, the study design essentially elimi-
tend to avoid mail order purchases when per- nated the potential for much variation in past
ceived risk is high. This study would not have experience with the company.
captured this information. Although past re- Perhaps the most important finding to mar-
search identified perceived risk as key in devel- keters interested in building relationships with
oping trust, most research proposing this rela- consumers is the support for the importance of
tionship was in the personal selling context. trust in building strong relationships with cus-
Consumers may save their high-risk purchases tomers. Customers trust in the organization is
for personal selling situations. important in building their perception that a
Credibility was also not a significant predictor relationship with the organization exists. Con-
of trust in the organization. This is a bit surpris- sumers who feel they can trust a company also
ing considering it is more similar to reputation feel they have a relationship with that company.
and perception of dependability in that compa- In a marketing environment such as businesses
nies can be pro-active in developing credibility face today where building relationships is al-
through communication strategy and credibility most necessary for company survival, under-
can be quickly erased through poor company standing this relationship provides marketers
performance. The credibility construct may not with important building blocks. Direct market-
be as important in developing trust in the direct ers that approach relationship marketing as
marketing context, even though it is consis- simply a good loyalty program, or good data-
tently identified as an important element in base modeling, or a good CRM program are
trust and building relationships in a channels of missing the key element building trust. Al-
distribution context. Perhaps in the channels though loyalty programs, CRM, and modeling
context, where credibility has been most often are important, these tactics potentially build re-
tested as an element of trust, the discrepant peat buyers but not relationships. In order to go
power relations inherent in that context make beyond simply getting consumers to buy more,
credibility key to developing trust and relation- this study reveals that the consumer must first
ships. In a mail order or direct marketing sales trust the organization. Although not measured
scenario, the power balance is not as disparate in this study, it would be interesting to ask con-
and therefore credibility less critical. That is, a sumers who are repeat purchasers and/or par-
consumers need to believe everything a mar- ticipants in loyalty programs if they perceive
keter says is not as strong as a channel partners that they have a relationship with the company
need to believe what other channel members they purchase from. This study suggests that the
say since the potential loss is great. It would be answer would be yes only if those consumers
interesting to study the role of credibility of a also trust the company. Thus consumers may fly
company in a controlled, direct marketing sce- only one airline to get frequent flyer miles, and
nario study where the consumers potential risk the airline defines this as a relationship. If the
or loss is much greater. consumer does not trust the airline, he/she
Finally, past experience with the company would not view this as a relationship with the
was not significant in building trust in a com- airline, but rather a series of repeat purchases.



The difference becomes apparent when a com- For example, the mail order prescription
peting airline offers a better program. The con- house earns its perception of dependability by
sumer who trusts the airline and perceives a providing prescriptions on time and being ac-
relationship with the airline is more likely to curate in filling prescriptions and billing. Its
remain loyal. Direct marketers must differenti- reputation is built through online advertising
ate between relationships with consumers built and perhaps mass media advertising as well as
on trust, and simple repeat purchase behavior physician referrals. Having a clear and pub-
to improve customer retention and satisfaction. lished privacy policy including information on
Direct marketing organizations focusing on a how consumer information is handled further
customer relationship approach to gain a com- builds reputation and perceptions of depend-
petitive advantage must develop trust through ability. Consumers build trust in the organiza-
the antecedents identified as significant in tion and are now more willing to provide addi-
building trust, reputation, and dependability. tional personal information, even medical
The marketer must coordinate a strong commu- history information, to help the prescription
nication strategy to build reputation and per- mail order firm provide better service. What the
ceptions of dependability with a relationship mail order firm does with the information may
marketing program based on trust. This sug- serve as a further feedback loop to the reputa-
gests, perhaps, that direct marketers should be- tion and perception of dependability. Selling,
gin incorporating a more integrated marketing sharing, or using the information indiscrimi-
communications (IMC) program that may in- nately will likely hurt reputation/dependability
clude brand or corporate advertising as well as and consequently trust and willingness to pro-
loyalty-based promotions and programs. Posi- vide more information. The relationship is then
tive public relations can also help build reputa- lost.
tion. Solid fulfillment and customer service pro- The finding that the antecedent and trust
grams can help build perception of relationships hold across industries (for the
dependability and consequently trust in the most part) and across methods of purchase sug-
company. gests that the results of this study may be useful
Similarly, companies using database-driven in many direct marketing contexts. In all indus-
marketing and therefore relying on personal tries identified by respondents, at least one of
information to build a relationship must first the two overall antecedents (reputation and
build trust to maximize consumers willingness perception of dependability) was significantly
to provide information. Across industries, the related to trust. Thus direct marketers pursuing
findings in this study suggest that consumers a relationship marketing strategy generally
purchasing through mail order, either by tele- should be concerned with building reputation
phone, mail, or online, are more willing to pro- and dependability regardless of industry. Inter-
vide information to companies if the trust has estingly, this held true across industries requir-
been built. This research study did not break ing diverse levels of financial risk (such as com-
out types of information, but it did measure puters and books), diverse types of information
both willingness to provide personal informa- (such as credit card financial information and
tion about the consumer and willingness to pro- apparel size), and both tangible and intangible
vide information about product/service needs products (books/CDs and telephone service).
and wants. In both situations, consumers are Once the trust is established, consumers are
equally likely to be more open to providing much more likely to perceive a relationship with
information, when the trust has been estab- the company across all industries, further dem-
lished. Direct marketers can help build that onstrating the importance of direct marketers
trust by protecting consumers information and putting efforts into establishing trust as part of
ensuring that the company is dependable with relationship marketing strategy. With the excep-
respect to consumers concerns about personal tion of credit cards, trust was significant in pre-
information. dicting a willingness to provide information to



marketers. Again, the relevance of this finding clear. Organizations concerned with building a
supports marketers need to emphasize trust- database of information and using that informa-
building over program- or tactic-building when tion to secure customer relationships, not just
the real goal is a relationship. The credit card repeat customers, must first work toward estab-
industry may be the exception because of the lishing a trust relationship with customers. Al-
nature of the information required (often though a number of constructs have been pos-
credit history and financial information) and ited to influence trust, in the direct response
the potential risk of being denied credit or the product purchase context, the key factors are
information being used for alternative uses. It the reputation of the organization and custom-
may also be a function of consumers acknowl- ers perception of the organizations depend-
edging that a credit card company must have ability. Firms must focus first on building these
certain types of personal data to issue credit and elements to then develop a competitive advan-
therefore trust is not necessary for consumers to tage based on customer relationship manage-
be willing to supply such information. ment.
This research study provides managers with
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