A THEORETICAL CONCEPTUALISATION OF TRUST AND COMMITMENT AS

TWO PILLAR ANTECEDENTS FOR CUSTOMER RELATIONSHIP

MANAGEMENT (CRM)

Prof Mornay Roberts-Lombard

(Department of Marketing Management, University of Johannesburg)

ABSTRACT
Customer Relationship Management is an enterprise-wide commitment to
identify an organisations individual customers, and to create a relationship
between the organisation and these customers as long as the relationship is
mutually beneficial. CRM provides a transition from a transaction-based to a
relationship-based model that concentrates on the acquisition, development and
retention of profitable customer relationships. Long-term relationships with
customers can only be created, reinforced and retained by building the
customers trust in an organisation over time, demonstrating a commitment by
the organisation to service, communicating with the customers in a timely,
reliable and pro-active fashion, and handling conflicts between the organisation
and the customers effectively. Trust exists when one party has confidence in an
exchange partners reliability and integrity. Relationships characterised by trust
are so highly valued that parties will desire to commit themselves to such
relationships. Customers will only make commitments to trustworthy partners
because commitment entails vulnerability, and leaves them open to opportunism
1. INTRODUCTION

The emergence of the relationship-marketing paradigm in modern marketing

thought consolidates the increasing importance given by marketing academics to
managing, developing and evaluating relationships (Lages, Lages & Lages,
2005). Achrol (1991) forecasted two decades ago that the rise of true marketing
organisations within networks of functionally specialised organisations whose

interrelationships, being norm driven, are held together and coordinated by

market driven focal organisations by means of norms of sharing and
commitments based on trust. Morgan and Hunt (1994) further argue that global
dynamics have resulted in a somewhat paradoxal nature of relationship
marketing. To be an effective competitor (in the global economy) requires one to
be a trusted cooperator (in some network). For most global businesses, the days
of flat-out, predatory competition are over .. in place of predation, many
multinational organisations are learning that they must collaborate to compete,
Business ethicists also stress that competition requires cooperation.

Wyner (1999) argues that one of the most visible shifts in marketing is the
movement from a transaction marketing orientated to a relationship marketing
orientated approach. Roberts-Lombard and Du Plessis (2012) argue that a
relationship marketing orientated approach will work best when customers are
engaged in relationship building activities. An organisation that wants to be
successful in the current global competitive market where customers are
empowered and brand loyalty erosion is increasing, will therefore have to move
to Customer Relationship Management (CRM). CRM, as a component of
Relationship Marketing, stresses the importance of continuous interaction
between the seller and the buyer in order to cultivate a long-term, mutually
beneficial relationship. Organisations can build mutually valuable relationships
with customers through a trust-based collaboration process (Yoshida & James,
2010; Mukherjee & Nath, 2003).

Krasnikov, Jayachandran and Kumar (2009) describe CRM as an enterprisewide commitment to identify an organisations individual customers, and to create
a relationship between the organisation and these customers as long as the
relationship is mutually beneficial. CRM provides a transition from a transactionbased to a relationship-based model that concentrates on the acquisition,
development and retention of profitable customer relationships. Long-term
relationships with customers can only be created, reinforced and retained by

building the customers trust in an organisation over time, demonstrating a

commitment by the organisation to service, communicating with the customers in
a timely, reliable and pro-active fashion, and handling conflicts between the
organisation and the customers effectively (Ndubisi, 2007). Trust is one of the
important underpinnings to CRM. The resources of the organisation have to be
used in such a manner that the trust customers have in the organisation is
maintained and strengthened (Ndubisi & Wah, 2005). A long-term relationship
between an organisation and a customer will therefore only develop if the
relationship is mutually beneficial (Baran, Galka & Strunk, 2008).
According to Van Vuuren, Roberts-Lombard and Van Tonder (2012),
commitment stems from trust, shared values and the belief that it will be difficult
to find partners that can offer the same value. Commitment is directly linked to
trust and is central to Customer Relationship Management (Roberts-Lombard,
2006). A customer will be committed to an organisation if the latter has proved to
be trustworthy and has shown that it has the ability to offer solutions and
successfully support the value-generating processes of the customer (Grnroos,
2003). Commitment is undoubtedly connected with trust, but it is less clear which
assumes precedence. Commitment may be the outcome of growing trust, or trust
may develop following a decision by the parties in the relationship to commit to
each other. Furthermore, the breakdown in commitment may be as a result of the
breakdown of trust and vice versa (Egan, 2004). Commitment operates in much
the same manner as trust, in that a certain level of commitment is required to
initiate the relationship, and as the relationship deepens, so does the existence
and evidence of commitment. Commitment involves behavioural, attitudinal,
affective and calculative components (Du Plessis & Roberts-Lombard, 2012).

This paper explores the nature of CRM and two key characteristics posited to be
associated with the effective cooperation that is required for customer
relationship management. Firstly, a perspective is provided on customer
orientation as a precursor to CRM, followed by a perspective on CRM. Secondly

it is theorised that successful customer relationship management requires

relationship commitment and trust. Finally, a framework is proposed to identify
the key components that constitute trust and commitment and how it relates to
the benefits of a customer management strategy.

2. CUSTOMER

ORIENTATION

AS

PRECURSOR

TO

CUSTOMER

RELATIONSHIP MANAGEMENT

Relationship marketing focuses on the retention of existing customers. By

maintaining current customers, it is suggested that costs are reduced by saving
money that would otherwise have been spent on advertising, personal selling,
the setting up of new accounts, explaining procedures to new customers and
reducing costs of inefficiencies in the customer learning process. A relationshiporientated view of the customer takes into account the income and profit to be
earned over a long-term relationship with a customer (Alvarez, Casielles &
Martin, 2011; Terblanche, 2007). Ndubisi (2007) stipulates that trust and
commitment are two primary principles on which relationship marketing is built.
The level of satisfaction which a customer experiences in a relationship with a
business is directly related to the principles of trust and commitment.

Organisations which recognise the importance of customer orientation create a

business culture which takes into consideration the interests of the customer in
all its activities. The business should observe the interests of the customer as a
partner in achieving the success of a business as superior to short-term separate
interests which occur within a business, no matter whether it is in the interests of
the employees, managers or owner of the business (Nazari, Divkolaei & Sorkhi,
2012; Vranesevic, Vignali & Vignali, 2002). Customer retention is therefore only
possible for the business if the principles of relationship marketing, namely trust
and commitment, focus on the interests of the customer, a commitment to
quality, the provision of added value through products and services, the
willingness to retain customers is applied by the business, and if relationships

with customers are managed professionally (McPherson, 2006). Considering

this, customer orientation should be perceived as an all embracive approach to
customer relationship management, resulting in customer retention. The next
section will focus on the concept of Customer Relationship Management (CRM)
as a method of retaining the most profitable customers.
3. A PERSPECTIVE ON CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

CRM is an information term for methodologies, software and usually Internet

capabilities that help an organisation to manage customer relationships in an
organised way. An organisation might build a database about its customers that
depicts relationships with sufficient detail so that management, salespeople,
people providing service, and perhaps the customer directly, could access
information, match customer needs with product plans and offerings, remind
customers of service requirements, and know what other products a customer
had purchased, amongst others (Hasan, Raheem & Subhani, 2011). CRM is also
perceived as an all embracing approach, which seamlessly integrates sales,
customer service, marketing, field support and other functions that touch
customers. When using this approach, by integrating people, process and
technologies and leveraging the Internet, the relationship with all customers and
suppliers is maximised (Hasounet & Alqeed, 2010). Basically, CRM is a notion,
regarding how an organisation can keep its most profitable customers and at the
same time reduce the costs and increase the values of interaction to
consequently maximise the profits (Frow, Payne, Wilkinson & Young, 2011).
CRM explores an approach to maximise customer value through differentiating
the management of customer relationships. The organisation utilises its
understanding of the drivers of current and future customer profitability to
appropriately allocate the resources across all areas that affect customer
relationships. These areas are communications, customer service, billing and
collections, product or service development and pricing strategies (Venkatesan,
Kumar & Bohling, 2007).

The importance of how CRM is described is not merely semantics. Its description
has a significant impact on how CRM is accepted and practised by the entire
organisation. CRM is not only an IT solution to the problem of getting the right
customer base, and growing it. CRM is much more (Robinson, Neeley &
Williamson, 2011). It involves a profound synthesis of strategic vision, an
organisational understanding of the nature of customer value and loyalty within a
multi-channel environment, the utilisation of the appropriate information
management and CRM applications, and high quality operations, fulfilment and
service. CRM can be viewed on a continuum. On the one side, CRM is defined
narrowly and tactically (i.e. as a particular technology solution), whilst at the other
extreme, CRM is viewed broadly and strategically (i.e. as a holistic approach to
managing customer relationships in order to create shareholder value the
organisation becomes more customer centric) (Payne, 2009).

CRM therefore emphasises that managing customer relationships is a complex

and ongoing process and a response to, and reflection of a rapidly changing
marketing environment. Therefore, it is advocated to position CRM in any
organisation in a broad strategic context to secure a more customer centric
approach (Payne, 2009). Against this background, the characteristics of CRM are
discussed.

3.1 The characteristics of CRM

CRM is no longer only a method used by service organisations to obtain a
competitive advantage, since it has become a necessity for survival. As markets
become increasingly competitive, the development of relationships with
customers that can be maintained in the face of many incentives to switch
service providers is seen as a method of creating a sustainable competitive
advantage. Professional services such as banking, and medical and insurance
services are rated and rewarded by the client relationships they manage (Berndt,
et al., 2009; Rootman, 2006). A well-designed CRM strategy will incorporate four
key characteristics (Berndt et al., 2009; Buttle, 2004) (refer to Table 1).

Table 1 Characteristics of CRM

Characteristic

Impact

Relationship Management

Instant response based on customer input

Sales force automation

Empowers sales professionals

Use of technology

Develop strong customer relationship through

an improved understanding of customer
preferences,

expectations

and

changing

needs
Opportunity in management

Flexibility to manage unpredicted demand

and a good forecasting model to integrate
sales history with sales projections

The first characteristic is relationship management: This characteristic includes

instant response based on customer input. Customers expect to be able to deal
with the organisation when they want, where they want and how they want.
Organisations are further required to remember past interactions with customers
and they must build on those interactions in the future. Organisations should
provide customer service centres that can assist customers to address their
questions (Berndt et al., 2009). The second characteristic refers to sales force
automation: Sales Force Automation systems (SFA), typically functions as a part
of an organisations CRM system that automatically records all the stages in a
sales process. SFA includes a contact management system which tracks all
contact that has been made with a customer, the purpose of the contact, and any
follow-up that might be required. This ensures that sales efforts are not
duplicated, reducing the risk of irritating customers. Other elements of an SFA
system can include sales forecasting, order management and product
knowledge. While sales force automation products were originally introduced to
improve sales force productivity and provide better documentation for the
organisation, they are increasingly orientated towards developing customer
relationships and improving satisfaction. The development of any CRM system
depends on a significant level of infield technology. In order for salespeople to

use the system, they must be connected to it through a computer, Personal

Digital Assistant (PDA) or other device. The CRM system requires continued
communication among all operations that touch the customer. This includes
automation of sales promotion analysis, tracking the customers account history,
and coordinating sales, marketing, call centres and retail outlets to realise that
sales force automation (SFA) assists with developing trust and commitment with
customers, as organisations are in a position to know exactly what a customer
wants and when he wants it (Baran et al., 2008).

The third characteristic encompasses the use of technology. The ability to extend
customer knowledge and develop successful relationships with customers lies in
the organisations ability to understand customers, their individual preferences,
expectations and changing needs. Technology is employed to capture
information on customers, which in turn is used to monitor the customers buying
behaviour and to communicate with them on an individual basis, often with
personalised offers (Egan, 2004). Customer data is considered to have value and
the potential to augment the customer-organisation relationship. The storing of
data for later retrieval is known as data warehousing, and the manipulation of the
warehoused data is known as data mining (Evans, OMalley & Patterson, 2004).
CRM is dependent on technologies. An example is where data warehousing
allows the organisation to search, store and integrate data from all available
sources, systems and organisational units. The data warehouse is a more
advanced form of database, often supplemented by mini-bases and data marts.
Data

warehousing

integrates

information

about

customers

and

other

stakeholders in an organisations network of relationships. With this knowledge

the organisation can better customise and target communication, goods and
services to boost the organisations competitive power and increase customer
retention. The data warehouse becomes a key knowledge tool for the
organisation and can be used to stimulate indices of intimacy and connectedness
(Gummesson, 2008). Other technologies have developed that give organisations
a myriad of opportunities for communicating with customers. These new

technologies can make up-to-the-second customer data available and allow

organisations to communicate with customers directly. These new technologies
include the Internet, telecommunication and computer-telephony in call centres.
(Evans et al., 2004). Technology is to the advantage of the customer and should
lead to customer loyalty, as the organisation can communicate up-to-date
information with customers which will remove uncertainty and will lead to the
creation of trust. The created trust will lead to an enduring desire from the
customers to maintain the valued relationship with the organisation (Ndubisi &
Wah, 2005). The fourth characteristic is opportunity in management. This
characteristic includes the flexibility to manage unpredicted demand and a good
forecasting model to integrate sales history with sales projections. Customer
portfolio analysis (CPA) and customer intimacy (CI) analysis can be used by the
organisation as primary analytical activities. CPA involves using customer and
market data to decide which customers to serve. CI involves getting to
understand customers and their requirements. Network development and value
proposition development are focused on building and acquiring resources to
create and deliver value to customers. Managing the opportunity in the
customers lifetime is about implementing CRM by acquiring and retaining
customers and developing their value (Berndt et al., 2009; Buttle, 2004).
Organisations can use opportunity management to win the trust of customers by
understanding the customers requirements and delivering on their promises,
whereas CI can be used for flexibility in communicating with customers and this
should lead to committed customers. The combination of CPA and CI should
notify an organisation of potential conflicts and should allow the organisation to
take corrective action immediately (Ndubisi, 2007). This is important in the
forming of long term relationships with customers.

4. FORMING LONG-TERM RELATIONSHIPS WITH CUSTOMERS

The purpose of CRM is to develop appropriate relationships with customers

through

communication

to

create

long-term

profit

(Roberts-Lombard,

2011b,2011; Grnroos, 2003). CRM provides a transition from a transactionbased to a relationship-based model that concentrates on the acquisition,
development and retention of profitable customer relationships. A goal of CRM is
to create an opportunity for re-purchase by a customer through an improvement
in the communication process to the customer, providing the right offer, relating
to product and price, through the right channel, at the right time. This will lead the
customer to perceive that the organisation is concerned with the customers
needs, and this in turn may lead to greater satisfaction, trust and commitment
towards the organisation. When the customer has additional experiences with the
organisation in which the customers needs were satisfied, the customer may
develop a sense of loyalty to the organisation (Roberts-Lombard, 2011a; Egan,
2004). Long-term relationships with customers can only be created, reinforced
and retained by building the customers trust in an organisation over time,
demonstrating a commitment by the organisation to service, communicating with
the customers in a timely, reliable and pro-active fashion, and handling conflicts
between the organisation and the customers effectively (Ndubisi, 2007).

4.1 Attracting profitable customers

Should an organisational goal be to attract the greatest number of customers,
this can be achieved by giving away products and services for free. The
organisation will be able to gain 100% market share, but it will not be in business
over a long period of time. Organisations should therefore only attract the most
profitable customers. All customers are not created equally, an organisation
should disinvest unprofitable customers. The purpose of CRM is to identify the
most profitable customers, retain them and encourage greater usage of the
organisations products and services, and to trade them up to more prestigious
and expensive items over time (Read, 2009; Baran et al., 2008; Rootman, 2006).
CRM adopts a customer focus that enables an organisation to retain loyal,
profitable customers and a greater share of the customers wallet through crossselling and up-selling. Organisations attempt to increase the customer lifetime
value through efforts such as personalisation, customisation and effective

10

customer profit projections based on recency, frequency and monetary value

(RFM) measurements. RFM is an approach to compute a score for each
customer based on how recently they purchased, how frequently they purchase
and how much revenue or profit they generate. The score generated is then used
to predict a customers likely response to future marketing expenditures and
efforts (Baran et al., 2008; Buttle, 2004; Egan, 2004). Trust is one of the
important underpinnings to CRM. The resources of the organisation have to be
used in such a manner that the trust customers have in the organisation is
maintained and strengthened (Ndubisi & Wah, 2005). A long-term relationship
between organisation and customer will only develop if the relationship is
mutually beneficial (Baran et al., 2008).

4.2 Managing the relationships with customers

The term management is important in defining CRM, as it pertains to the
organisations ability to develop strategies to attract and retain customers.
Management refers to the identification of prospects, selection and acquisition of
relevant prospects and developing the relationship. Organisations should
increase the number of products and services that add value for the customer
and are profitable for the organisation, since it can ensure that the lucrative
lifetime value of the relationship is maximised. To manage the relationship with
customers effectively, the linkage between marketing, communication and CRM
must be strong. CRM integrates marketing, sales and service functions through
organisation process automation, technology solutions and information resources
to maximise each customer contact. CRM facilitates relationships amongst the
organisation, customers, organisation suppliers and employees (Baran et al.,
2008; Du Plessis, Jooste & Strydom, 2005; Evans et al., 2004). CRM is about
managing the customer experience. Organisations must therefore understand
their customers needs and purchase behaviour and effectively manage each
interaction which they have with a customer. These interactions can arise when
customers interact with employees in the organisation through customer contact
centres, but also through advertising and sales promotion activities. CRM raises

11

the bar for customer service expectations as organisations exhibit greater

customer recognition and treat customers as individuals. Thus, CRM can provide
organisations with a competitive advantage (Baran et al., 2008; Du Plessis et al.,
2005). Customers will trust organisations that they (through past experiences)
have learnt can be trusted. Unfortunately, one of the constants of services is
service failure. When a service failure takes place the management of the
organisation should investigate what caused the failure, and they should rectify it
immediately and communicate their actions to customers. If service failures are
not dealt with, customers will end their relationship with the organisation (Berndt
et al., 2009).

4.3 CRM viewed as a system

CRM as a system refers to the technological integration of the various touch
points with customers throughout the organisation, e.g. the organisations
Intranet. The information obtained from customers must then be stored in a data
warehouse, which should allow easy, useable access to the information stored.
Touch points are any point of contact with the customer and can include phone
enquiries from customers, web applications, e-mail or in-person contact
transactions such as the interaction with the customer through walk-in-centres
(Onut, Erdem & Hosver, n.d.). When CRM is viewed as a system it must contain
four major technology components, namely (Baran et al., 2008; Geib, Reichold,
Kolbe & Brenner, 2005):
A data warehouse containing customer, contact, transaction and channel data.
The main purpose of data storage is to enable the organisation to develop
strategies around customer behaviour. A data warehouse is a repository for all
relevant customer and prospect information.
Analytical tools to identify customer behaviour patterns.
Campaign management tools to develop and evaluate the results of marketing
communications such as advertising and sales promotion campaigns.
Interfaces to maintain the database.

12

CRM aims to build relationships with customers through dialogue during the preselling, selling, consuming and post-consuming stages. Information must be
communicated to the customer that can be trusted. Communication with
customers should also tell dissatisfied customers what the organisation is doing
to rectify the situation (Ndubisi & Wah, 2005). Du Plessis (2010) furthermore
states that trust and commitment are key elements for retaining customers. An
organisation must therefore focus on building relationships with customers to
reap the rewards of loyal customers. Communication is the glue that holds the
relationships with customers together and emotional trust is the foundation for
partners to function. Against this background, the Trust-Commitment theory of
Customer Relationship Management (CRM) is discussed.

5. THE TRUST-COMMITMENT THEORY OF CUSTOMER RELATIONSHIP

MANAGEMENT (CRM)

Scholars have identified different virtues that have been theorised in the
relationship marketing literature, but have placed special emphasis on trust
(Morgan & Hunt 1994; Moorman, Deshpand & Zaltman, 1983) and commitment
(Morgan & Hunt 1994; Ndubisi, 2004). Morgan and Hunt (1994) stipulate that
trust and commitment are central to relationship marketing because they
encourage marketers to work at preserving relationship investments by
cooperating with exchange partners, resist attractive short-term alternatives in
favour of the expected long-term benefits of staying with existing partners, and
view potentially high-risk actions as being prudent because of the belief that their
partners will not act opportunistically. Therefore, when both trust and
commitment not just one or the other are present, they produce outcomes
that promote efficiency, productivity and effectiveness. In short, trust and
commitment lead directly to cooperative behaviours that are conducive to
relationship marketing success (Tsai, Tsai & Chang, 2010).

13

5.1 Trust
Before a relationship can exist, both parties must mutually perceive that the
relationship exists. Relationships are therefore a series of transactions which
build an awareness of a shared relationship through trust and commitment.
Higher levels of trust and commitment in turn are associated with higher levels of
customer retention, and this leads to increased organisational profitability (Read,
2009). Trust is focused and there is a generalised sense of confidence and
security in the other party. The parties believe that the one party will act in the
interest of the other, that the other party will be credible, and that the other party
has the necessary expertise (Lian, Chen & Wang, 2008). Trust can be viewed as
a partners belief that the other partner will perform actions that will result in
positive outcomes, as well as not take actions that will result in negative
outcomes. The trusting relationships between customers and organisations are
associated with overall positive outcomes, and trust in the organisation should
increase the benefit derived from transacting with the organisation (Botha & Van
Rensburg, 2010).

Ndubisi (2007) refers to trust as the willingness to rely on a partner in whom

confidence is entrusted. In developing relationships with customers, trust
between the parties is of the utmost importance. Customers will trust
organisations which they perceive to be honest (Sauers, 2008). Often consumers
only partially know what they are buying, their purchase is based on trust
(Morgan & Hunt, 1994). For example, the value of an insurance policy will only
be known at claim stage, as most customers do not understand the fine print and
legal conditions of their home insurance or retirement plan (Datamonitor, 2013).
A customers trust in an organisation has a positive and direct effect on the
customers loyalty towards the service provider. Customer loyalty is indicated by
an intention to perform a diverse set of behaviours that signal a motivation to
maintain a relationship with the organisation, including allocating a higher share
of the category wallet to the specific service provider, engaging in positive wordof-mouth, and repeat purchasing (Botha & Van Rensburg, 2010). The

14

relationship between consumer trust and loyalty is supported by reciprocal

arguments (Morgan & Hunt, 1994). When service providers act in a manner that
builds customer trust, the perceived risk with the specific service provider is
reduced, enabling the customer to make confident predictions about the
provider's future behaviours (Tsai et al., 2010). Trust also influences loyalty by
affecting the customers perception of congruence in values with the provider,
and such value congruence is significantly related to the customers loyalty and
satisfaction. Trust as an underpinning of CRM therefore has a positive influence
on customer loyalty (Hoq, Sulatana & Amin, 2010; Ndubisi 2007).

Trust is therefore an essential ingredient for successful long-term relationships

(Morgan & Hunt, 1994). It allows partners in a relationship to help preserve the
relationship, avoid alternative relationship with other partners, and reduce
perceptions of risk. Trust has been viewed as a key driver of successful and
long-term relationships in consumer markets, and a critical success factor in
viable relationships in services marketing (Hu, Kandampully & Juwaheer, 2009;
Morgan & Hunt, 1994; Dwyer, Schurr & Sejo, 1987). According to Morgan and
Hunt (1994), trust exists when one party has confidence in the exchange
partners reliability and integrity. One major source of trust is the satisfaction of
customer expectations, and it is reinforced by positive service evaluations and
satisfactory consumption experiences which make future exchanges more
predictable. Additionally, trust has been found to be directly related to
behavioural intentions (Sirdeshmukh, Singh & Barry, 2002; Chaudhuri &
Holbrook, 2001), however limited empirical studies have examined the influence
of trust on actual patronage behaviours (Percy, Visvanathan & Watson, 2010).

5.2 Commitment
Commitment is an essential ingredient for successful, long-term relationships
(Biedenbach & Marell, 2010). It arises from trust, shared values and the belief
that partners will be difficult to replace. Commitment motivates partners to cooperate in order to preserve the relationship investments. This implies that

15

partners forgo short-term alternatives in favour of long-term benefits associated

with current partners. Customers will only make commitments to trustworthy
partners because commitment entails vulnerability, and leaves them open to
opportunism (Read, 2009). Commitment is higher among individuals who believe
that they receive more value from a relationship, therefore highly committed
customers would be willing to reciprocate effort on behalf of an organisation due
to past benefits received (Botha & Van Rensburg, 2010). Therefore, commitment
in this context refers to both parties understanding that they are in the market
together for the long run. They are willing to make sacrifices for their partners
because they are mutually dependent upon each other in their quest to achieve
long-term returns on their psychological and financial investments (Baran et al.,
2008). For example, the way in which employees of an organisation perform their
tasks can lead to trust, and this will have a significant impact on the commitment
from the customer and therefore customer loyalty (Helkkula & Kelleher, 2010).

Commitment is central to a successful relationship. Commitment is the desire to

maintain the relationship and is indicated by ongoing investment into activities
which are expected to maintain the relationship into the future. As it may take
time to reach a point where a commitment is made, it may also imply a certain
maturity in the relationship (Morgan & Hunt, 1994). High levels of commitment
are also associated with perceptions of future rewards, relationship identification,
limited desire to seek out alternatives, the amount of effort expended in a
relationship, the investment made in the relationship and the individuals
assumed responsibility (Tsai et al., 2010; Gummesson, 2008). Relationship
commitment is central to CRM. A customer will be committed to an organisation if
the latter has proved to be trustworthy, and has shown that it has the ability to
offer solutions and successfully support the value generating processes of the
customer (Ma, Ding & Hong, 2010). Commitment is undoubtedly connected with
trust, but it is less clear which assumes precedence. Commitment may be the
outcome of growing trust, or trust may develop following a decision by the parties
in the relationship to commit to each other. Furthermore, the breakdown in

16

commitment may be as a result of the breakdown of trust, and vice versa (Jain &
Bagdare, 2009:35-36).

Commitment is higher among individuals who believe that they receive more
value from a relationship, therefore highly committed customers would be willing
to reciprocate effort on behalf of an organisation due to past benefits received
(Botha & Van Rensburg, 2010). Therefore, commitment in this context refers to
both parties understanding that they are in the market together for the long run.
They are willing to make sacrifices for their partners because they are mutually
dependent upon each other in their quest to achieve long-term returns on their
psychological and financial investments (Baran et al., 2008). For example, the
way in which employees of an organisation perform their tasks, can lead to trust,
and this will have a significant impact on the commitment from the customer and
therefore customer loyalty (Helkkula & Kelleher, 2010).

Egan (2008) states that commitment is the implicit or explicit pledge of continuity
between relationship partners. Commitment has also been found to be positively
related to behavioural intentions, particularly customer loyalty. For example, the
greater the customers (affective) commitment in the relationship, the more the
customer is inclined to remain in the relationship. Alternatively, the commitment
to building long-term relationships is also demonstrated by the willingness of the
parties to invest resources (e.g. assets, time and effort) to strengthen the
relationship. Thus, after establishing commitment in the relationship, this should
not only lead to a greater propensity to maintain the relationship, but also to
invest in the relationship to increase its quality (Gounaris, 2005). While trust has
been based on an evaluation of the partners qualities (perceived reliability and
integrity), commitment involves a psychological attachment, a concern for the
welfare of the organisation. The next section provides an in-depth perspective on
the relationship between Trust and Commitment and the influence of trust on
the relationship loyalty intention of the customer.

17

6. TRUST

INFLUENCES

RELATIONSHIP

COMMITMENT

AND

RELATIONSHIP LOYALTY
In service industries, a high level of contact between service providers and
customers is required. The greater customers satisfaction with their service
experience, the more they feel they can trust both the organisation itself and the
personnel who provide its service. Thus, satisfied customers are more willing to
increase use for a short period and in the long run, by trust having been built by
an organisation (Aydin & Ozer, 2006). Frequent exposure to the businesss
products/services or the businesss brand can cause it to be seen as a well
known name that can be trusted. Linked to this is the perceived popularity of the
product service, the idea being that, if a large number of customers buy a product
or service, it must be reliable and should be trusted (McMahon-Beattie, 2005).
Kuusik (2007) argues that the development of trust is influenced by three aspects
within the business: supplier, product and salesman. This shows that the
customer evaluates the business with regard to the supplier, product and staff to
examine whether a trust relationship is viable.
Staff comprise representatives of the business in the customers eyes. When a
staff members behaviour is perceived as ethical, the business is also perceived
as ethical. Customer trust in the relational sales context can be defined as a
confident belief that the salesperson can be relied upon to behave in such a
manner that the long-term interest of the customer will be served (Chen & Xie,
2007). Within an optometric practice the customer evaluates the trust relationship
based on interaction with staff, the product properties and the overall
performance of the practice to form an image of the supplier. McMahon-Beattie
(2005) argues that businesses need to consider the element of pricing policies
and revenue as an antecedent of trust. Businesses need to be aware that pricing
can decrease trust if there is a perception that services are charged incorrectly or
exorbitantly. Significantly, customers often base their level of trust/distrust in a
business on their perceptions of the fairness of the pricing of the products and

18

services. Customers typically perceive price increases as fair if they are a

reaction to increased cost from the sellers point of view, but unfair if they are in
reaction to increased demand.

The perception of a business as caring for its customers is also important in

developing trust, and a number of businesses have been witnessed investing in
RM and CRM strategies to improve the perception of the business in order to
result in the business being perceived as trustworthy in an endeavour to foster
customer loyalty and maximise long-term profits (McMahon-Beattie, 2005). Trust
is considered an important result of investing in a dyadic and affective
relationship between customers and the business. Increased trust is often cited
as a critical ingredient for determining relationship success and consequently
brings on an improved relationship quality with customers (Hoq et al., 2010).
Morgan and Hunt (1994) support this argument by stating that trust is extremely
important to relationship building and can be perceived as the cornerstone of the
strategic partnership between supplier and customer. Why? Relationships
characterised by trust are so highly valued that parties will desire to commit
themselves to such relationships. Indeed, because commitment entails
vulnerability, parties will only seek trustworthy partners.

Trust has been recognised as an important factor in affecting relationship

commitment and customer loyalty. Social exchange theory explains this causal
relationship through the principle of generalised reciprocity, which holds that
mistrust breeds mistrust and as such would also serve to decrease commitment
in the relationship and shift the transaction to one or more direct short-term
exchanges. Therefore, it is posited that trust is a major determinant of
relationship commitment (Morgan & Hunt, 1994). Literature further postulates
that if one party trusts another, such a party is willing to develop a positive
behavioural intention towards the other party. Accordingly, when a customer
trusts a business or brand, that customer is willing to form a positive buying
intention towards the business. Trust works at preserving relationship investment

19

by

cooperating

with

exchange

partners,

resisting

attractive

short-term

alternatives in favour of the long-term benefits of continuing with existing

partners, and viewing potentially high-risk actions as being prudent because of
the belief that their partners will not act opportunistically (Aydin & Ozer, 2006).
The relationship between customer trust and loyalty is supported by reciprocal
arguments. When service providers act in a way which builds customer trust, the
perceived risk with the service provider is reduced, which enables the customer
to make confident predictions about the service providers future dealings. Trust
influences loyalty by affecting the customers perception of congruence in values
with the service provider, and such value congruence is significantly related to
the customers satisfaction and loyalty. Trust as an element of customer loyalty
has a definite influence on the building of customer loyalty (Du Plessis, 2010;
Chen & Xie, 2007). Against this background, a perspective follows on the
influence of commitment on customer loyalty.

7. COMMITMENT INFLUENCES CUSTOMER LOYALTY

Relationships are built on the foundation of mutual commitment, and the

commitment level has been found to be the strongest predictor of the voluntary
decision to pursue a relationship. Commitment is a means for differentiating
successful

relationships

from

unsuccessful

relationships

hence

strong

relationships are built on the foundation of mutual commitment (Ibrahim & Najjar,
2008). Parties in the relationship identify commitment as the key endeavour to
develop and maintain their relationship. A high level of commitment provides the
context in which both parties can achieve individual and joint goals without fear of
opportunistic behaviour. This is because more committed partners will exert effort
and balance short-term problems with long-term goal achievement, higher levels
of commitment are expected with relationship success (Wang, 2010).

20

The following elements are generic to all definitions of commitment and can be
highlighted as follows (Du Plessis, 2010):

Commitment is directly linked to the concept trust.

Parties in the relationship trust each other and are loyal, which causes the
relationship to be stable.

Parties in the relationship work to create a long-term relationship with each

other.

One of the parties in the relationship has a desire to do business with the
other party in the relationship.

In a similar way to trust, commitment is an important ingredient in successful

relationships, with commitment being a central construct in relationship
marketing. In the buyer-seller relationship, commitment is defined as an implicit
or explicit pledge of relationship continuity between exchange partners hence
commitment refers to the motivation to stay with a supplier (Rauyruen & Miller,
2007). Commitment is generally regarded to be an important result of good
relational interactions. The strengh of customers commitment depends on their
perceptions of efforts made by the seller, which suggests that commitment is
fuelled by the ongoing benefits accruing to each partner. When the proportion of
commitment becomes more remarkable, it is not difficult to infer that the
relationship on both sides becomes more stable (Liang & Wang, 2005). For
commitment to exist, the following fundamentals need to be in place (Du Plessis,
2010):
Relationship terminations cost These costs are influenced by the lack of
comparable alternative partners, expenses associated with the dissolution of
the relationship, and switching costs.
Relationship benefits influence commitment Partner selection may be critical
in creating competitive strategies, as it is desirable to have partners who
deliver superior value benefits.
Shared values directly influence commitment The extent to which partners

21

have common beliefs about behaviours, goals and policies that are important
and right for a situation, can affect relationship commitment.
Communication indirectly influences commitment Sharing of meaningful and
timely information can strengthen the level of relationship commitment.
Opportunistic behaviour can negatively influence commitment through a
decrease in trust by one of the parties.

High levels of commitment in the relationship will lead to overall relationship

quality and loyalty. Relationship quality and commitment are antecedents of
repeat purchase behaviour. Customers who are committed to a relationship
might have a greater propensity to act because of their need to remain consistent
with their commitment (Liang & Wang, 2005). More committed customers tend to
form a positive overall impression towards the total relationship duration,
including different transactions, positive and negative, and these customers
exhibit strong intentions to stay in the relationship (Du Plessis, 2010).

The affective dimension of commitment best describes the emotional component

of loyalty. Hence, increases in relationship commitment will positively improve the
intention to continue a relationship which in turn will lead to increases in
behavioural intentions and ultimately loyalty (Zhang, Dixit & Friedmann, 2010).
Commitment operates in the same manner as trust, in that certain levels of
commitment are required to initiate the relationship, and as the relationship
evolves, so does the existence of commitment. Commitment is generally
regarded to be an important result of good relational interactions and is affected
by the customers perception of the effort made by the seller. Commitment is
fuelled by the ongoing benefits accrued to each partner in the relationship,
through the fact that committed customers have a greater propensity to act
because of their need to maintain their relationship commitment. When the
proportion of commitment becomes more remarkable, it is clear to infer that the
relationship on both sides becomes more stable, hence commitment is also an
important variable in the measurement of customer loyalty (Du Plessis, 2010;

22

Liang & Wang, 2005).

The next section provides insight into a new proposed paradigm of thought
based on the understanding of trust and commitment in future customer
management implementation.

8. OPPORTUNITY FOR A NEW THOUGHT PARADIGM BASED ON THE

UNDERSTANDING

OF

TRUST

AND

COMMITMENT

IN

FUTURE

CUSTOMER MANAGEMENT IMPLEMENTATION

Individual customers perception, once formed, can be difficult to alter. Decisions

that influence trust need to be infirmed by an understanding of customers, a
commitment to service and a focus on profitability. There is no need for confusion
when it comes to matters which relate to customers and trust (Olajide & Israel,
2012). What matters to the customer is a practical straightforward approach with
emphasis on honesty, simplicity, fairness, efficiency, initiative, respect and
excellence. Several vital truths exist when investigating trust and customers (Van
Vuuren, 2011):

Success is mutual Short-term profiting at the expense of customers can be

costly and should be avoided; relationships based on trust are the only sure
foundation for long-term profitability and win-win solutions are crucial.

Complexity can diminish trust Customers give their trust expecting

responsiveness, service and speed, and these are jeopardised by
complexity. Simplicity is needed if trust is to be built in the long run.

Recognition builds trust All parties respond better when their value is
acknowledged, so whether the success is a customers or someone serving
a customer, recognition for their needs builds understanding, community
spirit and trust.

Clear communication is vital Maintaining trust means listening, valuing

communication, being honest and learning from peoples comments.

23

Be consistent Practising what you preach is essential for all customers.

Maintaining the trust of customers is challenging at any time, but it is
particularly exacting given the changing nature of customers needs.

Unless there is a minimum level of trust between the parties, it is unlikely that
relationships will be maintained. It is therefore imperative that businesses
address the listed issues in order to build trust. Trust between the parties must be
developed and it must be seen as an investment (Du Plessis, 2010).

Commitment, on the other hand, is influenced by the psychological, emotional,

economic and physical attachments in a relationship that are fostered by
association and interaction which bind parties together in a business relationship.
Four strategies can be developed to increase perceived relationship investment,
which in turn influences the commitment: financial bonding tactics, social bonding
tactics, and structural bonding tactics (Liang & Wang, 2005). These strategies
are discussed as follows:

Financial bonding tactics Create a bond that stimulates customers

consumption motivation and improves their loyalty through price decisions,
such as price discounts or better financing opportunities. This bond is easily
emulated by competitors hence it is unable to give the business a
sustainable competitive advantage.

Social bonding tactics These are created through the personal ties and
linkages forged through interactions. These bonds are influenced through
factors such as disclosure, friendliness, closeness, empathy, responsiveness,
affiliation, attachment, connectedness and shared experiences.

Structural bonding tactics The knots that secure the structure through
administration, structure, norms and institutionalisation of the relationship.
Rules, policies, procedures, infrastructure and/or agreements give formal
structure to relationship. Norms informally govern interactions and systems
facilitate interactions.

Perceived relationship investment Relationship bonding tactics play a

24

predominant role through the increased importance the customer attaches to

the relational properties of interactions with the business. Investing time,
effort and other irrevocable resources in a relationship creates psychological
bonds that encourage customers to stay in that relationship and set an
expectation of reciprocation.

By providing this level of relationship bonding tactics, businesses can consolidate

their relationships with customers. The kinds of value-added services provided
improve customer efficiency and are not easily emulated by a competitor (Liang
& Wang, 2005).

Considering

the

theory

provided

in

this

article,

Table

propose

conceptualisation for a new paradigm thought on trust and commitment as two

pillar antecedents of CRM. .

Table 2: A new paradigm thought on Trust and Commitment as two

antecedents of Customer Relationship Management (CRM)

TRUST
Trust can be viewed as a partners belief that the other partner will perform
actions that will result in positive outcomes, as well as not take actions that will
result in negative outcomes. The trusting relationships between customers and
organisations are associated with overall positive outcomes, trust in the
company should increase the benefit derived from transacting with the
company (Du Plessis, 2010).
PILLAR

CONCEPTUALISATION

CONSTRUCTS
Two-way

The benefit of wanting to

relationship

establish a relationship

RESEARCH

SUMMATIVE

WORK

PERSPECTIVE

Du Plessis
(2010)

If an

by one part to another

Relationship

Cofidence of one party

25

organisation
delivers on its

Van Vuuren

promises, it

dependence

(2011)

that the other will act in

its best interest

Shared values

becomes
trusted by the

Morgan and
Hunt (1994)

Common beliefs on
what is appropriate,

client. The
customer will

inappropriate, right or

then be more

wrong behaviour

likely to utilise

Organisational

Recognition of customer

culture

orientation as a

RobertsLombard
(2010)

The parties

security

believe that the one

organisations
services again,

business culture
Confidence and

the

RobertsLombard
(2011)

as the customer
knows what

party will act in the

he/she can

interest of the

expect from the

other, that the other

organisation

party will be credible,

(Theron,

and that the

Terblanche &

other party has the

Boshoff, 2012)

necessary expertise

COMMITMENT
Commitment is an essential ingredient for successful, long-term relationships
(Biedenbach & Marell, 2010). It arises from trust, shared values and the belief
that partners will be difficult to replace. Commitment motivates partners to cooperate in order to preserve the relationship investments. This implies that
partners forgo short-term alternatives in favour of long-term benefits associated
with current partners.
PILLAR
CONSTRUCTS
Trust

CONCEPTUALISATION
Commitment arises from

26

RESEARCH
WORK
Morgan and
Hunt (1994)

SUMMATIVE
PERSPECTIVE
Customers will

trust, shared values and

make

the belief that partners

commitments

will be difficult to

only to

replace. Commitment

trustworthy

motivates partners to

partners,

co-operate in order to

because

preserve the relationship

commitment

investments

entails

Relationship

One party in the

willingness

relationship is motivated

Shared values

Du Plessis
(2010)

and leaves

to do business with the

them open to

other party in the

opportunism

relationship

(Read, 2009).

The extent to which

partners have common

Van Vuuren
(2011)

beliefs about
behaviours, goals and
policies that are
important and right for a
situation, can affect
relationship commitment
Communication

vulnerability

Sharing of meaningful
and timely information
can strengthen the level

Du Plessis &
RobertsLombard
(2013)

of relationship
commitment
Relationship

These costs are

termination

influenced by the lack of

costs

comparable alternative
partners, expenses
associated with the

27

RobertsLombard
(2011)

dissolution of the
relationship, and
switching costs

ASSIMILATION OF TRUST AND COMMITMENT INTO CUSTOMER

RELATIONSHIP MANAGEMENT
BENEFITS
Attracting new customers
Encouraging existing customers to more regularly make use of the
organisations service
Encouraging existing customers to purchase higher-value services to
ensure higher profits
Reducing the extent of customer churn
Terminating relationships with customers who are not profitable

From the paradigm framework provided in Table 2, Figure 1 is proposed. This

figure provides an illustrative summary of the elements that are central to trust
and commitment for improving Customer Relationship Management(CRM).

28

Figure 1: The elements of trust and commitment and their relationship to

Customer Relationship Management (CRM)

TRUST

Two-way relationship
Relationship dependence
Shared values
Organisational culture
Confidence and security

CRM

COMMITMENT
BENEFITS
Behaviour prediction
Personalisation

Trust

Customer profitability

Relationship willingness
Shared values
Communication
Relationship termination costs

Source (Researchers own construct)

It is therefore proposed that by focusing on the key aspects highlighted above

under each construct (refer to Figure 1), organisations can strengthen their ability
to enhance trust in the organisation and the brand it represents, and stimulate

29

the commitment of customers towards the organisation more successfully. The

potential outcome being that organisations can improve on their ability to predict
consumer behaviour, personalise products and services to their customer base,
and enhance their level of profitability through customer loyalty.

9. CONCLUSION

The development of trust is considered an important result of investing in a

dyadic and affective relationship between the parties in the relationship.
Increased trust is cited as critical for relationship success between the customer
and the business (Kumar et al., 2010). A customer will desire a relationship with a
specific business if he finds the benefits received to exceed the effort in obtaining
benefits. From this it is evident that both parties in the relationship have certain
costs or effort, but also expected benefits (Rootman, 2006). The benefits sought
through the relationship by customers are satisfaction, value and quality, while
the business ultimately endeavours to create long-term loyalty and profitabilty
(Wetsch, 2005:38). Trust refers to the confidence in the dependability of one
party to act in the long-term interest of the other party. A party to a relationship
has trust, if the feeling that the other party can be depended on, exists
(Nyadzayo, 2010). Customers are loyal when they have consistently been
satisfied, and are then passionately loyal about doing business with sellers who
can always be trusted. This high-trust relationship requires going further than the
realm of a customer transient and transaction-based feeling of delight, and is
regarded as total trust (Clancy, 2010). Trust exists when one party has
confidence in an exchange partners reliability and integrity. Relationships
characterised by trust are so highly valued that parties will desire to commit
themselves to such relationships (Ibrahim & Najjar, 2008). The following
guidelines are proposed for winning the trust of customers, namely secure the
confidence of customers, enhance trust in the product quality or service quality of
the offering, customers must perceive the service provider as reliable, there must
be channels to secure two-way communication, constant provision of high quality

30

service delivery is required, an affiliation with a professional body or Association

is recommended, a supplier must do continuous market research on the needs
and preferences of their customers, there must be a continuous effort by the
supplier to honour commitments made to customers, promises made to
customers must be honoured, and the employees of the supplier must act in a
professional manner at all times (Roberts-Lombard, van Tonder, Pelser &
Prinsloo, 2014).

Commitment, on the other hand, is also an essential ingredient for successful,

long-term relationships (Buttle, 2004). Similar to trust, commitment appears to be
one of the most important variables in understanding relationships, and it is a
useful construct for measuring the likelihood of customer loyalty as well as for
predicting future purchase frequency (Du Plessis & Roberts-Lombard, 2012).
Commitment arises from trust, shared values and the belief that partners will be
difficult to replace. Commitment motivates partners to co-operate in order to
preserve the relationship investments. Commitment implies that partners forgo
short-term alternatives in favour of long-term benefits associated with current
partners. Customers will only make commitments to trustworthy partners
because commitment entails vulnerability, and leaves them open to opportunism
(Buttle, 2004). Commitment is higher among individuals who believe that they
receive more value from a relationship, therefore highly committed customers
would be willing to reciprocate effort on behalf of a company due to past benefits
received (Alwi, 2009). Commitment in this context refers to both parties
understanding that they are in the market together for the long run. They are
willing to make sacrifices for their partners because they are mutually dependent
upon each other in their quest to achieve long-term returns on their psychological
and financial investments (Baran et al., 2008). For example, the way in which
employees of an organisation perform their tasks, can lead to trust and this will
have a significant impact on the commitment from the customer and therefore
customer loyalty (Roberts-Lombard, 2010). The following guidelines are
proposed for winning the commitment of customers, namely customers must be

31

convinced that it would be to their benefit to conduct business with the supplier,
the value that customers receive from the services or products provided by the
supplier must be greater than the value they would have received from
competitors, customers must perceive the service provided by the supplier as
unique, and difficult to duplicate, customers should understand that if they wish to
leave the supplier, they might have to incur high switching costs, due to the
unique benefits that the supplier is able to offer, customers must be convinced
that the supplier have their best interest at heart and as such, the customers
should remain committed to their practices, customers should believe that the
supplier does not simply have opportunistic intentions, but genuinely cares about
their well-being and shares the same values they might have, and meaningful
information must be shared by the supplier with customers in a timely manner
(Roberts-Lombard, van Tonder, Pelser & Prinsloo, 2014).

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