“Commitment and trust, rather than (or at least in addition to) power and dependence, are now central to discussions of business relationships. Researchers and practitioners have come to view most interactions between business parties as events that occur over the course of a relationship between two or more partners.”
The funny thing about business-to-business (B2B) is that it’s less about business and more about relationships. In fact, B2B is really P2P – person-to-person.
What I mean by that is that people buy from people. In large organisations, the decision to go with one particular service provider over another is often down to the answer to one simple question:
“Do I really want to work with this person?”
And the answer to that question is usually based on the perception of whether the individual can be trusted or not.
Even in business situations where a large contract is put out to tender and a clear set of evaluation criteria is prepared to help guide the choice of service provider, the decision is often made on softer and often unwritten criteria. Sometimes decisions are made on the basis of price, sometimes on the basis of functionality. But when it comes to making the final choice to award the contract, subtle psychological elements come into play.
“OK, I know these guys seem to have the [INSERT: ‘best product’, ‘lowest price’, ‘most innovative solution’] but what if it all goes wrong? Will they sort out the issues? Or will they leave me in the lurch? Will I lose my job?”
Fundamentally, we like to buy from people we think are honest, who will treat us fairly and who will act with integrity. In other words, people we trust.
Two American scholars figured this out two decades ago. In 1994, Robert Morgan and Shelby Hunt wrote a seminal paper on what really drives a long-term relationship between two business partners. The Commitment-Trust Theory of Relationship Marketing quickly became a hit, not just in academic circles, but among senior business executives who were trying to identify why people were likely to do business with you.
Essentially, what Morgan and Hunt realised all those years ago is that long-term business relationships are built on a mutual and cooperative working relationship between two partner firms, and that to foster and nurture such a relationship, Trust and Commitment are the two critical elements to focus on.