The Effects of Salesperson Trust Overestimation on Relationship Performance

Abstract

Environmental uncertainty is ever-present in society. One clear and powerful example of this uncertainty is the global pandemic, which caught governments and businesses by surprise. As a result, few business relationships operate the same as they did before the global pandemic. Most popular press articles have been quick to explore the myriad negative effects of the pandemic on the global economy. Our research, however, uses empirical data and identifies potential positive effects of environmental uncertainty in buyer-seller relationships. Prior research examining trust in buyer-seller relationships has shown the effects of trust and trust transgressions on relationship performance. Existing literature, in contrast, does not address the effects of salesperson trust overestimation (the difference between the salesperson’s and customer’s perceptions of trust) on relationship performance. We develop a framework of the effects of trust overestimation on both financial and referral outcomes. Furthermore, we explore conditions in which the negative effects of trust overestimation are exacerbated or mitigated based on customers’ attributions of blame. We use a multi-study approach to test the model, using qualitative interviews from business-to-business (B2B) professionals, surveys of matched dyads of B2B salespeople and their customers, and objective performance from company records. In combination, we find that a 1 unit increase in salesperson trust overestimation decreases financial revenue by $7.89 million, and potential referral revenue by $1.12 million, indicating severe negative consequences of trust overestimation. Moreover, the negative effects of trust overestimation are exacerbated by relationship intensity and mitigated by environmental uncertainty. These findings have significant theoretical and managerial implications, particularly as firms face daily challenges in serving their customers during this period of global economic upheaval. The results of this work suggest limits to the effectiveness of long-term relationships and offer conditions in which environmental uncertainty may actually aid in building relationships between salespeople and their customers.