The Hidden Cost of Salesperson Trust Overestimation
Stephanie M. Mangus, PhD, Eli Jones, PhD, Judith Anne Garretson Folse, PhD, and Shrihari Sridhar, PhD
A firm’s sales force is its lifeline, and mutually satisfying buyer-seller relationships are critical to the health of a business. Importantly, the sales team is often the primary point of contact between a firm and customers, which means salespeople must effectively communicate and build rapport with clients. Part of an effective sales approach is to build trust with buyers, thus driving down relationship tension and, therefore, improving productivity. However, research suggests 70% of B2B salespeople overestimate customers’ trust in them. This misconstrued perception of trust on the part of the sales organization can cause significant miscalculations when dealing with customers.
Our research aimed to evaluate the effects of salesperson trust overestimation on customer account revenue and word of mouth, as well as the likelihood and quality of referrals. We found that trust overestimation by the salesperson has significant negative impacts on associated account revenues. However, certain market conditions also have a mitigating effect on the impact of trust overestimation on customer account revenues.
Perceptions Matter
Perceptions matter. Importantly, inaccurate perceptions matter. A salesperson’s overestimation of trust can impact decision-making and lead to significant consequences. Trust overestimation might induce a salesperson to ignore or downplay potential problems or issues with a product or service. For example, if an agent overestimates the trust of a buyer, the agent could assume the buyer’s preferences and take action on the buyer’s behalf without consulting the buyer. This can lead to a lack of trust in the agent and the firm, potentially leading to legal issues. Additionally, if an agent’s overestimation of customer trust leads to complacency with the sales strategy or prioritizing new clients over existing clients, the agent may inadvertently make clients feel taken for granted. This can lead to decreased revenue, loss of referrals, and loss of competitive advantage.
Our Study
Our research aimed to quantify how much trust overestimation can impact a firm. To gather data, we surveyed salespeople and customers of a large transportation logistics firm. Customer firms varied in size, industry, location, and relationship length. Respondents were the buying firms’ primary contact or person most familiar with the salesperson. After customer surveys were completed, we then surveyed the selling firms’ salespeople about those specific customers. We matched salesperson-customer survey data with objective sales performance data to measure the salesperson’s perception of customer trust and its impact on relationship outcomes.
In this industry, we found that a one-unit increase in salesperson trust overestimation leads to $7.89 million in lost revenue for the relationship. Additionally, one unit of salesperson trust overestimation translated to $1.12 million in lost potential referral revenue. The financial impacts are significant and indicate that sales managers should allocate efforts and resources to monitor asymmetries within customer-salesperson relationships to reduce lost revenue opportunities. It is critical for firms to periodically check with clients to ensure the agent and client are on the same page in terms of the salesperson’s trust estimation on the part of the client, compared to the client’s perception of trust in the salesperson. Consider the previous example where an agent overestimated trust and acted without consulting the client. Should this client walk away, not only does the agent lose the current sale, but any future sales from that client and future referrals resulting in major losses to the agent’s current and future portfolio.
While trust overestimation has a significant impact on the bottom line, we also found that market dynamism—changes in the competitive landscape and customers’ changing product preferences—can have a mitigating effect on the implications of salesperson trust overestimation. An increase in market dynamism actually reduces the negative impacts of salesperson trust overestimation, so a challenging external market allows customers to shift negative perceptions to the market instead of to the salesperson. That said, it may be advantageous for salespeople to take periods of high market dynamism and use them to recalibrate with clients to reconnect or get on the same page.
Real Estate Application
Agents must assess client trust accurately and set realistic expectations to ensure a successful transaction and positive long-term relationships. The implications, as mentioned, could be dire for a firm if there is a widespread disconnect in perceived trust from clients. Fortunately, there is a silver lining. When times are toughest and the market is struggling, use that time to develop and grow client trust to give your firm a competitive advantage and ensure future success.
. . . . . . . . . . . . . . . . . . .
Recommended Reading
Mangus, Stephanie M., Eli Jones, Judith Anne Garretson Folse, and Shrihari Sridhar (2023), “We Are Not on the Same Page: The Effects of Salesperson Trust Overestimation on Customer Satisfaction and Relationship Performance,” Industrial Marketing Management, 109, 58-70.
. . . . . . . . . . . . . . . . . . .
About the Authors
Stephanie M. Mangus, PhD
Assistant Professor, Baylor University
Dr. Stephanie Mangus’ (PhD – Louisiana State University) research focuses on buyer-seller dyads in sales and the sales and service interface, including service recovery and the emotions driving salesperson and customer behaviors. Her research has been published in the Journal of the Academy of Marketing Science, Journal of Business Research, Journal of Personal Selling & Sales Management, Industrial Marketing Management, and Psychology & Marketing. She serves on the Editorial Review Boards for the Journal of the Academy of Marketing Science and the Journal of Business Research. She is the abstract editor and Editorial Review Board member for the Journal of Personal Selling & Sales Management. Her work has been presented at conferences by the American Marketing Association, the Academy of Marketing Science, the Association for Consumer Research, the National Conference for Sales Management, and the Thought Leadership in the Sales Profession Conference. Dr. Mangus’ research and expertise have received international media coverage, including outlets such as The Huffington Post, CJAD Radio, WLNS-TV, The Art Newspaper, The Speaker, KIJK Magazine, among others. She teaches personal selling and sales management for the Center for Professional Selling at Baylor and has received numerous teaching awards at the university and international levels.
Eli Jones, PhD
Professor of Marketing, Texas A&M University
Dr. Eli Jones (PhD – Texas A&M University) is a Professor of Marketing, Peggy Mays Eminent Scholar, and the former Dean of Mays Business School at his alma mater. He served as the Dean of three flagship business schools over 13 years—Mays Business School, the Sam M. Walton College of Business at the University of Arkansas, and the E. J. Ourso College of Business at Louisiana State University. Before becoming a dean, he was on the faculty at the University of Houston as an Assistant Professor, Associate Professor (with tenure), Full Professor, Associate Dean for Executive Education Programs, Director of the Program for Excellence in Selling, and the founding Executive Director of the Sales Excellence Institute. He has published sales and sales management research in top academic journals. He co-authors two professional books, Selling ASAP and Strategic Sales Leadership: Breakthrough Thinking for Breakthrough Results. His new book, Run Toward Your Goliaths, is about his and his wife’s faith journey. He is the recipient of Excellence in Teaching awards on the university, national, and international levels, having taught strategic selling, advanced professional selling, key accounts selling, sales leadership, and marketing strategy at the undergraduate and MBA levels and in executive education programs globally.
Judith Anne Garretson Folse, PhD
R.A. & Vivian Young Endowed Chair of Marketing and Chair of the Department of Marketing, University of Arkansas
Dr. Judith Anne Garretson Folse’s (PhD – University of Arkansas) research focuses on consumer-based strategy through explorations of source and message effects (persuasion), consumption emotions (e.g., gratitude, pride, regret, empathy), brand authenticity, and firm/customer interactions with theoretically and managerially relevant implications for bilateral and unilateral communications, services, and relationship marketing decisions. Her work has appeared in the Journal of Marketing, Journal of the Academy of Marketing Science, Journal of Service Research, Journal of Retailing, Journal of Advertising, Psychology & Marketing, Journal of Advertising Research, Journal of Public Policy & Marketing, and Journal of Business Research among other journals and national conference proceedings.
Shrihari Sridhar, PhD
Joe Foster ’56 Chair in Business Leadership, Professor of Marketing, Presidential Impact Fellow, and Research Director of the Sales Leadership Institute, Texas A&M University
Dr. Shrihari Sridhar’s (PhD – University of Missouri) use of quantitative models and advanced data science help firms assess and improve the effectiveness of their strategy and resource allocation. His current focus is on the deployment of machine learning to companies in the business-to-business (energy, education, media) sector. Sridhar has published in various top-tier academic and practitioner outlets, such as Harvard Business Review, Marketing Science, Journal of Marketing, and the Journal of Marketing Research. He serves as Editor for the Journal of Marketing and as Area Editor for the Journal of Marketing Research and the Journal of the Academy of Marketing Science. He is on the Editorial Board of the Journal of Retailing. His research has been featured in National Public Radio (NPR), Reuters Inc., FOX News, Forbes, and Booz & Co. and won several research awards. He was recognized with the Marketing Science Institute’s Young Scholar Award. In 2014, he was the youngest and only untenured faculty to receive the Varadarajan Award for Early Career Contributions to Marketing Strategy Research.