Trust-based marketing is a

marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to emph ...

theory based on building

consumer A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...

relationships through trustworthy dialogue and

unbiased Bias is a disproportionate weight ''in favor of'' or ''against'' an idea or thing, usually in a way that is closed-minded, prejudicial, or unfair. Biases can be innate or learned. People may develop biases for or against an individual, a group, ...

information. The concept was originated by Dr. Glen L. Urban, professor and former dean of the

MIT Sloan School of Management The MIT Sloan School of Management (MIT Sloan or Sloan) is the business school of the Massachusetts Institute of Technology, a private university in Cambridge, Massachusetts. MIT Sloan offers bachelor's, master's, and doctoral degree programs, ...

. Trust-based marketing focuses on customer advocacy techniques that assist consumers in making informed purchase decisions based on comprehensive marketplace options and equitable advice. The theory contends that being honest and open is the best path to building consumer trust and creating a more loyal customer base. This is said to give customers increased consumer power through Internet access to product information and competitive pricing. Companies therefore can no longer rely on traditional models of " push marketing" in which a product's positive attributes may mask unsuitable characteristics. For customers wanting to make an informed decision on a complex decision purchase, trust-based marketing is claimed to provide consumers with unbiased advice. The theory is that in competitive markets, companies need to approach their customers with respect and acknowledge that product and

competitor Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indivi ...

information is easily accessible. Companies that provide consumers with comprehensive product options, including their competitor's, will earn the trust of the consumer even if it does not result in an immediate sale. When

impartial Impartiality (also called evenhandedness or fair-mindedness) is a principle of justice holding that decisions should be based on objective criteria, rather than on the basis of bias, prejudice, or preferring the benefit to one person over another ...

and candid information is presented, a consumer's loyalty towards the company increases and greater lifetime

profitability In economics, profit is the difference between the revenue that an economic entity has received from its outputs and the total cost of its inputs. It is equal to total revenue minus total cost, including both explicit and implicit costs. It i ...

per customer will be achieved. Urban argues that "Trust-based companies have higher

customer retention Customer retention refers to the ability of a company or product to retain its customers over some specified period. High customer retention means customers of the product or business tend to return to, continue to buy or in some other way not defe ...

and more stable revenue streams. The prediction is that trust-based businesses will, in the end, have higher sales volumes and lower marketing costs than companies that survive on push-based marketing strategies."MIT Faculty Spotlight
/ref> According to authors Dan Kennedy and Matt Zagula, trust-based marketing is used by Ponzi schemers such as Bernie Madoff, who was successful despite the fact that “ onecould explain exactly what Bernie did with their money or how he consistently generated above-par returns.” Urban originally tested his hypothesis with a prototype site for General Motors called TruckTown which provided unbiased comparisons of competing truck products. He found that more than 75% of TruckTown visitors said they trusted TruckTown more than the dealer who had sold them their last vehicle. Urban continued to test his theory with projects such as AutoChoiceAdvisor, a website to help car shoppers find the vehicle that best suits their needs) and a Medicare Insurance advisor called PlanPrescriber.

References

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External links

Trust-Based Marketing, MIT Faculty Spotlight
Types of marketing

See also

References

External links