Initiation of buyer-seller relationships: The impact of intangibility, trust and mitigation strategies

The importance of collaborative buyer-seller relationships has increased with the transition from product sales to solution provision. However, the extant literature provides only limited evidence on how this transition affects the crucial phase of buyer-seller relationship initiation. This study explores how offer intangibility and the buyer's trust in the seller interact to affect this initiation. Based on a comparative case study of four software solution providers, the findings indicate that the riskiness of an offer, induced by its intangibility, sets a threshold level of trust that needs to be exceeded to cause the buyer to start a relationship with the seller. The data also reveals mitigation strategies that sellers can use to influence the buyer's behavior either by directly reducing the intangibility of the offer or by indirectly enhancing the buyer's trust in the seller.