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 How Does Your Company Measure Up On The Trust Monitor?

Studies show that more than two-thirds of people don’t believe advertisers and marketing. They see it as self-serving distortions. Consumers want to do business with companies they trust but, don’t know who to trust. What is trust and why is it important to customer relationships?

• A recent Datamonitor study of consumers in the USA and Europe found that 86% are less trusting of companies than they were five years ago.

• 80% of people stop buying products or services from companies when their trustworthiness comes into question (Edelman 2005 Trust Barometer)

• People spread distrust to friends and associates, the people we trust most.

• Over 33% who lose trust in a company, openly campaign against that company on the Internet.

The Datamonitor and Edelman research demonstrates that it goes beyond a few isolated cases. Another study done by Yankelovich showed that more than two-thirds of people don’t believe advertisers and marketing. They see it as self-serving distortions.

Consumers want to do business with companies they trust but, don’t know who to trust. Therefore, companies that proactively demonstrate trustworthiness stand to gain a tremendous source of competitive differentiation.

What is trust and why is it important to customer relationships?
Webster gives two definitions of trust that help separate the wheat from the chaff:
1. firm belief or confidence in honesty, integrity, reliability, justice or another person or thing
2. confident expectation, anticipation, or hope; as in trust in the future

Most companies believe they are trustworthy buy only measure up to the first definition. They want to be knows as a company that is honest, reliable and fair. They expect their products live up to expectations and when they don’t they think they treat customers equitably.

Do you think your company measures up? If you say yes, ask yourself what you proactively do to build this trust. Many companies have no deliberate strategy.

If you have a deliberate strategy, how well is it working? The Edelman Trust Barometer referred to earlier concluded that when looking for a credible source of information on a company or product, CEO’s, employees, public relations people and celebrities rank in the bottom half!

Measuring up to the first definition of trust is essential to sustainable and profitable customer relationships. However, even if customers believe your company is honest, reliable and fair, this is no guarantee they will be loyal and profitable. To garner commitment, profitability and high lifetime value, a company must measure up to Webster’s second definition as well.

Businesses that meet the first definition but not the second, run into the Satisficing Trust Barrier. Satisficing trust is the trust that allows a customer to feel comfortable in buying products or services from a company. It is a sense of confidence that the company will stand behind the product. It is sufficient trust to purchase a well-defined product, a commodity. In a world of abundance and overwhelming choice, satisficing trust does not insure repeat business. Customers buy commodities that offer the best trade-off between satisficing trust, price and convenience. Some companies become complacent because they feel they offer the best combination of the three. Unfortunately for them, all it takes to lose customers is for a competitor to create the perception of a better deal. No real relationship value has been accrued by the company who wins business this way.

The operative words in the second definition of trust are “hope” and “trust in the future.” Many purchases these days are not commodities they are not well defined and may not have a tract record. To make these types of purchases the customer must take a “leap-of- faith,” and this requires trust. The customer must believe that the vendor company is truly interested in a win-win relationship where both parties benefit. This type of trust grows out of experience with a company demonstrating a real commitment to win-win. Since virtually all customers have been “burned,” companies often have to subjugate their short-term interests to stimulate the development of faithful trust.

Customers want to build relationships that help them more confidently make “leap-of-faith” decisions. Being able to rely o this trust helps them simplify things in an increasingly complex world. When this happens, trust in the relationship becomes more important to customers than price and convenience. It starts with “hopeful trust.”

Customers want the vest for themselves. They want to adapt and to embrace change, and they will place extremely high value in relationships that help. Customers are on the lookout for signs from companies that their “hopeful trust’ will be well placed. But his “hopeful trust” is just a test. If the experience demonstrates that trust in the relationships is justified, faithful trust will emerge.

When trust morphs from “hopeful” to “faithful,” a very significant twist occurs. The main concern of customers shifts from price and utility to the seeking of advice and guidance. When price is an issue, customers withhold information. When the seek guidance, they openly share. ‘Faithful trust” enables this openness. It also enables both parties to prosper and builds a basis for co-adaptation, now and in the future.

The trustworthy company gets the immediate sale, but they get much more. Snafus or mistakes that might have once terminated a relationship are now overlooked for the sake of the relationship. Customers become turbocharged advocates. They don’t merely tell others what you sell, they vouch for you and the relationship value you delivery. They come to depend on your business and, as a consequence, they want you to thrive.

- From Customer Trust and Loyalty by John I. Odor, Ph.D. managing partner of The Whetstone Edge, LLC, a customer-centric consulting firm and the author of Addicted Customers: How to Get Them Hooked on Your Company.
 


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