News
 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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