We all know trust is important to business, but how much does it really matter? Trust is a catalyst for business and economic growth. In fact, it is often the factor that makes the difference between companies that merely survive and those that thrive.
Strong relationships with loyal customers are not only a hallmark of successful businesses; relationships built on trust fuel our economy with far-reaching impact.
Trust as the Foundation for Growth
Relationships can’t thrive without being built on a foundation of trust. Trust – or lack of it – can accelerate purchase decisions, streamline internal operations, facilitate innovation and improve adoption of new offerings.
But getting these is not easy. While trust is a concept we understand intuitively, comprehension does not necessarily make it easy to employ in the world of business.
We want to earn the trust of employees and customers who are often skeptical of corporate motives and individual credibility.
To inspire trust, we must first be worthy of trust from others. According to Dr. Graham Dietz of Durham University, trustworthiness consists of three characteristics:
- Ability – the technical competence to perform a task reliably
- Benevolence – having benign motives
- Integrity – acting according to acceptable principles such as fairness and honesty
Dietz explains, “Display these three attributes consistently and credibly, and you will be trusted by all but the most paranoid. Get any of them wrong, and your reputation will suffer. Trust is remade – strengthened or undermined – in every encounter.”
The Indelible Impact of Trust
The Edelman Trust Barometer, an annual survey of attitudes about trust in 25 countries, found that 81% of global respondents in their 2007 survey refused to buy products or services from a company they did not trust.
Other results of this survey show that when consumers don’t trust a company:
- 74% criticized them to people they know
- 70% refused to invest in them
- 50% refused to work for them
- 45% ignored their attempts to communicate with them
Trust enables firms to expand and enhance their economic value. In fact, research by Watson Wyatt found that high trust organizations outperform low trust organizations in shareholder ROI by 286%.
Layers of Trust
Trust in organizations is multi-dimensional. There is a difference between trusting relationships with an employee like a sales person and trust in the brand. Depending on the nature of the relationship, one layer can trump the other. For example, people will often follow an individual such as a financial advisor from firm to firm because of a strong, trusting relationship.
Changes in sales teams can disrupt customer connections when the buyer has a tighter connection with their contact than with the company. This can be particularly challenging for business-to-business marketers who must leverage the strengths of personal connections as well as product features and benefits.
Certain buying decisions, like stopping at a fast food restaurant for a drink, highlight the difference between affinity for the seller and the product. In Atlanta, many people are dedicated to Coca-Cola.® When we ask for a Coke®, we won’t readily substitute a Pepsi®. The trust in the restaurant does not transfer to the soda brand.
Strengthening trust in your organizations and teams can enable them to implement those strategies effectively and improve their own operational performance.
Techniques for developing corporate trust include:
- Authentic testimonials and reviews.
- Building on existing personal relationships with references and referrals.
- Extending trust from an established brand to a line extension.
- Taking advantage of referred trust from marquee clients or partners.
Reducing risk and uncertainly in a relationship is a key factor in creating trust. For example, lack of trust is the main reason people do not shop online. The online marketplace is characterized by high risk and uncertainty, both in vendors (“Will the product be as advertised?”) and in the transaction (“Will my information be kept safe and secure?).
To inspire trust among customers, remove the potential risks and provide assurance signals that give buyers confidence to more forward.
The Trust Advantage
Fully understanding trust’s tangible benefits can drive the level of commitment needed to implement effective trust development strategies within an organization—and realize a sustainable competitive advantage from increased customer loyalty, sales and ROI.
Marketers can turn trust into a catalyst for growth by identifying and addressing areas in which trust needs to be increased. Creating an environment that fosters a high level of trust both inside and outside the organization removes a significant barrier to business growth.
When trust is viewed as the foundation for productive business relationships, organizations are empowered to pursue innovation, increase market share and amplify their profitability.
Note: Coca-Cola, Coke and Pepsi are registered trademarks of their respective companies.
Image by Berkeley Robinson.