| Customer trust is a precondition for prosperity. | | | | Customers buy commodities that offer the best |
| Yet, most businesses...- Act as if customer trust | | | | trade-off between satisficing trust, price and |
| develops because the business believes it is | | | | convenience. Some companies become |
| honest. | | | | complacent because they feel they offer the |
| - Build only a shallow type of trust that does not | | | | best combination of the three. Unfortunately for |
| lead to profitable relationships and loyalty. | | | | them, all it takes to lose customers is for a |
| - Have no strategy to build the type of trust | | | | competitor to create the perception of a better |
| where customers increasingly value the | | | | deal. No real relationship value has been accrued |
| relationship.Now is an excellent time to | | | | by the company who wins business this way.The |
| aggressively and systematically work at building | | | | operative words in the second definition of trust |
| customer trust. Virtually all businesses have been | | | | are "hope" and "trust in the future." Many |
| tainted by the general rise in societal distrust of | | | | purchases these days are not commodities; they |
| companies.- A recent Datamonitor study of | | | | are not well defined and may not have a track |
| consumers in the USA and Europe found that | | | | record. To make these types of purchases the |
| 86% are less trusting of companies than they | | | | customer must take a "leap-of-faith," and this |
| were five years ago. | | | | requires trust. In this type of trust the customer |
| - 80% of people stop buying products or | | | | must believe that the vendor company is truly |
| services from companies when their | | | | interested in a win-win relationship. That is, they |
| trustworthiness comes into question (Edelman | | | | are interested a long-term relationship where both |
| 2005 Trust Barometer) | | | | parties benefit. This type of trust grows out of |
| - People spread distrust to friends and | | | | experience with a company demonstrating a real |
| associates, the people we trust most. | | | | commitment to win-win. Since virtually all |
| - Over 33% who lose trust in a company, openly | | | | customers have been "burned," companies often |
| campaign against that company on the | | | | have to subjugate their short-term interests to |
| Internet.The Datamonitor and Edelman research | | | | stimulate the development of faithful |
| demonstrates that it goes beyond a few isolated | | | | trust.Customer want to build relationships that help |
| cases. Furthermore, according to a Yankelovich | | | | them more confidently make "leap-of-faith" |
| study, more than two-thirds of people don't | | | | decisions. Being able to rely on this trust helps |
| believe advertisers and marketing. They see it as | | | | them simplify things in an increasingly complex |
| self-serving distortions.Customers want to do | | | | world. When this happens, trust in the relationship |
| business with companies they trust but, don't | | | | becomes more important to customers than price |
| know who to trust. Therefore, companies that | | | | and convenience. It starts with "hopeful trust." |
| proactively demonstrate trustworthiness stand to | | | | Customers want the best for themselves. They |
| gain a tremendous source of competitive | | | | want to adapt and to embrace change, and they |
| differentiation.What is trust and why is it | | | | will place extremely high value in relationships that |
| important to customer relationships? Webster | | | | help. Customers are on the lookout for signs from |
| gives two definitions of trust that help separate | | | | companies that their "hopeful trust" will be well |
| the wheat from the chaff.1. firm belief or | | | | placed. But this "hopeful trust" is just a test. If |
| confidence in the honesty, integrity, reliability, | | | | experience demonstrates that trust in the |
| justice of another person or thing. | | | | relationships is justified, faithful trust will |
| 2. confident expectation, anticipation, or hope; as | | | | emerge.When trust morphs from "hopeful" to |
| in trust in the future.Most companies believe they | | | | "faithful," a very significant twist occurs. The main |
| are trustworthy but only measure up to the first | | | | concern of customers shifts from price and utility |
| definition. They want to be known as a company | | | | to the seeking of advice and guidance. When price |
| that is honest, reliable and fair. They expect their | | | | is an issue, customers withhold information. When |
| products live up to expectations and when they | | | | they seek guidance, they openly share. "Faithful |
| don't they think they treat customers equitably.Do | | | | trust" enables this openness. It also enables both |
| you think your company measures up? If you | | | | parties to prosper and builds a basis for |
| say yes, ask yourself what you proactively do to | | | | co-adaptation, now and in the future.The |
| build this trust. Many companies have no deliberate | | | | trustworthy company gets the immediate sale, |
| strategy.If you have a deliberate strategy, now | | | | but they get much more. Snafus or mistakes that |
| might be a good time to question how well it is | | | | might have once terminated a relationship are |
| working. As mentioned above, Yankelovich's | | | | now overlooked for the sake of the relationship. |
| research shows that most customers don't | | | | Customers become turbocharged advocates. |
| believe your marketing and advertising. And, the | | | | They don't merely tell others what you sell; they |
| Edelman Trust Barometer concluded that when | | | | vouch for you and the relationship value you |
| looking for a credible source of information on a | | | | deliver. They come to depend on your business |
| company or product, CEO's, employees, public | | | | and, as a consequence, they want you to |
| relations people and celebrities rank in the bottom | | | | thrive.The real-life story of Billy Blue, a men's |
| half.Measuring up to the first definition of trust is | | | | clothier in San Francisco illustrates the power of |
| essential to sustainable and profitable customer | | | | fully trusting relationships. Billy Blue's thriving |
| relationships. However, even if customers believe | | | | business took a nose dive during the crash. The |
| your company is honest, reliable and fair, this is no | | | | downturn was so severe its owner, Billy Bragman, |
| guarantee they will be loyal and profitable. To | | | | considered closing his doors. Instead, he wrote his |
| garner commitment, profitability and high lifetime | | | | customers a letter explaining the situation and |
| value, a company must measure up to Webster's | | | | asked them to buy more clothes. Even though |
| second definition as well.Businesses that meet the | | | | many of his customers had their own business |
| first definition but not the second, run into the | | | | "trial and tribulations," they increased their clothes |
| Satisficing Trust Barrier. Satisficing trust is the | | | | purchases. One guy sent a check for $2,500 with |
| trust that allows a customer to feel comfortable | | | | a note saying, "You know what I like; just send |
| in buying products or services from a company. It | | | | me some new clothes." Billy Blue customers could |
| is a sense of confidence that the company will | | | | easily have turned to other men's stores but they |
| stand behind the product. It is sufficient trust to | | | | chose to support Billy Blue. They valued their |
| purchase a well-defined product, a commodity. In | | | | relationship with Billy Blue and didn't want it to go |
| a world of abundance and overwhelming choice, | | | | out of business.John I. Todor, Ph.D. |
| satisficing trust does not insure repeat business. | | | | |