Trust is critical to any relationship. Of course, trust is essential between your business and your customers.
Consumer trust has been waning in recent years, despite the efforts of many businesses across industries to ramp up transparency initiatives and improve customer engagement. Numerous scandals around corporate and political leadership as well as several high-profile consumer data breaches have put consumers on edge — and they’re more skeptical than ever.
The 2019 Edelman Brand Trust Survey revealed only 39% believe tech companies put welfare of customers ahead of profits. What’s more, although 81% say trust impacts their purchasing decisions, only a third of people say they trust the brands they buy from. And, 41% say they don’t trust brands’ marketing communications to be accurate or truthful.
Those are some pretty concerning data. And once customer trust is lost, it’s hard to get back. According to Edelman’s survey, 45% of consumers would never trust a brand again after it displays unethical behavior or is involved in a scandal, and 40% say they’d stop buying from that brand altogether.
Consumers aren’t only wary about the truthfulness of a brand’s communications, they’re concerned about their data being used improperly. Salesforce reports that over half of consumers fear their personal data are vulnerable to hackers and think companies don’t operate with their best interests in mind.
Consumer Trust Impacts Your Bottom Line
A lack of trust can be costly. Take, for example, the Cambridge Analytica scandal in September last year, which revealed that Facebook handed over 87 million user profiles. Facebook’s shares fell more than 24% and lost $134 billion in market value in a week. Accenture reports that lack of trust costs U.S. brands $756 billion per year. And new research by PushOn suggests that a lack of consumer confidence in a brand may be delaying people from buying — or prompting them to shop elsewhere.
To sum things up, consumer trust is hard to gain and easy to lose — but essential to business success.
Building Trust Takes Work
In this age of “fake news,” questionable political practices and corporate influence, how do you earn, build and maintain customer trust, and use it to improve your brand’s reputation?
First and foremost, you need to be transparent about how you’re handling customer data. California is spearheading the development of new laws that give consumers more control over their personal data and a company’s ability to purchase it — a common practice among marketers that dates back decades.
For example, the California Consumer Privacy Act (CCPA)— similar to the E.U.’s General Data Protection Regulation (GDPR) — will take effect in January, requiring companies to disclose the personal data they collect and how that data is used, and to delete it upon a customer’s request. (Reputation.com recently wrote a whitepaper on the regulation.) This law will likely be a blueprint for other data privacy laws sure to emerge over the next few years.
And it’s probably a good idea not to rely solely on purchased data for marketing efforts anyway. Deloitte reports that 71% of purchased data is inaccurate. Consumer-generated content and data that is given freely, such as when customers fill out a form to download content, respond to a survey or leave a review on Google or Facebook, is more direct and reliable. Reviews, social commentary and survey responses are also full of information you can use to fine-tune your marketing efforts and develop really relevant messaging and content.
But companies need to do more than be compliant with data privacy regulations. What are other ways to build trust?
- Build a reputation for transparency. In one study, participants were asked to evaluate organizations using the same messaging around transparency in response to a crisis. Companies that had a reputation for transparency were deemed more trustworthy than companies who didn’t. One of the ways you can build a reputation for being transparent about your business practices is by managing and responding to reviews. In the just-released 2019 Retail Reputation Report, we learned that retailers aren’t responding to negative reviews. In fact, overall, response rates are a measly 2%. When customers leave negative feedback, don’t put your head in the sand. Acknowledge the blunder and disclose your plans to right the wrong. Be proactive about collecting and analyzing customer feedback, take action on what you discover, and tell people about it. Also it’s important that you not remove negative reviews in most cases — 95% of consumers doubt the validity of positive reviews when they don’t see any negative ones.
- Get your social media ducks in a row. Social media is a great channel for proving to customers that you’re authentic and genuine in your desire to meet their needs and live up to your brand promises. Social media also provides a platform for showing your business’s human side and engaging in meaningful ways with consumers. Know who your followers are and make sure your posts and content align with their interests. Tune in regularly to the conversations happening on social media channels and engage frequently. And just like with negative reviews, don’t shy away from negative comments. Own up to any wrongdoing and be completely honest and transparent about how you plan to address and hopefully correct the problem. If there’s a crisis involving your brand, act rapidly. Remember United Airlines’ blunder a couple years back? The company’s hesitance to respond and be accountable for their mistakes sent their market cap into a $255 million nosedive overnight and forced them to invest heavily in rebuilding their tarnished reputation.
- Exceed expectations. When you wow your customers, you instantly build trust. That’s because to delight them, you have to understand them and anticipate their wants and needs — often before they figure it out themselves. If you do this once, they’ll trust you do it again and again. Look at Apple — they probably have the most loyal customers of any brand, because consumers don’t wonder if Apple products will be great — they trust the company to exceed their expectations. Apple accomplishes this by being transparent, listening to and acting on feedback, engaging in meaningful ways with its customers. That’s why paying attention to customer feedback is so critical.
In a world in which consumer trust is increasingly rare and tenuous, businesses can’t take anything for granted. By monitoring and analyzing what customers are actually saying about you, engaging in that conversation and taking action on what you discover, you can create a relationship built on trust and unshakable loyalty.