Retail TouchPoints: Communication Drives More Than 20 Percent of Customer Trust
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints’ website.
According to a study commissioned by Pitney Bowes Business Insight, customer communication drives more than 20 percent of a customer’s trust in a company. The study also concluded that trust is created by a company’s policies, practices, and the customer’s previous experience.
The findings were determined by ECSP Europe based on an online survey of 1,000 U.K. consumers and 1,000 U.S. consumers.
In the study, researchers found that trust is based on evaluation of three complementary dimensions – competence or credibility; integrity or honesty; and empathy or benevolence. The second and third of these could be interpreted as being more ’emotional trust’ and the first one more ‘rational trust’.
The most important influence factor of emotional trust is rational trust (56 percent). Other prominent factors that create a strong emotional relationship with customers include: front line employees (16 percent), management policies (14 percent), marketing communications (nine percent), and self-service technologies (five percent).
The division of factors that create rational trust, however, were spread more evenly. Trust in front line employees was named the most-considered factor, comprising 21 percent of a consumer’s trust level. Management policies (19 percent), marketing communications (18 percent), and past experience (18 percent), also were key factors in determining overall reliability in a company.
Researchers stated in the study that the main benefit of trust is customer loyalty, which in turns leads to a longer-term relationship, greater share of wallet, and higher advocacy of word-of-mouth.
“Results from our consumer survey show that emotional and rational trust drive between 22 percent and 44 percent of customer loyalty,” the researchers wrote in the study. “The other main factor influencing loyalty is customers’ satisfaction with their previous experience with the service provider. This is influenced by the customers’ own experience of service delivery and value, by what happens when things go wrong and by brand reputation, word of mouth and the experience of others.”
Researchers also noted that consumers currently have low-levels of trust in business. The Readers Digest European Trusted Brands 2010 study found that only 32 percent of consumers trust international companies and 13 percent trust advertising as opposed to 48 percent trusting their friends, work colleagues or neighbors.
The consumers surveyed recommended several ways for companies to strengthen trust-building activities, such as improving communications (quality and clarity), increasing transparency and providing advance information for better deals and problem solving. In addition, consumers claimed that they look for companies that provide high-quality customer care, ensure a sense of being ‘looked after’, and demonstrate a high level of competency and conduct from employees.
- Communication Drives More Than 20 percent Of Customer Trust – Retail TouchPoints
- Customer Communications Drives More than 20 Percent of Overall Consumer Trust According to Pitney Bowes Business Insight Survey – Pitney Bowes Business Insight
- The Role of Trust in Consumer Relationships Study – Pitney Bowes Business Insight
Discussion Questions
Discussion Questions: What factors most influence customer “trust” levels for retailers and brands? How can organizations build or rebuild customer trust in the current low-trust climate?
Excellent article. Trust must be earned, not bought. It’s no surprise that consumers trust the opinions of their friends and others before they trust brand advertising.
Brands and retailers can build trust by being consistent, offering excellent customer service and by putting customers first. And by the way…these are great ways to build good word of mouth.
It’s not the brands people don’t trust- it’s the people who represent them. Disengaged, bored, breathe-on-this-mirror hiring leads to mistrust. So the number one way to get, keep, and lose trust is human. Odd that all the attention now is on mobile…
Trust is irrelevant in the absence of risk.
So the question is “In what way are people at risk?” in today’s world? What is the “risk” inherent in walking into a store? Analyze the consumer risks and you’ll come to a much better understanding of the role of trust. “Fear” has to be brought into the equation too – given that our society and our businesses are almost totally driven by fear.
A mundane example. A store holds a sale with “Up To” 80% off. That creates a risk – and dis-trust. We all know the only thing that will be 80% off is an XXXXXL in brown left over from three seasons ago.
Likewise the whole low-price battle has done more to generate distrust than any other strategy.
The Golden Age of Retail will come when risk and fear are no more.
The challenge for the larger retailers has always been about consistency and scale of service in-store balanced with the labor costs. Most models (with a few notable exceptions) have evolved with less personal service (amount and quality) and more self service in favor of lower labor costs.
With smart phones and video becoming the baseline for communications, the opportunity for retailers is to use technology to deliver more and better “human” touchpoints, at lower costs than ever before.
Consistency of delivery and execution is key. This must be on the positive side of neutral. Preventing negatives is key too, which for bricks and mortar businesses can often be staff related but other elements like out of stocks, pricing, spam communications, data privacy breaches and hidden fees need to be prevented.
In today’s world it isn’t enough to know what is important for profiles or segments of customers, it needs to be known for individuals. A 20% campaign response rate could mean you actually annoyed over half those targeted! Social media access adds pressure to getting it right for everyone as bad news travels fast.
Loyalty has to be earned. Continuing to get it right for loyals is where businesses should focus which will in turn earn new customers.
There are two main factors that influence trust: in-store experience and word of mouth. For retailers–especially brick and mortar retailers–the experience in store is made good or bad at the moment the customer makes the purchase. Thus, a consistent and well executed in store experience can make or break a customer’s trust. The other component is word of mouth. With the overload of information and brand marketing consumers are being presented with, it’s no wonder they turn to friends and family members for recommendations and referrals.
WOM is the best way a brand can build trust. It is extremely important for brands and retailers to understand who their advocates are, where they spend time online and what they’re saying. Once advocates are identified, it is important that the brand or retailer reward them for their efforts and enable these advocates to continue to spread positive and authentic word of mouth to their social networks.
Technology in the form of social media is a good tool to develop trust. Social media is like the backyard fence of days gone by when neighbors congregated to share recipes, good and bad customer experiences and stories, etc. Social Networks are today’s digital backyard fence where people have conversations about things that are on their minds.
These networks represent a tremendous listening opportunity. The key is to listen and engage, not to simply sell. Listening and engaging are critical to developing trust in any relationship.
I think the biggest misconception about trust is that it can be bought and/or achieved quickly.
Trust takes time and repeatedly proving yourself at every touch point. Most businesses have neither the patience nor the executional discipline to consistently win the trust of consumers. The result is a disproportionate marketing spend on new customer acquisition, a revolving door of disenchanted patrons and frustrated frontline staff.
I know this is simplistic, but there’s only one thing that drives trust: telling the truth. If you say you’re the best at something, whether it’s price, quality, service, design…I don’t know, burgers…and you actually ARE the best: that truth will gain you trust. Telling the truth REALLY matters, especially to Millenials. As a matter of fact, it may be the only thing that matters in terms of brand building.
And conversely, the opposite is also true. Lie and you die. How many adverts do you see where, inside your head you’re going, “yeah, right”??? Those ‘believability’ thoughts should be first and foremost on most marketers’ minds. But as we’ve all experienced at one time or another, it can be difficult to see the forest of truth through the thicket of BS.
Without competency and consistency there can be no trust, even if service people are living angels (which they rarely are). Trustworthiness cannot be trained into an organization that is chronically dis-empowered by inadequate tools, rules, and management fools.
Ultimately customer-facing practices determine how an organization is perceived. Loyal behavior will follow if those practices are excellent. It is incumbent upon top managers to enable excellent practices in every way possible–systems, technology, policies, training, hiring and service standards.
There are no shortcuts to trust. It is earned in increments, but may be lost in an instant. Only consistent service practices can preserve it.
How you train your people is critical to ongoing success in any company. If you want a leg up on the increasingly frustrated consumer, than you had better give outstanding service with a smile. Great deals go a long way also, so it’s a double edged sword. Independents that do not provide this are gonners for sure, because it is more than price that keeps a customer.
Front-end people are very important, as they see the customer walk in, and see them on the way out. There’s no excuse for poor service. Instead of cutting back on training, maybe you should increase it, especially at the checkouts.
It’s no secret that people like to do business with people they like and trust. Trust begins with having an open and honest relationship.
Brands and retailers who open up the communication channels to provide access for consumers, and put in the effort to better understand who they are, what they want and need from the brand, and how they want to shop will develop the relationships that serve as the foundation of brand loyalty. Social media brings new tools and opportunities for brands to share and learn, if they take advantage of it.
Trust is earned; not bought or traded for in any way. If a brand is endorsed by those we like (trust), we are more inclined to use the products or services. That’s when the risk factor comes in. We are trusting the words and experiences of others. If the results are not as expected, our reliability in them diminishes. The cycle continues until we individually find and trust the results others give us.
The study reports, “The other main factor influencing loyalty is customers’ satisfaction with their previous experience with the service provider.” Is this not common sense? Based upon the fact that customer loyalty is weak among most retailers, what needs to be done to convince retailers that service matters? It doesn’t have to be a line item on the P&L. It needn’t cost anything.
Visit your favorite stores. Are they not your favorites often because of the service levels they provide? Services drive loyalty. Loyalty is a result of trust. Trust drives revenue, and that drives growth. Keep it simple. “Just do it.”
It’s no surprise that consumer trust is focused on front line employees. That’s where the action is. Retailers need to hire customer oriented staffers and promote on the job training that builds customer satisfaction and trust. It’s simple, yet it’s not. As others have stated, trust takes years to develop, but can be lost overnight.