What is the dollar value of trust?
Through a special arrangement, presented here for discussion is a summary of a current article from the blog of LoyaltyOne. The article first appeared on Forbes.com.
New research by Accenture Strategy assigns a dollar value to trust among organizations and finds companies that experience a material decline in trust could miss six percent in potential sales, on average.
The findings, based on an analysis of more than 7,000 companies across 20 industries, back up what many retailers should already know: That transactions are largely driven by brand confidence. The proper use of consumer data, it appears, plays a big role in instilling that trust and confidence.
A look at retailers that rank high on the 2018 Temkin Trust Ratings supports the theory, connecting trust with performance. Amazon and Kroger, the two top rated publicly traded retailers included, were tied at 22 among 318 entries. The top-rated retailers overall are two privately-owned supermarket chains: Wegmans Food Markets, second, and H-E-B, third.
Retailers that lost trust — and market share — encouraged less-frequent visits. Among those that fell at least 15 points below industry average on the 2018 Temkin Trust Ratings list is 289th-ranked Sears Holdings and Toys “R” Us, 273. Accenture’s “Competitive Agility Index” reveals 54 percent of companies have experienced a decline in trust.
Pretty much all retailers gather data, through a loyalty program, credit card data and/or digital transactions. Transforming that information into a shelter of trust, however, takes expertise. Here are some guidelines.
Be collaborative. When given a choice to choose what and how much information they share, shoppers are more likely to feel valued and believe in the brand.
Be clear. All communications, from explaining how the retailer uses its data to the special offers available through that data, should be interpreted in a few words.
Be as relevant as budget permits. Ideally, a retailer could break down its data into hundreds of unique messages, so each customer sees she is getting an offer special to her (and she actually wants).
Don’t take advantage. If the brand experience is incongruous or indifferent to the customer’s needs, they’ll lose trust, and that could be worse than never having been trusted at all.
If the Accenture theory is sound, then even blockbuster brands have the ability to improve performance through emotional connections and, specifically, the insights that enable them.
- Putting A Price On Trust: 4 Ways Data Can Enforce Brand Believability – Forbes
- Half of Companies on the Accenture Competitive Agility Index Experienced a Major Drop in Trust, Losing Out on $180B in Potential Revenues – Accenture
DISCUSSION QUESTIONS: What advice would you have for retailers seeking to use data to establish a “shelter of trust” with consumers? Can you provide examples of actions taken by specific retailers that create this type of trust on the part of consumers?