Strong customer relationships are essential to a company’s ability to sustain profits and have a shot at growth. This was the clear finding of a worldwide study by the Economist Intelligence Unit. They found that 90% of senior executive concurred. Here’s the way they put it:
…the winning differentiator is no longer product or price, it is the level of engagement—the degree to which a company succeeds in creating intimate, long-term relationships with customers.
Intimate relationships imply an openness—a sharing of concerns, challenges and desires. But this type of relationship requires two-way trust. Unfortunately, customer trust is very low.
Low Trust Customer Relationships
Distrust of a company usually happens for one of two reasons. The first is the customer suspects or detects a one-sided agenda: the company is most interested in a sale and less interested in delivering what the customer needs or values.
Seventy-seven percent of people stop doing businesses with companies they don’t trust. But it doesn’t stop there. They tell others, and 33% spread the word over the Internet.
Low trust in business, as is now generally the case, leads to suspicion which leads customers to adopt a one-sided agenda of their own. At best the relationship becomes competitive, at worst, adversarial. The classic example is the perception that a used car salesperson will say whatever it takes to sell a car. As a result, customers push hard for a lower price or other concessions.
Low trust contributes to closed mindedness—customers become immune to persuasion making it hard for a company to communicate effectively. This customer indifference has a serious consequence. Customers treat products like commodities bought on the best trade-off between price and convenience. There is no relationship, nothing to bring customers back to a particular business.
While many businesses believe they are the good guys and are worthy of customer trust, assuming customers believe the same thing is a big mistake. The general low trust in business tars everyone with the same brush. Companies can overcome this by deliberately shifted the focus of the relationship from their offering to the value customers get from using or consuming it. But customer must experience this. When they do, they are likely to become advocates.
Getting Started on the Journey
In the trust curve, there is a barrier between companies that are perceived to be focused on the sale and companies that are customer-centric. To get over the barrier the company must attract customers with a hopeful proposition: A proposition leads to a gratifying customer experience. I call this hopeful trust.
There are many online strategies that will attract a customer to a website or landing page. Some may even make a sale. But if they fail to accrue trust that convinces the customer that it is not a gimmick, it is a one shot event.
To get past hopeful trust companies must come through on a promise that is meaningful to the customer. They must also repeatedly engage with customers to demonstrate that the relationship has future value. Relationships build trust when customers believe the company will be there for them in the future. Trusting relationships simplify things in a fast-changing and increasingly complex world. With this kind of trust customers want the company to be around.
Does your company have a deliberate plan to develop this type of customer relationship?
My book, Addicted Customers: How to Get Them Hooked on Your Company spells out the psycho-economics principles that get customers engaged and lead to relationships customers value and reward with commitment and loyalty.
The Whetstone Edge, LLC, has applied the underlying psycho-economic principles to social media and customer relationships. Our framework enables someone to deliberately build in ways to build customer relationship rather than tactics that work temporarily and/or encourage customers to adopt a competitive or adversarial relationship.
If you are interested in learn how this psycho-economic framework can apply to social media, I suggest you consider my upcoming online course:
Building Customers Relationships and Advocacy with Social Media
This 3-session course is sponsored by the Social Media Academy. To register or for more details go to: Social Media Academy
Great post John. Now many businesses burned their bridges to customers in the past years mainly by over advertising, under delivering and an enormous quote pressure kind of was the final nail to the coffin which we call recession. How can people “Ctrl-Alt-Del” their old approach and start new?
Axel,
The level of trust in businesses is at an all time low, so businesses need to work at establishing trust that is meaningful to customers. Most businesspeople would say they are trustworthy because they stand behind their products. Customers now expect that, what they want is to be able to trust the relationship. They want genuine win-win relationships that help them achieve better outcomes.
So how do they jump start it? Make an offer that attract customers to the value proposition because it address issues, concerns or outcomes they find emotionally meaningful. If they are attracted, expect tentative hopeful trust, hope that and the relationship you portray is real. This is the beginning of a trust building journey where customers will become more open and receptive. They also will become progressively more committed.
John
John I. Todor, Ph.D.