Billy Joel is one of my all-time favorite musical performers. In 1986, he recorded “A Matter of Trust”, a great rock song in which the lyrics described what can go right, and go terribly wrong, in a relationship (http://www.youtube.com/watch?v=6yYchgX1fMw). A company’s relationship with, and desire to capture the hearts and minds of, two of its principal stakeholder groups – customers and employees – are almost entirely built around belief and value, i.e. perceived personal benefit. Largely, the loyalty behavior companies get are a direct result of the trust and authenticity they create with these stakeholders.
The dictionary defines trust as “assured reliance on another’s integrity, credibility, objectivity, veracity, and justice.” Sincere, a related word, means “pure, real, honest, and free of hypocrisy.” In ancient Roman times, from its Latin roots, sincere meant “without wax”, a bargain between vendor and customer so open and transparent that it did not require the usual seal of wax to complete the transaction or maintain the relationship. The vendor’s reputation was sufficient to seal the deal.
Both sincerity and trust are at the heart of partnerships, contracts, relationships and dealings between people and institutions; and these two words and concepts, along with authenticity and openness, are central to optimizing stakeholder experiences and behavior. As Billy Joel wisely observed in his song, trust is “a constant battle for the ultimate state of control”, which, too often, companies want to hold and not share. Then, customer trust becomes “a lie of the mind”, in which neither customer nor vendor feels fairly treated. And, seeing the glass as half empty, “After you’ve heard lie upon lie, there can hardly be a question of why” companies lose customer and employee support, favorability, and passion, leaving the door open for discontent, alienation, and even sabotage to occur.
Trust comes from deep within organizational rules and process execution, and it is built on the customer-related and employee-related vision, values, and mission regarding transactional experiences and marketplace behavior, through communication and purchasing or service. Trust, externally, is best understood as reputation and image: http://www.customerthink.com/article/corporate_reputation_and_advocacy_linkage
There are basics associated with trust, such as privacy, consistent delivery of essential elements of tangible value, and building and sustaining a proactive, positive, customer-centric reputation within the marketplace.. Building trust in a customer-supplier relationship begins with meeting these essential customer needs and requirements. Briefly, the customer needs one or more elements of a supplier’s product or service, resulting in that customer moving from prospective to engaged, ‘new customer’ status when an initial purchase is made. Then, the relationship builds on emotional and rational/functional delivery of perceived value over time, comprising one or more components of the customer’s ‘trust equation’.
If any element of trust is received in a less-than-desired manner (including a non-authentic, deceptive, or otherwise negative experience), the relationship can be undermined, sometimes very quickly and sometimes with unattractive, long-term consequences.
Trust has become an essential, differentiating element in creating customer loyalty behavior. In fact, trust may well be the only truly sustainable competitive advantage for an organization. It is necessary, for example, if the supplier is to learn from customers through a free and open exchange of information, offline or online. It’s essential in positive customer word-of-mouth and referral, in having customers be resistant to competitive offers, and in having them be tolerant of occasional value delivery lapses. Without trust and authenticity, companies can quickly find themselves back to square one with their customers, where everything they offer – price, design, convenience, service, etc. – can easily replicated by competitors.
Many companies endeavor to attract customers and to build trust through a rather passive, commoditized, rational and product-centric sales and marketing approach to the customer. Such companies often believe that high accuracy, delivery timing and completeness, and other tangible components of value will earn both differentiation and customer loyalty. As a result, they don’t adequately determine the customer’s real priorities and set of expectations, what the customer wants to hear (positioning) , how the customer wants to hear it (preferred communication channel), or how they are going to say it (messaging). This is the traditional ‘push’ approach to marketing, lacking authenticity and engagement; and it often doesn’t involve, or minimally involves, the customer in actual planning or dialogue. And, if the company fails to deliver expected value, i.e. not doing what they say they will do and not meeting basic commitments and requirements, even using traditional one-way communication techniques, the relationship will inevitably fail.
When economic times put pressure on customers, whether in b2b or b2c, optimizing relationships and perceived value become even more important. What is required is close experience management through setting, or resetting, service levels so that they do not degrade from the customer’s perception of value and, at the same time, not over invest (with capital, people, time, or technology) in competency levels not important to the customer.
Trust-building does indeed take investment and effort. Companies that rely largely on building a brand pedigree – what they think is product or service uniqueness, pricing, or corporate recognition – are likely to be challenged. Why? Because these factors have been identified, again and again, to be the least influential in customer purchase decisions. Further, while customers are often willing to provide feedback, and do so, they also insist that companies take action on the input they provide. Increasingly, customers are insisting on a sense of partnership with their vendors or suppliers.
Thus, a ‘bank account’ of trust and belief that the company is acting in the customer’s best interest can be built. However, just as bank deposits can be made, so can withdrawals in the form of expressed and unexpressed complaints, and customer defection – and quickly. Just ask Toyota, FedEx, British Petroleum, AIG, ExxonMobil, Bank of America and other organizations that have taken hits to their corporate image (including dearly departed companies like Enron, Adelphia, and WorldCom). Once reputation is impaired, the ‘long tail’ of negativism is difficult to recover.