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Trust is the new currency for all business
By Katharina Kuehn, director of the consumer insights and strategic branding divisions of Australia-based Retail Doctor Group.
In an increasingly complex marketplace, consumer trust is emerging as a new currency you cannot trade. As the strength of this currency increases, it falls upon brands to create stable trust economies that will weather the rise and fall of the local and global movements around them.
So just why has trust become so important to consumers and how do you, as a brand, foster your own trust economy to build loyal and profitable customer relationships?
In this extraordinary connected world we now live in, we have seen an erosion of universally valid rules, norms and values in society and a higher level of social diversification than ever before.
As a result, consumers have started to crave a sense of identity, meaning, and continuity in their lives determining the way in which they make decisions and act.
When seeking to satisfy these cravings, consumers and shoppers are looking towards iconic and trusted retail brands to fulfil these needs.
The Ebeltoft Group of global retail experts has released the findings of its annual global Trust Research. The goal of this research was to assess why some retailers manage to bond with their customers in difficult economic times, even increasing their profitability and fostering their market position, while others lose market share and customers.
Based on 19,000 surveys of 238 retailers in 12 countries, Ebeltoft Group identified the drivers behind building brands’ own trust economies and which retailers are most successful in building such trust among shoppers. These retailers were awarded the title ‘Trust Champions’.
The results also proved, beyond doubt, the value of trust as a currency. According to the Ebeltoft Group Trust Research 2011, trust helps retailers improve their performance due to three main factors - recommendations of a retailer among shoppers, increasing future shopping expectations and shoppers’ preference of a retailer over its competitors.
Furthermore, it was found that shoppers with a high trust level for a specific retailer will accept an unsatisfying situation significantly better than customers with a lower trust level for a retailer.
Brian Walker, MD of The Retail Doctor Group also shares the belief that trust currency is vital in today’s retail marketplace.
“When we look at the trust economy of retailers, we look at every element that feeds into it. Fit retailers have a higher trust economy because they have executed fit principles from brand establishment to the most consistently amazing customer service,” says Walker.
“If a customer can rely on the retailer, they trust them. Break that at any stage and they will not only find an alternative, they will now broadcast that they are finding an alternative.
“So it’s vital that they can rely on every aspect of the business seen and unseen,” Walker advises.
Key findings
To really understand the value of trust, Ebeltoft Group researched the trust standards for each country and retail sector as well as the key trust components and levers.
To really understand the value of trust, Ebeltoft Group researched the trust standards for each country and retail sector as well as the key trust components and levers.
What makes a Trust Champion, how do they achieve such high scores and what can we learn from them?
The research identified the following key findings:
The strongest driver of trust all over the world is reliability. No surprises. No deception. Just the absolute fulfilment of customers’ expectations every single time and the complete understanding that non-fulfilment is your biggest trust threat.
The corporate strength of an established brand is necessary but not sufficient to build trust.
Staff and effort contribute to high trust, but being weak in these areas does not necessarily prevent brands from receiving good overall trust scores. However, extraordinarily high trust scores do depend on store staff.
Brand trust is driven by honesty, advertising credibility and customer orientation. In our world of incredible connectivity, brands are being punished more easily for dishonesty and inconsistent communications.
A lower price positioning makes it more difficult to win trust, although it is possible when offering your own brands.
The food sector achieves low trust scores despite a higher visit frequency.
Customers will trust brands because they respect them. A brand’s commitment must be sincere, not a "payback calculation.”
While trust has only a slightly positive influence on the frequency of visits, trust significantly increases consumers’ propensity to prefer the retailer as a first choice and recommend the retailer.
The higher the trust value the less important is the image of a retailer for the choice priority.
The higher the trust value the more the shoppers excuse an unsatisfactory last shopping experience.
10 tips to build trust
1. Build a meaningful relationship with your customers.
Exploring the emotional drivers, motives and needs of your customers is essential to connect with them. Make it about them and position yourself as their reliable and understanding problem solver. Only communicate and make relevant offers based upon your understanding of them.
Exploring the emotional drivers, motives and needs of your customers is essential to connect with them. Make it about them and position yourself as their reliable and understanding problem solver. Only communicate and make relevant offers based upon your understanding of them.
2. Genuinely care about your customers.
Trust Champions genuinely care about their customers and staff. Meeting customer needs and being sensitive to their desires are priorities for all Trust Champions - whether it’s price, professional service, ease of shopping or product quality.
Trust Champions genuinely care about their customers and staff. Meeting customer needs and being sensitive to their desires are priorities for all Trust Champions - whether it’s price, professional service, ease of shopping or product quality.
3. Build a brand they love to build brand love.
Create a unique, distinctive and consistent brand identity. Trust is always related to certain expectations and their repeated fulfilment. Make it your mission to show you love your brand at every single place a consumer can experience it. Apple is the master of this. Every square inch of the brand right down to how it slides out of the box has been loved and thought through for customer feeling and expectation fulfilment.
Create a unique, distinctive and consistent brand identity. Trust is always related to certain expectations and their repeated fulfilment. Make it your mission to show you love your brand at every single place a consumer can experience it. Apple is the master of this. Every square inch of the brand right down to how it slides out of the box has been loved and thought through for customer feeling and expectation fulfilment.
4. Trust your customer first.
Give your customers some trust credit, too. Yes, trusting someone can be risky as you can never be sure of the outcome, but in order to facilitate the trust of another party, giving them some trust credit is a good strategy. One possible action here is to have an accommodating return policy or promise money back if disappointed. This shows that you trust them to do the right thing and they understand there is a risk associated for you. Trust Champions create two-way trust between themselves and their consumers eg. a ‘no questions asked’ returns policy, returns without a receipt (Aldi), or the ability to test products at home and return if you don’t like them (Decathlon, B&O).
Give your customers some trust credit, too. Yes, trusting someone can be risky as you can never be sure of the outcome, but in order to facilitate the trust of another party, giving them some trust credit is a good strategy. One possible action here is to have an accommodating return policy or promise money back if disappointed. This shows that you trust them to do the right thing and they understand there is a risk associated for you. Trust Champions create two-way trust between themselves and their consumers eg. a ‘no questions asked’ returns policy, returns without a receipt (Aldi), or the ability to test products at home and return if you don’t like them (Decathlon, B&O).
5. Empower and value your employees.
A strong emotional bond between retailers and their own people has been shown to build trust, especially if the company is a sought after place to work, with profit sharing programs, special bonuses, or just being a ‘cool place to work’ (Ikea). At John Lewis in the UK, employees are true partners, with each having part ownership of the company and a share of its profits. The company has an extensive social program for its partners including playing fields, golf club memberships and even a cruising yacht.
A strong emotional bond between retailers and their own people has been shown to build trust, especially if the company is a sought after place to work, with profit sharing programs, special bonuses, or just being a ‘cool place to work’ (Ikea). At John Lewis in the UK, employees are true partners, with each having part ownership of the company and a share of its profits. The company has an extensive social program for its partners including playing fields, golf club memberships and even a cruising yacht.
Ikea and Whole Foods are examples of Trust Champions. Staff members are an integral part of the Whole Foods family where a decentralised team culture values and empowers employees. Store staff work in teams and participate in the hiring process for new team members.
6. Show your mission and passion.
Trust Champions have a clearly defined mission statement that conveys the strong, fundamental driving force behind the company forming the framework of all decisions against which performance is measured. Trust Champions are passionate about their company and their products and have passion and pride in their offer whether it’s a superlative product (Ecco), service (John Lewis), or by being the most efficient (Aldi). Trust Champions also perpetuate the values that reflect the personality of the company’s founders, such as Ikea or Apple.
Trust Champions have a clearly defined mission statement that conveys the strong, fundamental driving force behind the company forming the framework of all decisions against which performance is measured. Trust Champions are passionate about their company and their products and have passion and pride in their offer whether it’s a superlative product (Ecco), service (John Lewis), or by being the most efficient (Aldi). Trust Champions also perpetuate the values that reflect the personality of the company’s founders, such as Ikea or Apple.
7. Become an icon of your own country.
Trust Champions reflect the best of their country of origin, and are icons in their own country. They have a strong national identity and are representatives of their culture, for example, John Lewis has a strong tradition in the UK of association with the Royal Family, and Ikea displays immense pride in Scandinavian design and lifestyle across all its communications around the world.
Trust Champions reflect the best of their country of origin, and are icons in their own country. They have a strong national identity and are representatives of their culture, for example, John Lewis has a strong tradition in the UK of association with the Royal Family, and Ikea displays immense pride in Scandinavian design and lifestyle across all its communications around the world.
8. Innovate and lead.
While all Trust Champions are long established companies, they are still constantly evolving, keeping abreast of changing consumer trends, innovating with pioneering store formats, exploring different target markets, and pursuing new opportunities. Innovation, leading edge concepts, and keeping up to date are of paramount importance in their maintenance as market leaders. Trust Champions are described as leaders, pioneers and mavericks. For example, Trust Champion Aldi is a supermarket leader in Germany that sets standards of efficiency for other retailers. Ikea has always been viewed as a maverick and pioneer whether in merchandising, advertising and instore displays which not only fulfil but create consumer needs. Coop is a leader in Italy in innovative customer services. Recently, Coop introduced an experimental store format for blind and handicapped customers. It was also the the first Italian retailer to introduce self scanning.
While all Trust Champions are long established companies, they are still constantly evolving, keeping abreast of changing consumer trends, innovating with pioneering store formats, exploring different target markets, and pursuing new opportunities. Innovation, leading edge concepts, and keeping up to date are of paramount importance in their maintenance as market leaders. Trust Champions are described as leaders, pioneers and mavericks. For example, Trust Champion Aldi is a supermarket leader in Germany that sets standards of efficiency for other retailers. Ikea has always been viewed as a maverick and pioneer whether in merchandising, advertising and instore displays which not only fulfil but create consumer needs. Coop is a leader in Italy in innovative customer services. Recently, Coop introduced an experimental store format for blind and handicapped customers. It was also the the first Italian retailer to introduce self scanning.
9. Multi-channel Integration.
Trust is an important attribute for success in e-commerce. Retailers with a strong e-commerce strategy and a strong trust position have a major advantage in this growing retail channel, where purchase decisions are largely based on trusting the vendor. However, e-commerce can’t be viewed in an isolated way. Building trust and business fitness in a multi-channel environment requires a consistent and integrated communication across all channels.
Trust is an important attribute for success in e-commerce. Retailers with a strong e-commerce strategy and a strong trust position have a major advantage in this growing retail channel, where purchase decisions are largely based on trusting the vendor. However, e-commerce can’t be viewed in an isolated way. Building trust and business fitness in a multi-channel environment requires a consistent and integrated communication across all channels.
10. Have a genuine concern with ethics, environment and societal issues.
All Trust Champions have programs that address some of today’s foremost social issues. Coop has a particular passion for social causes. Whole Foods, the only supermarket Trust Champion in the US, has created its total identity based on its commitment to community and social integrity. These are values that especially attract today’s younger generations and are likely to create trust in retailers that are genuinely socially responsible.
All Trust Champions have programs that address some of today’s foremost social issues. Coop has a particular passion for social causes. Whole Foods, the only supermarket Trust Champion in the US, has created its total identity based on its commitment to community and social integrity. These are values that especially attract today’s younger generations and are likely to create trust in retailers that are genuinely socially responsible.
Now it’s time for you to start building your own brand Trust Economy. Start by setting business reliability goals from top to bottom and measure them constantly against a pre-determined set of KPIs.
If you can ensure this reliability flows through every aspect of the business including your own manufacturers and suppliers, then you can instil this in your company DNA.
Quite simply, this is the most fundamental aspect of business fitness. When this is in place, monitor your own trustworthiness and build your customer loyalty and profitability.
Article originally published by Inside Retail www.insideretailing.com.au/IR/IRNews/Trust-the-new-retail-currency-4696.aspx on 17/04/2012