Customer trust is a precondition for prosperity. However, most companies …

o Act as if the customer’s trust is developed because the company believes it is honest.

o Build only a superficial type of trust that doesn’t lead to profitable relationships and loyalty.

o Not having a strategy to build the kind of trust where customers increasingly value the relationship.

Now is an excellent time to work aggressively and consistently on building customer trust. Virtually all companies have been affected by the general increase in social mistrust towards companies.

o A recent Datamonitor study of consumers in the US and Europe found that 86% trust businesses less than five years ago.

o 80% of people stop buying products or services from companies when their reliability is questioned (Edelman 2005 Trust Barometer)

o People transmit distrust to friends and associates, the people we trust the most.

o More than 33% who lose trust in a company openly campaign against that company on the Internet.

Datamonitor and Edelman’s research shows that it goes beyond a few isolated cases. Also, according to a study by Yankelovich, more than two-thirds of people do not believe in advertisers and marketing. They see it as selfish distortions.

Customers want to do business with companies they trust, but they don’t know who to trust. Therefore, companies that proactively demonstrate reliability can gain a huge source of competitive differentiation.

What is trust and why is it important to customer relationships? Webster gives two definitions of trust that help separate the wheat from the chaff.

1. Firm belief or trust in the honesty, integrity, trustworthiness, fairness of another person or thing.

2. confident expectation, anticipation, or hope; as in confidence in the future.

Most companies believe they are trustworthy, but they only live up to the first definition. They want to be recognized as an honest, trustworthy and fair company. They expect their products to live up to expectations and when they don’t believe they treat customers fairly.

Do you think your company is up to the task? If they say yes, ask yourself what you are proactively doing to build this trust. Many companies do not have a deliberate strategy.

If you have a deliberate strategy, now might be a good time to ask yourself how well it is working. As mentioned above, Yankelovich’s research shows that most customers do not believe in his marketing and advertising. And, the Edelman Trust Barometer concluded that when looking for a credible source of information about a company or product, CEOs, employees, public relations people, and celebrities rank in the bottom half.

Living up to the first definition of trust is essential for sustainable and profitable customer relationships. However, even if customers believe that your business is honest, trustworthy, and fair, this is no guarantee that it will be loyal and profitable. To gain commitment, profitability, and high lifetime value, a business must also live up to Webster’s second definition.

Companies that meet the first definition, but not the second, encounter the Satisfactory Trust Barrier. Satisfactory trust is the trust that allows a customer to feel comfortable purchasing products or services from a company. It is a sense of confidence that the company will stand behind the product. It is enough confidence to buy a well-defined product, a commodity. In a world of abundance and overwhelming options, satisfying trust does not ensure repeat business. Customers buy basic products that offer the best trade-off between satisfactory reliability, price, and convenience. Some companies become complacent because they feel they offer the best combination of the three. Unfortunately for them, all it takes to lose customers is for a competitor to create the perception of a better deal. The company that wins business this way has not increased the real value of the relationship.

The operative words in the second definition of confidence are “hope” and “confidence in the future.” Many purchases these days are not commodities; they are not well defined and may not have a history. To make this type of purchase, the customer must give a “leap of faith” and this requires trust. In this type of trust, the customer must believe that the supplying company is really interested in a mutually beneficial relationship. That is, they are interested in a long-term relationship in which both parties benefit. This type of trust stems from experience with a company that demonstrates a real win-win commitment. Since virtually all customers have been “burned out,” companies often have to subdue their short-term interests to stimulate the development of loyal trust.

The client wants to build relationships that help him make “leap of faith” decisions with more confidence. Being able to trust this trust helps them simplify things in an increasingly complex world. When this happens, trust in the relationship becomes more important to customers than price and convenience. It begins with “hopeful confidence.” Customers want the best for themselves. They want to adapt and accept change, and will place an extremely high value on relationships that help them. Customers are watching for signs from companies that their “hopeful confidence” will be well placed. But this “hopeful confidence” is only a test. If experience shows that trust in relationships is justified, faithful trust will emerge.

When confidence is transformed from “hopeful” to “faithful”, there is a very significant turnaround. Customers’ primary concern shifts from price and utility to seeking advice and guidance. When price is an issue, customers retain information. When they seek guidance, they openly share it. “Faithful trust” allows this openness. It also allows both parties to prosper and build on co-adaptation, now and in the future.

The trustworthy company gets the immediate sale, but they get much more. Faults or mistakes that could once have ended a relationship are now overlooked for the good of the relationship. Customers become advocates for turbochargers. They don’t just tell others what you sell; They vouch for you and the value of the relationship you offer. They become dependent on your business and, as a result, want it to prosper.

The real-life story of Billy Blue, a men’s tailor in San Francisco, illustrates the power of trusting relationships. Billy Blue’s thriving business took a nosedive during the dot-com crash. The recession was so severe that its owner, Billy Bragman, considered closing its doors. Instead, he wrote a letter to his clients explaining the situation and asking them to buy more clothes. Although many of her customers had their own commercial “trials and tribulations,” they increased their clothing purchases. One man sent a check for $ 2,500 with a note that said, “You know what I like; just send me new clothes.” Billy Blue’s customers could easily have turned to other men’s stores, but they chose to support Billy Blue. They valued his relationship with Billy Blue and didn’t want him to go bankrupt.