By Jo Causon, CEO, The Institute of Customer Service
We all know that trust between organisations and their customers is an essential ingredient for success. When customers trust businesses, they are likely to interact with them more frequently, spend more, stay with them longer, and recommend them to others. Without it, they will be less loyal, spend less and warn others away too.
In times of uncertainty and challenge such as the Covid-19 pandemic, trust matters even more. It is the organisations that customers feel they can really rely on that they stick with through such times – and are likely to keep returning to in the future.
However, new in-depth research that we have undertaken at The Institute finds that many organisations see trust as a by-product of customer satisfaction and few have strategies specifically focused on building trust with their customers. I believe businesses have much to gain by thinking more closely about the factors that influence and drive customers’ trust. This is all the more important because we find that levels of trust have largely stagnated in recent years – perhaps driven by the proliferation of the online world where the scale of information and unclear provenance of many sources has fuelled confusion, uncertainty and perceptions of ‘fake news’.
Our research underlines the extent to which customer service, customer satisfaction and trust are interlinked. Two thirds of customers (67%) agree that having a high level of trust makes their experience of dealing with an organisation better; 94% say it is important or very important that they trust the customer service of an organisation they do business with; and 41% of customers strongly agree that customer service strongly influences their trust in an organisation.
But what factors actually build trust? In some senses, trust is one of those feelings we all know but which is hard to intellectually define. Nearly six in ten (56%) customers could spontaneously name an organisation they trust – on one level, it is just something we feel.
In fact, though, we argue in our report that there are seven dimensions that help organisations build a model for customer trust:
- Customer ethos – the sense that an organisation genuinely considers the needs and interests of its customers
- Competence and capabilities – the quality of products and services, and the end-to-end service experience
- Reliability and dependability – consistency in delivering the brand or service promise, accountability for putting things right
- Transparency – transparency and honesty in communications, terms and conditions, pricing and management of personal data
- Ethics – treating employees and suppliers fairly, commitment to environmental sustainability, paying a fair share of tax, making a positive contribution to society
- Empathy and care – listening to and understanding customers’ needs and circumstances, providing reassurance, solutions tailored to personal needs
- Brand validation – feedback and endorsement from others: friends and family, mainstream media, social media, influencers
Some of these are well-established, while others are newer – and growing fast. For example, ethics including commitment to environmental matters and the ESG agenda, is becoming rapidly more significant. Our research finds that measures of an organisation’s ethical conduct – doing the right thing in its business practices – in fact make the strongest single contribution, helping build a latent feeling of trust in a growing number of customers.
Conversely, we also identify a number of ‘trust breakers’. The most damaging business practices in this context are hidden costs or fees (that ‘definitely reduce’ trust in 68% of customers), product defects (63%), manipulation of online reviews (62%), charging different customers different prices (61%), and salespeople using high pressure sales tactics (60%).
Clearly then, organisations need to focus harder than ever on building trust, reinforced through excellent customer service and the continual pursuit of higher levels of customer satisfaction.
But what does this mean for managers and leaders? It underlines the need for integrity, authenticity, clarity of communication and commitment to core organisational purpose. It also underscores the need to remain committed to the highest levels of service, which customers expect and rely on.
In turn, this means ensuring that standards are not allowed to slip within the business regardless of external circumstances. The pandemic has posed huge challenges; Brexit has also challenged businesses in some sectors. But this cannot be an excuse for dropping our performance levels. Managers and leaders need to find the right balance so that they provide empathetic support and guidance to their teams while also spurring individuals to excel.
As we emerge from the Covid crisis into more of a steady state, I believe this is the perfect time for organisations to look at trust anew. They should refocus their energies on building a model fit for the long term, founded on the best principles of service, transparency and integrity, and delivered through both organisational and individual performance excellence.