What is the dollar value of trust?
Through a special arrangement, presented here for discussion is a summary of a current article from the blog of LoyaltyOne. The article first appeared on Forbes.com.
New research by Accenture Strategy assigns a dollar value to trust among organizations and finds companies that experience a material decline in trust could miss six percent in potential sales, on average.
The findings, based on an analysis of more than 7,000 companies across 20 industries, back up what many retailers should already know: That transactions are largely driven by brand confidence. The proper use of consumer data, it appears, plays a big role in instilling that trust and confidence.
A look at retailers that rank high on the 2018 Temkin Trust Ratings supports the theory, connecting trust with performance. Amazon and Kroger, the two top rated publicly traded retailers included, were tied at 22 among 318 entries. The top-rated retailers overall are two privately-owned supermarket chains: Wegmans Food Markets, second, and H-E-B, third.
Retailers that lost trust — and market share — encouraged less-frequent visits. Among those that fell at least 15 points below industry average on the 2018 Temkin Trust Ratings list is 289th-ranked Sears Holdings and Toys “R” Us, 273. Accenture’s “Competitive Agility Index” reveals 54 percent of companies have experienced a decline in trust.
Pretty much all retailers gather data, through a loyalty program, credit card data and/or digital transactions. Transforming that information into a shelter of trust, however, takes expertise. Here are some guidelines.
Be collaborative. When given a choice to choose what and how much information they share, shoppers are more likely to feel valued and believe in the brand.
Be clear. All communications, from explaining how the retailer uses its data to the special offers available through that data, should be interpreted in a few words.
Be as relevant as budget permits. Ideally, a retailer could break down its data into hundreds of unique messages, so each customer sees she is getting an offer special to her (and she actually wants).
Don’t take advantage. If the brand experience is incongruous or indifferent to the customer’s needs, they’ll lose trust, and that could be worse than never having been trusted at all.
If the Accenture theory is sound, then even blockbuster brands have the ability to improve performance through emotional connections and, specifically, the insights that enable them.
- Putting A Price On Trust: 4 Ways Data Can Enforce Brand Believability – Forbes
- Half of Companies on the Accenture Competitive Agility Index Experienced a Major Drop in Trust, Losing Out on $180B in Potential Revenues – Accenture
DISCUSSION QUESTIONS: What advice would you have for retailers seeking to use data to establish a “shelter of trust” with consumers? Can you provide examples of actions taken by specific retailers that create this type of trust on the part of consumers?
Cynthia HolcombFounder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Cynthia HolcombFounder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Cynthia HolcombFounder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Cynthia HolcombFounder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
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14 Comments on "What is the dollar value of trust?"
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Founder and CEO, CrunchGrowth Revenue Acceleration Agency
Chief Executive Officer, The TSi Company
Founding Partner, Merchandising Metrics
I think it boils down to how data drives behavior. Customers see and feel behavior. Honest product and pricing. How many price tags in the mall are believed/trusted as the real price? How many brands use data to regionalize and localize assortments? Retailers are drowning in data, but many seem unable to filter and edit and change behavior.
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Trust is more of a “show-me” than an “ask me.” A uniquely personal, relevant offer speaks volumes over plying a consumer with “transparent” language on how their data is used and shared. All under the guise of demonstrating trust? A policy of depending on the consumer to read, process and determine if they should trust a retailer is completely counterintuitive to “show-me” why I should trust you, my retailer. Retailers have so many initiatives in play at once, it can be overwhelming to the consumer. Thinking holistically from the consumer viewpoint is rare, evidenced by current retailer trust strategies. A unique emotional connection with a consumer requires a new way of thinking.
Global Retail & CPG Sales Strategist, IBM
This is a great example of retailers needing to stay on top of their brand image constantly. They must respond to negative publicity in a decisive, genuine manner to regain and build new trust. I think we can all name a few strong examples of brands that demonstrate this ability.
Managing Director, GlobalData
In this case I think trust is being conflated with wider issues of brand connection. I trust both Kroger and Wegmans to provide edible, reasonable quality food, just as I trust them to be responsible corporate citizens. However, I have a real connection to Wegmans because its whole proposition aligns with what I want from a grocery experience.
Retail Futurist + CEO @ MeSpoke
Founding Partner, Merchandising Metrics
Good points. And I’ll add that CMOs are only as good as their lack of bias and predisposed points of view. Lots of uncharted territory out there these days. Learning and changing behavior don’t cohabitate with bias very well. You certainly didn’t suggest that — just sayin’ …
President, The Ian Percy Corporation
Founder, CEO, Black Monk Consulting
Great point Ian. Trust is most clearly manifested during periods of conscious risk. But trust is also a risk-mitigation vehicle. So, for example, when a lower income shopper goes to Walmart, they “trust” they will receive good products at reasonable prices. In this example, Walmart’s performance over time mitigates the risk of a poorer shopper minimizing the value of the small number of disposable dollars they have available to them. The risk of not being able to make the money go far enough is certainly always there, but again it is mitigated by experience as opposed to something more dramatic, say, you walking off a 30 story building because you trust me when I say you will be safe. And this is exactly why “trust” isn’t something branders can — or at least should — promise. You are spot on. It is a spiritual experience that lives in the hearts and minds of the consumer who chooses to bestow it — or not to bestow it — on a brander.
Founder, CEO, Black Monk Consulting
I have to question the premise here. Trust isn’t something a retailer “creates,” it is something customers bestow on retailers as a result of their experience with them. A retailer cannot promise, “trust,” — their trustworthiness is either validated or refuted in real time by their customers. And exactly how much should a customer “trust” a retailer who strives to “be as relevant as budget permits”? Why is trust linked to economic performance? Does this means that in tough years branders can feel free to misuse data? And data security is only one aspect of how customers measure trust, not the only criterion. So if my data is secure, but my customer service experience is horrendous and/or a brander misrepresents the products they manufacturer or sell — am I suppose to still trust them? I agree with Phil Masiello. He calls the methodology “ridiculously flawed” — and he’s right. It’s either that or hopelessly naive.
President, The Ian Percy Corporation
Best comment of the day, my brother!
Retail Solutions Executive, Teradata
If you don’t know them, you can’t delight them. If you misstep, it doesn’t take long for them to find someone else who will provide a better CX. This is not the day and age to guess and assume. Better get it right. It starts with seeing the shopper, then making intelligent decisions on what you know, and acting on that intelligence in a timely, relevant and appropriate way. Miss one component of that process and you will see the loss in trust.
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
I reckon the value of consumer trust is 100%. If you want to calculate its dollar value to your organization, just look at your bottom line.
Trust is a requisite for loyalty, but they are not the same thing.
Trust is earned over time, by the consistent, competent and transparent actions of the institution. Delivering on your promises is of paramount importance. Stating them clearly is a core discipline.
Compared with that, collaboration on data collection seems like a pretty soft action. If analytics enable personalization, then of course the execution must be flawless, lest the customers receive the message that you are not truly attending to their wants and needs.
Defining trust as a “shelter” makes it seem like a cold-blooded, possibly deceptive tactic. A brand or retailer that acts in predatory fashion toward its customers doesn’t deserve to survive.