A culture of trust is one of the most powerful predictors economists have ever found to explain why some countries are prosperous while others are poor. This is according to highly acclaimed published research by Paul Zak. For the same reason it is true of countries, it is true of companies. High trust results in the type of social interactions that engender more economic transactions that create superior wealth. It is valuable therefore to do what it takes to build greater customer trust.
This is the third in our customer trust series of blogs. Foundational to customer trust is the competence of an organisation and its employees. Added to this, a customer’s perception of the company’s ethics play a significant role in the level of trust a customer is willing to extend. Now we address corporate intentions.
The definition of a company’s intention is the strategy, objective, plan, goal or scheme that the company proceeds to act upon. With regards to customers, every company has some objectives, plans, goals or schemes whether explicit or implicit, whether well thought-through or not, whether good or poor.
Ask business leaders to tell you what their intentions are when it comes to customers and many will say this: They intend to have as many customers as possible, charging them the highest price possible in order to make the greatest profit possible. If you were a customer of a company with this intention, how would you feel? I would say: Hang on a second, I’m happy for you to make a great profit, but if it isn’t important to you that I, your customer, gain great value while you make great profit, I would rather deal with someone else. If I have no choice and am stuck with you, then I will cross-question and second-guess everything you do. This added friction will increase your costs to serve and keep me.
Self-centred intentions do not foster customer trust. While it is obvious that no business will succeed without any element of self-interest, the greatest long-term success comes to those shareholders who appreciate that having due regard for the interests of all human beings in the value chain is in their self-interest. A prosperous perspective does not see the shareholder, customer, employee, supplier, regulator, and community at odds with one another but rather as an ecosystem that has the potential to become sustainably value-generating. Hence the concept of “shared value”.
A sustainable value-generating ecosystem requires good leadership. Good leadership includes competence, sound ethics and intentions to do good, never harm. Good leadership cultivates trust. Research confirms that when trust is present in a company’s culture, it significantly increases the likelihood of greater productivity. “Trust acts as and economic lubricant”, as Paul Zak says, “reducing the frictions inherent in economic activity.”
High-trust companies generate more profit than those eliciting low trust. But trust does not happen by accident. Trust is something that can be actively cultivated. Ensuring that a company’s good intentions in creating shared value is one of the keys to this cultivation.
Customer trust increases when customers perceive that a company has their best interests at heart. This doesn’t mean that the company always does anything and everything the customer wishes or demands. But it means that the company proactively does what is best for the customer, even in matters that the customer is unlikely to know about.
We work with numerous financial services companies to measurably improve their customer trust which in turn positively impacts their bottom line and regulatory compliance. When addressing the issue of good intentions, some clients have been humble enough to be willing to evaluate their business practices, exposing where they might not quite be living up to their customer-centric intentions.
Using our tools and methodologies*, our clients have successfully revised their strategies, policies, systems, as well as various processes related to product design, marketing, sales, customer communication, complaint management, administration and service design. These revisions have directly resulted in improved customer outcomes and increased customer trust.
*Our methodologies include components based on a study conducted by the Harvard Business School Mind of the Market Laboratory. Here researchers unpacked what critical elements are required in order for customers to have positive thoughts and feelings that a company truly has their best interests at heart.
In many cases we find that certain company strategies or policies have unintended consequences for customers. We identify these and work with our clients to rectify them. In other cases we find that a client’s desired customer outcomes are not consistently achieved. We work with them to deal with the roots of the problem and find effective ways to correct various shortcomings. Our tools enable them to proceed on their own, to track, monitor and measure customer outcomes impacting customer trust on an ongoing basis.
The point is this: It takes a thorough process of evaluation and follow-through action to ensure that one’s stated intentions to look after customers’ best interests are manifest in day-to-day business practices. If a customer does not feel you have their best interests at heart, they may trust your competence but won’t trust your intentions. The latter will significantly diminish their trust levels making them either difficult to serve and please, or making them discontinue business with you, both of which reduce company profitability.
“Customer trust increases when customers perceive that a company has their best interests at heart.”
Given that high-trust companies generate more profit, perhaps it is worth giving time to considering what you could do to build customer trust. Give us a call or send us an email – let’s chat about it and find a quick win that will start to make a positive difference for you, your employees and your customers.