Consumer trust can be easily damaged if businesses fail to be ethical in the way they do business, lack innovation or lose focus on customer satisfaction.
These are some of the finding from a new European study conducted by Unisys, which discovers that, to earn consumer trust, companies must instead focus on how they treat their customers and employees while demonstrating strong leadership and investing in local communities.
More than half of European consumers surveyed cited these “softer” and less quantifiable attributes as those factors that build the most trust in the organisations with which they do business. While important in the boardroom, factors such as shareholder value, market share and profitability held little interest for these consumers.
From the list of 28 attributes consumers had to rate as key in building or eroding their trust, there are certain factors people don’t put at the top of their trust-building list but that would factor highly in eroding their trust. For example, consumers don’t place as much emphasis on a company’s ethical business practices (40%), customer satisfaction (47%), and innovative products or services (39%) in building trust with an organisation, suggesting that they have now come to expect these attributes in day-to-day business.
However, their trust can be severely eroded when these baseline requirements aren’t met, with potentially dramatic consequences for business. For example, a massive 63% of European consumers would be concerned about buying a product or service if a company was unethical; 56% would lose trust with bad customer service, and 59% would react negatively to outdated products and services.
These and other findings are from the Unisys Trusted Enterprise study, which measured the importance, impact and influence of trust, privacy and security among 3 669 consumers across eight European countries. The Ponemon Institute, a privacy research organisation, conducted the study.
“This research illustrates the business importance of winning consumer trust and the perils of undervaluing it,” says Rene Head, head of enterprise security in Continental Europe at Unisys. “The message here for European business is that they should absolutely maintain their commitment to product quality and service delivery, but increase their focus on the more intangible attributes that really make their customers tick – whether that’s investing more heavily in local services or treating their staff well. These issues are at the forefront of consumer hearts, minds – and purse strings.”
Larry Ponemon, chairman and founder of the Ponemon Institute, adds: “Trust is an intangible asset that is often overlooked until it is too late. Many organisations invest heavily to increase their market share and profitability but, as this research reveals, if these organisations want to instill trust among their customers, they may be focused on the wrong factors, or ignoring the right ones altogether.”
Of 30 industries surveyed, consumers viewed retail banks as one of the most trusted industries across Europe, with the exception of Sweden, where the government is regarded as the most trusted.
At the other end of the scale, the telecommunications and airlines industries fell into the least trusted category in France, Holland, Sweden and Italy. Both of these least-trusted industries face the challenges associated with high consumer expectations, so if things go wrong, consumer trust can erode very quickly.
However, just because consumers trust banks more than telecommunications providers, doesn’t mean they trust them absolutely. Indeed the majority of consumers – 68% across Europe expressed their willingness to jump to a competitor if it offered better security or protection for their personal information. What’s more, 71% would not want to pay more for better security – they would expect it to be a core component of doing business today.