Welcome to the Fourth Industrial Revolution – an era defined by continuous technological innovation that’s transforming customer expectations. Trust is no longer a guaranteed certainty for institutions, and it’s easily lost, making the fostering of trust a business imperative – and transparency key.
According to the State of the Connected Customer report, trust significantly influences customer loyalty. A staggering 95% of customers say that trusting a company increases their loyalty to it.
The importance of trust isn’t new, but how it’s won and lost has changed. Businesses have historically won trust by signalling strength and reliability with their physical presence – think of the imposing facades of early bank buildings, or the trust that was automatically granted to successful companies. The Fourth Industrial Revolution has brought with it a trust crisis.
You only have to look at the 2018 Edelman Trust Barometer to see the systematic decline in trust of our four key institutions: media, business, government and NGOs. This downward slide has a multitude of causes, including the wave of new technologies that’s empowering customers with greater access to information, and businesses lagging on keeping up with the expectations this new technology creates.
Now, every brand has to prioritise earning trust to win and keep customers. To be trustworthy, every touchpoint with the customer needs to looked at.
And this is a crisis being felt globally, including here in Australia. I’ve recently been meeting with customers, and the ability to build and foster customer trust in this new 4IR world is a high priority for local businesses in Australia.
Earning trust is of course achieved in large part through honest business, and delivering the products and services your customers expect. However, it extends well beyond this to the authenticity of a company’s actions.
This authenticity comes from prioritising trustworthiness, even ahead of growth. Customers place more trust in companies that are transparent in their actions and that strive to have a net positive impact on the world.
Authenticity also hinges on how the business interacts with all of its stakeholders – not just its customers.
The ability to have conversations anchored in clear corporate values and honesty will become a hallmark of future success. If a business doesn’t have an authentic voice, it doesn’t have trust. And if it doesn’t have trust, it doesn’t have customers.
And being value-centric doesn’t mean putting out a shiny media release and beating your chest publicly – customers can see right through that – it’s about walking the talk every single day. Companies that have signed up to Pledge 1%, integrating giving back into the DNA of their businesses, are a great example of this.
Today’s customers expect personalised experiences. This requires the use of data, and there’s a roadblock – customers have fundamentally lost trust in companies to do the right thing when it comes to their data.
In the State of the Connected Customer report, 57% of customers say they’re uncomfortable with how companies use their personal information. This nervousness largely stems from a lack of transparency in how companies are using their data in the first place.
The truth is, people are quite willing to share their personal information, providing they feel the company’s going to give them something meaningful in return. Yet, all too often, companies are collecting a huge amount of customer data, without providing transparency and control. When this happens, the customer naturally starts to question what they’re trading their personal information for.
The mishandling of data is the fastest way to lose customers and their trust. But by collecting data for specific purposes and seeking explicit consent for these uses, you’re building trust, transparency and value with the customer.
While some might see the European Union’s General Data Privacy Regulation (GDPR) as a frustration, it’s actually an incredible opportunity for business. Why? Because we have a clear signal from customers on what they expect as a minimum when it comes to the usage and handling of personal data. It’s up to companies now to take this information, and build trust and transparency around data practices.
The businesses that will thrive in the Fourth Industrial Revolution are those that prioritise trust – value-centric businesses that are completely transparent in their actions, including those of their leaders. Successful businesses will listen to their customers and partner with them to deliver the experiences they’re asking for.
Businesses that earn their customers’ trust earn more than just their repeat business. Customers spend more with brands they trust, and are more likely to advocate on their behalf, recommending the business to colleagues, friends and strangers. That’s an incredibly powerful display of trust.
Customer expectations are at all-time highs, driven by new, innovative technologies. Find out more in the State of the Connected Customer report.