in the shade of the trust arbor: nurturing better business

8/7/2019 In the Shade of the Trust Arbor: Nurturing Better Business

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THE GROWING TRUST INITIATIVE

In the Shade of the Trust Arbor: Nurturing Better Business

A ‘Portrait Thinking’ Discussion Paper



In the Shade of the Trust Arbor

Every day customers interact with hundreds of products and services, thousandsif you include communication messages as interactions. While the volume has

exploded, the time provided for each has reduced dramatically.

So how does consumer decision making handle the vast number of interactions

with little time for deliberation? What signals, proxies and approximations do

consumers use today in the stead of time-intensive decision making processes? Do

brand-customer relationships still matter in a world of ‘faceless’ interactions? And

therefore what role does trust play in those relationships?

Attempting to answer these questions is the basis for this series of Portrait Thinking

Discussion Papers. This initial paper explores the background to and current

customer relationship environment, why customer trust is even more relevant today

and how you can grow and nurture that trust.

Future papers in the series delve further into individual elements that buildcustomer trust and how they intertwine and interact. By referencing research and

extrapolating established theory we hope to open new avenues of thinking about

each customer interaction and what it might mean to your business.




The Relationship Concept

To better understand where we are today, let’s take a short journey back to where the concept of relationships was

gaining its foothold in marketing.

In the 1990’s the discovery of ‘relationship marketing magic’ sprouted loyalty programs from every business. Then

came the CRM age where every business rushed to implement the latest and greatest and subsequently spent

years licking the wounds of budget blowouts, customer push back and corporate culture implosion. Finally customer

centricity has been hailed as a new way forward for business to delight customers and by doing so drive greater market

share. But it’s not quite so clear cut.

Customer centricity describes an organization orientating itself to focus on the needs and wants of the customer.

Mission and vision statements started to be peppered with the term and marketing and advertising exalted the benefits

this approach would deliver to customers. There are several high profile examples of customer centricity delivering real

benefits, such as Nationwide Building Society. However, there are equally other examples where customer centricity has failed to make a difference except to place high levels of financial strain on the organization.

As organizations serve several stakeholders, a pure focus on the customer has been notoriously difficult to execute. It

requires most companies to rebuild from the ground up - culturally, organizationally and operationally. Not many have

been able to fulfil such an ambitious goal alongside the financial expectations of board members and shareholders.

It starts to sound like relationships and relationship building activities were doomed to under-deliver despite numerous

research outcomes and theories suggesting otherwise.

Trust as the key

The truth is relationships - person to person (interpersonal) or business to person (B2C) - do matter and do influence

customer behavior - just look at ‘social media’. If a relationship is defined as ‘an emotional or other connection

between people’ then it becomes obvious that both parties need to want the ‘connection’ and emotions are a key

driving force for building or casting aside that connection. Some customers don’t seek a long-term relationship with

your brand (although for several reasons explained later this may change) while others clamor for the certainty and

trust of a brand relationship. Studies1 have already shown that trust is key to lasting customer relationships, helps to

maintain market share2 and has a positive effect on the consumer’s intention for future purchase3.




But herein lies the problem. Simply put, customers don’t trust marketers; they’re tired of being ‘sold’ irrelevant services

and they’re empowered enough to do something about it - witness the rise of #fail, do not call lists, online discussions

and massive opt-out from marketing messages4

. Some companies are experiencing opt out rates up to a whopping 50percent for existing customers - existing customers!

A Forrester survey demonstrates this lack of trust phenomenon with direct company communications via email or

direct mail well down the list of trusted information sources.




So what is trust?

Researchers and academics have developed numerous definitions5 however for the purpose of our discussion:

‘trust is the belief by consumers that the organization (or service provider) will act in the

best interests of the consumer and not take advantage of customer vulnerabilities’.

It encompasses an expectation that promises will be fulfilled and enables customers to enter into exchanges where

there is a risk that the outcome might not be positive. If the outcome is certain, there is no risk and trust would not

play a part. However the multi-dimensional nature of risk, the increasing use of web-based distribution channels (e.g.

downloads, online shopping, cloud-based services like g-mail) and the morphing of corporate offerings as services

rather than goods6 means there are very few situations with no risk 7.

This doesn’t necessarily mean that we all need to abandon the last fifty years of marketing strategy and look to social

media as the sole savior. Today’s marketing is different from the 60‘s mass-marketing and the 90’s personalized

marketing approaches. But the same key tenets learnt in marketing 101 are still relevant, whether you’re a socialmedia groupie or not.

Relationships built on trust - the essence of marketing

It’s time to go back to the essence of marketing - building relationships that deliver a win for customers and a

win for corporates; relationships built on trust - where customer trust has a value that is protected and enhanced

by marketers. Where customer trust abuses are avoided (like irrelevant messages or ignoring time or channel

preferences) and genuine individual relationships are nurtured and encouraged. This is more than one-to-one

marketing. It is more than segmenting the market via behavioral, demographic and psychographic factors and then

‘selling’ the service to the segment.

It is all about knowing enough about each individual customer to tailor products and services so closely to the

customer’s ideal that the customer is naturally drawn to purchase with little ‘persuasion’ required. It is all about

aligning all elements of the business to earn and grow trust - straight-talking is back in fashion.




Growing trust - the Trust Arbor

A tree is a very good metaphor for trust. Both a tree and customer trust need to have strong roots and when nurtured

well they grow successfully. We call this the Trust Arbor, an analogy that likens trust to an ecosystem, it has to be

well balanced, in unison, not too much and not too little. It also highlights the fact that even the smallest change or

poor conditions can dramatically affect the health of the tree (could the customer disinterest phenomenon be trust’s

‘climate change’?). Just like customer relationships, it is an orchestration of many different aspects which, when

managed well, build a long-term, enduring and healthy condition.




In this context, enhancing customer trust becomes a corporate goal. In its purest form, it can only be achieved if the

organization truly recognizes the importance of customers and aligns its strategy, processes and infrastructure around

the customer. This internal customer-centric strategy focuses on realizing the dream of a ‘single source of the truth’8

.But we have already witnessed the impossibility of pure customer-centricity - the ecosystem needs more balance.

Enter the concept of balanced centricity 9, where customer focus and business pragmatism are adjusted to an

equilibrium. Balanced centricity recognizes that long term viability relies on delivering satisfactory outcomes for all

stakeholders - including customers, shareholders and staff. When implemented successfully, customers acknowledge

- in many cases sub-consciously - the whole interaction bundle includes peripheral benefits that add value to the

transaction.

But balanced centricity doesn’t have the PR appeal customer centricity has to customers - they’re not going to beat

a path to your door from a marketing tagline like ‘we put you in the centre of everything we do (except when that

might damage our quarterly results)’. That’s why your balanced centricity efforts should be invisible to customers -

below ground in our tree analogy. Outputs from this effort though, should be noticeable, like making ‘brand promises’to individual customers and delivering on those promises - effectively boosting trust to boost loyalty and increase

customer value.

So how might this play out for the brand-customer relationship?




The traditional view of relationship marketing and relationship management involves organizations seeking to move

prospects up a loyalty ladder from prospect to evangelist via seven stages as shown below:

Adapted from: Lovelock, Patterson & Walker, ‘Services Marketing’




With a positive correlation between trust and loyalty / customer satisfaction, the more trust in a relationship the higher

the loyalty as perceived risk decreases - effectively moving the customer up the loyalty ladder.

This journey is taken via multiple brand interactions which, over time, boosts customer satisfaction and involvement to

a hypothetical trust trigger point10 where in-depth trust develops.

Adapted from: Lovelock, Patterson & Walker, ‘Services Marketing’ and Hart & Johnson, ‘Growing the Trust relationship’




By overlaying the concept of differing types of trust as relationships develop, there are several significant trust points

during the move up the loyalty ladder.

Initially a prospect has to overcome the trust barrier, your brand as the ‘unknown’ and where ‘generalized trust’

lives. Several strategies such as testimonials, positive reviews, ‘no-risk’ trials help to draw the prospect into an initial

interaction. This moves prospect to customer and a transactional level of trust is established - the interaction was as

expected and risks were minimized11. With further engagements and positive brand interactions, previous success at

a transactional level builds and develops trust across the other brand offerings - the customer could be considered

a client now. Eventually the client reaches the hypothetical trust trigger point where trust and loyalty increase rapidly

such that the client turns advocate and ultimately evangelist for the organization.

Adapted from: Lovelock, Patterson & Walker, ‘Services Marketing’ and Hart & Johnson, ‘Growing the Trust relationship’




Additionally, as the trust deepens past the trigger point, relationship commitment can withstand service failure - even

increasing customer satisfaction and trust from a positive service recovery experience (and positive doesn’t have to

mean a financial inducement)12

.

Seeing each tree in the wood...

Obviously where an organization has hundreds of thousands or even millions of customers, it is impossible to

personally know each customer and where they are on their brand journey without an army of marketers. This is where

sophisticated technology enables the future of marketing – in a supporting role and imperceptible to the customer.

This technology can also provide customer intelligence and understanding that ensures the simple explanation of

marketing we all learnt upon entering the profession - marketing is the bringing together of buyers and sellers - is

simply executed though a strong understanding of the individual customer.

...to then nurture each one

Building trust, developing an emotional connection, with customers is one of the most important strategies you can

implement to boost customer value, improve relationships and ultimately impact your bottom line. Building trust

means a true customer focus on each interaction, understanding the context and background of the relationship and

putting the customer’s needs foremost - not to secure a short term revenue gain but to help them climb the loyalty

ladder where retention is easier and long term value is achieved.

To make trust happen, nurturing is needed. Without the internal mechanics to deliver customer knowledge and

understanding to every touchpoint, your trust efforts will flounder. Luckily technology advances have made customer

insight, understanding and delivery of this insight to every touchpoint possible. Now you’ve probably heard that before.

Today’s difference lies in necessity. Clumsy attempts at relationship building are no longer tolerated by customers

while unprecedented levels of computing power, bandwidth and network access have opened the door to technology

so sophisticated that it’s like a marketing expert directing every action automatically - and so clever it’s transparent to

the customer.

Forrester’s eight technologies ‘today’s marketer must have’ include customer data integration, predictive analytics,

web analytics, brand monitoring, contact optimization, event-triggered marketing, interaction management and site




optimization13. For time-poor marketers across the globe struggling to devise, plan and execute, this kind of assistance

makes a real difference.

But technology alone is not the answer. Trust-building strategies to foster trust and nurture the relationship need to bein place before the judicious addition of technology that supports those strategies (without taking over like a massive

weed).

The next discussion papers in this ‘Portrait Thinking’ series take different viewpoints on trust strategies and the

elements that you might consider, including references to research and established theory. Together they form building

blocks for further discussion and reflection - and perhaps new avenues of thinking about each customer interaction

and what it might mean to your business - stay in touch for the next in the series.




Upcoming discussion papers include:

Nurture nature: how our B2B cousins can help our marketing

We will explore how business-to-business organizations have developed intricate brand nurturing strategies to improve

customer relationships albeit with a much smaller customer base than those in B2C. By examining these strategies

insight into possible B2C approaches for individual interactions en masse can be gleaned.

Where there’s a risk, there’s a sale: perceived risk and cultural factors

Strategies to reduce perceived risk inversely impacts trust and relationships as long as cultural influences are taken

into account. This paper examines risk and culture theory from Hofstede to recent times; the changing mix of risk

avoidance behaviors and developing strategies to minimize real and perceived risk.

Who’s holding the watering can?: losing control and thriving

This paper reviews what happens at each interaction and how allowing each customer to have some level of control

can deliver greater trust, particularly as customers seek to exert more control and ownership of the interaction.

For instance, inbound interactions (where customers contact you) can be the only chance you have to market to a

customer or prospect as opt-outs and do not call registers limit the reach of outbound programs.

It’s what is inside that counts

In a more theoretical discussion we’ll look at other strategies that address customer expectations and behavioral needs

that have also been shown to deliver trust benefits, including script theory and addressing key customer needs of

security, respect, esteem and fairness in interactions.




End Notes

1 See Tara A.

E.

Ebert, ‘Facets of Trust in Relationships–

A Literature Synthesis of Highly Ranked Trust Articles’, Journal of Business MarketManagement, vol 3, 2009/1 for a review of research nding since 1966.

2 Urban GL, Sultan F, Qualls WJ. ‘Placing trust at the center of your Internet strategy’; Sloan Manage Rev 2000;42

3 Geyskens, I., J-B. E.M. Steenkamp, and N. Kumar (1998), ‘Generalizations About Trust in Marketing Channel Relationships Using Meta- Analysis’; International Journal of Research in Marketing, 15 (July), 223-48

4 Media disintermediation has also shattered traditional communication models and channels as social media usage (eg. twitter, facebook,blogging) has exploded - providing active consumers with a personal ‘story-telling’ opportunity to a wide ‘passive’ audience.

5 See Tara A. E. Ebert, ‘Facets of Trust in Relationships – A Literature Synthesis of Highly Ranked Trust Articles’; Journal of Business Market

Management, vol 3, 2009/1

6 Consider the increasing number of cloud-based or hosted services available today and some traditional goods providers reinvention in

a user-pays / access-fee business model. Even tangible goods selected and purchased online have an overwhelmingly high ‘service’component to the ‘product’ as described by Kotler in 1972. Lovelock and Gummesson in ‘Whither Services Marketing? In Search of a New

Paradigm and Fresh Perspectives’ posit that there is no longer any difference between goods and services marketing.

7 Note also that we are not referring to ‘generalised trust’ as measured by polls and sentiment surveys. This is more intimate, experience-

based trust that is as unique as each individual.

8 Single source of the truth refers to a single repository of all customer information from anywhere in the company - crossing across productlines, territories and internal departments.

9 Evert Gummesson, ‘Customer centricity: reality or a wild goose chase?’, European Business Review, (2008)

10 Hart, C.W., Johnson, M.D.; ‘Growing the trust relationship’; Marketing Management; 1999; pp.8-19

11 Garbarino, E. & Johnson, M.; ‘The different roles of satisfaction, trust and commitment is customer relationships’; Journal of Marketing, Apr1999, 63, 2; Pg 70

12 DeWitt,T., Nguyen, D.,and Marshall, R.;‘Exploring Customer Loyalty Following Service Recovery: The Mediating Effects of Trust andEmotions’; Journal of Service Research, 2008, 10; 269

13 Vittal, S. (with Condon, C., Anderson, E. and Joseph, J.); ‘Eight Marketing technologies that enable Customer Centricity’; Forrester

Research Inc; 5 June 2007




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THE GROWING TRUST INITIATIVE

The Growing Trust Initiative is funded by Portrait Software

in the shade of the trust arbor: nurturing better business

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