Trust is an integral component of any successful business. It's an invaluable asset that transcends mere transactions and influences long-term profitability and growth. Here, we'll explore the indispensable role of trust in building lasting customer relationships, its quantifiable impact on your company's bottom line, and some actionable strategies you can use to strengthen it.
This article gives you insights on:
- Why is customer trust so important?
- How do you measure customer trust?
- A real-life case: How quickly trust can be lost
- The ROI of earning customer trust
- 3 essential strategies for ensuring customer trust
- Trust: The foundation for excellent customer experiences
Why is customer trust so important?
Why is customer trust essential? Simply put, there is no business without trust. Built incrementally through every interaction customers have with your products or services, trust is the foundation of business sustainability, especially in a marketplace flooded with alternatives.
Building trust is a marathon, not a sprint. It develops over time and requires consistent effort to maintain. And while trust is built incrementally, it can plummet very quickly (but more on that later).
Finally, trust is universal; it transcends all industries and is a cornerstone of every customer relationship.
How do you measure customer trust?
Trust is a measurable outcome that can be analyzed through tools such as customer relation surveys.
An open-ended question such as "What should our company do to become more trustworthy?" can highlight both challenges and solutions from the customer’s perspective in a hands-on way, setting the stage for meaningful improvements.
Some survey tools also produce heat maps that highlight specific areas where trust issues may occur, whether they are widespread or limited to demographics or products – so you can better define and understand the challenge at hand and target your improvement efforts.
See the top 7 questions to ask in a customer survey.
A real-life case: How quickly trust can be lost
To illustrate how quickly trust can be lost, we’ve included an anonymous case from the real world (with numbers adjusted for anonymity):
The table below shows the customer survey scores of a well-respected company that has consistently maintained high customer trust scores and operates across various European markets:
*CX Performance = The overall performance score of the business regarding customer experience.
This company was celebrated for its integrity and the quality of its customer experiences, with trust scores peaking at 84 out of 100 and a CX Performance score of 76 out of 100 by 2021. However, the company's reputation suffered a catastrophic decline when two employees in one of its markets were implicated in a corruption scandal in 2022.
Following the scandal, the company's trust score nosedived to 58, and its CX Performance fell to 65. These numbers reflected not only a loss of customer trust but also a significant deterioration in overall customer satisfaction and loyalty.
The impact was immediate and severe: where 77% of customers had previously said they would maintain or increase their business with the company over the next 12 months, that number plummeted to just 41% after the scandal.
Rebuilding the trust
The company's situation in 2023 illustrates the difficult road to recovery. Trust scores and CX Performance have recovered only modestly to 67 and 69, respectively. Despite the slight improvement, regaining previous levels of customer trust and satisfaction remains a formidable challenge.
This is a powerful illustration of how quickly and severely trust can be eroded, and the extensive efforts required to rebuild it.
The ROI of earning customer trust
Earning and maintaining a high level of customer trust doesn't just mitigate risk - it significantly improves overall business performance and ROI. Here are some of the ways a solid foundation of trust can increase your return on investment:
Increased advocacy and business expansion
Trustworthy companies benefit from higher levels of customer advocacy. Satisfied and trusting customers are more likely to recommend your business to others, organically expanding your reach and customer base. This positive word-of-mouth is a powerful marketing tool that leads to increased business opportunities and a broader commercial footprint.
Enhanced forgiveness for mistakes
When customers trust a company, they are more forgiving of minor errors. This goodwill is built over multiple positive interactions and experiences, making customers less likely to abandon the company over small issues. Instead, they often appreciate transparent and sincere efforts to correct mistakes, which strengthens their loyalty.
Greater willingness to co-create and co-branding
When your customers trust you, they are more likely to engage in co-creation activities. This can include providing feedback on product development or participating in case studies, which enhances the products and strengthens the relationship. Such collaborative efforts not only improve products but also foster a deeper bond between the company and its customers, leading to mutual benefits and shared success.
Read more about why great customer experiences are key to your company’s success.
3 essential strategies for ensuring customer trust
As we’ve seen, there’s no quick fix for trust. However, some strategies can help you maintain, nurture, and build more trust. Here are three essential customer trust tactics that work across industries and markets:
- Accountability: Always deliver what you promise. This means ensuring that every product, service, and customer interaction is reliable, consistent, and meets the high standards your customers expect. When promises are kept, trust is maintained.
- Empathy: Actively listening to your customers and responding to their needs with understanding and care. This includes providing solutions tailored to their challenges and communicating in a way that shows genuine concern for their satisfaction and well-being.
- Transparency: Be clear and honest in all your business interactions. This includes straightforward communication about prices, terms, and the pros and cons of your offerings. Transparency builds trust by helping customers feel informed and respected in their decisions.
Trust: The foundation for excellent customer experiences
To sum it up, trust is essential to delivering excellent customer experiences. You can have the best products in the market, but if customers don't trust you, those advantages will have no impact.
Trust is the existential dimension that underpins every other aspect of customer service and experience, and is directly linked to customer loyalty and retention, which are to sustainable business growth.
Measure your customers’ trust with our Customer Relation Survey.
