Thursday, October 11, 2007

Trust: The Key to Loyalty

It seems intuitive that customers must have some trust in the company in order to be loyal. This blog will consider the concept of trust and identify some elements that may develop trust and loyalty.

The first question is, “What is trust?” Webster’s dictionary defines trust as “assured reliance on the character, ability, strength of someone or something.” The word was probably borrowed from the Old Norse word traust that meant help, confidence, or firmness. The German word trost and the Dutch word troost originated about the same time with similar meanings. These ancient words give a little better sense of trust, especially the notion of confidence.

The Oxford Dictionary defines trust as “a firm belief in reliability, honesty, veracity, justice, strength of a person or thing; reliance on truth of statements without examination; confident expectation; accept without evidence.” Webster’s New Dictionary of Synonyms describes trust as “confidence, reliance, dependence, faith in the fact of feeling sure that a person or thing will not fail him.” Trust implies an absolute and assured resting on something or someone; often suggesting a basis upon other grounds than experience or sensible proofs. The point is that trust implies a deep reliance upon a person or thing.

A Personal Service Story

As I was thinking about trust and what it is, I recalled a personal example. Several years ago I bought an Audi. The car had a sunroof and one day the sunroof decided not to close. I took it to the dealer and found they could not schedule it for repair until the following day. Since there was a slight chance of rain, I decided to seek an alternative. I found a small repair shop that specialized in German cars. The owner came to the car and removed a panel in the roof inside the car and quickly examined the sliding mechanism. He commented that this was a simple repair, got his screwdriver and within less than 5 minutes the sunroof was completely operational. When asked what the charge was he said “No charge but please keep him in mind the next time my car needed service. He began to earn my trust and loyalty in three important ways:
1. He was competent
2. He was proactive in wanting to solve my problem
3. He did not take advantage of me – even though he could have.

He has remained consistent and congruent in these behaviors over time and I still trust him and am a loyal customer.

The ideas of Dr. John Richardson and Linnea McCord in their article Trust in the Marketplace are very similar. They note that there are three aspects of trust that relate to interaction between consumers, employees and companies in the marketplace:
1. Consumers and employees must have confidence in organizational promises or claims made to them.
2. Consumers and employees require that integrity and consistency follow a known set of values, beliefs, and practices; clear expectations.
3. Consumers and employees require concern for the well-being and respectful treatment of others.

In short, a company should meet customer requirements and expectations consistently over time and to demonstrate that they (the customers) are valued and appreciated.


It may be easier to describe and understand untrustworthiness or lack or trust rather than trust. We are all aware of examples that demonstrate untrustworthiness and its implications. One current high profile case is Firestone tires on Ford Explorers. It seems that both Firestone and Ford did not disclose some important relevant information to the public. Now that the information is known, the reputation of Firestone (and to a lesser extent Ford) is tarnished and trust in Firestone tires has been seriously damaged. Because the nature and extent of injury and loss of life that is directly attributable to tire defects (Firestone) and their use on Ford Explorers, the damage to the credibility and reliability of one or both of these companies may be permanent, or at least long-term. The new CEO of Firestone is now appearing in commercials that focus on Firestone’s commitment to producing quality tires. These commercials are certainly an attempt to respond to the public’s lack of trust in Firestone tires and to recover from sales losses that resulted from the disclosures of their failure to deal forthrightly and swiftly with information about defective tires.

Companies usually lose customer trust and confidence when they either mislead, misrepresent or exaggerate claims about their products or services. The loss of customer trust is very expensive and very difficult to restore, if not impossible.

A look at e-commerce

In a recent study of 50 e-businesses, six components were identified as being important in developing trust:
1. Provide state-of-the-art security
2. Show legitimacy (by aligning with an established brand)
3. Fill orders promptly and accurately
4. Assure customers they are in control of the buying process
5. Treat customers with care (be sensitive to their mood)
6. Allow customers to chat with other customers.

These components reflect for the need for businesses to cultivate qualities of competence, pro-active attitude, concern and respect. The chat room is the internet version of providing assurance to the customer that he/she is receiving a fair deal and good value by allowing them to communicate with other customers, who are otherwise invisible and unbiased, to discuss the products, prices and services.

A trustmark

Another study discusses the concept of a “trustmark.” The author of the study defines a ‘trustmark’ as:

“a distinctive name or symbol that emotionally binds a company with the desires and aspirations of its customers. It’s an emotional connection – and it’s bigger and more powerful than the uses that we traditionally associate with a trademark…”

The key point about the trustmark is that it emphasizes the key differences between satisfaction and loyalty. Satisfaction is a passive state. Customers can be passive about your company, products and services and still claim that they are satisfied. For example, I bought my wife’s computer based on price, features and availability. While it was an excellent deal, my experience with the store was very good, and my wife is very happy with the laptop, I am not necessarily loyal to that brand of computer. Hence, my attitude about the computer company is passive; I have no emotional investment in purchasing from them again. Now, base on performance and experience with the computer, my satisfaction could grow into loyalty. It should also be said that, in this example, my wife will form her own opinion about the computer based on her individual experiences. At this point, she is predisposed favorably towards the company because she’s engaged with it and her needs and expectations are being met.

On the other hand, loyalty and trust are not passive states. They are active in the sense that loyalty and trust require an emotional connection to the company through a variety of means: experience with products, services, employees, word-of-mouth awareness, advertising, promotion, image, share of heart. A loyal customer trusts that the company will meet and/or exceed their expectations in connection with the delivery of its products and services. It is the emotional link that brings the customer back and acts as a barrier to competitive pressures. When a customer gives a company his trust, he is simultaneously relinquishing some of the wariness that would normally be present in a decision-making process to purchase a good or service. The loyal customer expects that they can rely on certain assertions made by the company to provide quality and service at the best price. The same customer, when dealing with a company to which he is not loyal, will have a more skeptical attitude and challenge the information provided by the company. Consumers are more educated than ever. They have vast resources for information and easy access to a multitude of options.

The emotional connection lubricates and smooths the way for the buying process. For example, once I trusted the Audi mechanic, the buying process for service is simple: take the car in and describe the problem. I know that the problem will be fixed and that the price will be fair and competitive. There would be no extra parts or hidden or bogus costs. I am able to ‘enjoy’ the process, as much as I can enjoy spending money on car repair, rather than being on edge and wondering whether I’ve asked the right questions or whether the job will be done right.
Trust is built, one transaction at a time! People want to know where they stand with each other. They may not always like what they hear, but if they can count on what is being said as being true, then they are in a position to decide how they want to handle the situation or the relationship. Customers and employees have the option to choose the companies with which they invest their precious time, energy and money. Often times, the only face of the company is presented by the employee who is serving the customer. The company is understood through multiple means (advertising and marketing, multiple employee contacts, public relations, word-of-mouth information, images).

It is the emotional connectedness that impacts people over time. The concept of ‘share of heart’ comes from this idea of touching the emotions of a customer through some type of exchange or contact, personal or otherwise. That is why companies work so diligently to create a positive experience with each customer. Sometimes it is personal, sometimes by association. This is the reason that many companies engage in significant community service efforts and contributions, to demonstrate their regard for things that are important to their customers and to earn good will and respect.


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