Wednesday, July 13, 2011

Loyalty is Built on the Three Dimensions of Trust

This is the third in a series of blogs taken from the research of Professors Halliburton and Poenaru from ESCP. The previous blog discussed trust as having two components; namely rational and emotional trust. The research takes these factors the next step by introducing three complementary dimensions of trust built on these factors; namely competence, integrity and empathy. Based on the previous blog, the first dimension would be considered rational trust and the second and third dimensions could be considered emotional trust.

Each of these dimensions can be defined as follows:
COMPETENCE could be considered as the ability shown by the company demonstrated by its personnel.

INTEGRITY is another word for honesty which builds confidence that the actions of the company are true and correct.

Another word for EMPATHY is concern. The companies that show personal concern for their customers take a major step to showing their customers that they are more than a source of revenue.

From these three dimensions the answer to loyalty can be seen to be more than a simple one-dimensional measure. Any measure of trust needs to be reviewed with these three components in mind. While there is no current research that demonstrates that these dimensions are independent, intuitively they appear to have little overlap and hence may, indeed be independent.

Some of the results that have been discovered from their survey between the US and UK include:
1. USA tends to score higher than the UK when looking at banking, insurance and mobile telecommunications
2. Older customers are generally more trusting.
3. There were no gender differences in trust.
4. Part-time and self-employed individuals showed the lowest levels of trust. Retired workers showed the highest levels.
5. Education level had virtually no effect on trust.
6. The length of the relationship between the customer and the company had only a weak correlation.

In any case, measures of loyalty need to include measures of these three components in order to better understand trust. Rather than focus only on top boxes for a loyalty measure, it might be worthwhile to consider adding questions that incorporate these three measures.

The bottom line is that loyalty and trust are becoming more and more important to long-term success of companies. Companies need to consider the research that is being done and incorporating those aspects of the latest research that they believe will improve their understanding of their customers and ultimately add to their long-term success.

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