Edelman: The importance of customer trust
The importance of customer trust
By Elizabeth Akass, Editor, Engage Business Media
Edelman, the world’s largest global independent communication firm, explains how the insight provided by its annual trust barometer can reflect and inform customer relationships with brands across the sectors.
Trust has never been more important for companies to develop and maintain. It affects every aspect of a customer’s relationship with a brand and can ultimately result in the success or failure of an organisation. Edelman works with brands and organisations to help build trust through communications and PR, with over 6,000 employees in 60 markets across the world. Edelman spans across the whole breadth of marketing and communications services, working across corporate affairs, technology, health, and financial communication, and has specialities in crisis communications purpose, employee experience, digital, creative, and content.
Its annual Trust Barometer has been gathering data for two decades, exploring trust in business, government, NGOs, and media, and surveys over 34,000 people in 28 markets. Gerry Wisniewski, Managing Director at Edelman, discusses why this data collection is so important: “We have many proof points collected over those years to demonstrate why building trust with customers and stakeholders is so critical.” The first, she says, is that “trusted companies have greater license to operate”.
The second is that “trusted companies have better relationships with consumers”. She explains this further: “Three quarters of people in our database say they actively recommend a business they trust. This means they’ll be willing to pay a premium, they’ll want to try your latest innovations first, and they’ll stick with your brand even if a competitor gets better reviews or is more innovative or greener. Customers who trust you are more likely to engage with, buy from, advocate for, and defend you.”
The third is that “trusted firms have trusted employee relationships”. She says: “Our data says that seven in 10 people are proud to work for companies they trust, compared to half who are embarrassed to work for people they distrust. Trusted companies are also more likely to have employees that recommend them as a great place to work and advocate for them.”
The fourth is that “trusted companies are more likely to receive institutional investment and investor opportunities”. She highlights that investors say that their trust in a company is the single most important factor when considering investment decisions, placing it above 17 other factors including the financial evaluation and an engaged board of directors.
Wisniewski also mentions that “trusted companies are more likely to out-perform the stock market,” detailing that “over a one-year period, trusted companies’ stock out-performed their sector indexes by more than 5%.”
The final proof point she notes is that “trusted companies are much more resilient in the face of a crisis or risk”, relating back to consumers and employees being more likely to remain loyal to and continue supporting brands that they trust, even in times of difficulty. “If you put these all together, you can see that there are significant benefits to being a trusted company and ensuring you have that strong customer reputation.”
Wisniewski continues to describe the key industry insights that the Trust Barometer for 2019 showed. “The world has never been more divided,” she says, “of the 26 countries that we surveyed last year, 15 are distrusting. One contributing factor has been political uncertainty and upheaval.”
“We saw a very modest rise in trust across NGOs, business, government, and media. NGOs and business are the most trusted, and the government and media are still generally distrusted with modest year-on-year improvements.” She says that trust in tech remains the highest of all sectors by a significant margin, which she finds surprising. “There have been data privacy scandals, electorate manipulation, crises in leadership, and the growing power and influence of large tech companies, particularly those in Silicon Valley.” Although, she acknowledges that this disparity might be due to the general public who were surveyed not equating their personal technological devices and the benefits they provide with the broader issues in this sector.
Wisniewski explores this further, stating that the tech sector is in a precarious position behind the scenes. “We saw entrepreneurs and investors warning that AI may be the ultimate threat to humanity. We also saw employees walking out of tech firms, saying that they didn’t want to work for companies that sold to the military or had alleged harassment and discrimination and assault,” she says. “Our data also shows that people have concerns about the power of information tech firms have, with 65% of respondents saying technology companies have too much power to determine what news and information people see or not.”
“There are also concerns that tech companies put profit before customers. Nearly half of respondents said they feared the pace of innovation, and they felt that disruption was happening too fast and they didn’t understand how this disruption was going to affect their lives. People were worried about losing their jobs to automation, and the tech sector needs to address these fears to build stronger trust.”
However, she emphasises that there could be a positive future for trust around the tech sector if they actively and appropriately work towards easing these concerns. “Tech needs to be a force for positive change. These sectors have a responsibility to guide society through the disruptions they are part of so people can feel better prepared. There is a global rising tide of people who say that profit and the greater good are not mutually exclusive. They want to see positive societal change in their communities and feel that tech companies are able to create this without sacrificing a profit. Firms need to show that they are adding value in their communities.”
This is most relevant with employees in the tech sector. “People expect their employers to be part of this solution, and the majority say that it is critically important for their employers to respond and talk about challenging times and sensitive subjects,” Wisniewski says. “Employees want to work for companies with leadership that stands up for them and their shared values. Companies need to go back to their core values and have a strong view of how they can build trust.”
Moving forward, Wisniewski says that the 20th Trust Barometer will also include the health tech sector as a new category for data collection. “This is an emerging sector where we’re seeing this combination of technology from AI and blockchain and IOT and wearables coming together.” She feels that measuring how this newer sub-section of the tech industry will fare in trust amongst the general public, and comparing it to how people feel working within this industry, will add vital further insight to the existing Trust Barometer, continuing to develop and progress it each year.
Connect with Gerry Wisniewski.