Research shows that unethical business practices, customer dissatisfaction and lack of innovation erode consumer trust. And though the following article relates to Europe, there are lessons for African business; lose your customers' trust and winning it back will be an uphill road.
Unisys, a leading research company, in their European Trusted Enterprise Study
reveals (somewhat unsurprisingly) that unethical business practices, customer dissatisfaction and lack of innovation all – whether individually or in combination – erode consumer trust in a company.
Key points of the study reveal that respect for customers and employees and local community investment win consumer trust and that in the European countries surveyed, banking ranks as most trusted industry, while airlines and telecommunications companies are least trusted. Trust is easily eroded
To earn consumer trust, companies must instead focus on how they treat their customers and employees, while demonstrating strong leadership and investing in local communities. More than half of European consumers surveyed cited these "softer" and less quantifiable attributes as those factors that build the most trust in the organisations with which they do business. While important in the boardroom, factors such as shareholder value, market share and profitability held little interest for these consumers.
From the list of 28 attributes consumers had to rate as key in building or eroding their trust, there are certain factors people don't put at the top of their trust-building list but that would factor highly in eroding their trust. For example, consumers don't place as much emphasis on a company's ethical business practices (40%), customer satisfaction (47%), and innovative products or services (39%) in building trust with an organisation, suggesting that they have now come to expect these attributes in day-to-day business.
However, their trust can be severely eroded when these baseline requirements aren't met, with potentially dramatic consequences for business. For example, a massive 63% of European consumers would be concerned about buying a product or service if a company was unethical; 56% would lose trust with bad customer service, and 59% would react negatively to outdated products and services. Don't undervalue consumer trust
These and other findings are from the Unisys Trusted Enterprise
study, which measured the importance, impact and influence of trust, privacy and security among 3,669 consumers across eight European countries*. The Ponemon Institute, a privacy research organisation, conducted the study.*
"This research illustrates the business importance of winning consumer trust and the perils of undervaluing it," said Rene Head, head of Enterprise Security in Continental Europe, Unisys. "The message here for European business is that they should absolutely maintain their commitment to product quality and service delivery, but increase their focus on the more intangible attributes that really make their customers tick – whether that's investing more heavily in local services or treating their staff well. These issues are at the forefront of consumer hearts, minds – and purse strings."
"Trust is an intangible asset that is often overlooked until it is too late," said Larry Ponemon, chairman and founder of the Ponemon Institute.
"Many organisations invest heavily to increase their market share and profitability but, as this research reveals, if these organisations want to instil trust among their customers, they may be focused on the wrong factors, or ignoring the right ones altogether."Trust and mistrust across industries
Of 30 industries surveyed, consumers viewed retail banks as one of the most trusted industries across Europe, with the exception of Sweden, where the government is regarded as the most trusted. At the other end of the scale, the telecommunications and airlines industries fell into the least trusted category in France, Holland, Sweden and Italy. Both of these least-trusted industries face the challenges associated with high consumer expectations, so if things go wrong, consumer trust can erode very quickly.
However, just because consumers trust banks more than telecommunications providers, doesn't mean they trust them absolutely. Indeed the majority of consumers – 68% across Europe expressed their willingness to jump to a competitor if it offered better security or protection for their personal information. What's more, 71% would not want to pay more for better security – they would expect it to be a core component of doing business today. About the Research
The Ponemon Institute conducted the research on behalf of Unisys, polling 3,669 adult-aged consumers in eight countries – Belgium, France, Germany, Italy, the Netherlands, Spain, Sweden and the UK -through a combination of telephone and Web-based surveys. Overall response rates were 5-6%. Ipsos/MORI conducted an equivalent study, polling 500 consumers in the United Kingdom.
The survey required respondents to rate 28 trust attributes that they believed most likely either to build or erode an organisation's trust level, using a five-point scale ranging from "very important" to "irrelevant." Respondents also ranked trust-building and -eroding factors among industries. Experts in the areas of trust, ethics, security and related disciplines developed the survey instruments and tested them for readability, difficulty and validity. About Unisys
Unisys is a worldwide information technology services and solutions company. We provide consulting, systems integration, outsourcing and infrastructure services, combined with powerful enterprise server technology. We specialise in helping clients use information to create efficient, secure business operations that allow them to achieve their business goals. Our consultants and industry experts work with clients to understand their business challenges and create greater visibility into critical linkages throughout their operations. For more information, visit http://www.unisys.com/
*The eight participating countries are the UK, France, Germany, Holland, Sweden, Italy, Spain and Belgium.