It’s little wonder that trust in Australian institutions has hit a five-year low. According to the latest Edelman Trust Barometer, trust levels have collapsed in the last two years across all four institutional groups covered in the survey – government, media, business and NGOs.
Let’s have a look at some of the factors at play.
The government has just kicked off a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The Commission is putting a spotlight on the industry following a series of scandals that have eroded trust in the system among Australian financial services customers.
On top of this, recent high profile cyber security breaches – think Uber, Equifax and Dominos Pizza – have shed light on the fact that even large companies are at risk of breaches. The consumer implication is that: there is no guarantee that your data is safe.
In the case of Equifax, one of the largest repositories of Americans’ most sensitive financial data, the massive breach occurred despite sophisticated security measures, a dedicated operations centre and antri-intrusion software. It was, it appears, implementation rather than process that let Equifax down.
Dominos is an example a bit closer to home for Aussies, with an apparent data breach in the supply chain late last year causing customer details to be leaked online. A statement from Dominos at the time said there was no evidence to suggest that there had been unauthorised access to the company’s systems, but regardless of the ‘how’, the result – erosion of trust – is the same.
Another month, another article about a data breach exposing customers to risks that are outside of their control. And all this in the context of a business world that’s increasingly reliant on ‘big data’ and machine learning.
The rise of the machines
The explosion of ‘digital’ has undoubtedly brought with it much convenience for customers, efficiencies for businesses and a proliferation of new products and services that fundamentally improve the customer experience.
Artificial intelligence is the new black. It’s become as much a part of the business person’s lexicon as bitcoin has for the man on the street.
There’s been much talk about job losses due to AI, with an article in the Australian Financial Review this week pointing to a PwC survey of Australian CEOs which found three quarters are concerned that an explosion in robotics and AI will force them to retrain staff and make job cuts.
Furthermore, that same study found cyber attacks have become the biggest threat to Australian businesses.
So what do consumers think about the rise of the machines? According to a study published by HSBC last year, consumers don’t trust AI. The findings, based on a study of 12,000 people across 11 countries, found that despite the clear customer benefits, consumers are apprehensive about letting chatbots and robo-advisers help them open a savings account, or provide mortgage advice.
This is partly about education – people tend to fear what they don’t really understand – but it’s also due to one simple fact: it is much harder to build trust in machines than it is in people.
The human advantage
You may have heard of the trust equation:
Credibility + Reliability + Intimacy/ Self-orientation = Trustworthiness
Credibility and reliability together form a sense of your authenticity as a business or person: are you who you say you are? And do you do what you say you’re going to do?
Intimacy is inherently linked to relevance – you’ll struggle to get close to your customers and earn their trust if you aren’t having relevant conversations and building products and services that meet their personal needs and wants.
Self-orientation is pretty straight forward; the more you demonstrate that your actions are self-serving, the less your customers will view you as a trusted partner. And if they don’t see you as a trusted partner, they’re highly unlikely to want to buy products and services from your company.
Trust must be earned. Real trust – driven by emotion and strongly influencing loyalty and advocacy – can only be built over time, following multiple positive customer experiences.
It is not a one-off hurdle to be met along the customer journey, it is something that is developed slowly and broken quickly.
Trust lies at the heart of the customer experience, and if you want to build long-term valued relationships with your customers, it’s the key nut to crack.
If you’re interested to learn more, there’s a great animation that uses game theory to explain how trust works as a flexible adaption between multiple types of players over time, and under different conditions: http://ncase.me/trust/
But if you’re time poor, here are the key learnings from the animation for building trusted relationships:
- Consistency – trust keeps a relationship going, but you need the knowledge of possible future repeat interactions before trust can evolve. In other words, your customers need an understanding of how you are likely to behave in the future, and to feel confident that behaviour will be both consistent in their best interest;
- Possible ‘win-wins’ – you can’t be playing a zero sum game. You need to be playing a game where it’s at least possible that both players – business and customer – can be better off (a win-win). As the trust equation explains, self-orientation erodes trustworthiness;
- Strong communication – too little communication, or worse – miscommunication – can cause trust to break down. This is particularly important for those in service-based industries who live and die by the service they provide their customers. Information breeds certainty; make sure your customers remain informed, even when things aren’t going to plan.
Of course, in the real world there is also reputation, shared values, cultural markers, a unique CVP and many other aspects that contribute to your brand identity and enable you to build trusted relationships.
In the short term, the game (or context in which we are operating) defines the players, but in the long term, it’s the players who define the game. Creating the right conditions will help you build long-term, high trust customer relationships that result in win-wins for all involved.
Follow Kristen on LinkedIn: www.linkedin.com/in/kristenturnbullcoredata