Why Trust is a Powerful Competitive Force In the World of Business

Trust has replaced convenience and price as the ultimate competitive advantage for businesses.

Clemens Rettich of Great Performances Group explores what it really means to build trust with customers — and why it matters.

Volkswagen sold cars that made consumers feel better about driving on a planet that really can’t take the emissions of many more internal combustion engines. The company lied. Air Transat sold “nonstop” flights to Mexico at unbelievably low prices. It lied. And then Americans elected a billionaire who doesn’t just lie — he lies unashamedly, his deceptions verging on the pathological.

Lies and more lies.

This post-truth propensity is stressing the fabric of our political, social and mental health. But there’s good news: it’s also creating a massive entrepreneurial opportunity. Here’s why.

In the 20th century, the ultimate competitive advantage was convenience (think fast food and shopping malls). But in the 21st century, where complexity and deception are generating oceans of anxiety, the ultimate competitive advantage for businesses has become trust. Businesses that earn trust consistently do three important things:

1. They help consumers make good decisions in alignment with the consumers’ own values.

2. They reduce the overwhelming complexity of choice and information (no deliberate obfuscating!).

3. They ensure that their products, services and brand experience are what consumers want.

Once a company gets these core practices right, that’s when consumer trust begins and the relationship becomes about loyalty. That’s something organizations such as Rolex, Disney or Lego know. Interestingly, these three organizations took first, second and third spots on Forbes Magazine’s 2017 World’s Most Reputable Companies list.

Who Cares?

Building a company that values a trust relationship with its clients or consumers is, quite simply, the right thing to do. What’s the alternative? To shoot for the “Least Trusted Brand” award? But beyond this, being a trust-based company is also the most effective way to build market share, ultimately leading to greater profits — and companies build market share when they increase retained and referred business.

Any organization that can build a community in which trust and delight are abundant, and its members spread the word on their own, has achieved the gold standard in the 21st century: its customers and employees become vectors.

So what exactly is a vector? In biology, a vector is an agent (like a dust particle) through which an infection is spread or transmitted. In marketing, vectors are people who spread the word about the value of a business. Seth Godin, author of many business books, including Unleashing the Ideavirus, calls these people sneezers. Essentially, what they sneeze out is the message “You can trust this brand or company.” And the message spreads.

But trust, like creativity or team player, is one of those words that is all suggestion and has no hard-edged meaning. To be meaningful, trust requires edges and measurable behaviours. These are the most important ones for businesses:

1. Expertise

Ignorance is the enemy of trust. Consumers won’t trust you just because you and your business mean well. You need to know your stuff. This isn’t the easy truth of the saccharine social media “memes”; this is truth that takes work and costs something.

So become a trusted expert. Whether it is in business growth, cocktails or climate change, own your space. Commit to lifelong learning. Commit to filtering everything you share, teach or promote to ensure that it’s the truth.

To do that, you have to know what the truth is, and you have to tell it even if it hurts. That, and nothing short of that, builds market-eating loyalty. When consumers trust you that completely, they come back. And they send their friends and people they care about. When they trust you that much, they’ll become your vectors.

2. Communication

Consumers can’t trust a business if they can’t understand it. More importantly, they can’t trust a business that doesn’t make an effort to understand its customers.

Communication that inspires hope in a better future and is rooted in the truth is the core of leadership. To transform that communication into a vector for trust, you must do one more thing: speak consumers’ language. You may have the answers, but are you answering the questions consumers actually have?

Precision in communication matters. Little has grown consumers’ collective cynicism more than the exploitation of language by liars. Phrases like “all natural” and “non-stop [flights]” become corrosive agents in the hands of brands who don’t live up to these promises, eroding consumer trust.

Ask yourself what a 10-year-old would understand from the words you are using. Create your ad copy accordingly.

3. Transparency

When it comes to true transparency, there’s no place for salesy smoke and mirrors. What you really want is for the consumer to say, “I’ve seen everything about you, and it is exactly what you said it was.” Challenge yourself every day to risk being more transparent, especially with your employees, who can be your most powerful vectors.

If trust is the most powerful competitive advantage for businesses in the 21st century, then transparency may be its greatest lever. Distrust is proportionate to the extent to which consumers believe something is hidden from them. Open the door.

4. Consistency

The more consistently you can deliver on your promises, the more sustainable the trust factor. Again, this is especially true when it comes to your employees.

Will you tell the truth even if it costs you profits? If it benefits a competitor? Nordstrom is famous for training its employees to put the happiness of its customers first, even if it means losing a sale. Would you do that?

Tell the truth when you’ve made a mistake. In fact, use mistakes and failures as opportunities to showcase your commitment to your values. Consumers find out what you are really made of only when they see how you fix your mistakes. They won’t trust people who can’t own up to their mistakes.

Trust is a powerful force — and trust me, in a world where information overload and deception have become default settings, consumers will be very reluctant to abandon a business they trust for a cheaper or more convenient alternative.

 This article is from the February/March 2018 issue