Trust and loyalty go hand in hand in any relationship, and it’s no different when it comes to a brand and its customers. When a person loses trust in an entity, feelings of loyalty are lost as well — and hard to get back. For brands, it’s a double loss. This article will take a look at brand trust and customer loyalty, how it’s won and lost, and what can be done to gain it back.
The Psychology of Trust
All relationships are built upon trust. Whether it’s a romantic relationship or a relationship between a customer and a brand, if there is no trust, there can be no relationship. Trusting a person or a brand involves estimations of probabilities of how the person or brand will behave, and is a state of vulnerability for the person that is placing trust in another. Put another way, trust is a feeling of confidence and security in the way an entity will act.
It doesn’t take trust for us to know that when we go outside during the day, the sun will be in the sky. It has always been there, and we know it will be there tomorrow. But when the weatherman has been correct for the last year in his weather predictions, we trust him when he says it will be sunny today at noon. He is not infallible, but he has not broken our trust so far, and we trust that he will once again be correct in his forecast.
Customers relate the same way when it comes to brand trust. If a brand is selling what they are calling a 6-piece rotisserie set, but when it was received, it only has 3 pieces, a customer’s trust in the brand would be diminished, and they may very well leave to find a brand they could rely on. The brand would have lost the customer’s trust, and with it, their loyalty to the brand.
How Brands Gain the Trust of Customers
Brands that are people-centric, that is, those brands that put people before profit, more easily gain the trust of both employees and customers. When customers and employees know that they are personally valued, they are more likely to trust a brand and remain loyal to it, as they recognize that the brand prioritizes relationships over sales. Customers trust brands that are honest, consistent, provide value, and put people first.
Data security is a huge concern for customers, as data breaches continue to be a growing problem. Consumers want to know that their data is safe from nefarious hackers who seek to pilfer their personal information. Once a data breach has occurred, it’s difficult to win back their trust.
Matt Ramerman, president of Sinch for Marketing, spoke with CMSWire about how it is important for customers to feel safe and secure when they do business with a brand. Ramerman said that customers are reasonably concerned with sharing their data with a brand, and that the brand must make the case that in exchange for the customer's data, they will provide something of value in return. "First, it is important to understand that access to consumer data is a privilege and brands must treat it as such. Companies should articulate how they will provide tangible value to customers who opt to share their data."
The value that a brand provides to a customer begins by gaining a deeper understanding of the customer and what they are interested in. “When analyzed properly, this data can be a lens through which brands can better understand customer wants and needs, right down to the individual level.”
Customers expect to be recognized as individuals with specific needs and preferences, and they want to be able to connect to a brand through their preferred channel whether it’s on a mobile device, website, social media, or brick-and-mortar storefront. “Strive for hyper-personalized, contextually-relevant communications with one-to-one personalization. At the same time, be extremely thoughtful about how you personalize content or you may run the risk of irritating customers — or, worse, create the impression their personal data is being misused,” suggested Ramerman.
By having a visible social media presence where customers can feel comfortable leaving feedback or customer service inquiries, customers can see that a brand cares about their feelings and responds to their concerns in an appropriate and timely manner. A social presence also allows customers to get a feel of who the brand is, and how it relates to its customers.
Another area that brands tend to overlook is being impeccable with their word. If a brand says that it can have a product delivered in a week, and it takes two weeks, the customer may feel as if they have been lied to, and trust is lost. On the other hand, if the brand says the product can be delivered in 10 days, and it only takes 5, the brand gains more trust. Brands should not engage in exaggeration or create unreasonable expectations, as it will always come back to bite them where it hurts — trust. Brands that under-promise and over-deliver will have customers that trust the brand and are loyal to it.
Related Article: What a Holistic Approach to Customer Experience Looks Like
Transparency Is Vital for Building Trust
A brand must build its culture around being transparent about its goals, values, ideals, and practices. Transparency can be thought of as being open and honest. For customers, it means that a brand is honest about how it will be collecting customer data, what it will be doing with that data, and how it will be shared with others. It means being upfront about shipping and handling fees. It means having integrity in one’s dealings with customers, employees, and everyone it deals with. It means owning up to failures and mistakes, learning from them, and never repeating them.
Rob McGovern, founder of Careerbuilder.com and CEO and founder of PreciseTarget, understands that today's customers are hyper-sensitive about being exploited by brands that use their private data for targeted advertising. "It's important to be honest and direct, clearly explaining how the consumer's data will be used. I regularly advise our brand customers to not use retargeting ads, which are the product ads stalking you with photos of products you previously viewed. I've heard the eloquent mumbo-jumbo from technologists that cookies are safe, and always advise them it's mission impossible to convince a consumer he or she isn't being exploited when being stalked with ads."
Transparency must begin with leadership and be a part of every department and channel in the business. Leadership needs to be open and honest, and encourage management to do the same. Being open with employees and customers about the goals and values of the brand, how it operates, and what it hopes to achieve increases loyalty, engagement, and retention for both of those groups.
“In today's world, consumers still view companies operating in a way that reflects the desires of its leadership,” said McGovern. “Transparency is critical, and rather than simply asking a consumer to click-through an opt-in, I'd love to see brands add an explainer link to their sites. Tell me why you're using 50 trackers and tell me my options to reduce this privacy exposure.”
Along with transparency comes communication. Openly communicate with customers, not so frequently the brand becomes an annoyance, but often enough that the customer never feels left in the dark. If a product is taking longer than expected to ship out, send them an email letting them know, and when they can expect the product to ship. If the brand is out of a product unexpectedly and it will be delayed, let them know what their options are: a refund, replacement, or credit. Do not make the customer seek out details, but rather, proactively take care of issues before they become trust-killing problems. Communication is not limited to email, but rather, should be available throughout all of a brand’s channels.
“With two-way conversational messaging, brands can evolve how they proactively reach, retain and engage valued customers,” said Ramerman. “This technology heightens the customer experience, creating a way to initiate communication with the brands they follow. Omnichannel conversation APIs take this engagement a step further by allowing for instantaneous, contextualized messaging on whichever channel (or channels) a customer prefers.”
When Brands Lose Trust
Sometimes brands can lose the trust of their customers through no fault of their own. Tylenol is one such example. In 1982, seven people died from taking Tylenol capsules that had been tainted with cyanide. Johnson & Johnson had to recall 264,000 bottles of its Extra Strength Tylenol. They immediately owned up to the disaster, issued apologies and regrets, and offered replacement bottles to their customers. Although James William Lewis, a New York City resident, was convicted of extortion for sending a letter to Johnson & Johnson in which he attempted to extort $1 million to stop more people from dying, nobody was ever convicted for the deaths themselves. The debacle cost the brand $100 million, but in the end, Tylenol won back the trust and loyalty of its customers.
In 2015, an e-Coli and norovirus outbreak sickened over 50 Chipotle customers across 11 states, and its second-quarter profits fell by 81%. Chipotle responded to the disaster by providing coupons for millions of free entrees, initiated a summer loyalty program, gave free drinks to students, and ran ads in USA Today and The Wall Street Journal admitting that they had made a mistake, taking responsibility, and outlining their plan to keep customers safe going forward.
Chipotle also created an enhanced food safety program that included DNA-testing ingredients prior to shipment to restaurants, changed food prep and handling practices, and provided paid sick leave to discourage sick employees from working. The brand's efforts seem to have been effective at regaining the trust of its customers. In July of 2019, the New York Times reported that Chipotle’s stock had reached a high of $759, well over its August 2015 price before the incident occurred.
The two biggest traits that brands employ to earn trust (or gain it back) are honesty and sincerity. By owning up to mistakes, not blaming others, and being transparent and sincere, a brand can begin the process of winning back the trust of its customers. “I admire the companies that confess their data breaches and clearly articulate how they'll prevent a recurrence,” said McGovern. “Brands would be smart to follow Apple's lead in making trust and privacy a core tenant,” McGovern suggested. “As Warren Buffet said, it takes 20 years to build a reputation and five minutes to ruin it.”
Customers today must trust a brand in order to feel loyal to it, but as with any relationship, that trust must be earned. By being transparent in its goals, values, ideals, and data practices, communicating honestly and sincerely, and owning any mistakes that occur, a brand can build and maintain the trust of its customers, and with it, the customers’ loyalty.