Study examines trust in consumer relationships
Communication from a service provider is one of the leading influencers of consumer trust, according to a research study by the ECSP Europe Business School and customer data expert Pitney Bowes Business Insight.
The study, entitled 'The Role of Trust in Consumer Relationships', found that customer communication drives more than 20% of overall consumer trust in a company, affecting not only the length of customer relationships but also business profitability and customer advocacy (i.e. word-of-mouth).
According to the study, trust is a significant factor in the kind of long-lasting customer relationships that are critical to business success, and digital technologies and social media are already allowing companies to reach their customers directly in an environment where those customers also exchange opinions about products, services, and brands.
Customer satisfaction with interactive channels is often determined by trust in self-service channels (for 10% - 20% of consumers) and by communications from the provider (15% - 20%). Customer trust is also influenced by a service provider's management policies and practices, and by a customer's previous experience. Overall, the study noted that trust can drive up to 44% of a customer's loyalty to a specific brand.
"Trusted brands build upon each interaction to enable lifetime customer relationships," said David Newberry, chief marketing officer for Pitney Bowes Business Insight. "Every customer interaction - whether in person, on a web site, by direct mail, or through a call centre - is an opportunity to build or break that trust."
Levels of consumer trust varied across demographics, including age, income and occupation. For example:
- Older consumers were generally more trusting, specifically those aged over 65.
- Higher income is correlated with higher trust, with those earning more than US$70,000 per year showing the highest levels, in contrast to those earning less than US$20,000 per year.
- Retired respondents demonstrated the highest levels of trust, while part-time or self-employed consumers showed the lowest levels of trust.
The consumers surveyed recommended several ways for companies to strengthen trust-building activities, such as improving communications (in terms of quality and clarity), increasing transparency, providing advance information for better deals, and problem solving. In addition, consumers claimed that they actively look for companies that provide high-quality customer care, that give customers a sense of being 'looked after', and that demonstrate a high level of competence and conduct from employees.
According to Newberry, "Businesses can enhance the customer experience by empowering customer service representatives to deliver fast, efficient and personal customer interaction, allowing customers to control how they receive information, and tailoring communications for individual messages and delivery channels. This helps to increase sales opportunities, reduce customer churn, and lower overall communications costs, thereby improving ROI."
A full presentation of the study has been made available for free viewing online - click here (no registration needed).