In an era where consumers have several options when it comes to brands, trust has become a critical factor for businesses to survive and thrive. People prefer to buy from brands they trust. If the trust is gone, they have no qualms about finding another brand. According to the Edelman Trust Barometer Special Report: Brand Trust in 2020Opens a new window , ‘trust’ was the second most crucial factor in purchasing decisions after price. The criticality of consumer trust became more apparent during the pandemic. According to EY Future Consumer IndexOpens a new window (FCI), a vast majority of consumers distrust all major institutions, except healthcare providers. This lack of trust extends to consumer brands and retailers.
As businesses and consumer behavior increasingly move online, the amount of trust in brands becomes increasingly tied with how they use consumers’ personal data.
Jebbit recently conducted a study and released the 5th edition of the Consumer Data Trust IndexOpens a new window . The study tries to answer the questions such as how some brands are using the data they collect from consumers, how it affects consumer sentiments, and what behaviors are more likely to create mistrust. It also identifies how some well-known brands rank on consumer trust and a few ways they can improve trust.
The study found that some brands like Amazon and Adidas retained the top spots respectively when it comes to consumer trust. Amazon remained in the first spot for the fourth consecutive time. Netflix and Google climbed to the 3rd and 4th spots from the 5th and 12th spots, respectively. Adidas was at the top of the retail industry and rated 11% above the industry average. Other companies that climbed up the chart included CVS Health, IBM, and Intel. Companies that saw a decline included Samsung (from 2nd to 4th) and Microsoft (from 4th to 8th).
Further, the tech industry dominated the rankings, with 4 out of 5 companies in the top positions. This was closely followed by the quick service restaurant (QSR) and restaurant industry. Beauty and food and beverages (F&B) industries ranked the lowest on customer trust.
Some of the least trusted companies include Anheuser-Busch, 3M, Facebook, Tyson Foods, and Lyft.
The following are the key takeaways from the study.
Also read: Building Customer Trust in a Post-Pandemic World
1. Brands Should Choose Their Communication Methods Wisely
Today, brands have several communication channels at their disposal. However, all channels are not created equal. When considering a channel, brands have to consider both personalization and the data used to achieve it. Consumers undoubtedly want personalization. However, the way brands approach personalization can impact trust and consumer experience.
Email is a communication channel which is an excellent example of this. About 38.9% cited those personalized emails based on the information they knowingly shared with brands increased trust. About 52.8% said personalized emails based on data they have not knowingly shared decreased trust.
2. Interactive Experiences Are the Best Channel for Trust
The study found that interactive experiences are the best channel of communication that benefits both consumers and brands. Interactive experiences have a close tie with personalized emails based on willingly shared data (38.4%) when it comes to increasing customer trust. They are also the least likely to reduce trust (28.4%). This is because they provide transparency in the data they collect and provide immediate value in terms of personalized recommendations.
3. Brands Need a Strategy When Collecting Data
While being transparent in collecting and using data, people are also wary of sharing tons of personal information or filling up a long and boring survey. According to 35% of respondents, asking too much personal information was the top reason for distrusting a brand. This means brands should have a data collection strategy. They should determine the most important data points to meet their objective and focus on collecting them.
4. Awareness Does Not Guarantee Brand Trust
The study revealed that while brand awareness helps overall trust, it is not a given. Overall, the ten best-known brands ranked slightly higher than the ten worst-known brands. Further, the top 10 overall brands had a lower average “unknown†percentage than the ten brands at the bottom.
Also read: 3 Not-So-Obvious Ways To Build Trust in Your Brand
What Motivates Distrust and How Different Forms of Communication Impact Trust?
The study found a few important factors that motivate consumer mistrust and impact trust. The following are a few findings.
- There are a few causes of mistrust when sharing information with brands. About 34.6% cited brands asking for too much information, while 21.1% cited public data scandal caused distrust. About 18.2% said experiencing “creepy†advertising, and 14.6% said confusing privacy policies were the reasons for distrust.
- Close to two-thirds (65.5%) of consumers support federal data privacy legislation, though it is less than 80% in Q1 2020. This could mean that consumers believe the current laws are sufficient and certain actions by companies like Google and Apple will have the required effect.
- About 31.2% of consumers are more likely, and 46.6% are equally likely to trust a brand that provides an improved customer experience based on the information shared.
- About 42% said conversational tools that provide personalized experiences and recommendations increased their trust in a brand. Only about 21.6% said these tools decrease trust. Having said that, other tools, too, improve trust if used wisely and in conjunction with one or more tools.
- Interestingly, consumers are almost equally split on their opinions around irrelevant marketing and advertising based on past purchases. About 36% said it increases trust, while 31% percent said it reduced trust. About 33% said it did not affect their trust. There are better ways to use ads to increase trust.
How Brands Can Improve Customer Trust Post Pandemic
Now that we know a few common causes for distrust in consumers, here are a few ways you can develop or improve trust.
- Given that consumers distrust brands that offer “personalization†using data consumers have no knowledge about, the latter should be completely transparent in how and why they are collecting data from consumers. Mention your customer and data policies clearly on your website and other relevant digital assets.
- Stay away from too much personalization. While people want personalization, too much personalization may come off as creepy. According to Neil KirbyOpens a new window , marketing and consumer director, Bupa Global, if you go too deep, you risk turning off the customer. Hence, you should focus on user segmentation and relevance when it comes to personalization.
- Another way to improve trust among consumers is to provide them superior experience throughout their buying journey, from creating awareness about the product/brand to post-sales support. There are several ways you can offer a seamless customer experience.
- Encourage user-generated content and reviews. We are in an age where every user is a critic, and every content has the potential to become viral. That means both good and bad words about your brand can spread fast. According to a BrightLocal surveyOpens a new window , 79% of consumers trust online reviews as much as personal recommendations from friends and family. Hence, learn to use user-generated content (UGC) and reviews to your advantage to build trust for your brand.
- Take measures to amp up your data security. Cybersecurity is increasingly becoming a concern for brands. Given that public data scandals are the second most cited reason for distrust among consumers, according to the study, and cyber threats are everyday phenomena, you should take all the necessary precautions to boost data security.
Also read: Privacy vs Personalization: 5 Ways To Strike a Balance in This Data-Sensitive World
The year 2020 can be considered a pivot point for most organizations where business dynamics changed drastically. As most experts say, trust is the new consumer currencyOpens a new window . Understanding and following a few principles will lead to gaining trust and position your brand for success in the new consumer economy.
What steps has your organization taken to maintain consumer trust? Do share with us on FacebookOpens a new window , TwitterOpens a new window , and LinkedInOpens a new window .