Trust determines nearly half of customer loyalty
Consumers reveals ways for companies to increase trust
Trust can drive up to 44% of customer loyalty in a brand, according to a new survey by analytics company Pitney Bowes Business Insight.
The survey – The Role of Trust in Consumer Relationships – illustrates that communications from a service provider is one of the leading influencers of trust. Customer communications drives more than 20% of overall trust of the company, impacting length of customer relationships, business profitability and customer advocacy or word-of-mouth experience.
The consumers surveyed recommended several ways for companies to strengthen trust-building activities, such as improving communications (quality and clarity), increasing transparency and providing advance information for better deals and problem solving. In addition, consumers claim that they look for companies that provide high-quality customer care, ensure a sense of being ‘looked after,’ and demonstrate a high level of competency and conduct from employees.
The survey says that long-lasting customer relationships are critical to business success, and trust is a driving factor. Digital technologies and social media enable companies to reach their customers directly in an environment where those customers also exchange opinions about products, services, and brands.
According to the study, customer satisfaction with interactive channels is often determined by trust in self-service channels (10-20%) 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.
“Trusted brands build upon each interaction to enable lifetime customer relationships,” said David Newberry, chief marketing officer of Pitney Bowes Business Insight.
“Every customer interaction – in person, on a website, with direct mail, or with a call center – is an opportunity to build or break trust. This study validates how crucial customer communications management programs are for positively managing customer interactions and, therefore, for also improving the value and profitability of every customer relationship.”
According to the study, levels of consumer trust vary across demographics, including age, income and occupation:
• Age – Older consumers were generally more trusting, specifically those aged over 65.
• Income – Higher income is correlated with higher trust, with those earning more than $70,000 showing the highest levels compared to those earning less than $20,000.
• Occupation – Retired respondents show the highest levels of trust, while part-time or self-employed showed the lowest.