Marketing trust

For today’s consumers, choosing a product or service is more complicated than ever before. On one hand, beyond quality, there’s a growing desire for transparency and sustainability. On the other, markets and value chains have become extremely complex, ramified, and global for the most part. Within this context of uncertainty and complexity, trust takes a central role, becoming a key factor in simplifying and guiding consumers’ decision-making processes. To put it very simply, trust represents the expectation that others will behave in a way that is fair and advantageous to the interests of the customer while honoring their promises. Seen in this light, trust is an indispensible resource for any firm: a company, a brand, or a product that elicits trust will be in a better position to establish stable, long-lasting, valuable relationships with customers.

So today it’s critical for companies to develop “trust-oriented marketing,” in other words marketing that aspires to earn customers’ total trust on a long-term basis. This can be achieved by working synergistically and consistently to leverage all the different customer touchpoints – from physical stores to the company website to customer care services. The benefits that come from this approach are tangible: companies that believe and invest in trust earn a hard-to-imitate competitive advantage that eventually translates into better economic performance.

Companies that have a history of striving to develop trust-based customer relationships often reap long-term rewards. Take Migros, for example, the biggest retail group in Switzerland. Since its foundation, Migros has made the conscious choice to build a “heritage of trust” with customers. From the beginning, the brand has been synonymous with sustainability in the minds of consumers, from both an ethical and an environmental standpoint. Migros is also “consumerist” – in other words, the company stands by its customers. For many product categories, Migros has set down clear and concise codes of conduct that suppliers must agree to respect before their products will make it to store shelves. Since Summer 2019, for example, all the fresh salmon sold in the retail chain has ASC certification (Aquaculture Stewardship Council), guaranteeing responsible, certified fishing practices.

Based on this relationship of trust with its customers, Migros can satisfy a broader range of needs as compared to the standard offering of big distribution. In fact, the Swiss group even offers financial services and insurance policies, organizes travel and tourism, and provides training and educational programs for young people, and even baby caring. Migros is an excellent example of how the trust that a company earns can have positive ripple effects throughout the entire range of products and services it offers. And once a trust is established it’s easy to extend the relationship between company and consumer to new offerings, a technique that’s technically known as cross-buying.

More generally speaking, trust can be considered an indispensible component of consumer loyalty, which has countless benefits. Loyal consumers are more likely to spend more; they’re less price-sensitive, and more willing to buy higher-quality and higher-value goods. This ties again into cross-buying, in other words, purchasing different types of goods and services from the same company.

And a loyal customer is also a customer who keeps on buying from the same company over time, someone who probably won’t succumb to the siren song of the competition. So both the customer retention rate and the customer lifetime value will rise. So to sum up, trust has a positive impact on the value generated by the individual customer, which is calculated based on the cash flows that they can generate during their relationship with the company. This is known as customer equity.

As the Migros case shows, to win the trust of your customers, it takes more than just talking the talk. Companies have to demonstrate their honesty, transparency, and integrity consistently over time, avoiding opportunistic behavior. The foundation of trust is the positive perception of the company among consumers, a perception which is confirmed coherently and systematically over time by how they experience their relationship with the company and the products and services it offers.

The relationship, in any case, isn’t limited to the individual customer and the single company. As social feedback systems have come to the fore, such as online reviews, the trust (or lack of trust) that consumers express is becoming more and more tangible. And not only that, the trust-based relationship is moving in a bilateral direction: customers are also called onto behave in an upright, responsible way, or they’ll lose the trust they’ve built within the communities they belong to (be they physical or virtual). So it’s possible to construct actual networks based on trust, setting in motion a virtuous circle.

For all stakeholders, it’s clear that the effort involved is substantial, but the benefits are enormous, not only for individuals, but for the system as a whole. And more broadly, a society embedded with relationships anchored in trust is a society that is at once more effective, more efficient, and more sustainable.