Trust Me, I’m Untrustworthy!

When it comes to building trust, you have probably discovered that your trust performance score is highly resistant to change. If you are finding it challenging to lift your trust score, it is almost certain that you are yet to have statistically dissected trust into the core components that make up trust for your category and for your brand.

Trust is an outcome; that is, a lag indicator. In econometrics parlance, it is a dependent variable. Before the reconstruction of trust can occur, you must first deconstruct trust down to the independent variables. That is, the drivers of the dependent variable, trust. If you have not undertaken multivariate analysis to determine the relative importance of the independent variables (the building blocks of trust) and directed your investment to the major couple of drivers of trust, then this is almost certainly why you are finding it difficult to budge your trust score.

Applying factor analysis, the independent variables – or drivers of trust – tend to fall into two or three buckets: capability, benevolence, and character. Capability is the extent to which I believe the organization can deliver on its core promise. Benevolence is whether I believe the organization is on my side and trying to help me, and character is whether I believe the organization acts ethically. Statistically speaking, sometimes benevolence and character blend into a single factor. The relative importance of factor or bucket varies by category.

The percentage of each element of trust explains the relative importance of that element or factor in explaining how trust is determined. In retail banking, customers do not ordinarily question the core capability of the bank but rather, when determining the level of trustworthiness of the bank, primarily (60.7%) look to the bank’s character.

“Brands make trust an organizational goal however, they have little or no empirical evidence of how to build trust.”

However, it is not enough to know that you have a challenge with character. To drive the trust score up, you also need to know what character is comprised of. The below exhibit lists the trust drivers for a retail investment category prior to factor analysis allocating the attributes to capability, benevolence, and character. An example of a capability driver is ‘having consistently strong returns’, while a benevolence driver is ‘telling you things as they are’, and a character driver is ‘always being honest with customers’.

Quantitative research and expert judgment were used to develop the hypothesized drivers of trust.  The subset list below is the econometrically derived list of statistically significant trust drivers.

Breach of trust

Organizational trustworthiness equals stored value in the form of forgiveness. Forgiveness is the consumer’s preparedness to regard wayward behaviour as an aberration. Damage from a breach of trust comes in two forms: loss of buyer choice (brand damage) and/or a tightening of regulation (loss of social license) – which is the category-wide cost for a breach of trust.

“Saying that you lack capability is more palatable than saying you lack benevolence or character.”

Brands often mistakenly believe that they can communicate their way to trust. The market’s cynicism filter is acutely tuned and there are no shortcuts to taking the first step of econometrically inferring the drivers of trust and then, a penny at a time, rebuilding trust. As the saying goes, when it comes to managing trust, it’s “up by the stairs but, down by the elevator”.

Should you apologize for a breach of trust?

In the event of negative publicity, internal colleagues almost always lose perspective. Board members are usually the worst offenders. Bring some objectivity to the discussion by gauging the awareness/attribution/blame of the matter with your existing and prospective customers. A quick poll is inexpensive and can be completed overnight.

In the event of a breach of trust, I recommend the following guide to determine action. You will find most incidences fall into the first category – Do nothing.

When it comes to a breach of trust, it is common for businesses to apologize for making mistakes. That is, there was a momentary loss of capability. Saying that you lack capability is more palatable to the organization than saying you lack benevolence or character. Rather than admit a lapse of character or benevolence, commonly organizations suggest the breach of trust was a momentary loss of capability. “We made a mistake.” Anecdotally, the market can detect the deflection away from the underlying cause of the breach of faith and therefore, consider the apology, insincere.

All in all

Brands make trust an organizational goal; however, they have little or no empirical evidence of how to build trust. To build trust, you must first deconstruct trust into its constituent pillars and explanatory variables, model the importance of the hypothesized variables, and then, set about to build or rebuild trust based on the statistically derived, drivers of trust.