Friday, June 22, 2001

The Role of Trust Between Consumers and Companies

Some companies are widely trusted, and others are not, according to this week's issue of The Harris Poll that explores the reasons why. At the top of the list comes personal experience of the company's products or services, or of its customer service department or website. Knowledge of the company (organizational knowledge) is also very important. This includes knowledge of the company's management and leadership, and the position that a company may take on an important issue, such as the environment, or health and safety legislation. These issues, people believe, influence their level of trust in companies much more than advertising and packaging, but people may underestimate how much they are influenced by sales and marketing "glitz."

These are some of the findings of the Booth-Harris Trust Monitor, a survey Harris Interactive (Nasdaq: HPOL) conducted in March for M Booth and Associates, a public relations agency. It sought to measure the underlying dimensions of consumer trust, how the public develops trust in companies, and how companies earn or lose consumers' trust. This research is based on interviews with a nationwide sample of 1,252 adults surveyed online, using the same methodology used by Harris Interactive to predict last November's elections with great accuracy.

In analyzing the data we found that there were five different types, or dimensions, of trust: "personal experience," "organizational knowledge" (of the company), "deference" (or the trust people have in companies generally), "reference" (what one learns about a company from others), and "glitz" (or advertising, packaging and high pricing).

Four of these are used to differentiate between companies - they increase or decrease trust in one company rather than another. One, "deference," is generic; people with high levels of deference (e.g., they trust most companies to do the right thing when faced with a crisis, or they believe that most companies are "honest and truthful") tend to trust all companies more.

One message is loud and clear, personal experiences trump all other influences on trust. The statements which the largest number of people believe increase or decrease their trust in corporations are all elements of their personal experiences:

- If a company's customer service department or website is responsive to my questions, I am more likely to trust that company (96%);

- I believe that if a company's products don't deliver in some way, that company should do what it can to make it up to me (80%);

- If I try a new brand and it doesn't work or doesn't meet my needs once, I will find it difficult to trust that brand again (76%).

A large number of people are influenced in their willingness to trust companies by what they know about them as organizations:

- I really can't explain why I trust certain companies more than others. There are just some companies about which I have a good feeling (60%);

- I am more likely to trust products from companies that have effective leadership or people I respect in management positions (56%);

- I will not trust any products from a company that supports issues that I don't believe in (48%).

At the other end of the spectrum, relatively few people believe that their trust in companies is substantially influenced by advertising, packaging or high prices (of course, they may not be aware of this influence):

- I trust products that cost more because I believe the quality is better than other similar products (28%);

- I feel more confidence about a product if they have a high quality advertising campaign (22%);

- I trust products more that have attractive or appealing packaging (15%).

The overall picture that all these results paint is that companies win the trust of consumers "the old-fashioned way; they earn it," and they do so over years. As many corporate executives have learned, this trust is hard to earn and easy to lose, and while some aspects of trust can be addressed through good corporate communications, often when you lose trust, advertising and public relations will only do part of the job in regaining it.