Author:Deborah Matthews, firstname.lastname@example.org
Too often companies are focused on how many customers “like” them. What really matters is: do they trust you? Contrary to conventional wisdom, loyalty and trust are the precursors to building your institution’s following on Twitter and Facebook, not the other way around.
Trust is a critical ingredient in building the reputation and ultimately the success of any organization. It’s a catalyst for customer loyalty and an essential component of brand equity. The payoff of nurturing trust is significant. Customers that feel this connection with you will use more products and will also become a source of referrals. Stronger levels of trust drive growth and translate into a stronger brand. According to Steven M.R. Covey, “Return to shareholders in high-trust organizations is almost three times higher than the return in low-trust organizations.”
Building trust is a strategic imperative and a competitive advantage. According to ath Power Consulting, 9 in 10 consumers feel trust in their bank is a “must have”; 84% of bank customers say that a strong reputation is also a must-have or ideal component.
Undoubtedly, your institution’s credibility grows when you deliver on your brand promises. Customers expect seamless service delivery and “no hassles.” Getting the job done right and making it easy to do business with you is assumed. Beyond that, did you know that you can raise the mercury in your trust-o-meter with more effective communication? In July, Pitney Bowes’ research found trust in the marketing communications of a service provider determines up to 32% of a customer’s overall trust in the provider.
Source: Chicago Booth/Kellogg School Financial Trust Index, 7.20.11, www.financialtrustindex.org/resultswave11.htm
The good news is that Americans are again placing more trust in their financial institutions. There is a growing body of evidence that proactive communication and transparency is the driving force behind this renewal. Results from a recent J.D. Power study found that credit card customer satisfaction has reached the highest level since 2008. These improved ratings have been attributed to “plain language” disclosures required by the CARD Act. In fact, your customers crave simplicity and clarity to the degree that nearly three-fourths of Americans with checking accounts support regulations that would require banks to better disclose the terms, conditions and fees associated with their account.
“The Role of Trust in Consumer Relationships” summarizes consumers’ views on activities that help build trust. Not surprisingly, improved communications was at the top of the list. Recommendations include transparency, managing expectations by avoiding surprises and effectively communicating information in advance. (If you’re still not convinced, consider that simple, clear, timely communication can help create efficiencies by reducing volume in your call centers. According to Tower Group, the per-call cost is $3.75.)
Armed with these insights, institutions now have a timely opportunity to transform one of the most pressing issues on your customers’ minds – security - into a competitive advantage. The updated FFIEC guidance acknowledges the foundational role of effective communication by mandating specific customer awareness and educational activities. FIs are required to provide information about regulatory coverage, steps customers can take to help mitigate risk, and who to contact in case of suspicious activity. Rather than view these requirements as tasks on a checklist, harness this opportunity to bolster trust:
- Clarify expectations, roles and responsibilities
- Offer relevant, valuable guidance for enhancing security
- Keep customers informed with educational resources
- Provide communication tools (such as alerts) to deputize your customers in the fight against fraud
Your customers will thank you - and trust you.