The science of building trust

By Kristen Berman and Evelyn Gosnell

United Airlines. Uber. Wells Fargo. Each of these companies has experienced a torrent of negative press, with accompanying public outrage. Was each instance caused by a fundamental mistake? Or were they more an issue of trust?

Uber most recently came under fire for its pricing strategy that people are calling “deceptive” and “the most psychologically poisoning pricing system.” Imagine if Lyft had launched this strategy. Based on Lyft’s history of acting like “the nice guys” as compared to Uber, our sense of trust would be stronger and our reaction would likely be more forgiving.

Real trust depends on a social contract rooted in interpersonal relationships. Humans learned to survive and build trust by trusting other humans. Each individual had just as much to gain or lose.

David Pizarro, moral philosopher at Cornell and Dan Ariely, behavioral economist and author, have suggested that this imbalance in power is why real trust is hard to achieve between an individual and a company. The individual has more to lose than the company. The company has more to gain. The system is not equal.

Research backs up the value of trust in a company. It’s a critical predictor of brand loyalty, consumer retention and purchase intention.

The question is: how do you build trust? We can increase trust by designing the system so that it feels more equal between the customer and the company.

Be transparent about intent

For a customer-centric company, increasing transparency is about revealing your well-meaning intentions. When testing new programs or strategies, make sure you share those intentions with customers. As an example, Berkshire Hathaway builds trust through transparency in its incredibly detailed annual shareholders report.

As Robert Cialdini pointed out in the book “Pre-Suasion: A Revolutionary Way to Influence and Persuade”, Warren Buffett reportedly included “…what I would say to my family today if they asked me about Berkshire’s future.” The letter always begins by outlining mistakes from the previous year. Shareholders are then more trusting of the rest of the information contained therein.

Be transparent about effort

Showing effort, also known as operational transparency, is about demonstrating the work you’re putting into your product or service.

Think of trendy restaurants that display their kitchens more openly. We see all the hustle and bustle, from the thin-crust pizza coming out of the oven to the chefs carefully plating and adding garnishes. And it’s hard to complain about the chefs when you see them working so hard.

Why is transparency important? Consumers’ perceptions of effort have meaningful implications on trust and perceptions toward a company.

Show long-term commitment

In order to increase trust, make it clear to customers that you want to have a long-term relationship with them. A company can signal this by acting against its own best interest at times. After all, a marriage or friendship in which you always acted in your own best interests wouldn’t last long.

What if Uber gave you suggestions on how to save money? What if it gave drivers recommended times when they should STOP driving for the day because they could earn more tomorrow?

The takeaway

Given that human error is inevitable, companies have the opportunity to mitigate any resulting negative consequences by investing in building trust. In doing so, they get the added bonus of building brand loyalty, retention and purchasing intentions.

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