Trust was a focal point of conversation at the Digital Banking Week this year.
1. Are you recommending chicken or lobster?
Dan Ariely brought up an interesting survey:
A group of 4 people go to a restaurant. Person #1 orders the fish.
Case 1: The waiter says “The fish is not so good today. Get the chicken, it’s cheaper and better.”
Case 2: The waiter says “The fish is not so good today. Get the lobster, it’s 3X more expensive, but it’s better.”
Are Person #2, #3, and #4 likely to trust the waiter when the waiter gives them recommendations?
What happened in Case 1?
The group was more likely to trust the waiter’s recommendations.
Why? Because by recommending the chicken to Person #1, the waiter showed that they were willing to sacrifice their own self-interest in order to protect the clients’.
What happened in Case 2?
It was unclear whether the waiter had recommended Person #1 the lobster because it was truly the better recommendation, or because the waiter was selfish and wanted to make more money.
This resulted in the group having less trust in the waiter’s recommendations.
What does this mean for banks?
“Banks need to look for opportunities where they are sacrificing something for our benefit and show it to us” — Dan Ariely
In cases where the interests of the bank and the interests of the client are misaligned, it is critical that the bank acts in the interest of the client and shows the client that they doing this — this is how trust is established.
But perhaps if we spent more time designing systems where the interests of the client are directly aligned with the interests of the bank, trust would be innately built into the system.
2. Are you building trust with the right people?
Did you know that 80% of family financial decisions are made by women?
“Yet a lot of financial advisors don’t even bother establishing a relationship with the women. So much so that a lot of the women (70%), after the passing of their spouse, end up firing their wealth advisor.” — Theodora Lau
This brings up a bigger question: Are advisors spending time establishing relationships with the right people?
Are you spending time with people who are likely to make a positive change to their behaviour? Are you spending enough time with your most valuable clients? How do we use stats to drive advisor behaviour?
These are some of the problems we are tackling at Responsive.
3. Building loyalty after service failures
Service Recovery Paradox:
A customer thinks more highly of a company after the company has corrected a service problem, compared to how they would regard the company if non-faulty service had been provided.
As it turns out, there is no better time to establish trust and loyalty than right after a service failure. Luke Williams really hammers this home.
Every brand will make mistakes. The act of making a single mistake will not lose you the customer — it is repeated service failure that causes the customer to leave. On the contrary, service failures can actually help make customers more loyal to you if you correct the mistake.
Earning trust means being authentic and having an authentic connection to your customer.
Are you willing to change to make your customers happy?
Do you know who your customers actually are and what they value?
Are you willing to push through failure to help gain client loyalty?
At Responsive we are working ( and sometimes failing ) hard to build the best solution possible for building trust between advisors and clients