We've believed for a while that companies of any size must cultivate trust. Consumer trust plays an important role in brand advocacy, social media engagement, and the success of new products. While much of the analysis and conclusions surrounding trust in the business world has tended to be on the theoretical side, a recent survey has revealed some very interesting, concrete facts and statistics surrounding consumer trust. And this survey has revealed that trust isn't just a “nice to have” thing for your business or organization; it's now a “must have” if you want your company to succeed.
Let's take a look.
The Trust Barometer
The Edelman Trust Barometer (ETB) is complex analysis combining a variety of factors that ultimately measure trust in institutions such as business, media, government and NGOs. And similar to Gallup, the ETB has revealed some distressing news: A marked divide is emerging between what Edelman has coined the “elite” population and the rest of the masses. While the members of the elite, informed public – those with at least a college degree – exhibit sustained support and trust for the government, media and business sectors, there's a growing gap in these trust levels as compared with the “mass population.” In a piece on the Edelman website, Richard Edelman explains,
“The average gap in trust in institutions between the elites and the mass population has grown to 12 points (across the developing and developed world). In the U.S., the difference is 19 points…”
But why does this gap exist in the first place? Over the next few posts, I'd like to speculate on and analyze some of the origins and consequences of this growing gap in trust, as well as explore how leaders can go about cultivating trust in their businesses. To begin, I'd like to propose a few ideas about the origins of this trust disparity so we can more accurately predict what we can do to increase trust
Disparity and Distrust
While the accelerating gap between trust levels of the “informed” and mass populations may be somewhat alarming, it's not necessarily surprising. With a news cycle often focused on sensationalism and the rise of new, collaborative forms of reporting, many consumers no longer have the same level of faith in the old bastions of information. Edelman explains,
“Rising income inequality, high-profile revelations of greed and misbehavior and the democratization of media have flipped the classic pyramid of influence. The trust of the mass population can no longer be taken for granted, and any continuation of the 'grand illusion' is dangerous for leaders in today’s world.
In one sentence, Edelman strikes upon three of the major instigators that have fueled these recent changes.
1. Economic Issues
The Great Recession of 2007-2008 was an eye-opener. As the housing market collapsed and the stock market plummeted, a major revelation swept across the United States and, by the looks of Edelman's research, the world. For the majority – regardless of Edelman's class qualifications – the “all is well” facade conveyed by our financial institutions and economic leaders faded, giving way to a much more turbulent and distrustful scene. Huge numbers of Americans lost large chunks of their financial assets. And these struggles were only intensified by the fact that large lending institutions and Wall Street firms were left still standing—some even thriving. Steve Denning, author and business consultant, explains in an article for Forbes,
“Wall Street’s compensation system was – and still is – based on short-term performance, all upside and no downside. The bonuses are extraordinarily large and they continue—$135 billion in 2010 for the 25 largest institutions and that is after the meltdown.
With information like this so readily available – and the low- and middle-class economy in such a turbulent state – it's no wonder the mass population began to develop a distrust for the government and its financial leadership.
2. Social Media Echo Chamber
A complex way of saying, “We see, read and respond to what we want!” In today's 24-hour news cycle, which is now amplified by the prevalence of smartphones and tablets, it's a natural tendency for many of us to only select information that reinforces existing ideas and beliefs while censoring those that have dissenting opinions. The millions of tweets, Facebook and blog posts coupled with lightning-fast search from Google provide us the ability to find media that conforms to our own perspectives. As a result, there's a sense of distrust toward media sources that aren't necessarily viewed as being in alignment with our own values.
3. Technology Trust Tests
Almost every aspect of our lives is either fully digital or in the process being digitized. While this simplifies dozens of our daily activities, it also can create anxieties about security risks. With high-profile security breaches at companies like Apple and Target, the integration of new technology has not been without problems. Further, many have raised concerns surrounding big data storage and online anonymity. It's clear consumers are much less willing to trust companies and government agencies with their personal information for fear it will be compromised in some way.
Toward a More Trusting Business World
As Edelman explains, the gap between the trust levels of the “elite” and the masses are growing, and if these number are correct, they're showing no signs of stopping. Now that we've highlighted some of the causes of the trust disparity, we'll be looking into its consequences in the next post. I look forward to having you along for our exploration!
Al Eidson is the owner of Eidson & Partners, a business and marketing strategy consultancy, and a founder of SparkLabKC, an early-stage startup accelerator program in Kansas City. He's an expert in taking products to market and has launched more than 220 new products and ventures through his career. He's also proud of killing off a great many problematic products before they hit the market. His vision involves meaningful and lasting products through innovation.