I’ve been working to quantify the value of trust for a business. Think of it this way: If a business invests time, energy and resources into building trust with its customers, what’s the return on that investment?
We’re getting plenty of evidence that a lack of trust costs all of us dearly.
For instance, a recent TIME article references the Chicago Booth/Kellogg School Financial Trust Index. The quarterly survey measures Americans' confidence in banks. The scale runs 1 to 5, where 1 means no trust and 5 absolute confidence. In one quarter, all financial institutions fell from 2.95 to 2.8 in the first quarter of this year. Trust in bankers went from 2.6 to 2.5. I was never a whiz at math, so correct me if I’m wrong. On a scale of one to five, 2.5 falls right in the middle, which is 50%. When I was in school, a 50% grade was an F.
I can hear someone saying, “Yeah, but if it’s an approval rating – it’s a lot better than most politicians.” Thanks for making my point. The level of trust – across the board – is dismal. In fact, it’s worse than dismal. The lack of trust is a crisis.
According to the Edelman Trust Index, trust in business in the United States dropped from 58% to 38% since 2008. That’s the lowest level of trust recorded by the survey since it started ten years ago.
However, the Edelman folks give us a glimpse of the trust ROI. They looked at 20 major economic countries around the globe and found 91% of respondents say they have specifically purchased a product or service from an organization they trusted. More significantly, 77% have refused to buy a product or service from an organization they distrust in the last year.
The answer is simple. We must move from a crisis of trust to a trust renaissance. The work is going to be much harder.
Just like keeping customers is less expensive than finding new customers, regaining lost trust is much harder than keeping it.
For business, that hard work means creating a culture of trust based on honesty, integrity and responsiveness.
I’ll be talking about the specifics of building trust to build ROI at 7:30 a.m., Tuesday, May 19, at The Business Breakfast hosted by KBOI and the Northwest Nazarene University School of Business. RSVP by May 17, to krlubiens@nnu.edu.