Saturday, August 3, 2013

Trust Drives Customer Loyalty and Spending

Winning over the Empowered Consumer: Why Trust Matters, a recent white paper from IBM, concludes from a survey of 28,500 consumers that trust spells the difference between enjoying a loyal customer base and suffering a transient one.

Consumers come in three varieties, author Melissa Schaefer argues:

  • Advocates, who like you, recommend you, buy more from you, and shun your competitors;
  • Apathetics, who are largely indifferent toward you; and
  • Antagonists, who dislike you.
The survey asked consumers about the degree of trust they placed in businesses and found direct correlation between trust and advocacy, and between trust and higher spending.

When you win customers' trust, you not only make them your advocates; you create a "cognitive monopoly" over them, Schaefer says. They have no thought of buying elsewhere.

Trust comes from communicating frequently and "re-humanizing" the experience of doing business with you, according to Schaefer. That's because customers crave recognition. "They want to be known, they want to be heard and they want to be valued," she says.
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