Posted on October 08, 2009 | By lindstrom

The Trust Business

Trust is an indispensable goal in online and offline operating strategies. Consumers need to know who they can trust, but Net-born brands are behind the eight ball when it comes to enjoying consumer trust.

Consumer trust in dot-coms is falling at just about the same rate as Internet business is expanding. A study conducted by Cheskin Research in July 2000 shows that only 10 percent of consumers perceived little or no risk when purchasing on the web; 23 percent of users felt threatened by hackers; and 16 percent were concerned about unauthorized acquisition and abuse of their personal information. A study conducted by CNN/Time in March 1999 showed that only 13 percent of kids between the ages of 13 and 17 trust the Internet.

It’s clear that establishing consumer trust in the e-tailer is a fundamental objective if consumers are to be convinced to buy online. So how do e-tailers inspire trust? Combining offline with online enterprise is clearly beneficial for online brands that are still trying to cultivate consumer trust.

Alliances between established offline retailers and online e-tailers can add credibility to the online business. Hence, more and more online brands are establishing unions with brick-and-mortar businesses to leverage the solid market position of the offline brands.

Well-established real-world operators who’ve been around for years not only have a physical presence for their customers, but they also have an intellectual, even emotional, one as well. The store is represented by the real people that constitute its staff; it’s patronized by real people in the form of friends and family who’ve shopped there as long as they and the store owner can remember. This familiarity is described as “transparency,” a quality that helps build trust. Companies with a nontransparent image are unfamiliar, unseen, and, therefore, distrusted. Consumers trust what they know, what they can see, and what they understand fully.

Online and offline businesses are reassessing this concept of transparency. It’s an asset that has come to be treated blithely by the brick-and-mortar retailers that possess it. Yet consumer trust should be cultivated and nurtured with extreme care. Far too many web sites tarnish their brand’s image by bombarding consumers with information they neither want nor need. This is crazy when companies instead could be systematically using information from their sites to tailor messages and restrict communications to only information that is relevant.

Since 1998, sites such as TRUSTe, VeriSign, and BBB OnLine have been established to donate trustworthiness to the web sites they “endorse.” What’s really interesting about the emergence of these sites is that they’re educating consumers to value their own personal data and teaching them to be skeptical and careful when choosing transaction partners, both online and in the real world.

You can’t buy goodwill and trust. These assets are earned over time. Considering that no online brand has existed for more than a few years, consumer trust has been earned by a mere handful of Net-born brands. To maintain and extend consumer trust, established brands have realized they need to apply the same principles from their offline brand management to their online efforts. Primary among these principles is respect for the customer.

Consumers may know and respect an online brand, but their trust in that brand is what keeps them coming back to the site — and to the brand. Maintaining your consumers’ trust in your brand requires respect for consumer privacy and guaranteeing that the consumers’ inboxes won’t be packed with superfluous emails once they hand over private information. The personal and behavioral data revealed in every transaction is a valuable commodity to e-commerce operators. And canny consumers are learning not to give it away.

Posted in: Insights

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