The decline of consumer trust and what to do about it
Forrester Senior Analyst Tom Champion discusses the decline of consumer trust and how companies can rebuild brand equity with transparency, integrity, and competency.
The consumer climate is rife with cynicism and distrust, especially toward institutions. This natural — but heightened — sense of distrust has spilled over into commercial markets and has combined with customer-driven forces impacting brand equity.
As customers have seized power, they have taken a different position for brands — taking a watchdog rather than a spectator role. Consumers actively call out brands — and, in some cases, cause PR crises — and hold them accountable for authentically delivering their brand promise.
This is not simply an idle market dynamic — it is an assault on the P&L, and CEOs are seeing this link. In fact, 69% of surveyed CEOs see the erosion of trust as a problem. This is not trust as a belief or emotion, but trust as a necessary ingredient to drive customer acquisition, retention, and spend. For instance, 18% of customers will abandon a service if they distrust how their data is used, and brands can see reduced spend of up to 15% based on a reduction of trust. Add to this the network effect — one person who loses trust amplifies that sense of disappointment or anger across social networks, serving as acid on limestone to the brand.
In this episode, Tom Champion describes the levers of trust. He brings us through a tour of how we can consider — or reconsider — the true meaning behind transparency, integrity, and competency.