Issue 1.11 | May 2010

In this Article: how safety builds trust and trust builds traction in the market.

by Jonathan Wilson

The common experience of many a customer is to feel abused.  Where you least feel control or influence in a situation, you experience frustration and, if the stakes are high, the anxiety that goes with vulnerability.  Consider the mood of tens of thousands of travellers in Europe stuck under a veil of ash earlier this year.

The common experience of many a customer service representative is to feel abused.  When a customer phones into a call centre and discovers there are no service options that speak to their issue, they feel powerless.  With no real control or influence to exercise, they employ the one tool left to them: emotion.  As the ash-cloud from Iceland locked down Europe-routed flights, service representatives manning check-in desks across the world fielded primarily not information or the need for information, but anger.  Anger, more than rationality, was likely the primary fuel for the ensuing blame-game, wherein European regulatory bodies and even the airlines were accused of having inadequate contingency plans.

Natural events aside, the feeling of abuse in the world of business is, at heart, a matter of trust.  We trust someone when we feel they are safe, reliable, and capable. I subscribe to a telecom provider whose systems are reliable.  In terms of their technology, they are very capable.  That they add those extra seconds of pointless instructions to my voicemail message, and that they do it to make money ($600 million extra in revenue for Verizon, is the estimate), is a tremendous trust-buster.  These and other similar actions tell me that while they are reliable and capable, they are not safe.  They do not have my best interests at heart, but their own.  They are exploiting their dominant position to exploit me, and millions of others besides.

Failure to build trust comes at a price.  There is a financial consequence to not attending to trust, whether internally, between team members, or externally, with customers.  Ultimately, for publicly traded companies, it is the shareholders who feel the impact of customer distrust.

Two Giants Discover the Price of Breaking Trust

Traction comes from trust.  A business that loses the trust of its customers instantly loses traction in the market.  This loss of traction will increase when a provider enters the market who is deemed not only reliable, not only capable, but also safe.  The exploited and abused customers of their competitors will run quickly into their arms.

Have you ever heard of Diaspora, Appleseed or Elgg?  There’s a reason that Diaspora’s recent efforts to raise capital exceeded goals by 1250%, and why they and these other new social networking sites may soon get popular.  It is because they offer a safer alternative to Google’s Buzz and to Facebook.  Google recently lost traction in the market due to revelations in Germany that its Street View cars were not only photographing streets, but capturing snippets of data from private, un-secured, wi-fi networks.  Google claimed that this was a bit of rogue software built into the cameras that no-one in authority knew was there or operating.  Mike Schmidt, Google’s CEO, says it is a matter of “worry” but not “harm”, to the public.  These facile self-justifications strain credibility: two strikes against trust.  The third may be that Google has said it will not delete the private data collected in Germany or elsewhere unless ordered to.  This breach of trust has come hot on the heels of the clumsy launch of Google’s Buzz, in which default settings meant that a user’s followers and “followees” were visible to the public: probably Google’s way of ensuring a high number of sign-ups as quickly as possible.

Facebook is once again embroiled in a public fuss over its privacy settings, and the result has been yet another quick about-face in which they introduced simpler privacy controls for users and stricter default settings.  This was after observant Facebook users found that the service’s default settings left their information completely open to the public.  But the damage is no doubt done.  Many high profile users deleted their accounts in protest.  Why?  Because they did not find Facebook safe.  Facebook’s every indication was that it only had its own interests at heart: for Facebook makes money only through advertising, and advertising online is driven by access to the demographic information provided by users.  More information enables more targeted advertising: the more effective the advertising, and the higher the click-through rate, the more money for Facebook.

Trust is built not only when the service provider is reliable and capable.  It arises wherever the provider is safe.  Safety is evidenced when the provider is other-serving, and not self-serving.  And herein lies the problem when public companies place a premium on shareholder return: this focus lends itself to self-serving business tactics.  Ironically, however, it is only when the customers’ interests are prioritized and served accordingly that trust builds the traction that generates the kind of profitability that yields cumulative returns for shareholders.  Although it is too soon to determine with confidence how Google’s breach of trust will impact its shareholders, since the buzz around Buzz in April, its share price has dropped 20% (Facebook is privately held).

Google and Facebook have tremendous capacity, enabling them to deliver incredible functionality to customers. But if they continue to appear self-serving, customers will be distrustful, and these companies will lose more traction – and the money that goes with it.

Be safe.  Build trust.  Build traction.

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See these related slideshows: Trust & Performance; Accelerating Business Transactions