Posted on: Monday 11th of July 2016
For two years now we (Ctrl-Shift) have organized conferences that focus on the importance of trust. Why are we banging this drum so much?
The simple is that we think many companies are not seeing, never mind addressing, fundamental shifts in the way trust operates and, in turn, how value is created. And that’s undermining their chances of competitive success – the other side of the coin being that those companies that do get it have a huge chance of opening up clear blue water between themselves and their rivals.
What are these fundamental shifts in the way trust operates? It’s a natural evolution, really. We can see three different levels of trust in consumer/company relationships.
Three levels of trust
The first level, around which the industrial age revolved, was product trust. At his level, companies made promises about their products (‘washes whiter!’) and if they kept their promises well enough at a good enough price, customers were satisfied and brands were built.
The second level shifted the focus to reputation trust. This was a complex transition, but it revolved around the realization that there are complex supply chains and processes behind products and the things they promise. A soap powder that washes whiter might also include chemicals that pollute the environment. Or the process of making and distributing the product might involve unethical or questionable practices.
In this era, companies not only to produce products that performed, they also had to do it in a way that sustained their reputation for being socially responsible.
The third level, which we are only just entering, revolves around relationship trust. A relationship happens when there is information exchange, which opens up new degrees of intimacy. Of course, marketers have been talking about ‘relationships’ for decades, as in ‘customer relationship management’. But these weren’t really relationships because the information was only flowing one way: from company to customer.
But now we are entering an era when real two information exchange between customers and companies is becoming a reality, and the more this happens the more intimate the relationship becomes.
This is both a threat and an opportunity. A person who knows more about you can do harm more effectively; but they can also help you solve your problems more effectively. And that’s precisely the battle that’s now being fought around personal data.
So why does it matter that many companies are missing this shift? Because of the way it impacts how value is created.
As we move from an industrial to an information age, the hot spots of value are shifting from ‘thing’ intensive activities (shaping and moving stuff, like soap powders) to information intensive where more information means more value. A better product is a thing intensive form of value. A better decision is an information intensive value. And that’s where value is shifting. From providing better things (which companies still have to do), to decision support: “help me find the best way to achieve what I want to achieve, including decisions about which products and services I need to get there”.
For this additional level value to work, companies have to shift gear from product and reputation integrity to relationship integrity: “when you provide me with information or collect and use information about me, can I trust you to be on my side?”
New levels of trust and new levels of value creation go hand in hand. Those who get it have the opportunity for new levels of intimacy with customers, driving new categories of service, new revenue streams, and new strategic opportunities. And those who don’t get it will be left behid.
Our next conference on trust, Achieving Growth Through Trust in London on September 29 will explore the many ins and outs of this crucially important strategic shift.