New Study Finds Trust Determines 22 to 44 Percent of Customer Loyalty
LAS VEGAS, June 06, 2011 - Insights 2011 User Conference-- Pitney Bowes Business Insight, a global leader in customer data, analytics and communication software and services, today released a research study on The Role of Trust in Consumer Relationships. Conducted by the ECSP Europe Business School, the study illustrates that communications from a service provider is one of the leading influencers of trust. Customer communications drives more than 20 percent of overall trust of the company, impacting length of customer relationships, business profitability and customer advocacy or word-of-mouth experience.
Long-lasting customer relationships are critical to business success, and trust is a driving factor. Digital technologies and social media enable companies to reach their customers directly in an environment where those customers also exchange opinions about products, services, and brands. According to the study, customer satisfaction with interactive channels is often determined by trust in self-service channels (10-20 percent) and by communications from the provider (15-20 percent). Customer trust is also influenced by a service provider’s management policies and practices, and by a customer’s previous experience. Overall, the study finds that trust can drive up to 44 percent of customer loyalty in a brand.
“Trusted brands build upon each interaction to enable lifetime customer relationships,” said David Newberry, Chief Marketing Officer of Pitney Bowes Business Insight. “Every customer interaction – in person, on a Web site, with direct mail, or with a call center – is an opportunity to build or break trust. This study validates how crucial customer communications management programs are for positively managing customer interactions and, therefore, for also improving the value and profitability of every customer relationship.”
According to the study, levels of consumer trust vary across demographics, including age, income and occupation:
- Age – Older consumers were generally more trusting, specifically those aged over 65.
- Income – Higher income is correlated with higher trust, with those earning more than $70,000 showing the highest levels compared to those earning less than $20,000.
- Occupation – Retired respondents show the highest levels of trust, while part-time or self-employed showed the lowest.
The consumers surveyed recommended several ways for companies to strengthen trust-building activities, such as improving communications (quality and clarity), increasing transparency and providing advance information for better deals and problem solving. In addition, consumers claim that they look for companies that provide high-quality customer care, ensure a sense of being ‘looked after,’ and demonstrate a high level of competency and conduct from employees.
In order to meet this level of customer communications management (CCM) and ensure trust, Pitney Bowes Business Insight provides solutions that enable organizations to create, manage and connect effective multi-channel communications into an ongoing customer dialogue. Businesses can enhance the customer experience by empowering customer service representatives to deliver fast, efficient and personal customer interaction, allowing customers to easily control of how they receive information and tailoring communications for individual content and delivery channels. This helps to increase sales opportunities, reduce customer churn, and lower enterprise-wide communications costs, improving ROI.
This study, commissioned by Pitney Bowes Business Insight, was conducted by ECSP and interviewed 20 senior marketers in order to gain a deeper understanding of the importance that organizations place on customer trust, the benefits they’re looking for, the way they measure trust and the management policies they put in place to influence it. In addition, ECSP issued an online consumer survey of 1,000 UK and 1,000 U.S. residents.
To read the entire study, please visit: http://www.slideshare.net/pitneybowes/the-role-of-trust-in-consumer-relationships-pitney-bowes-white-paper