Quantifying customer trust
Customers of technology companies often reward trustworthy brands but punish those that aren't. Research shows which domains are important to focus on for building customer trust.
The pace of change and complexity of challenges businesses have to navigate seem as great as ever. Given the strategic and operational challenges brought on by the pandemic, social justice, climate change, geopolitical shifts, and increasing competition, companies are under pressure to act quickly, and make every move count. Such a fast-moving environment can make it difficult for companies to maintain stability and high levels of customer trust.
These pressures are particularly felt by technology companies. For example, overall trust in the technology sector has fallen in the United States, as the sector moved from first place among the most trusted sectors in 2020 to ninth in 2021.1 Recent studies indicate that many tech customers, both end users and business-to-business (B2B) purchasers, lack trust in the organizations from which they purchase. In a fall 2021 survey, almost three out of four B2B purchasers surveyed said that “tech vendors typically fall short of being honest.”2 This lack of trust can make it challenging for technology brands to drive growth and achieve their mission and purpose.
Trust in an organization depends on relationships with different stakeholders and is built through incremental steps occurring over time. These steps are actions that demonstrate a high degree of competence and the right intent, i.e., both the ability and desire to maintain a relationship based on trust. Although many executives value the importance of building trust with stakeholders, many also consider trust to be too complex and multifaceted to address, except very broadly.3
Deloitte’s research suggests that trust can be managed and measured like other strategic objectives on the C-suite agenda—by identifying actions across the enterprise that affect trust, and then tracking and managing the effectiveness of these actions over time, both in terms of conveying competence and good intent.4 Dozens of interviews Deloitte has conducted with senior executives and subject matter specialists across industries since 2020 reveal a broad range of areas that can impact stakeholder trust (figure 1). However, few studies in the broader market so far have attempted to quantify the impact of an organization’s actions and stakeholders’ trust in them, as manifested in positive behaviors, attitudes, and perceptions of organizational performance.
To address this gap, we conducted a comprehensive analysis looking specifically at the US tech sector. We surveyed two types of customers in the US technology sector in January 2022: end users and B2B purchasers from large corporations (with more than US$500 million in annual revenue). Our analysis suggests for these stakeholder groups, certain trust-building actions are significantly more valuable than others—actions primarily in the areas of quality of customer service, the brand’s focus on innovation and insights, and the foundational security of its offering (including cybersecurity, data protection, and conduct and crime). (See the sidebar “Our methodology” for an explanation of how the survey was conducted.)
Both surveyed B2B purchasers and end users demonstrated positive behaviors and attitudes when they strongly agreed that trusted actions were occurring in these three areas. They also cited potential damage to the brand that failed to take these actions or do them well. In other words, customers may reward brands for taking specific actions, but they can also punish those that do not. This suggests that executives should consider both the positive gain and negative implications when identifying and prioritizing trust-building efforts with their customers (both B2B and end users).
Our methodology
Between January and February 2022, we surveyed more than 1,000 US technology end users and 600 B2B purchasers from large organizations. End users ranged across age groups, gender, income levels, and US regions. B2B purchasers were cross-sector, and more than 80% of their organizations generated more than US$1 billion annually. Nearly half (49%) of purchasers had the authorization to make these purchases, and 41% were part of teams making the purchase decisions. (This is consistent with reports suggesting that many large technology transactions are purchased through cross-functional teams.5)
Respondents were asked to reflect on a recent purchase from a technology brand and answer a series of questions regarding the “trusted actions” the brand took in areas such as customer service, cyber protection, data protection, and employee experience. They were also asked to reflect on their behaviors toward that brand (such as whether they paid more to purchase from that brand) and their view of that brand’s financial and competitive performance (such as whether they viewed the brand as profitable or the market leader in its category). In addition, we measured respondents’ level of trust in the organization and assessed the extent to which the brand demonstrated the following trust signals: capability (possessing the means to meet customer expectations); reliability (consistently and dependably delivering upon promises made); transparency (openly sharing information, motives, and choices in plain language); and humanity (genuinely caring for the experience and well-being of others).6
Results of both the end user and B2B purchaser surveys were then analyzed through a set of regression models to test the impact of each trusted action on customer behaviors and perceptions of firm performance.
How much trust do US customers have in tech brands?
Our analytical results are consistent with other research and the general marketplace consensus: Trust in technology brands is lacking and trailing trust levels among many other consumer-facing industries.7 We found that fewer than 40% of our respondents highly trusted the brand from which they recently purchased. In other words, fewer than 40% of respondents strongly believed that the brand demonstrated each of the four signals of trust discussed above - capability, reliability, transparency, and humanity (figure 2).
While these trust scores may be low, technology executives have reason to be optimistic. Trust levels of those surveyed were significantly higher for brands that successfully executed trusted actions in the operating areas noted previously: providing superior customer service; investing in innovation, intelligence, and technology; and providing a strong foundation for enterprise security (cybersecurity, crime, and conduct). For example, surveyed B2B purchasers who very strongly agreed that the brand employed measures to prevent data loss and privacy breaches were 24% more likely than average to highly trust the brand, and end users who very strongly agreed the brand leveraged its digital capabilities to enhance the customer experience were 14% more likely than average to highly trust the brand (figure 3).
“Table-stakes” actions that impact trust can be crucial, with the failure to do them possibly having an outsized negative impact on stakeholder behaviors and perceptions
In addition to impacting trust, actions taken in these domains―customer service; innovation, intelligence, and technology; and the foundational security of the brand—were also key to influencing surveyed customer behaviors and perceptions of firm performance.
Both end users and B2B purchasers who very strongly agreed that the organization took successful actions in these trust-building areas were 4–10% more likely than average to have paid a premium to purchase from the brand, recommended the brand to others, or purchased additional products from the brand, among other behaviors. In contrast, respondents who very strongly disagreed that the brand adopted actions in these areas were 20–53% less likely than average to have engaged in such behaviors (figure 4). Similar findings were observed in how customers perceived the brand’s organizational performance and competitive position, for instance, whether they thought the brand was a strong partner or collaborator, more innovative than peers, or the market leader in its category. Previous research suggests that such positive brand perceptions are indeed important, being associated with increased customer retention and loyalty, and, by extension, greater sales volumes, reduced marketing costs, and increased profit margins.8
Therefore, our research indicates that while the gain of one action done well in isolation may be incremental, the risk of inaction or poor action in just a single area could be far more severe, with a greater negative impact on customers’ perceptions of the brand’s value and resulting behaviors toward the brand. The following sections explore these key trust-building domains and actions in more depth.
Customer service
Providing a high-quality customer experience emerged as one of the key trust-building domains for both surveyed technology end users and B2B purchasers (figure 5). B2B purchasers who very strongly agreed that the brand provided superior customer service were more likely than average to have paid more for the brand’s products and to have gone out of their way to purchase from the brand. Meanwhile, end users who very strongly agreed that the brand enhanced customer experience through digital operations were more likely than average to consider the organization to be more innovative than peers, on a growth trajectory, or the market leader in its category.
The results are consistent with current technology purchasing trends. Many tech buyers today are seeking to collaborate with their vendors, forming a collaborative, tech-enabled relationship rather than a transactional one.9 Among IT buyers, one survey showed that building trust with customers was a key priority for technology companies when addressing the challenges of COVID-19, and that high levels of customer service were critical for building partnerships with IT suppliers as well.10 Trust enabled through the customer experience is thus a key underpinning of a collaborative relationship, adding to the benefits of purchasing a high-quality product.
While the positive impact of great customer service and a tech-enabled customer experience may not be surprising, research findings show the severity of the downside risk, by a factor of more than four times in some instances. Prior studies have shown that businesses could lose more than US$75 billion a year due to poor customer service experiences,11 and our research indicates that low levels of trust could be an important factor explaining such outcomes, for instance, by discouraging customers from going out of their way to purchase from the brand.
Innovation, information, and intelligence
Another key trust-building domain in the tech sector relates to an organization’s ability to invest in innovation, information, and intelligence. For instance, in both surveys, respondents who very strongly agreed that the brand they purchased from leverages research and insights-driven intelligence to make effective business decisions were more likely than average to have chosen the brand over another option. In addition, end users who very strongly agreed that the brand regularly deploys new innovations were also more likely to have recommended the brand to others, to have purchased additional products from the brand, or to have gone out of their way to purchase from or use the brand. Most respondents also indicated that for them, these trust-building actions made them feel that the brand is profitable, likely to increase its market share, and capable of withstanding an economic downturn (figure 6).
These findings indicate that both surveyed B2B and B2C customers pay attention to the level of technological sophistication of technology brands and that this can influence their purchasing decisions. This is consistent with recent marketplace research: A study of B2B purchasing behavior indicated that accelerating the shift to digital business was among the top five drivers for IT buyers in 2021.12
But again, the negative consequences of organizations not being able to build customer trust appear more consequential. Technology brands reading this article may think that their organization is digitally enabled, and that they have a customer base confident in its digital capabilities. However, this sense of security may be misplaced if the brand isn’t doing what it can to ensure that its digital capabilities are apparent. Brands should likely focus more on making customers aware when they roll out new capabilities and show how they are leveraging data and insights to make objective decisions that impact the customer experience.
Securing the foundation: Cyber, data protection, crime, and conduct
The third important category of domains impacting customer trust in the tech sector relates to organizations securing the foundation of their operations through innovations in cybersecurity, data protection, and crime prevention, and having clear standards of employee conduct for all employees. For instance, end users who strongly agreed that the brand can rapidly address criminal activity and compliance breaches were more likely than average to consider the brand to be profitable and likely to increase its market share. In a similar vein, for B2B purchasers, enterprise actions such as having a strategic and enterprisewide regulatory compliance program, promptly identifying and addressing compliance breaches, and employing measures to prevent data loss were all indicators of positive behaviors and perceptions of the brand having a strong competitive position (figure 7).
Research suggests that customers are indeed becoming increasingly aware of surveillance operations, and that organizations that prioritize data privacy can increase both consumer trust and loyalty.13 Apart from investing in data protection measures, also having a strategic compliance program can help brands increase trust by enhancing the customer experience14 and by providing an added layer of assurance in response to security and financial risks. Again, the negative consequences of organizations failing to execute these actions effectively can be quite severe. Technology brands may need to revisit their cybersecurity and compliance capabilities to increase accountability with customers and improve stakeholder trust.
So what should tech organizations do next to build trust?
Those familiar with Greek mythology will recall Sisyphus, king of Corinth. Having been condemned for his greed and trickery, Sisyphus was tasked by Zeus to roll a giant boulder up a hill, only to have it roll back every time, for eternity.15 For executives, building trust with stakeholders may feel the same: It requires an ongoing commitment, the benefits of which may not always be easily quantifiable or appear incremental at best. But trust can be lost when organizations misstep or face an unexpected crisis, and the consequences for the brand can be severe, as our research suggests.
The following principles may help leaders commit, or recommit, to a trust-building mindset.
- Stay attuned to and be wary of shifting customer perceptions. In today’s competitive environment, organizations are expected to deliver across a range of domains, with customer service, information and intelligence, and enterprise security among the most important for the technology sector. Organizations may not be aware of the extent to which some customers may have become dissatisfied with their brand offerings and service, or the reasons why they feel that way, making it important for leaders to establish mechanisms to continuously monitor customer feedback and identify shifts in attitude or perception before these shifts can drive negative consequential customer behavior.
- Recognize the scope of trust-building actions when prioritizing investments. The actions that drive the needle with customers span internal as well as external functions. Customer service and digitally driven customer experiences matter, but then so do internal capabilities such as cyber and data security and financial transparency.
- Enhance operational transparency whenever and wherever possible. Given the breadth of factors that can impact the level of trust customers have in the brand from which they purchase, look for ways to be transparent across the life cycle of the customer relationship, and be open to sharing the capabilities and competences that make your brand unique. This means, for example, being more transparent when demonstrating digital capabilities and showing how those capabilities inform enterprise decisions. Further investment in digital technologies to make supply chains more resilient and transparent with customers will likely also be important to consider.16
- Look to build trust equity to mitigate future risk.Trust equity represents the accumulation of goodwill or support that customers have in a brand, driven by the organization’s success of delivering on its promises over time.17 It can serve as a reserve for organizations to draw upon during times of crisis when trust gaps may have emerged, enabling the organization to be more resilient and weather crises that arise without veering too far off its strategic course.
Small moves made over time can help build trust and positively impact key stakeholder behaviors, but these moves when poorly executed can similarly create large trust gaps. The opportunity and the threat both exist. While our research focused on technology customers, the lessons likely apply to organizations across industries. Organizations have it within their control to build trust as a tangible asset and in a manner that can prevent a landslide loss.
Deloitte Future of Trust
Trust is the basis for connection. It is built moment by moment, decision by decision, action by action. In an organization, Trust is an ongoing relationship between an entity and its varying stakeholders. When performed with a high degree of competence and the right intent, an organization’s actions earn Trust with these groups. Trust distinguishes and elevates your business, connecting you with the common good. Put trust at the forefront of your planning, strategy, and purpose, and your customers will put Trust in you. At Deloitte, we’ve made Trust tangible – helping our clients measure, manage, and maximize it at every opportunity. Let’s talk.
