Growing Brand Trust is a Waste of Money
Brand trust is not a strong predictor of consumer behaviour or share of spend, nor does it prove your customers are emotionally committed to your brand.
Consumers still buy from brands they distrust, provided they personally gain from the relationship. The more consumers gain from dealing with your brand than competitor brands, the less impact brand trust or distrust scores have on your revenue.
5D, Australia’s leading strategic data consultancy, conducted comprehensive research into the nature of brand trust amongst 5,000 consumers, and found:
When asked if they trust a brand, consumers answer two different questions based on their ‘mindset’.
Two elements constitute trust – capability to do what you promise and ethical behaviour by being honest and doing no harm.
When consumers are asked if they trust a brand, 60% interpret the question as asking if the brand is capable to do what they promise, while 40% interpret the question as asking if the brand is ethical in how they operate.
A consumer’s mindset (capability vs ethics) has the biggest impact on whether or not they trust a brand, not what they hear about the brand in the media.
Customers with a Capability mindset are 30% more likely to say they trust brands, believing brands are capable of performing their basic functions. Current customers can more confidently answer how capable a brand is than non-customers, making them more likely to say they trust a brand, while non-customers who cannot answer the question are more likely to respond indifferent (neither trust or distrust the brand).
While customers with an Ethics mindset are 88% more likely to say they distrust brands, despite being exposed to the same levels of negative brand media as those with a Capability mindset. This Ethics mindset leads to higher distrust for both customers and non-customers.
Consumers with an Ethics mindset are more likely to distrust multiple brands across multiple industries because they distrust brands in general.
Brand trust and distrust are two different measures (capability vs ethics) and a net score of trust minus distrust is statistically meaningless.
Most consumers have no reason for trusting a brand, other than not having a reason to distrust the brand.
The weakness of measuring brand trust, compared to other consumer metrics such as customer satisfaction, is that 52% of customers are unable to give any reason for why they trust a brand. Brand trust cannot be validated by emotional commitment to the brand.
66% of customers who distrust a brand can provide evidence why the brand should not be trusted. That leaves around one third of all brand distrust being driven by distrusting brands in general, and not anything to do with the actual performance of your brand.
You potentially know one of these hardened cynics who do not trust any brands in any industry. Some of them are your current customers.
Brand trust is a poor predictor of customer value relative to other customer metrics.
Brand trust is a weak predictor of brand consideration and future intent – trying to grow trust scores in the population is not an efficient way to increase revenue. The correlation between brand trust and brand consideration is only 0.48 – with no difference between customers and non-customers of brands.
Brand trust does not guarantee the brand will be considered, 1 in 5 non-consumers who have a brand they prefer to all others claim they do not actually trust that brand – while of the brands most likely to never be considered 1 in 5 was highly trusted.
In fact, 70% of customers who distrust the brand they are with say they plan to either maintain or increase the number of products they have with that brand.
The reason for this incongruity is due to brand trust being most strongly correlated with brand awareness at 0.77. The more people are aware of your brand the more you are likely to receive higher brand trust scores in a survey, regardless of consumers intent to purchase from your brand. When non-customers have the same level of knowledge of a brand as current customers their brand trust levels are the same.
The consequence is that, unlike several alternative customer metrics, increasing brand trust does not lead to a significantly greater share of consumer spend, because it does not strongly align to consumer behaviour.
Spend patterns across multiple industries show that if a customer distrusts a brand they still spend on average 56% of their monthly spend with that brand. This only increases to 60% if they trust the brand. Investing money trying to get existing customers to trust your brand brings a relative increase of only 7% of monthly spend. This is an extremely poor return on investment.
Many alternative customer metrics (like customer satisfaction) are much stronger predictors of customer behaviours, improving these metrics can result in more than a 50% increase in monthly spend, versus 7% for brand trust.
Trying to grow brand trust, that is automatically given to brands when people become more aware of the brand’s capabilities, is wasting your money. Focus on meeting the needs of your consumers better than competitors and identify alternative metrics that accurately predict consumer behaviours and where to invest to drive real growth.
Trust me.
