Decoding brand trust in a time of crisis

Trust is critical to any business (unless you are a monopoly). If your customer can take their money elsewhere, then you better not damage their trust in you.

IB have been thinking about the concept of trust on behalf of several clients recently, and we believe that, in the next 12 months, brand trust will be more important than ever. 

As we face up to the white heat of three interlocking crises - economic, public health and the climate - brands will need to consider how their customers might be torn between two opposing forces, representing either side of the ‘trust’ coin:

• the need for stable, trusted brands in a time of uncertainty, drawing them towards existing providers

• the possibility that those providers will let their customers down in their hour of need, driving them to seek out novel solutions to new problems, and creating space for new brand relationships.

So how can brands create and nurture trust? How can they do so in a crisis? To answer this question, we need to ask a deeper one? What actually is trust? 

To explore this, I’m first going to draw on a little bit of psychology, and then look at how that has played out (and will play out in the future) in one sector in particular - retail banking.

So, it turns out that trust has been studied in depth by social scientists for decades, leading to the establishment of quite rigorous models of the psychological drivers of trust.

One such model - originally established to explore trust within organisations, but which has been shown to apply to situations as diverse as trust in the government and trust in a life coach is the ‘integrative model’.

Briefly, the model describes 3 very different kinds of trust: trust in the other person’s ability, in their integrity and in their benevolence towards you. 

All three are required for trust to take place - hence ‘the integrative model’.

If we take a look at the banking sector for a moment, we might cynically say that banks have no need for the second two kinds of trust - that the principles of ‘benevolence’ and ‘integrity’ don’t matter in the retail banking sector, and in fact might actually be a bad thing commercially speaking.

Historically, retail banks have routinely broken these principles, for example by delivering hidden charges and fees (integrity 👎), whilst endlessly encouraging you to take out more debt (benevolence 👎) and quietly investing your money in things you don’t like to think about (benevolence 👎). 

Looking more deeply at our definition of benevolence for a second, we see something that doesn’t even sound like our stereotypical idea of a bank: 

The benevolent company: acts in the interests not just of its bottom line but of its customers, employees and the world at large. It is willing to take care of people, make sacrifices in the interests of others, and credibly demonstrate warmth.

And yet, when the pandemic hit in 2020, retail banks leaned in to ‘benevolence’ in a big way. 

As the lockdown unfolded, banks bent over backwards to support people with mortgage holidays and prioritise help to those who needed it most - like careworkers and those who could not work. For retail bank employees, it was cathartic to be the good guys for once.

They did this because, in 2008, they had been burned. It had been painful for banks to hear over and over again that customers fundamentally didn’t trust them. 

They realised that what looked like loyalty was actually a customer who had given up on the idea that there was something better out there. Banks were sitting on a leaky dam made up of inertia and status quo bias, which threatened to burst at any time.

And with the arrival of fintechs in the 2010s, they realised they could no longer rely on the idea that ‘we’re all as bad as each other’. Here were new entrants that looked fundamentally different, carried none of the benevolence baggage, and were rapidly getting traction. 

So, faced with the extreme and unusual threat of the pandemic, banks intuitively made the right call. They decided to play the benevolent guy for the benefit of their customers and employees. In doing so, they shored up the dam.

But, unfortunately, this ‘new normal’ doesn’t feel particularly normal at all. Once again, consumers face serious threats to their financial stability and wellbeing. 

So the pressure will be on banks again - and on all other consumer service providers - to decide if they want to act as benevolently as they did in the pandemic, empathising with and supporting those unable to afford their bills, and losing their livelihoods or homes - which will come at a cost to the companies themselves.

To make the right decisions in this context, brands need to understand their ‘trust signature’ - i.e. what are the crucial elements of trust that matter for their particular brand, in their category, and across different audience segments.

Here are 6 things we think every brand should be asking itself heading into 2023:

• How do we score on benevolence towards our customers, employees and the world at large?

• How do we score on integrity in terms of our values and societal values at large?

• How do we score on our fundamental ability to deliver the right service, and is the need changing in the new normal?

• Which of these factors are most important to our different audience segments in terms of loyalty and engagement behaviour?

• How effective are our current  ‘benevolence’ and ‘integrity’ activities?

• Where should we invest to reinforce trust during the current crisis, and is there anywhere where we are over-investing?

If you would like to talk more with us about your ‘trust signature’, benevolence audits, risk and the triple threat of crises, please email me at jamie@weareib.co