Trust Key Factor in Why Consumers Switch Providers

Trust is emerging as a critical influencer of consumer behavior.

Only one in four consumers reportedly trust the companies with which they do business, according to the latest Accenture Global Consumer Research study.

And, over the past year, loss of trust has increased as one of the key reasons behind consumers deciding to change providers in the consumer electronics, retail and tourism industries.

According to the authors of the report, “trust is emerging as a critical influencer of consumer behavior.” In eight of the 10 industries surveyed,  13% to 17% of the respondents mentioned trust as one of the reasons for switching service providers.

The five least trusted industries, in which at least 20% of consumers “do not trust at all,” were  (in order): gas & electric utilities, cable and satellite companies, landline phone companies, wireless phone companies, and life insurance providers.

Not a single industry is trusted “very well” by more than one-third of its customers, and none of the 10 industries surveyed had higher “trust very well” scores  than a year earlier.

The sixth annual Accenture Global Consumer Survey was conducted in 17 countries, with over 5,800 respondents being asked about their attitudes and behavior towards 10 key industries. For more details on these survey results, see the Keeping Good Customers Blog.

Other surveys reflect similar trends in the trust gap between consumers and business. We wrote a three-part series on these declines about a year ago in the Monday Morning Marketing Memo (send me a note if you would like me to send these three articles to you.)

The declining levels of trust across the globe in businesses and governments dictates that organizational leaders need to focus on regenerating trust with key stakeholders and constituencies. 

This is more than just a marketing problem; it needs to rapidly become a Boardroom concern before it becomes a Boardroom problem of epic proportion.

On the other hand, building trust with consumers and your customer base is definitely a strategic marketing opportunity, since so few consumers find their service providers trustworthy.

What are your thoughts on how businesses can re-build trust with consumers?

Online Product Resarch Now First Step for Shoppers

58% of consumers conduct pre-purchase online research

The investigative phase of the buying cycle of the typical adult shopper in the USA now frequently starts with online product research.

According to the latest Pew Research Center’s Internet & American Life Project, 58% of American adults have done research online about the products and services they buy, up from 49% in 2004. The study was conducted with over 3000 adults between August 9 and September 13, with the findings released earlier this week.

On a typical day, one in five adults (21%) are searching for product or service information online, a 40% from the 15% level reached in September 2007.

According to Jim Jensen, a senior fellow with the Pew Research Center, the research clearly shows that more people are going online first to compare prices, make product comparisons, and read product reviews, even if they make their purchases in retail stores rather than online. As Jensen says, “even if they end up making their purchases in a store, they start their fact-finding and decision-making on the Internet.”

Interestingly, nearly a quarter (24%) of the respondents said they have posted comments or reviews online about the products and services they buy.

The Pew research also reported that 52% of Americans are now purchasing products online.

It definitely appears that shoppers start with the Internet, and then decide if, what and where to purchase.

Google Identifies Pre-Purchase Patterns for Movie Goers

The power of the Internet as a pre-purchase resource tool has been further confirmed by recent research commissioned by Google.

According to the study, which is reported by Online Media Daily at http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=48550, around 33% of movie goers use the Internet to learn more about newly released movies before deciding which option to see.

Interestingly, the Internet is NOT how film buffs first hear of new movies. TV ads and word of mouth remain the main communication channels for learning about new movie releases.

Also, over 50% of surveyed respondents attending movies said they used the Internet to find information on movie schedules and theater locations, more than all other sources combined.

It looks like the power of the Movie Section in the daily local newspaper is going down the path of Black and White movies…..strictly for old-school traditionalists.

Regards,

Steven Howard