Saturday 31 January 2015

Why do you trust?

Why do you trust certain companies? What is it about them that earned your respect and loyalty?

In our recent Honesty Survey we asked several hundred people how much they trusted certain industries. We asked them about banks, insurance companies, furniture stores, micro-lenders, cellphone network providers, all sorts of difference companies.

The results weren’t particularly surprising. Although there were no industries that did particularly well there were some clear winners and certainly some clear losers. Top of the list were new car dealers (who almost reached “slightly honest”) and banks and supermarkets which both only barely achieve trustworthy scores.

There were no surprises at the bottom of the list. Furniture stores and micro-lenders were firmly in the “slightly dishonest” category but bottom place went to second-hand car dealers. I don’t think that’s a surprise, do you?

Most worrying for me was the bulk of industries in the middle. Remember that no industry did very well but the bad news was that most of them were seen as being close to “slightly dishonest”. This included a number of industries that you might expect would want to be seen as better than that, notably cellphone network providers, newspapers and attorneys.

However what worried me most of all was the score received by the insurance industry. They scored halfway towards “slightly dishonest”. This scares me because insurance is such a critical service. If you don’t have any form of insurance you need to ask yourself some serious questions. What would happen if your car was stolen or if you crashed it? Who would pay for it to be repaired or replaced? How well would you cope if there was a fire in your house? How would your studies or your business cope if your laptop was stolen? What would happen to your children if you suddenly died? Would they be able to pay for the funeral? Would they be able to live without your salary?

With insurance you might be able to survive these disasters. Without it you’d almost certainly suffer. Worse still, your children might.

So it concerns me to think that if our research is correct 60% of people think the insurance industry is dishonest. Only one in five people described the industry as honest to any degree.

So how does a company make itself appear honest? What can they do to improve the way the public perceive them?

I think it’s a lot about education. Customers are more likely to trust an organization that is not only open about the nature of its products but also goes out of its way to educate them on their industry, the fine details of their products and the impact they can have. A good example is the Madi Majwana project financed by Barclays Bank. This series of mini radio plays has been broadcast on various radio stations and has covered everything you can think of about money, how to handle it and how to protect it. As far as I’m aware at no point have any of these programs suggested that listeners should buy a Barclays product, they’ve just raised awareness about matters of critical importance to us all. Barclays also went out of their way to educate the public on security issues with their recent series of workshops on card fraud.

It’s also about maturity. I was with a senior manager of a well-known company recently and he told me that there was a crisis developing in his company. There was soon going to be some public embarrassment about a product they were about to launch. It wasn’t exactly their fault, it was in fact their supplier who had deceived them but that doesn’t matter. When the news hits it’s going to embarrass this company, not the guys behind the scenes. To his credit he had already realized what to do. Be honest. Customers would much rather listen to a company being grown up enough to admit they’d made a mistake and try to remedy the situation than to try to cover it up and make excuses. Customer appreciate a little humility sometimes.

However all of this requires that the senior leadership is mature enough to admit failure. And that’s not always the case. All too often the executives in a company prefer either to go into denial, make things up or just slam the door in customers’ faces

We were contacted recently by a variety of customers of Ellerines and Beares who had responded to a special offer they heard advertised on the radio. This offered massive discounts on various products of up to 50%. Customers turned up, selected the item they wanted, paid and went home to await delivery of their discounted goodies.

But not everyone ended up happy. It seems that what they had misunderstood was that the offer was only valid for one specific day. Many of the customers had actually turned up the day beforehand and even though they’d paid the money, got receipts and the staff in the stores had said everything was fine they were later told that it was just too bad, they couldn’t have the products. You can understand why they were upset, even angry. They’d paid for something and were now told to come back and pick up their money.

Unfortunately the management weren’t as flexible as we would have hoped. Once they’d stopped blaming their stock control systems, shortages and customer confusion for the problem they eventually conceded that this was a breakdown in communication. But no, they wouldn’t bend the rules, even though a legal sale had probably been made. Instead of doing the mature thing and making an exception for those decent customers who just wanted what they thought they’d bought, they stonewalled. Customers could just go away.

So maybe this begins to explain why furniture stores are among the least trusted companies in Botswana?

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