The Trust-Driven Business
“Trust-driven business” is a business model that prioritizes customer trust above all other priorities, even when reducing short-term profit margins.
In the long run, trust-driven businesses get more customers, keep them longer, charge higher rates, and pay less for marketing.
How trust-driven businesses get better results
Here are the net results that trust-driven businesses achieve and why it works:
Get more customers. Trust is a major factor in how people today make their buying decisions. A whopping 86% of people checking online reviews before making a buying decision. And 78% saying they trust online reviews as much as personal recommendations.
Keep customers longer. Once trust is earned, customers tend not to switch as often to an unknown competitor, even if the competitor has a competitive offer or price.
Charge higher rates. Many customers are willing to pay more for a business that offers them the “peace of mind” that trust offers them, rather than save a little money by switching to a lower-priced competitor that hasn’t earned their trust.
Lower marketing costs. Every marketing campaign costs less per customer acquired, because trust increases conversion rates for all marketing campaigns–both online and offline.
Customer trust is a high-value asset
A trust-driven business treats customer trust as a business asset that’s valuable enough to invest in.
The more the company invests in building customer trust, the more the company can expect to see a return on that investment in the form of more customer sales, more repeat business, higher rates, and lower marketing costs as a percentage of revenue.
Likewise, businesses that ignore the importance of customer trust in today’s online world risk losing to their trust-driven competitors. These businesses can expect to see fewer customer sales, less repeat business, more price competition, and higher marketing costs than their trust-driven competitors.
Trust-driven business is no longer optional
Once upon a time, businesses could easily use “push” marketing, paid advertising, and public relations to control their reputations.
Those days are long gone, now that 45% of the world, 70% of the US, and 67% of Northern Europe are on social media, and 86% of people now check online reviews to make buying decisions.
Online reviews and social media have changed the game.
Businesses no longer control their own reputations.
Your customers now control your reputation.
The trust-driven business model simply acknowledges this new reality and adjusts accordingly.
The Trust Cycle
The Trust Cycle is a powerful “viral” cycle that trust-driven businesses use to organically spread the word about their businesses.
As prospects advance through the Trust Cycle, they first get to know the business, then like the business, then trust the business enough to become paying customers, and finally share their experiences with others, causing a new round of prospects to get to know the business.
Phase 1) Know
First, prospects must know that your business even exists.
They may come to know your business through traditional means, such as advertising, a marketing campaign, or good old fashioned word of mouth.
Or they may come to know your business because you earned the trust of your past customers enough that they shared their experiences via social media or online reviews.
When your happy customers share a 5-star review online, they actually make it easier for new prospects to discover your business for the first time.
That’s because prospects who need your products or services turn to sites like Google, Yelp or Facebook to find a business to help them. And all of those sites use positive online reviews to decide which businesses to show those prospects (and negative reviews to decide which businesses NOT to show).
When your happy customers share their experiences in online reviews, they increase the chances of new prospects discovering your business.
Social media also plays a major role in helping new prospects know about your business.
Increasingly, prospects turn to Facebook, Twitter, and local social sites like Nextdoor to directly ask people in their network which businesses they trust.
When you invest in building customer trust for your business, you plant the seeds for future prospects to discover your business more frequently without spending a dime on marketing.
Phase 2) Like
Once prospects know that your business exists, the next phase of the Trust Cycle is to get prospects to like your business on a personal, emotional level.
This means giving your business a friendly face. Prospects should enjoy interacting with your employees.
It also means making both your online and offline presences fun, attractive, and easy to use.
If your business has a greater purpose or social mission, then get prospects to like your business because they believe in your mission.
Make sure prospects get a feel for the “personality” of your business through the words of your existing customers in online reviews, social media messages, and website testimonials. This is where you put the customer trust you earned from past customers to work helping you build a new relationship with new prospects.
Ultimately, getting prospects to “like” your business simply means that they enjoy engaging with your business on a very basic, emotional level.
Phase 3) Trust
Just because someone likes your business, doesn’t mean they trust your business to solve their problems.
So the next phase of the Trust Cycle is getting prospects to trust that your business can solve their problems.
This is the most important phase, because trust is what turns prospects into paying customers, which drives real business results.
That’s why it’s called “The Trust Cycle” and not “The Like Cycle.”
Make customer trust your top priority. This is what separates trust-driven businesses from all others.
When you’re faced with tough choices that force you to choose between building trust vs. growing short-term profit margins, always choose building trust.
The trust-driven business understands that the long-term value of customer trust averages out to be greater than short-term wins that fail to build trust (or worse, actually erode trust).
Look for opportunities where you can actively show prospects that you value your long-term relationship with them more than short-term gain.
If a prospect needs something that your business doesn’t provide, refer the prospect to another business that might be better able to help instead of your own.
Give away free advice, product samples, quick-fix services, or anything else you can easily afford to give away… just to show the prospect that your top priority is helping them, not just profiting from them.
The “trust phase” is also when your online reviews, social media engagement, and website testimonials become more important than ever.
It’s much easier for your past customers to convince your new prospects to trust you than it is for you to convince them yourself. There’s just nothing you can say that will be more convincing than unbiased reviews from your past customers of what it’s like to be your customer.
So make sure you make the most of your online reviews, social media profiles, and website testimonials in this phase.
When you do a great job in the “trust phase,” you’ll see a significant increase in your conversion rates from prospects to paying customers… without any corresponding increase in your marketing budget.
Phase 4) Share
The final phase comes AFTER your prospects convert into paying customers.
In fact, it comes not only after you’ve made the sale, but after you’ve completely satisfied the customer and left the customer feeling like their initial trust in you was well deserved.
If you didn’t completely satisfy the customer, or if the customer lost trust in you along the way, then you lost the battle during the “trust phase” and don’t have the trust you need to advance to the “share phase.” So don’t bother trying to get customers to share their experiences if you haven’t both earned their initial trust and then proven that their trust was well placed.
In the “share phase,” you’ve delivered (past tense) the full results the customer was looking for. And now the customer trusts that, if they ever need the same problem solved again, you’re the one they should come to without considering any of your competitors.
Once you’ve reached this post-sale milestone with customers, it’s time to ask customers to share their experiences with others.
Ask customers to share their experiences in online reviews on major sites like Google, Yelp and Facebook.
Ask them for testimonials you can publish on your website.
Encourage them to engage with other customers via social media.
Phase ∞) Repeat
Ultimately, the “share phase” turns customer trust into new prospects. And you start the Trust Cycle all over again at the “know phase” for those new prospects.
When you do well at getting your happy customers to share their experiences, you rank higher in search results on Google, Yelp, and other sites when new prospects search for businesses.
You also get more of your customers referring their friends and family to your business through word of mouth and social media.
But the “share phase” doesn’t just give you more exposure, driving more new prospects into the “know phase.”
The better you do in the “share phase,” the better your conversion rates get when converting prospects into paying customers through both the “like phase” and the “trust phase.”
As you build more and more customer trust over time, that trust yields greater and greater returns through ever-increasing new prospects and ever-higher customer conversion rates.