• June 30, 2015

Global Customer Trust Hits a New Low

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For the first time in the 15-year history of Edelman’s Trust Barometer, two-thirds of the 27 nations surveyed fell into the company "distruster" category. The research firm reports that worldwide, people are becoming more wary when thinking about companies' true motives.

There is a new factor depressing trust: the rapid implementation of new technologies that are changing everyday life, from food to fuel to finance. More than half (54 percent) of respondents say business growth or greed and money are the real impetuses behind innovation.

People showed the greatest concern when it came to genetically modified foods and hydraulic fracturing, with trust levels dropping to the 30 and 40 percent ranges in those categories. The industries charged with implementing these technologies have a clear vote of no confidence. The food business, for example, is trusted by only a third of respondents to manage genetic modification in a responsible manner. Meanwhile, the energy industry is trusted by only 48 percent to carry out fracking safely and responsibly.

What's more, by a four-to-one margin, respondents want government regulation of these activities, but less than half have confidence that governments can do so effectively.

There is a clear difference in attitudes between developed countries and those undergoing development—the latter group is more accepting of technological innovation (77 percent), the former less keen on it (44 percent). "The Trust Barometer confirms a direct correlation between the trust level in a country and its willingness to accept these innovations," Richard Edelman, CEO and president of Edelman, wrote in an essay introducing this year’s results. "At the top of the list of trusters are the United Arab Emirates (UAE), China, India, and Indonesia. At the bottom are several nations in Europe including Germany, France, and Spain, plus Japan and Korea."

Another factor in this year's decline in trust, Edelman suggested, is the quantity and gravity of bad news: The Ebola outbreak, the disappearance of Malaysia Airlines Flight MH370, and the steady spate of data breaches, most recently at Sony Pictures, have all, to varying degrees, shaken confidence in institutions.

Some analysts suggest the loss of faith has more to do with the ways in which people have come to perceive companies. "There's been a general shift towards mistrust in companies," says Paul Greenberg, president of The 56 Group.

Greenberg traces those waning levels of trust to other factors, including where consumers are now placing their trust: Over the past 10 years or so, consumers have been putting more faith in peers. "As trust in [peers] increases, the distrust in [companies] increases as well," Greenberg says.

Jonah Berger, a professor at the University of Pennsylvania's Wharton School of Business, delivered a similar message to an audience of thousands at this year's IBM Amplify conference. "People don’t trust company-generated communications," he said. Having peers advocate for a company is more effective, he said, noting that word of mouth can go a lot further than even the most brilliant advertisement.

The big question: If consumer trust is at all-time lows, how can organizations improve it? Greenberg cites Samsung as a company that has effectively embraced peer-to-peer interactions to regain trust. Samsung opens its channels and grants customers special privileges to provide any feedback that is deemed useful to other customers. "That kind of stuff is what gets trust back," Greenberg says, "because the customer then [thinks], 'You know what, you're believing in me, and you've made me feel good about my relationship with you by [telling me] my ideas and feedback are valued.'" —Oren Smilansky

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