The Trust Recession

A new survey shows that the trust gap between firms and their customers keeps growing. Why that’s troubling in this economy.

The firm knew its customers wouldn’t be happy about the price hike. But it assumed they’d understand the rationale for it—inflation. In all likelihood, the firm was wrong.

At a time when rising prices and declining service have already put clients and customers on edge, a new survey shows a growing trust gap between leading companies and those who buy their products or services. According to the survey, 9 out of 10 executives believe that their customers trust their organization—when only a third of customers actually do. Experts say the numbers suggest potential long-term customer attrition, especially in this economy. “If trust is moving in the wrong direction, customers decide that a brand can’t be counted on, and they don’t intend to be loyal to it,” says Mark Royal, senior director at Korn Ferry. “Trust is essential in long-term customer retention.”

Some executives’ impressions are accurate: their organizations have strong relationships of trust with clients and customers. But many leaders don’t have a good handle on the situation, experts say, because they’re conflating trust with capitalism. “They’re two different economies,” says Kamma Braham, head of assessment and succession in Copenhagen for Korn Ferry. “Trust is about working together to solve a customer’s problem, not profit.”

Trust is also being eroded in B2B relationships, as Korn Ferry’s 2021 Buyer Preferences Study found. This is in part because B2B organizations aren’t bringing in salespeople, who can help shape needs and solutions, until late in the process. Customers are left to do their own online research to narrow down potential purchases, and an opportunity to build trust between the salesperson and the client is lost. “Firms are not seeing those interactions as valuable, and that will eventually affect spending habits,” says business psychologist James Bywater, solution architect at Korn Ferry.

Experts say that declining levels of trust can be attributed in part to increasingly distant relationships between customer and corporation— some of which grew even more distant during the pandemic. A standard transaction might involve clicking through four web pages; if the process goes south, the customer might have to place a call, then press five different numbers before even reaching a human being. “Customers feel like numbers,” says Braham. “It’s impersonal and cold, and it feels more like a money-making exercise.”

There’s no panacea here, but Royal suggests that leaders think about why the customer’s trust might be falling. “Executives could be focused on different service drivers,” he says. For example, a focus on fast, smooth, frictionless transactions might inadvertently lead customers to perceive a company as cold and cutthroat. Or a leader might not be receiving complete information on customer views. The solution, then, is to focus on customer feedback, with the aim of understanding the aspects of transactions that matter most.

Experts agree that focusing on connection with the customer is paramount. This is best done, they say, by evaluating how to use services and leadership to connect with the customer. Given that many services and products can now be delivered without this connection, secondary efforts are often required. For example, a client-based consulting service might bring together clients to nibble on hors d’oeuvres and drink wine while exploring a topic of interest. “When cold, hard cash is in the center, interactions become harder and colder,” says Braham. “The goal is centering warm connections between people.”