Stephen Covey’s (the son) book, “The Speed of Trust,” should be on the reading list of everyone interested building customer equity. Many business executives think of trust as a soft issue. Covey emphatically talks about the economics of trust. When there is low-trust in relationships, “we are paying a hidden low-trust tax right off the top—and we don’t even know it.” In contrast, “high trust materially improves communication, collaboration, execution, innovation, strategy, engagement, partnering, and relationships with all stakeholders.”

He picks up on the point made by Solomon and Flores (Building Trust); trust is a pre-requisite for prosperity. Now couple this with the difficulty companies have in gaining and sustaining high-profits these days. Something needs to change.

Here’s how I see this applying to customer relationships and the customer experience. When the focus of the relationship is on the transaction, both parties take a low-trust often adversarial position. The vendor might win the sale but lose from a customer relationship perspective. Without trust, customers see competitive products as undifferentiated. They shop for the best trade-off between price and convenience. Their focus is on utility, acquiring a product is a “means-to-an-end”. Customers approach these situations with indifference and there is no inherent loyalty.
 
In contrast, when companies build trust they court the engaged buying personality. They facilitate a shift in the focus from “transaction or thing” to experience and relationship.

Posted by John Todor on Monday, February 19th, 2007 at 7:51 am.