Trust in us

x Sponsored content on Research Live and in Impact magazine is editorially independent.
Find out more about advertising and sponsorship.

“I am not ‘part of the family’, or whatever the marketing spin is,” says a respondent. “Somehow these brands feel like they have a right to invade my life every day.”

He isn’t a disaffected millennial or a political campaigner. He doesn’t have an agenda, and isn’t about to give up on society, drop out or go dark. The conclusion from a recent research report from strategy consultancy Quadrangle is that he’s past all that: he’s what the report is calling a ‘post-digital consumer’, and the number of people like him is growing, rapidly.

While these consumers remain economically active, many don’t have the admiration for brands and products that marketers desire. The expression ‘customer delight’ would, in most cases, seem ridiculous to them. They understand that this is what brands do, but they know they are being manipulated. They might quite like to take back control.

In short: with a resigned shrug, they have learned not to trust. But is this an inevitable outcome of marketing in a data-driven commercial environment, in which the battle for share of wallet demands that we must squeeze every drop of value out of data? Or can that same technology be used to create new categories of sustainable, long-term relationships, based on transparency and authenticity? And, even if those relationships are possible, are they commercially viable?

There’s not much good news about trust. The Edelman Trust Barometer, which tracks consumer confidence in institutions, has found that 24% of the population trust the media, 2% less than trust the government. Business does better, but it is only trusted by 33% of the population. In 2013, those figures were at a recent high of 36%, 37% and 49% respectively – in itself, hardly a result that prompts high-fives.

As part of the institution with the lowest score (the media), Trinity Mirror Group – with the help of Ipsos Connect – did some research into this erosion of trust, using an online community, focus groups and a 1,000-respondent questionnaire. It found that 42% distrusted brands – a disquieting result given that inspiring trust is the prime directive of branding – and 69% distrusted advertising. Four out of 10 respondents associated brands with being ‘pushy’.

Andrew Tenzer, head of group insight at Trinity Mirror, refers to the disconnect between what marketing believes customers think and how they are really perceived as “brand delusion”. He explains that, in the minds of their customers, many established brands are “abstract, unreachable, and not well-liked”, especially outside London. 

Loss of faith

This emerging crisis of trust has at least two dimensions: there are global and local causes. The causes of the global problems are well-documented – at least they become well-documented after the fact. For example, we learned recently that taxi-app company Uber suffered a massive data breach in 2016. Hackers stole information about 57m users and drivers, and Uber – while telling none of the people affected at the time – paid $100,000 to the hackers to destroy the data. In the words of the Financial Times, this latest own goal was “spectacular for its lack of judgement, even by the ride-hailing company’s standards”.

We don’t know whether Uber was unlucky or incompetent to be hacked, but in choosing not to reveal the breach, the company is certainly guilty of undermining ‘big picture’ trust. Its secretiveness about its failings fits perfectly with the idea that a new generation of digital companies profit from our data, while not taking particularly good care of it. 

In the past few years, organisations have been breached repeatedly with the simplest of tools, to the point where there are no longer any credible voices arguing against the terms of the EU’s General Data Protection Regulation (GDPR) – even though, according to a study by the International Association of Privacy Professionals and EY, it will cost members of the Fortune 500 $7.8bn to comply. 

With the UK government locked into mirroring EU regulation for the foreseeable future because of the global nature of digital data storage and transfer, it will soon be implementing the Regulation on Privacy and Electronic Communications, which will provide new guidelines on the use of cookies, online behavioural advertising, direct marketing and the Internet of Things (IoT). Fines under this regulation will be as eye-watering as those for breaches of the GDPR.

But the billions invested in information security will not fix the other dimension of trust. The problems highlighted by Quadrangle’s research – and the strong messages from Trinity Mirror’s respondents – didn’t originate in an information-security problem. Instead, it’s a feeling that, day after day, the commercial behaviour of brands is a bit off; they are taking advantage of the information asymmetry in the relationship with their customers to play them like pinball machines. This isn’t a problem of regulation or criminal behaviour. These are cases in which the commercial contract between supplier and customer is made more profitable by breaking an implicit social contract of fairness.

Privacy fatigue

In a recent paper published in the Washington & Lee Law Review, titled ‘Privacy in the Age of Autonomous Vehicles’, Ivan Sucharski and Philip Fabinger name the phenomenon by which consumers are exhausted by complex and nuanced privacy decisions, so that they are unable to make an informed choice and just go along as ‘privacy fatigue’. Instead of managing access to their personal data actively, they simply give up, because it has become too hard to make a conscious choice. 

The public will eventually become aware of this, and may react strongly. An example of the long-term consequences of privacy fatigue is the jump in the use of ad blockers by people who are confronted, for the first time, with the information they were unaware they were giving away. The Consumers’ Association (CA) issued a similar warning to companies as long ago as 2013, when a Which?/YouGov survey of 5,257 UK adults demonstrated that few of us have the skills to make informed decisions with the information provided.

Professor Paddy Barwise, chairman of the CA at the time, said it was perfectly rational not to read the terms and conditions imposed by PayPal, because the CA had calculated they were longer than Hamlet. 

He diagnosed a ‘kitchen sink’ research process by which brands created these digital services: they would try everything and settle on the tactic that was most profitable in the short term – which might mean offering the service consumers understood the least. It’s a strategy whereby service providers do things because they have calculated they can get away with it.

We can rethink what we mean when we apply the label ‘trust’ in this circumstance. Fixing it does not require a new law, or everyone to act together. Brands, however, will have to reassess the value of transparent relationships. They will need a better understanding of the long-term quality of those relationships and how their commercial value is undermined by short-termism. Finally, an innovative business model may be needed to put new ideas in place. 

It also doesn’t mean that big data is bad. On the contrary, there is plenty of evidence that digital technologies, two-sided platforms and mobile devices can deliver a more sustainable contract, based on reliable, shared information. Some brands – and many researchers – are advocating or building these future-facing models of digital trust today.

Step by step

To create these sustainable relationships, Sucharski and Fabinger proposed a two-step process. The first step is to create better ways of giving informed consent. The second, they argue, would be “a radical rethinking of the privacy protection system by sharing the vision of ‘privacy as a service’”. One way to find out what consumers prefer in terms of managing the relationship is to ask them. At least one supplier of services to the auto industry is taking note. 

German company Here Technologies provides the location services embedded in four out of five cars sold today, and it agrees that the conventional approach to obtaining permissions is broken, and will not sustain long-term industry growth. So it is trying to create a better way. 

“It is crucial to understand how we can increase control and transparency – increase empowerment and trust – so that people are ready to share their data and don’t fear us,” says Dora Heinkel, its head of market intelligence and trust. 

“You can stick your head in a bucket, but you cannot rely on people who gave their consent being willing to do so in the future, without any restriction. This is not something that you can base your whole business model on, because it’s not future-proof.”

Here Technologies has already commissioned BuzzBack to survey 8,000 consumers – in countries including the UK, Brazil and Japan – about how they would like to control the data that comes from passive sources, such as location or the IoT. It’s a hard topic with which to engage customers, Heinkel admits – “who likes to read terms and conditions?” – but the results are being used to guide Here’s product development, and will be shared publicly at the beginning of 2018, in an attempt to build consensus in the industry.

“This is impacting on our corporate strategy in general, and our data strategy specifically,” adds Heinkel, who believes that – in creating new strategy – researchers must be advocates of sustainable trust with their clients. “Market researchers are all dealing with personal data and with sensitive information, both from the client side and from the participant’s side. So market research, as an industry, can definitely take the lead on these discussions and contribute significantly.”

A simple first step might be to test new ways to present complex legal information – just as research has been used, for decades, to perform A/B tests to simplify the buying process. RBS, for example, surveyed its small business customers and found that only 1% read their terms and conditions for a loan. In response, Andy Ellis, head of a small digital innovation unit called Strategy & Innovation, created a project that experiments with simpler small print to encourage borrowers to read it carefully. So far, the proportion of customers that now read the terms and conditions of a loan has risen to 30%. 

Inevitably, the way in which data is collected will also change. Radical models such as CitizenMe (see panel, page 29 ) aim to give people total control over their data, which they can then choose to sell to researchers. But flipping the industry on its head won’t happen overnight. There’s another way in which technology can undermine or enhance trust, and that’s the way in which ad hoc surveys are created and used. 

You don’t have to be an insight professional to have noticed the increase in customer satisfaction surveys. But Fiona Blades, founder of Mesh Experience, argues that this is one more aspect of a customer relationship that, for marketers, seems positive, but – for respondents – the process of answering questions can be a disappointingly one-sided relationship. There’s more in it for the brand than for them. 

“Our company was born out of the fact that we wanted to understand things through the customer’s eyes,” Blades says. “Sometimes when you just ask a survey question, particularly when they’re not worded well, the customer is forced into answering something that he or she doesn’t quite believe… whereas, if you ask people to tell you their experiences, they’ll do as good a job as they can.”

Mesh created mobile-phone surveys in the days before the smartphone – but, even with severe technical constraints, it made the decision to impose minimal structure, as a way to prioritise authenticity in communication. “Respondents put things forward in such a way that, when we have asked them later, they felt good about what they said. They say, ‘yes, that was me; those were my experiences... I wasn’t kind of shoe-boxed into answering something that didn’t quite feel like me’.”

Permission granted

Establishing sustainable, authentic processes for granting permissions and listening to customers is, arguably, the entry level of a trusting relationship – the first stage of Sucharski and Fabinger’s solution. But many services can go far beyond that, and use what we call ‘trust’ in a commercial sense – not as a way to win business, but as the foundation of the business itself.

It’s ironic that Uber, so often the villain of digital capitalism, is one of the pioneers of using data in this way. When Transport for London (TfL) refused to renew Uber’s operating licence, one of its prominent defenders in the press was Sarah Green, co-director of the End Violence Against Women coalition, who pointed out that Uber was considered a safe transport option by many women. She said it was “absolutely real” that women would be concerned about the potential disappearance of Uber. “It makes sense that something as easy to use – and offering a door-to-door service – will give a lot of women a feeling that it improves their ability to get about.” 

Uber’s app is valued by many vulnerable passengers because it can show the location of your car, who your driver is and that driver’s rating, plus it allows others to see where you are. Uber, though, has shown the limits of this approach if management commitment to transparency fails when it is most important, by not reporting promptly to police multiple allegations of sexual assault against its drivers. “Uber is allowing situations to develop that clearly affect the safety and security of the public,” wrote Metropolitan Police Inspector Neil Billany in a letter to TfL in August 2017.

However, Colin Strong, global head of behavioural science at Ipsos, believes that business models that expose information transparently – built into services by default – are becoming a more rigorous foundation of what we loosely call ‘trust’ in business relationships. In many cases, he argues, they will replace the emotional side of trust, and may even improve it when commercial relationships are brief or infrequent, or when preferences change more frequently. The sharing economy is leading the way in this, Strong argues, but it will be applied to other business models.

“There’s some confusion about the distinction between trust and transparency,” he says. “Digitisation means we have more access to information about others than we’ve ever had. So we can jump into other people’s cars, let them into our houses or lend them our lawnmowers – not because we trust them more, but because we know more about them.”

Using this approach, we no longer need to rely exclusively on the emotional concept of trust in an institution, a brand or a business relationship, based on prior experience and word of mouth. We don’t have to be part of a global village. Instead, we can live in a global city, using data to improve our choices (see box p35, SkinNinja) In this world, it is the function of digital platforms to match service providers – taxi drivers, people renting their spare room, restaurants – to consumers who want to make an informed choice. They do that by providing the rules to help reveal useful information to parties on either side of the transaction, whether that is a rating, a price, a location or a recommendation. Those that do it best will build the most sustainable service, whether the platform is helping consumers make informed choices about their financial futures (see box p29, CitizenMe) or beauty products. 

“This is an inevitable consequence of where we are now,” says Strong. “In a sense, that is what platform businesses do; they help you to make decisions more efficiently and effectively. An Airbnb, an eBay – or whatever it is – they use that information to help you in your decision-making process.”

There is also tentative evidence that this may be a one-way street. Itamar Simonson is chair of marketing at the Stanford School of Business and author of Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information. He has completed experiments that show consumers use the availability of information from people unconnected to brands – such as Yelp, TripAdvisor and so on – to make more accurate assessments of quality in the products they choose. 

Whereas, once, marketers could influence buying decisions using proxies for quality, Simonson argues many consumers have been “trained out” of this behaviour in the past 10-15 years. This even applies to our own previous experience, which he finds has less influence on our future choices than before. So trust is rooted, for complex products, in the reported experience of others. Forrester Research finds that shoppers trust user ratings and reviews three times more than traditional marketing. Intuitively, this makes sense. Once you have used TripAdvisor, it’s hard to trust a travel brochure without it. It’s no surprise, therefore, that some brands have responded to the challenge by poisoning the well. 

There are two responses to the need for good reviews: earn better reviews or try to game the review process – and there’s plenty of evidence that some brands can’t help but do the latter. Digital transparency is powerful, but far from perfect. Also, it’s not clear that the trusted reviews always measure the things that matter most to us, or are free from perverse incentives, even without active attempts to game the system.

If we have been trained out of a state of emotional trust, however, Strong’s tentative conclusion is that smart brands might be re-evaluating their reliance on the emotional “brand promise” in favour of a more rational brand transparency. There’s already evidence that post-digital consumers instinctively discount the traditional proxies for trust and quality, such as the celebrity endorsement. As one of the respondents in Quadrangle’s research says: “Bradley Walsh, if you shop in Farmfoods I’ll stick my arse out in Burton’s window.”

In terms of brand transparency, technology may have a somewhat different role to play. Technology can help create trust thanks to open banking and Blockchain. Open banking uses application programming interfaces (APIs) to share customer information securely – so that advisers, for example, can see transaction information without the owners of that information having to hand it over. This means they can give advice – or, just as likely, use artificial intelligence to create intelligent advice – on how a customer can manage their finances. After years in which banks have lamented their failure to create a single customer view (one respondent to Quadrangle’s research said banks “must know more than the way they behave”), open banking offers this possibility. 

HSBC, for example, started a test of open banking with 10,000 UK customers in October 2017. In the trial, customers have been able to add, to a single screen, accounts from 21 different banks, including Santander, Lloyds and Barclays. In this way, they can see a ‘safe balance’ based on all their money, or analyse their spending by category. Open banking offers the possibility to level the financial services playing field; innovators and start-ups will also be able to offer specialist services based on that data.

At Trinity McQueen, director Simon Shaw and his team are working on an open banking project for a client in financial services, trying to analyse how likely customers are to use it to solve their real-world trust problems. “Open banking is a flowerbed at the moment, which is having seeds dropped on it. It has huge promise, and a platform that gives small players a level playing field is hugely exciting,” says Shaw. “It changes the way customers will consent to doing things such as regular payments. This really puts customers in the driving seat.”

As with the problems of privacy fatigue, however, what customers complain about – and what actions they are willing to take in relation to a tech-based solution they don’t yet understand – are two different insights. This is another reason why industry support for open banking has been lukewarm. 

Trinity McQueen’s researchers are watching how customers manage the trust relationship in the real world. 

“There is bound to be some scepticism initially,” says Shaw. “What we do is spend some extended time with people, to find out how they live their lives, observing their real problems and frustrations.”

Blockchain, though an entirely separate technology, also has the possibility to create a trust economy built on shared information – as long as customers are willing to take advantage of it. 

Using the software platform, parties to a contract can store data securely in a shared ledger – that we might consider as ‘reputation’ – and choose to expose it to others selectively. Clearly, this helps all platform businesses, especially in the sharing economy, to create digital trust relationships. If open banking potentially favours disruptive new entrants, Blockchain could be a general-purpose technology that makes a
trust economy more effective for everyone.

While traditional financial services companies are overwhelmingly wary about investing in open banking, digital platform businesses are already working out how to encourage their users to help Blockchain become a kind of digital currency. At the moment, information about a company’s – or a customer’s – trustworthiness or reliability on one platform stays there. Customers can’t use it elsewhere. With Blockchain, this could change. 

Recently, Airbnb chief technology officer Nathan Blecharczyk was asked whether the company would be adopting Blockchain. “Your reputation is everything, and I can see it being even more so in the future,” he said. “You might need a certain reputation to have access to certain types of homes. But then the question is whether there’s a way to export that, and allow access elsewhere, to help other sharing-economy models really flourish.”