Organizations that Break Consumer Trust Can Lose Customers Forever, According to YA and University of Minnesota Survey

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In the August 2018 survey of nearly 150 consumers, nearly all (96 percent) say there are circumstances where organizations can lose their trust forever, and nearly a third (32 percent) say they have less trust in organizations than they did five years ago.

“It’s incumbent for organizations to work day in and day out to build a culture of trust with employees, partners and customers, and to be transparent and honest when issues do arise,” said YA President and CEO Chris Behrens

According to a new survey, trust is top of mind for consumers, with 93 percent saying they consider whether they can trust an organization before they give the company their business.

In the August 2018 survey of nearly 150 consumers, nearly all (96 percent) say there are circumstances where organizations can lose their trust forever, and nearly a third (32 percent) say they have less trust in organizations than they did five years ago.

The survey was completed on behalf of leading marketing promotions firm YA, and The Institute for Research in Marketing at the University of Minnesota’s Carlson School of Management. The two organizations are sponsoring the Sept. 20 “Protecting Trust in Today’s Consumer Journey” Conference at the University of Minnesota.

“In recent years we’ve heard tale after tale of trust issues between consumers and companies,” said YA President and CEO Chris Behrens. “It’s incumbent for organizations to work day in and day out to build a culture of trust with employees, partners and customers, and to be transparent and honest when issues do arise.”

The survey also found that 60 percent of respondents say their personal information had been compromised as a result of a security breach affecting a business, and two-thirds say it is unlikely they would return to the business where the breach occurred.

“In today’s large, complicated businesses, there are countless ways organizations could potentially lose consumers’ trust,” said Steve Goodyear, Director for the Institute for Research in Marketing, University of Minnesota Carlson School of Management. “There are clear right and wrong ways to handle these situations, with the worst action being no action at all.”

According to the survey, the top action organizations can take to re-earn consumer trust is for management to be transparent, admit there is an issue and announce steps to regain trust. Another top way to work to regain trust, according to the survey, is to create a clear mission and values in the organization to ensure employees are working ethically and living those values every day, not just in times of crisis.

“Think of gaining and keeping trust as a marathon, not a sprint,” said Behrens. “Smart organizations regularly assess their business processes to ensure employees are rewarded for behaving in a trustworthy, ethical way.”

When asked about their own work environment, 65 percent of respondents say at some point they had a boss or co-worker who was doing something unethical, and nearly half (48 percent) say that they have worked for an organization that had practices in place that were unethical.

More than half of respondents (57 percent) say that if they saw unethical behavior in the workplace, they would tell their supervisor.

“This is a classic case of ‘see something, say something,’” said Goodyear. “If organizations can curb unethical behavior before it spreads, they’ll have a much greater chance of protecting their brand and the consumers they serve.”

To learn more about the Sept. 20 Ignite: Sparking Action in Marketing “Protecting Trust in Today’s Consumer Journey” conference and to register, visit http://www.ignitemarketing2018.com.

About the survey

The survey of 145 consumers took place in August 2018.

Survey results

Are there circumstances where you would never regain trust in an organization? Can they lose you forever?

Yes     96 percent
No    4 percent

Has your personal information ever been compromised as part of a security breach affecting a business (e.g. a retailer)?

Yes    60 percent
No    40 percent

How likely would you be to return to a business if your personal information was compromised in their system?
Very likely    4 percent
Somewhat likely 30 percent
Somewhat unlikely 43 percent
Very unlikely 23 percent

When deciding whether to do business with an organization, how often do you consider if it can be trusted?
All of the time    48 percent
Some of the time 47 percent
It really doesn’t enter my mind     7 percent

What organizational characteristics/actions most create trust among customers and others?
Reputation of management as trustworthy 9 percent
Mission and vision that articulate the importance of trust/ethics     9 percent
Actions that reinforce the importance of trust (e.g. their partners) 62 percent
Proactive communications that lead to better understanding 20 percent

What is the top action organizations can take to re-earn customer trust if it has been eroded?
Offer free product/services to affected customers 5 percent
Management is transparent, admits there is an issue and
announces steps to regain trust 73 percent

Fire those responsible for breaches of trust 5 percent
Create clear mission/ values in the organization to ensure employees are all
working ethically, live those values every day, not just in times of crisis 17 percent

Have you ever felt that you had a boss or co-worker who was doing something unethical?
Yes 65 percent
No 35 percent

Have you ever worked for an organization that had practices in place you felt were unethical?
Yes 48 percent
No 52 percent

If you noticed unethical behavior in the workplace what would you do?
Nothing. I wouldn’t want to get in trouble 3 percent
Tell my supervisor 57 percent
Give information through an anonymous tip line 32 percent
Quit my job 8 percent

Compared to 5 years ago, what is your level of trust in organizations with which you do business?
Much more trust 8 percent
A bit more trust     11 percent
About the same     49 percent
A bit less trust    28 percent
Much less trust    4 percent

Compared to 5 years ago, do you think there are actually more issues in business that erode trust or do you think it’s that more issues are now being made public?
I think there are more issues that erode trust today 30 percent
I think there are the same amount of issues, but
more are being made public today 68 percent

I think there are fewer issues that erode trust today 2 percent

What is the top reason you would choose to do business with one company over another?
Price 8 percent
Quality    43 percent
Customer service 28 percent
They are trustworthy and ethical 22 percent

About YA
For more than 45 years, YA has been a leader in promotional marketing services. We deliver high-impact data-driven digital, social and mobile promotions, such as rebates/rewards, enter to win and loyalty programs, to the nation’s most respected brands. With deep expertise across several industries, our end-to-end management of 3,500+ promotions each year helps our clients reach tens of millions of consumers annually. This makes us experts at turning even first-time customers into loyal brand advocates who take action, buy more and spread the word. For more information, visit: http://www.yaengage.com.
About The Institute for Research in Marketing

Since 2005, the Institute for Research in Marketing at the University of Minnesota’s Carlson School of Management has provided a forum for some of the world’s most distinguished academics to partner with top organizations in order to generate thought-provoking perspectives about companies, consumers, and communities. Working together, we apply our faculty's leading marketing insights and findings to real-world problems. The Institute is committed to building enduring relationships with the corporate community that lead to advances in the science and practice of marketing.

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Tracy Kurschner
YA
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