According to Edelman´s “Measuring trust thought leadership 2021”, there are three main reasons why businesses need to measure trust, when developing a strategic view of how they are perceived in the world. This short article describes those three reasons, and reflects upon the relationship between trust and reputation, with the latter being the more commonly measured factor today then the first.
- Trust trumps reputation
The Edelman Trust Barometer has shown that both trust and reputation are correlated with actual and intent to purchase, but that trust is in many ways the more powerful factor. Case in point, 61% of people globally say that a good reputation may get them to try a product; but unless they come to trust the company behind the product, they will soon stop buying it regardless of its reputation. Trust is more potent because reputation fades in importance if personal experience is discordant with a brand’s reputation. Even a great reputation cannot sustain a consumer-brand relationship when there is a lack of trust.
- Trust impacts purchasing
The decision to make a purchase is made, in part, by weighing the perception of risk in buying a particular product. Trust, by its nature, impacts that perception. Both trust and reputation measured together, predict purchasing intent and loyalty, but trust alone is a more powerful predictor than reputation alone. This is because trust, more so than reputation, directly reduces consumers’ perceptions of risk (Gefen, Benbasat & Pavlou, 2008) and thereby their reluctance to purchase (Ha & Stoel, 2009), (Warkentin, Gefen, Pavlou, & Rose, 2002). The relationship between trust and intentions has been validated in research, regarding buying intention and repurchase intention (e.g., Bart, Shankar, Sultan, & Urban, 200514; Hong, 201515).
- Trust is a leading indicator
It is difficult for a company to maintain a good reputation over the long-term if it is not effective at building trust. This is because as the segment of distrusting, disappointed consumers grows in number and volume, they will eventually alter a brand’s reputation by shifting public opinion with their negativity. It takes a trusting fan base consistently stoking the fires to keep a positive reputation energized and alive. As trust dwindles, eventually a brand’s reputation will descend into ignominy, but often as a lagging indicator of its actual overall health.