Customer Trust – the serious practical impact of the economics of trust is that in many relationships, we are paying a hidden low-trust tax right-off the top—and we don't even know it. Stephen M.R. Covey, The Speed of Trust, 2006.

Intrusion, Engagement, Trust and Conversion

We love statistics—especially if they agree with our perspective. With that in mind I am going to use some numbers to validate an important perspective.

From a Nielsen survey of 26,486 internet users.

78% trust the recommendations of other consumers.

34% or less trust search engine ads, online banner ads, or text ads to mobile phones.

What's up?

The ads are intrusive, they push an agenda on the consumer, relevant or not. In contrast, people who read reviews are already mentally and emotionally involved. Their engagement signals a high degree of relevance and the motivation to reach a decision. Also, they are looking for information meaningful to them, not what some advertiser thinks is meaningful.

Recently I was looking for a hotel room in Washington, DC. I had a budget in mind and wanted the hotel to be convenient to the meeting site. I used the online tools to come up with a short list. The hotel that was sure to meet my quality expectations was at the upper end of my budget. Several were attractive from a price perspective but the hotel description and lower star rating left me wondering if I would regret choosing one of them.

One had two customer reviews. Both rate the hotel less then 3 stars, yet they lead to an immediate decision to book a room. Both implied the rooms were okay but a little worn. But these comments did it for me: "Walking distance to the coffee houses and restaurants of Dupont Circle." "Didn't spend much time in my room, but enjoyed the energy of Dupont Circle." These were the experiential variables most important to me.

Do review readers really convert to buyers at a higher rate or am I the exception? Petco.com, for one, found extremely high conversion rates by online shoppers who read reviews (49% versus 10% for nonreaders). Last week I had a conversation with Brett Hurt, the CEO of BazaarVoice, the company doing the research for Petco.com. He agreed that level of engagement was important to economic outcome. Not only did the review readers convert at a higher rate, they bought more, bought more expensive items, and were easier to service.

It’s time companies come to grips with "who's agenda matters" and "who's value proposition is in play" - their’s or the customer's.

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For more on the topic of Customer Engagement download out white paper:

Why Customer Engagement Pays Dividends

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You might notice the intersecting of a couple of themes in recent newsletters, namely the building of customer relationships and the influence of Web 2.0 or Social Media. The Whetstone Edge is taking this seriously. Many business people find it difficult to see how business strategies can play out in a Web 2.0 world. Others get wrapped up in a blog, social networking or other form of social media and complain that it is a time sink. We have put together corporate briefing and seminars to pull the issues into an actionable framework.  To learn more email John at jtodor@thewhetstoneedge.com and put Social Media in the Subject line.__________________________________________________________________________

For additional information on trust and customer relationships, check out John's book, Addicted Customers: How to Get Them Hooked on Your Company. www.AddictedCustomer.com.

This newsletter is brought to you by The Whetstone Edge, LLC (www.TheWhetstoneEdge.com).

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