The Objective Measurement of Trust
“Trust” is the foundation of all relationships. We know this inherently. Including, not only our personal relationships, but the relationships we want to build between our business and the people the business serves. All businesses, by their very nature, exist to serve their employees, customers, vendors and shareholders, all of whom are confident the business will keep the commitments it has made. This is what we call trust.
Several authors, including Rachel Botsman, Stephen M.R. Covey, Barbara Brooks Kimmel, Natalie Doyle Oldfield and many other brilliant minds have come up with innovative ways to prove trust is not only valuable to every business, it is a leadership imperative.
“Trust is the ultimate collaboration tool.”
Trust is the first important step in any business relationship. There has to be some level of trust before any customer is going to part with their money to buy your product or service. How might we create a shared definition of trust for our team or our business and make sure it is measurable?
I was recently on a conference call with a trust consortium made up of many authors, thought leaders and people who have dedicated their lives to the study and understanding of trust. This problem of “definition” came up as a recurring dilemma. (List of contributors in the references below.) The problem with defining trust lies in the subjectivity of the word and the passion we apply to it. It is such a powerful and meaningful word. We use it every day to make most of the decisions in our lives.
The context in which we are using the word matters deeply. We vary our definition of trust in different situations and we each hold personal standards around the word, which vary in different environments. We even adjust our definitions with different people.
I am going to focus on the definition of trust as it pertains to a business earning trust from any person, whether they might be an employee, a customer, or even a vendor to the firm. Before we define it, let’s discuss how trust occurs and what it looks like mathematically.
This graph describes how it is earned. Trust occurs incrementally as a step function. Something has to occur to move the customer upward on the graph over time, as shown above. We all start at the bottom left corner of the chart with zero trust until an experience occurs, which moves us either up or down.
In a business environment, our customer might hear about us from another one of our happy customers, like an advocate who told them a great story about us, and start out with an aggressive move up the graph. Alternatively, they might hear about us from an advertisement. When advertisements have their intended impact, they cause a positive move up the chart, but they typically have a much smaller impact than an advocate would. The better the first experience is, as perceived by the consumer, the faster the journey up the trust “ladder.” If they hear bad things about us, trust might go into the negative. Early in the relationship, this can be detrimental.
Las Vegas and the entire gambling complex is built on this heuristic. We are all loss avoiding machines. This is why, as businesses, we spend so much money and energy on marketing to makes us look as perfect as can be.
“The pain of a loss is approximately twice as potent as the pleasure generated by a gain.”
Of course, we hope we only produce positive experiences for our clients and move them up and to the right on the trust graph. If we draw a line across the top of the chart, we might call it our Trust KPI (Key Performance Indicator.) Once we establish this clear, objective measure for when our customer has exhibited a set of observable trust behaviors, this line would represent the point in the relationship the KPI is met. Our goal is to reduce or condense the amount of time it takes to get our customers to cross the “Trust Threshold.”
For some of our customers, we might be able to purposefully add steps into the process to increase the number of experience opportunities that might occur. In order to move them up faster, it logically makes sense to try and get in front of them more frequently. At ITX, we build software for a living and in our world, when we purposefully insert more digital experiences, we call the activity spam. I recommend you be judicious with this strategy. There are many powerful reasons why you should work to understand your customer’s journey and try to optimize the series of experiences they have with you. However, in all cases, you should work to increase the upward movement resulting from each individual experience you produce for your customers.
Our simple thought experiment above (advocates vs. advertisements) demonstrates the power of each experience. If their first “experience” hearing about you is from an “advocate” vs. an “ad,” common sense would tell you your customers will have a much larger jump in trust from kind words about you from an advocate than they might from the fleeting experience of an ad. If you own a home and you need a plumber, we all know a friend who “has a friend,” who is way more trustworthy than the actor in the television advertisement.
Before we figure out what our trust threshold will be and how we will measure trust, we have to deal with the subjectivity of the word. Try this thought experiment with your team: Have each of your leaders, including yourself, spend 90 seconds to privately write down their definition of trust on a piece of paper. After 90 seconds, Go around the room and have everyone read their definition aloud.
I have been running this exercise in small group workshops with 15+ CEOs at a time, and privately with executive teams for a decade. In total, I have asked hundreds of CEO’s and key executives this question and 100% of the time, it yields the same results. There is a lot of positive head bobbing in the room as people read their definitions aloud. After everyone is done, we come to two conclusions as a group:
- Everyone has a different definition of the word. There are some similarities, but most of them are markedly different. I have kept track of the definitions given to me by these CEO’s and have observed their definitions to be their very personal definitions of the word. I will share more on my research below.
- Everyone’s definition is right. I always ask the inverse as a part of the exercise: “Whose answer is wrong?” With the exception of the occasional joker, the group unanimously agrees with this observation. Everyone’s definition has some part of the subjective truth.
These two observations, when combined, prove our personal definitions are useless to the business in any context that might be measurable. We have to objectify the word before we can operate on it. Thus, years ago, I set out on a research project to find an objective definition to set a baseline for “trust” and make the word measurable.
I’ve been collecting definitions of trust from dictionaries wherever I could find them both online and offline. I have included all of the dictionaries you used as a kid (yes, for some of us, those dictionaries printed on paper and in books) and even included and some less-traditional sources like the “Urban Dictionary”. I am, after all, searching for the way in which the word is actually used.
As it turns out, even formal dictionaries have many definitions for the word, making it an interesting exercise. This word cloud shows the top 75 words by frequency from this dataset of definitions (more on the methodology in the notes):
The word “confidence” turns up more than three times as frequently as the next most common words in the dataset. Among the words at the top of the list, which might serve as a valuable and objective proxy for trust, are words like confidence, reliability, credit, responsible, reliance, faith, believe, etc.
I have also been collecting the definitions from business leaders (over 600 CEO’s and Key Business Leaders) in my workshops. The results are a little different. “Confidence” shows up as one of the top words. “Belief” is the top word, but there is not much of a spread in occurrence between the top five words. (Belief shows only about 1.5 times more frequently than ability, the 5th word below it.)
I also looked at all of the definitions from these sources with an eye on what simple definition might be made objective and thus, measurable. The best definition I could find of trust from any of the authoritative sources, which met those parameters, both written and online, comes from Merriam-Webster. It happens to be:
“One in which confidence is placed.”
Again, with “confidence” as the key operating term. I believe it is reasonable to ask your leaders to agree on this as an “objective proxy” for trust. It is simple, hard to dispute and is easy to agree for the business, “confidence” can be measurable. I have done this in my workshops for years with little objection.The good news, as you can do the same in your organization.
In “KPI’s That Inspire,” I explain why it is important to measure the behaviors of the people in your ecosystem to understand the long term health of the business. The right measures provide both a leading indication of your success and they will have a tremendous impact on the motivation of your team. We need to find the behaviors that, when exhibited, indicate we have earned trust.
For example, we could turn the simple definition from Merriam-Webster above into something measurable by asking it as a question: How will you know when the people you want to earn trust from, your customers, are placing confidence in your organization? The answer is relatively simple: trust is observable when they make a meaningful investment in your firm. An investment could come in the form of time, information or social capital. You should avoid, however, using money as a key metric of trust.
You will be tempted to make an argument for money being the only investment important or valuable enough to use as a metric for trust. This is problematic for many reasons. Although “pulling out your wallet” is a behavior, it causes distortions in the behaviors of those who are trying to earn trust and can feel like an extrinsic, low quality motivational tactic. It is incredibly important to measure the leading and strategic indicators of trust in our ecosystem: “behaviors,” which are observable and measurable. In this article on loyalty, I explain, with some basic calculus, why using money as a metric is misleading, while measuring engagement and “experience” is more valuable in the long term. You should avoid using money for this metric.
Try this on for a simple, shared and measurable way to observe you have earned some trust between your firm and your customers:
Trust Behaviors: Investments of time, information or social capital in your firm.
How this might be implemented will be different for every organization. If you are selling a low priced commodity, like a cup of coffee, for example, your metric will be very different than if you are selling $100M construction projects. In the later example, you have a large average sale and a long sales cycle. The measure will probably be a checklist of behaviors, which include your key customer’s time, information and a clear introduction to the other decision makers in the targeted company, sharing their social capital. If you are responding to an RFP, for example, and your client is not taking your calls or spending the time to give you the information you need to be successful, you have not earned enough trust. Here are a few examples from some different industries, which might prove helpful to you:
For a local chain of coffee shops: A single, one-time purchase of coffee is not a great indication of trust. It is a small cost and they may have only bought your coffee this time because your location was more convenient than others. However, if your customers invest in telling you who they are, what they care about, and they allow you to track their purchases, you have good candidates for a powerful trust metric. In this case we might use “The percentage of our customers who have signed up for our newsletter to be more connected to the coffee shop” as a great measure of trust.
For a heating and cooling contractor: The price point of your average customer is higher than the coffee shops and your customers probably tend to shop around and get a few quotes. If your measure of trust is the sale, you are missing the real opportunity here. Trust, in this case, needs to be earned long before the customer pulls out their credit card. A better measure of trust is whether or not they filled out a complete assessment which would allow you to collect their concerns. Another measure might be the percentage of assessment meetings attended by all of the decision makers of the household.
With a clear and shared understanding of what trust means to your organization and a clear metric, your team will fully understand the result expected from everyone:
Customers who demonstrate trust invest their time, information or social capital in our organization.
If you empower everyone with a clear set of best practices and the decision rights to experiment with things like the language they use, or the tactics they employ to maximize trust, they will find the innovations that lead to more trust and will share them with their colleagues.
Let’s use the barista behind the counter in the coffee shop above, for example. If he or she understands how important trust is to the organization because it is one of their KPIs, and understands you are all playing the long game with your customers, you will unleash their creativity and they will figure out what stories to tell and what language to use to inspire customers to sign up for the coffee newsletter and use their rewards card whenever they visit. The barista will quickly figure out how to communicate the value of signing up in terms your customers understand. As an advocate of your business, he or she will also share what they learn with colleagues to further add value to your business and its ability to build relationships with your consumers at scale.
More trust will be earned and everyone wins. After you have earned trust, you can start working on loyalty.
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References
Botsman, Rachel “Who Can You Trust?” (2017) | https://www.amazon.com/Who-Can-You-Trust-Technology/dp/1541773675/
Covey, Stephen M.R., “The Speed of Trust” (2006) | https://www.amazon.com/Speed-Trust-Thing-Changes-Everything/dp/B001U2MTAG/
Kimmel, Barbara Brooks, “Trust Inc. Strategies for Building Your Company’s Most Valuable Asset” (2013) | https://www.amazon.com/Trust-Inc-Strategies-Building-Companys/dp/1932919368/
Oldfield, Natalie Doyle, “The Power of Trust” | https://www.amazon.com/Power-Trust-Companies-Manage-Protect/dp/0994041632
Covey, M.R. Stephen, Trust Across America | https://www.smartbrief.com/original/2020/04/what-working-remotely-has-taught-us-about-trust | Note: This quote is attributed to him.
Kahneman, Daniel, “Thinking Fast and Slow” (2013) | https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555
Kahneman, D. & Tversky, A. (1992). “Advances in prospect theory: Cumulative representation of uncertainty”. Journal of Risk and Uncertainty. 5 (4): 297–323. doi:10.1007/BF00122574.
Flaherty, Sean W. “Measuring Loyalty” | https://medium.com/@TheSeanFlaherty/measuring-loyalty-3c30fce621cd
Trust Across America, Trust Around The World Working Group:
Definitions of trust sourced from sources like these and many more:
Merriam-Webster | https://www.merriam-webster.com/dictionary/trust |
Dictionary.com | https://www.dictionary.com/browse/trust
Google | https://www.google.com/search?q=google+definition+trust
Thesaurus.com | https://www.thesaurus.com/browse/trust
Cambridge | https://dictionary.cambridge.org/us/dictionary/english/trust
Macmillan | https://www.macmillandictionary.com/us/dictionary/american/trust_1
New Oxford American Dictionary | https://www.amazon.com/New-Oxford-American-Dictionary-3rd/dp/0195392884/
Wiktionary | https://en.wiktionary.org/wiki/trust
Random House | https://www.amazon.com/Random-Dictionary-English-Language-Unabridged/dp/0394500504
Collins English Dictionary | https://www.amazon.com/Collins-English-Dictionary-Thesaurus-Set-dp-000810266X/dp/000810266X/
Urban Dictionary (Top 5) | https://www.urbandictionary.com/define.php?term=TRUST
Note: I eliminated the legal and organizational definitions for the word for the analysis. If you are interested in the methodology I used to derive this result, please reach out to me.
