Embracing digital trust will set you up for success in this increasingly digital world.
Trust. A key driver in many personal and business interactions. Your customers know who and why they trust in the physical world. Just like you, they believe in someone who keeps their word. They rely on friends who come through every time they need them. A local business that has never let them down earns their confidence.
But what is digital trust? How do your customers know who to trust online? These are important questions to answer, now more than ever, as 2020 forced many offline businesses to move operations online. Those that embraced the change saw a marked increase in sales occasioned by the move to e-commerce websites.
Let’s dig into the answers and more below.
Table of contents ↓
- Why is digital trust important for your business?
- Best practices to leverage digital trust
- The Future
What is Digital Trust?
Digital trust is the degree of confidence a customer has that a technology, person or process is capable of upholding security, privacy, safety, reliability and credibility online.
Most literature tends to deal with the security aspect of digital trust, and rightly so, since security is a key pillar of building digital trust. But digital trust is definitely more than that.
In a recent study to find out how digital trust varies around the world, the Harvard Business Review outlines four components of digital trust:
- The security of an economy’s digital environment;
- The quality of the digital user experience;
- The extent to which users report trust in their digital environment;
- The extent to which users actually use the digital tools available to them.
A brief walk through the history of digital trust can demonstrate this even better.
A brief history of digital trust
Early definitions of digital trust focused on digital signatures and cybersecurity. Indeed, efforts to build digital trust began back in the 90s, during the development of the commercial internet, with the US, EU and China leading the efforts to research the concept.
However, the scope of digital trust has gradually become broader in the 21st century. Social networks have overhauled communication and media in ways few had foreseen. We no longer wait for media gatekeepers and agenda setters to tell us what we should talk about. We tend to trust friends and relatives on social media and popular messaging apps like WhatsApp, which is one of the many channels that have fueled the epidemic of fake news.
The way we trust has not changed, but avenues through which we acquire information have changed. Today, people expect that businesses and leaders are listening to them. Customers are in the driving seat. They are deeply aware of what they want and standards that businesses should uphold in the digital age.
Customers expect businesses to move with these expectations by embracing technology while being accountable through their data and information-sharing policies. According to a survey by PwC in 2018, most people believe that emerging technologies like blockchain and artificial intelligence are critical for business success, but fewer are very confident that their businesses are building sufficient digital trust controls to adopt these new technologies.
This brief history would not be complete without highlighting the effect of the COVID-19 pandemic in the acceleration of digital transformation around the world.
Schools have adopted online learning, many companies have gone fully remote and retailers have embraced ecommerce to reach their customers. In fact, COVID-19 has changed the sales landscape so much that B2B customers are buying big online. 70% of B2B decision makers are open to making remote purchases of over $50,000, according to recent research conducted by McKinsey. B2B organizations have embraced video calls and live chats to interact and close deals. As a result, the amount of revenue generated from these digital channels jumping by 69% since April 2020.
While the pandemic accelerated this move to digital, there are strong indications that it will continue in 2021 and beyond due to the clear competitive advantages it has lent to B2B organizations. These include lowering customer acquisition costs from fewer in-person visits and extended reach in new markets.
Digital tools are great. They have made life bearable amidst the crisis, but they have also shown us how easily digital trust can break. Case in point is the misinformation that was rampant at the height of the pandemic in early 2020. It is interesting to note that according to the latest Edelman Trust Barometer, while trust in business continues to rise, trust in technology has declined to a new low in 2021. The fear of losing jobs has driven part of this decline, especially at the height of the pandemic. Customers have called upon companies to be accountable and transparent to help assuage fears and share trustworthy information.
Now let’s delve into the importance of digital trust and how you can leverage it for the success of your business.
Why is digital trust important for your business?
For starters, it is a major driver of customer loyalty.
Without trust, a customer is just purchasing your product or service as a means to an end. You lose out on the chance to build a relationship with them that keeps them coming back for more.
With trust, you are able to create and nurture relationships with your customers. Trust enables you to retain customers and generate new revenue streams. You can cross-sell and upselling to these loyal customers who become your brand champions. Ultimately, organic word-of-mouth grows from here, cutting down your acquisition costs. As we have pointed out in this article on building customer trust, the cost of retaining new customers is often lower than that of acquiring new ones.
Customers with a high level of digital trust spend more.
A 2018 survey showed that 57% of consumers with a high digital trust increased their online spending over 12 months versus 43% for consumers with low trust.
The UTU Trust API replaces anonymous ratings and reviews, personalizing the recommendations that your customers see as they interact with your digital platform. This helps build digital trust in your business.
Let’s now talk about how you can leverage digital trust to grow your business and gain a competitive advantage in this increasingly digital world.
Best practices to leverage digital trust
1. Embrace innovation and security
Digital transformation is taking over the business landscape, now more than ever before. Cybersecurity is no longer a preserve of the big companies. Cybercrimes have morphed to include email phishing startup employees and tricking oblivious mobile money customers to send life savings to fraudster’s accounts.
Businesses who go the extra mile to use digital tools to secure their systems and data gain the trust of their customers. Some good security practices include:
- Enforce a security policy among employees. Each of them should use strong passwords and access them through password vaults such as 1Password. This puts an end to uncontrolled sharing via unencrypted tools.
- Invest in firewalls and antivirus software to protect computers used by staff from intruders.
- Sensitize staff on various ways hackers can get to them. Keep everyone updated on the latest gimmicks that can find them unawares, such as email phishing.
- Back up data while encrypting customer information in the process.
Customers are aware of security measures. They will ask when they notice features such as 2FA missing from your app, especially in the financial services sector. They understand that security is not just their responsibility but yours too. Yes, they will protect their passwords but they want to know you are doing enough to safeguard from unauthorized use.
It is essential to have your workforce sensitized on best practices while at work to secure customers’ interests. Include security training as part of employee onboarding. Put structures in place to ensure they follow security measures, even while working remotely.
2. Uphold transparency
The internet and social media have given customers loads of information at their fingertips. They wield this information even before interacting with your business. They expect that businesses will be upfront about what they do with their data and be honest about all their dealings.
Customers come to you already knowing your competitor and their offerings. This means that they can easily walk away if you don’t give them something more. Transparency can be that differentiator.
In a digital world, here are some ways you can leverage digital tools available via the internet to demonstrate transparency:
- Get straight to the point when sharing information online and offline too. Beating around the bush will make you lose business. In this digital world, our attention spans are very short.
- Give visitors and customers all the information they need to make purchase decisions. It’s best when it comes from customers who have used your products or services. Voluntary reviews give potential customers the confidence that real people like them used your product and so it can work for them too.
- Be clear about your pricing. Using confusing language or making customers jump hoops to find the real price does nothing to build trust in your offerings.
- Let customers know who has access to their data and why.
Let’s expound on this last point in the next practice, championing digital privacy.
3. Champion digital privacy
In this digital economy, data is another key differentiator in the sea of competitors. Some have called it the “new oil”, it helps you sell better and tailor experiences. However, most people want to know that you are handling their data ethically. They do not expect you to share it haphazardly with third parties. Indeed, when you safeguard personal data and information, you build digital trust.
Some ways you can uphold data privacy include:
- Adhere to regulatory requirements locally and globally. The EU’s (General Data Protection Regulation) GDPR is a great example of a regulation that has caused many businesses and indeed jurisdictions to revisit data privacy and take necessary steps to uphold it.
- Store user data in closed databases and where possible, on users’ devices to remove the need to transfer data across servers.
- Give users the choice to have their data deleted.
- Be proactive about data breaches and their fixes.
- Support opt-out. An example of this is letting people opt out of having cookies tracked on your website.
At UTU, we believe in the power of artificial intelligence and machine learning to train models of high accuracy. Our recently-launched Creditworthiness API is the latest solution utilizing this for all our clients. We give control to business and individual users whereby we require general consent and leverage fine-grained privacy controls. We are working to include anonymity constraints in showing recommendations and signals.
4. Improve user experience
As mentioned in the previous point, data is necessary to customize digital experiences. Without trust, customers will not share the data required to drive a personalized experience. If they trust your company, many people will not mind sharing their data. In addition, give them control over how much data they provide and more importantly, add value to their experience.
When you make your customer’s life easier by offering highly personalized services, they have no reason to doubt your proposition. Relevant recommendations, ads and content that directly feed into what they do greatly improve user experience. Look at what Google does with its smartphone apps. With Google Maps, you need to share your location to get directions. Otherwise you are lost. That is a clear value addition to the service offered.
In this culture where consumers have come to expect instant gratification, your business has to keep up too. Large companies are able to do this by following the customer through their entire journey. From ads to retargeting, endorsements and sponsorships to returns and refunds. But for small businesses, it is wiser to focus on what you can do with what you have. Many popular startups differentiated themselves by focusing on one key area of the user experience. For example, Zappos dedicated its experience efforts on delivering customer success. Early Google focused on delivering a better technology — PageRank — to differentiate search from existing competitors.
5. Build your brand online
As mentioned above, customers today will likely research online before buying your products or services. In 2019, almost a third of consumers used the internet to search for local businesses on a daily basis. Customers naturally expect a business to be online when they begin their research. It is then becomes logical to have a digital presence for people to find your business easily.
Companies that are awake to this fact have invested heavily in building their brand online. Not only do they do it themselves, they know that the biggest builders of digital trust are their loyal customers. These customers have become digital advocates. These advocates relate with the brand and its values and are happy to spread the word to friends and family.
Building your digital presence does not have to be expensive, it however does take time. Securing digital properties such as memorable URLs and social media handles can go a long way in cementing your brand. Building a website is much easier than it was a few years ago. Tools like WordPress have made it possible for non developers to configure fully operational websites in minutes. Once you have a user-friendly website that is mobile-friendly too, you can go about making it search engine optimized. Then you can engage your target audience and customers both on the website and social media. This way, you build your credibility and professionalism.
While you are at it, focus on the future and stay in touch with the latest trends to remain relevant.
Digital trust will continue to evolve over the years. Young people were born in an online world and quickly warm up to new technologies. They see these tools as enablers in the new digital economy.
Businesses will continue to embrace technological advances at a wider scale. The open question will remain how responsibly and trustworthily they will deploy them for the good of humanity. While trust in businesses continues to grow, it is upon each of the human actors to cultivate and leverage it. These human actors are you and me. Only then will we be in a better position to serve happy customers and ensure business success.
Be part of that future. Embrace digital trust. Talk with us today.