Expanding the Trust Premium: Insights for Lawyers and Accountants

In recent surveys, I extended the Trust Premium model to add additional insights and specific Trust Premium data related to two more professions: lawyers and accountants.

The Trust Premium Model

The trust premium model comprises three core components:

1.????? Trust Preference: This is the probability that a customer will choose a trustworthy provider over one they do not know, assuming all other factors (including price) are equal. While trust preference is typically high, it is not always 100%. Some customers require more than just trust to make their decisions.

2.????? Trust Premium measures how much more a customer is willing to pay a trustworthy provider than one they do not know. For instance, if the trust premium is 40%, a customer would be willing to pay 40% more to a provider they trust before considering switching to a less-known provider.

3.????? Distrust Discount: This is the amount a provider must discount their price to attract customers from a trusted competitor. Unlike the trust premium, the distrust discount must be significantly higher to compensate for the lack of trust.

Extended Insights into Trust

My recent research has added depth to the trust premium model by exploring additional aspects, such as the maximum trust premium and the role of transferable trust.

Absolute Trust Preference: The Trust preference I found was over 90% in all cases thus far, but never quite 100%. It could be that with a small discount (nowhere near the Distrust Discount), the trustworthy provider can guarantee 100% preference, but this might not be the case, as some customers will still need more information. This is not an important data point since the preference was consistently over 90%.

Maximum Trust Premium: Some customers still prefer trusted providers even when prices are significantly higher. For example, even at a 100% premium (double the price), some customers (e.g., 20-28% for various professions) still prefer the trustworthy provider. This important data point indicates that some customer segments will still prefer you at higher prices.

Transferable Trust: This concept explores how trust can be transferred from one context to another. It can be inbound (how previous positive reviews or recommendations affect new customers' decisions) or outbound (the likelihood that satisfied customers will recommend the provider to others). Research indicates that references from previous customers hold significant weight in building new trust.

Application Across Professions

I applied the Trust Premium model to various professions, including financial advisors, insurance agents, lawyers, and accountants. While the specific values of trust preference and trust premium vary slightly among professions, the overall trends remain consistent. In a recent survey, I polled small business owners in a position to hire lawyers and accountants:

• Trust Preference: Lawyers—90.6%, Accountants—92.9%.
• Trust Premium: Lawyers—32.7%, Accountants—34.6%.
• Maximum/Marginal Trust Premium: Lawyers—21%, Accountants—26%.
• Inbound Transferrable Trust for both was between “a little more” and “more” (how impactful inbound transferrable trust was, such as recommendations, reviews/ratings, and references, in choosing one over the other).
• The Outbound Transferrable Trust for both was between “likely” and “very likely” (how likely they are to Recommend, provide a Reference, or write a Review for the provider).

The numbers were very consistent between the two professions.

Want to know more? Listen to the full podcast episode: https://podcasts.apple.com/us/podcast/s14e4-expanding-the-trust-premium-insights-for/id1569249060?i=1000663081084