Trust as brand differentiator

Growing up in a family with my mother, sister, and granny from a young age influences your outlook on the world. As my dad died when I was 11, it was a woman only setup. No typical male or female chores, just chores. And as mom worked to support us and me being the oldest: a lot of chores on my plate indeed. With all the long hours' mom worked, it was mainly gran who raised us. Being a war widow, and having raised a family all by her self as well, she was a lady with strong opinions. l'histoire se répète. The way she raised us was in 2 ways. She would either look at you intensely in silence, and you were sure never to do what you just did or said ever again, or she would tell stories. The stories forced you to think, come to a conclusion about right and wrong. One of the stories was about her brother. He was a farmer in the small community we lived in. During the war, he exchanged homemade butter for bread from the baker. 3 pounds of butter in exchange for a 3-pound bread. One day the baker noticed that the pieces of butter looked smaller than usual. He weighed them, and indeed, it was less butter; certainly not the 3 pounds agreed. Start of a dispute. The baker got angry and involved the elders of the church, the usual way to solve conflicts. As the elders listened to both stories, they asked grans' brother the farmer if he delivered less butter. No! I always weight it every time. Maybe your weights are incorrect? Weights? I only have a scale, I never use weights. So the elder asked with amazement in his voice: then how do you check the weight of your butter? Quite simple really: I get my bread from the baker, it weighs 3 pounds. I then put the loaf of bread on the right side of the scale and balance it with butter on the left side. That way I know, it's always precisely 3 pounds.

One of the many stories of me gran that I use to explain concepts like trust. Trust is a difficult concept to grasp. And trust keeps popping up. In some recent work, we sketched the overall flow from customers in need of a new house, from initial conversations to signing the deeds and getting the mortgage. Long before they talked to a bank, long before the 'official' customer journey started, they talked to family, friends, and micro-influencers about the house. Location, number of rooms, the proximity of schools. Only after the house conversations, they started talking about the mortgage. Family home first, mortgage second. For the mortgage, the #1 conversation topic was trust. Trust of the bank. House first, mortgages second. Then trust over interest rate. Can I trust the advice the bank gives me? Trust as the main differentiator in deciding which bank to use for getting or renewing one's mortgage.

Banks realize they might well be in the late phase of the economic cycle indicated by an overall global flatlining return on tangible equity (ROTE). Tangible equity is used to evaluate a financial institution's ability to deal with potential losses. From flatlining global score to individual banks: some 60% of all banks are confronted with a ROTE that indicates they are not creating value at all, with most banks in Europe way down the list. Some of the components for their low individual performance are hard to change. Scale, location, market differentiation, or business model are mostly out of their control in the short and medium-term. With 60% of all banks generating returns below the cost of equity, a pessimistic view would be they missed out altogether. A glass half full view would be that “The best time to plant a tree was 20 years ago. The second best time is now.” With the short window of opportunity left in the late-cycle, there are still levers banks can use to affect their performance. Levers such as using AI for risk management. Lower cost levels by shifting all non-differentiating processes to industry utilities, like what the car industry did in the '90s. The 3td and most import lever is achieving revenue growth by combining deepening the customer relationship with improving customer experience. Relationships and experiences are both driven by trust. If trust is a crucial contributor to the topline, how do we capture trust in the new job descriptions we have to create for the customer-facing roles? Redefined roles that are the outcome of a new customer-centric operating model? The new style employees that need to deliver and improve the customer relationship and experience? How do we achieve trust, make it actionable beyond mere words?

Trust is a cumulative response, trustworthiness is what we have to judge. My grans' stories help to explain trust. As does the formula we use to define trustworthiness. Trustworthiness, in our view, is a simple formula. Trustworthiness = Alignment * Capability * Ethics. Alignment means we make suitable promises, work towards the same goals as our customers, not just our own goals. Capability means being able to keep those very promises. If the job description says driven by service; do the tools, the processes, the internal experience levels agreements allow the customer-facing employees to deliver on that aligned promise? Ethics really tells us if we care about people, both customers, and employees. Are we allowing our employees to be honest and transparent, do the right thing when no one is watching? Do we want to keep our promises? Combining the formula Trustworthiness = (Alignment * Capability * Ethics) with the story of my gran's brother can make the trust concept actionable. With less than 30% of all customers trusting banks, 60% of all banks not creating value, adding actionable trust to the mix might be the brand differentiator you're looking for in this upcoming economic downturn.

Recent blogs: Digital Donkeys / Storify your Strategy / Empower Experience / Conversation centers run point / Talk to me before the journey / Innovation Tour Guide / The science of experience / The impact of experience / Service before contact / The value is in the experience / On Trust / G?uiding Principles in customer focus / Work Life balance / Earlier blogs

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