I plead guilty to enjoying a cold beer or two, and I’ve watched with amazement as the decade-long bull market in the craft beer industry shows no signs of abating.
Most businesses today consider themselves to be trustworthy, and by yesterday’s standards they are. But by tomorrow’s standards, trustworthy won’t be nearly good enough. Not even close, say Don Peppers and Martha Rogers in their new book, “Extreme Trust: Honesty as a Competitive Advantage.”
Technology is ushering in a world of increased transparency, Peppers and Rogers argue. “Things that companies, governments and other organizations never meant for people to know, they will know. Any business that fails to prepare for this new reality will soon be driven out of business by rivals who figure out how to do a better job of earning the trust of their customers.”
The authors have coined the George Bush-like term “trustability” to encapsulate this new form of Extreme Trust. They define trustability as “proactive trustworthiness.”
Trustability already has eked into some businesses marketing strategies; it will be a best practice before long, they predict.
“Even if it were to cost billions of dollars in real money, trustability is still going to become a dominant characteristic of business competition, because the rise in expectations with respect to trust and trustworthiness is being fueled by the steady, irresistible drumbeat of technological progress,” they state. “The world will become ever more interactive and transparent, and competitive pressure will compel companies to adjust their business models to be more trustable.”
The key to understanding trustability as a competitive advantage is recognizing that many of its economic benefits — increased customer loyalty and referrals, for example —don’t come immediately. Unfortunately, the authors say, companies’ tendency to focus on short-term profitability produces untrustable, self-destructive behavior.
Not only is technology driving trustability, but the authors hold up high-tech giants Google, Facebook, Amazon and more as companies that from their origins placed long-term customer satisfaction above short-term financial gain.
“The overall conclusion of our research is that although the financial benefits of earning the trust of customers may or may not show up in current-period results, there can be little doubt that trustworthiness and its higher standard, trustability, have the potential to return significant benefits over the long term,” say Peppers and Rogers. They promise more research to come, and invite readers to check for updates and future studies online at trustability.com.