How to Build and Lose Customer Trust
(Episode 2 of 2 with Shalene Gupta)
Welcome back to another episode with Shalene Gupta, co-author of the book, The Power of Trust. In the last episode, we discussed how trust can empower our business. Today, we’re going to discuss ways we can build, lose, and regain trust.
We will cover the following key takeaways:
- Whenever we take a daily action, we can ask ourselves, “How can we build trust? With whom will this build trust?”
- The only sustainable long-term strategy is to build a company that people love.
- One of the common ways to lose trust as a company is through layoffs.
- As we hit roadblocks in our businesses, we should look for innovative ways to overcome them. If we make a mistake, there is almost always a way to fix it.
Building Trust Day to Day
As we discussed in the last episode, trust has four elements: confidence, motive, fairness, and impact. If we want to build trust daily, we should focus on these elements.
“It’s really just [about] evaluating what you need to do next on a day to day [basis],” Shalene said. Whenever we take a daily action, we can ask ourselves, “How can we build trust? Who will this build trust with?”
Lately, I have received auto-dialed, pre-recorded voicemail messages from marketers. They have really started to annoy me because they’re sent right to my voicemail and they aren’t personalized. Recently, I had one of these sales people contact me saying, “Why don’t you do this for your business? You should start broadcasting your message.”
I told him I didn’t want to do it because I don’t like it when people do it to me. Why would I do it to someone else? He responded with, “Well, this company and this company do it and it works really well for them. They’re getting great results from it.” But I think they didn’t ask the right question.
The question isn’t, does it convert a sale? The right question is, does this build trust or take away trust? Does it help build my relationships with my customers? In my case, I believed this action would take away trust from my customers, so I didn’t do it, even though it may have helped me gain an extra sale.
We have to be disciplined as companies. If a strategy is going to take trust away from our relationship with our customers, we shouldn’t do it, regardless of how it drives sales. The number of sales is not the deciding factor. The trust growth should be the deciding factor.
Shalene once worked for a bank in Kazakhstan. While she was there, the CEO realized that customers hated their company. He knew this wasn’t acceptable so he rebuilt his entire business to become loved. Rather than focusing on how he could make more money, he focused on how he could gain his customers’ trust.
It feels like so many business decisions are made based upon what makes the most profit, but that’s a very short sighted decision. The rubric we’re using there is wrong. I believe those companies often go out of business in the long-term as competitors arise. The only sustainable long-term strategy is to build a company that people love.
A Common Way to Lose Trust: Layoffs
One of the common ways to lose trust as a company is through layoffs.
“Layoffs are extremely destructive,” Shalene said. “When you lay off an employee, up to 20 years later, they’ll still trust businesses less than their peers that haven’t been laid off. Not only that, after you lay off employees, you still have the survivor and it turns out, they get incredibly disengaged and their performance goes down.”
The laid-off employees, and likely many of their friends and family members, lose trust in the company. The remaining employees may also lose trust because they feel more anxious, guilty, and have less job security. If it’s a huge layoff and it becomes public, it may even reduce the trust of our customers.
Then, once the company gets to a point where they need to rehire workers, it takes additional time and money to train new employees. By laying off workers, we lose a lot of internal talent we now have to make up for.
During COVID-19, many companies were forced to layoff workers due to decreased revenue and health restrictions. One great way companies went about this was through furloughs. Instead of layoffs, they allowed their employees to take a temporary leave, in which they were expected to return after.
Looking back on my career, there were a couple of times when I’ve had to do major layoffs in companies I’ve run. I look back at the most recent time I did that, and I lost so much credibility from the people I let go and from the people I retained. I ended up having to ultimately replace almost everybody at that company because of the credibility I lost from having to do that layoff.
We should do everything we can to prevent layoffs so we can retain employee trust. However, at the same time, we also don’t want to not get rid of the wrong employees. We may have an employee who is constantly late, misses deadlines, produces low-quality work, or doesn’t follow our company culture. When this happens, our trust and credibility may reduce if we don’t lay them off.
“If you have people who are being rewarded for not acting as part of the culture, what are you really doing?” Shalene said. “That fear of not wanting to have that conversation and not wanting to reinforce values when you’ve got a star performer bringing in the results, at the end of the day, it doesn’t take you very far.”
Early in my career, I also made this mistake. I did not let go of people soon enough. When you know it’s not going to work and you’ve done what you can to keep an employee, you likely have to let them go. When you keep that person that’s not a fit, you’re setting an expectation and losing credibility with the rest of the people in the organization.
We want to make sure our employees are aligned with our company culture. To do this, we could have personal conversations and lay out our vision in the very beginning. It would also be a good idea to create a performance plan and check-in with our employees to keep everyone accountable.
How to Regain Trust
The founder of a company in Japan that has advertisements sold a ton of shares in exchange for political favor. Newspapers tried to cover this up and it became such a big scandal that it was printed in school books. The company made a huge mistake, so how did they regain trust after it was lost?
They started to regain trust by focusing on creating a great product. While their customers trusted them though, their employees still didn’t. No one wanted to work for them because they didn’t want to damage their reputation. To help fix this, the company created flexible work options such as part-time options. The company recognized they couldn’t promise life-time employment, so they offered life-time employability. This way if an employee left them, they could make it so any company would want to hire them. This helped increase their employee trust.
Many entrepreneurs, when hit with a challenge to that extent, would have given up and the company would have folded. However, this company looked internally and innovated. They created a different system where they could differentiate themselves and regain trust. I’m just so impressed by that. That’s a lesson we can all learn as we hit roadblocks in our business creation. If we make a mistake, there is almost always a way to fix it.
Connect with Shalene
Thank you so much Shalene for sharing your stories and insights with us today. To learn more about or connect with Shalene:
- Connect on Twitter
- Visit her website at ShaleneGupta.com
- Check out The Power of Trust on Amazon
- Get a free ebook about passion marketing, and learn how to become a top priority of your ideal customers at PassionMarketing.com.
- Subscribe to Monetization Nation on YouTube, Instagram, Twitter, our Facebook Group, and on your favorite podcast platform.