Extreme Trust:

Honesty as a Competitive Advantage

By Don Peppers & Martha Rogers, Ph.D.

As new technologies streamline our social interactions the standard for what constitutes trustworthy behavior is increasing. Many traditional, widely accepted, and perfectly legal business practices – put together before the current level of interactivity and transparency – can no longer be trusted by customers, and will soon become extinct, driven to dust by the competitive pressure of increasing consumer demand for fair treatment, empowered by social networking.

  • Mobile phone carriers profit from customers signing up for more expensive calling plans than their usage requires, and from roaming and data services accessed by accident.
  • Retail banks make a substantial portion of their operating profit from overdraft charges and other fees assessed for what are usually just simple customer errors. (In fact, many standard bank processes are explicitly designed to encourage overdrafts.)
  • The overwhelming majority of companies even today don't allow customers to post product or service reviews on their own Web sites.
  • To credit card companies, a marginally sophisticated borrower who can never resist spending, rolls his balance from month to month, and often incurs late fees is considered a most valuable customer. The common industry term for a credit card user who dutifully pays his bill in full every month is "deadbeat."

At its most basic level the concept of trust can be understood in terms of two qualities: competence and intent. If I want you to trust me, then I have to convince you that I am competent to be relied upon and that my intentions are good – that is, that I have your interests in mind. Another way to say this is that trust involves doing things right, and doing the right thing.

But technology has now changed the landscape of competition so much that a new, more extreme form of trustworthiness will be required in order to be successful. Simply doing what you say you're going to do and charging customers what you say you're going to charge them will no longer be sufficient. Instead, businesses will be expected to protect the interests of their customers proactively–to go out of their way, commit resources, and use their insights and expertise in such a way as to help customers avoid making mistakes or acting against their own interests simply through their own oversight.

We've coined the term "trustability" to encapsulate this new form of Extreme Trust, and what we mean by trustability is very simple: "proactive trustworthiness."

For instance, if you order a book from Amazon that you already bought from them, they will remind you before they process your order. Same with iTunes. It wouldn't be cheating for Amazon or iTunes simply to accept your money, thank you very much. God knows, most retail banks certainly would. A retail bank might actually go out of its way to encourage you to make this mistake, the way they might encourage you to overdraw your account.

Trustability – as opposed to mere trustworthiness – requires that a company do things right, and do the right thing, proactively.


Doing things right

Doing the right thing


The demand that future customers will make for genuine trustability in the companies they deal with will have a dramatic impact on the structure, operation, and management of businesses. Managers will need to think much more clearly about balancing a firm's short – and long-term economic interests. Untrustable businesses squeeze every last penny out of each immediate financial period, while trustable ones recognize that customer trust is a highly valuable–and measurable–financial asset, so they place more emphasis on balancing the short-term revenue from customers with the long-term value of their customers, their brands, and their reputation in the marketplace. The problem is that a great deal of money today is being made by not respecting customer interests. So the economic consequences of trustability are not going to be trivial and will require deliberate balance of short – and long-term success.

Then there is the problem of information itself – both its importance to a business and its rapidly increasing volume. Even today, it's difficult for many businesses just to apply the scientific method in their business decision-making, and this problem is only going to get worse as the volume of data – particularly unstructured data – explodes. A trustable business is one that will ensure the information it conveys to customers is both objective and accurate, and it will apply the same criteria when using information to make its own decisions.

One final point: In the hyper-interactive future the central role of basic competence can hardly be over-emphasized. Companies will have to exhibit not just product competence – price, quality, production efficiency – but also customer competence. The world may be less manageable or predictable than it used to be, but if you want to be trustable, you still have to be able to do the basics right, which means you also have to have strategies for dealing with mistakes and recovering from a poor product or service execution. And every day, you have to make it easy for customers to do business with you.

New technologies are rapidly wiring the human race together, connecting everyone with everyone, making interactions among people more and more efficient. And because of the role that trust and trustworthiness play in how we interact with others, as interactions increase in both speed and volume the role that trust plays is ever more important, for three basic reasons:

  1. Trust makes interactions more efficient, reducing the time and energy required to communicate;
  2. Trust is one of the most important filters for deciding what information, messages or interactions deserve more of attention; and
  3. The increased transparency generated by more widespread interactivity raises the cost of hiding the truth.
  • Extreme Trust Book Read the 1st Chapter

    How your company can stay competitive in a world of total transparency

    With their first book, 1993's The One-to-One Future, Don Peppers and Martha Rogers, Ph.D. introduced the idea of managing interactive customer relationships, long before the Web and social networking made it standard business practice. In this their 9th book, Extreme Trust, they look to the future once again, predicting that rising levels of transparency will require companies to protect the interests of their customers and employees proactively, even when it sometimes costs money in the short term.

Excerpted from Extreme Trust by Don Peppers and Martha Rogers by arrangement with Portfolio Penguin, a member of Penguin Group (USA), Inc., Copyright © 2012 by Don Peppers and Martha Rogers