The leverage of trust in business

The trust that Zappos has cultivated has not only driven high repeat purchase rates but also significantly reduced the costs associated with customer service and churn
Tariro Manamike

“Trust is the foundation of any team. Without trust, there can be no collaboration and without collaboration, there can be no success.” — Patrick Lencioni.

How many times have you engaged the services of a provider whom you had a gut feeling about, yet ignored your instincts and proceeded with the deal anyway? Only to think to yourself later, “I should not have done business with them.”

At the core of this issue is that they failed to deliver, you lost trust, and consequently, you lost money and time. This common scenario underscores the pivotal role of trust as leverage in business communications.

Here’s a little story on trust . . .

The sun cast a golden hue over the city skyline as Emily adjusted her laptop screen, preparing for her virtual meeting. As the chief marketing officer of a rapidly growing tech firm, she knew the importance of today’s presentation.

A potential partnership with Orion Enterprises, a global leader in AI technology, was on the line. Her boss, Tom, the CEO, had repeatedly emphasised one point: “Trust is our leverage.”

You could almost hear him say it with the gravity of a superhero cape billowing in the wind.

The meeting began and on the other side of the screen appeared Mark, Orion’s COO, known for his sharp intellect and cautious approach. Emily started her presentation with the usual data, market projections and strategic fit. She could see Mark’s polite but impassive expression. Clearly, he had perfected the art of the poker face.

Then, she shifted gears. “Before I continue with the technical details, I would like to share a story,” Emily said, catching Mark’s attention. It was like flipping a switch from PowerPoint to Netflix.

“Two years ago,” she began, “we were in talks with another company for a significant project. Everything seemed perfect on paper. But there was one problem: we did not fully trust them. The communication felt forced, numbers were inconsistent, and there was a lack of transparency. We decided to pull out, despite the potential profits.”

Mark’s eyebrows raised slightly. Emily continued, “A few months later, we partnered with a smaller firm.

They did not have the same resources, but they were upfront about their challenges and transparent in their dealings. That trust became the cornerstone of our relationship. Today, they are one of our most reliable partners, and we have grown together exponentially.”

She paused, letting the story sink in. “What I’m saying, Mark, is that we prioritise trust over everything else. We believe that with mutual trust, we can overcome any obstacle and achieve far more together.”

Mark leaned back, a thoughtful expression on his face. “It is rare to hear such candidness in business discussions, Emily. Trust is indeed a crucial factor, often overlooked.”

The rest of the meeting flowed smoothly. Emily noticed a shift in Mark’s demeanour — he was more engaged, asking detailed questions and sharing insights about Orion’s vision and challenges. By the end of the call, it was clear they were on the same wavelength.

A week later, Tom walked into Emily’s office with a broad smile. “We got the deal with Orion. Mark mentioned that your story about trust made all the difference. It set the tone for a partnership built on mutual respect and transparency.”

Emily felt a sense of accomplishment. The anecdote about trust had resonated deeply, proving that in business communications, trust is not just a value but a powerful leverage.

Months later, at a tech conference, Emily and Mark shared a stage, discussing their successful partnership. Mark turned to the audience, “In our industry, technology evolves rapidly, but the one constant should be trust. It is the foundation that allows businesses to innovate and grow together.”

Emily nodded in agreement, adding, “When trust is leveraged in business communications, it transforms transactions into lasting partnerships.”

The audience erupted in applause, a testament to the universal truth that trust is, indeed, the ultimate leverage in the world of business.

The power of trust

Stephen M.R. Covey highlights in his seminal work, “The Speed of Trust: The One Thing That Changes Everything,” that trust is not merely a soft, social virtue but a hard-edged, economic driver. Covey argues that trust affects the speed and cost of transactions.

When trust is present, businesses move faster and at a lower cost. Conversely, when trust is absent, transactions slow down and costs increase. Covey’s insights suggest that trust is a critical component for any successful business strategy, directly impacting efficiency and profitability.

Amazon: The trust-driven growth machine

Amazon, under the leadership of Jeff Bezos, exemplifies Covey’s insights into trust as a critical business driver. From its early days as an online bookstore, Amazon has leveraged trust to build a global empire.

Its customer — centric approach, transparent pricing and reliable delivery services have fostered immense consumer trust. This trust has allowed Amazon to expand rapidly into various sectors — from cloud computing with AWS to grocery delivery with Amazon Fresh. By maintaining high levels of trust, Amazon not only speeds up transactions but also reduces costs associated with customer acquisition and retention. The result? A dominant market position and a valuation exceeding $1 trillion.

Zappos: Building trust through exceptional service

Zappos, an online shoe and clothing retailer, provides another vivid example of how trust can drive business success. The company is renowned for its exceptional customer service, including a generous return policy and 24/7 customer support. This unwavering commitment to customer satisfaction has earned Zappos a stellar reputation and deep customer loyalty.

The trust that Zappos has cultivated has not only driven high repeat purchase rates but also significantly reduced the costs associated with customer service and churn. Their focus on trust has translated into a strong competitive advantage and contributed to their acquisition by Amazon for $1,2 billion in 2009.
Philosophical and practical dimensions of trust

Robert C. Solomon and Fernando Flores, in “Building Trust: In Business, Politics, Relationships, and Life,” delve into the philosophical and practical aspects of trust. They argue that trust is foundational to any meaningful relationship and that it is particularly crucial in business contexts. Trust enables open communication, minimises misunderstandings and fosters a collaborative environment where parties work toward shared goals.

Patagonia: Trust through transparency and ethical practices

Patagonia, an outdoor apparel company, embodies the principles outlined by Solomon and Flores. By prioritising environmental responsibility and ethical sourcing, Patagonia has built a strong trust-based relationship with its customers.

The company’s transparent supply chain practices, commitment to fair trade and efforts to reduce environmental impact resonate with consumers who value corporate social responsibility. This trust has translated into brand loyalty and a competitive edge in the market.

Patagonia’s approach not only reduces misunderstandings between the company and its customers but also creates a cooperative environment where both parties share a common commitment to sustainability.

Google: Trust as a catalyst for innovation and collaboration

Google’s approach to fostering trust within its organisation and with its users provides another example of how trust enhances collaboration and drives success. Google’s open communication culture, emphasis on employee well-being and commitment to user privacy are integral to its business model.

By creating an environment where employees feel valued and where users trust the company with their data, Google has encouraged innovation and collaboration. This internal trust has facilitated the rapid development of new products and services, while external trust has bolstered user engagement and satisfaction.

The result is a company that continues to lead in technological advancements and maintain a dominant position in the digital market.

Real-world implications: When trust is lost

Consider the case of Volkswagen. The 2015 “Dieselgate” scandal, where the company was found to have manipulated emissions tests, resulted in a catastrophic loss of trust. Volkswagen faced billions of dollars in fines, recalls, and lost sales. This breach of trust not only tarnished their brand but also led to significant financial repercussions and long-term damage to their reputation.

Similarly, Wells Fargo experienced a massive trust deficit in 2016 when it was revealed that employees had created millions of unauthorised accounts to meet sales targets. This scandal resulted in substantial fines, legal battles and a loss of customer confidence, demonstrating how a breach of trust can erode a company’s foundation and lead to severe financial losses.

Building and maintaining trust

The importance of building and maintaining trust in business communications cannot be overstated. David H. Maister, Charles H. Green, and Robert M. Galford, in their book “The Trusted Advisor” emphasise that professionals can build trust with their clients by consistently demonstrating competence, reliability and genuine concern for the client’s interests. This trust becomes the bedrock of a successful advisory relationship, leading to long-term partnerships and business growth.

Peter Drucker succinctly puts it, “Trust is the glue of life. It’s the most essential ingredient in effective communication. It is the foundational principle that holds all relationships.” This quote encapsulates the essence of trust in business. Without trust, communication breaks down, collaboration falters, and relationships dissolve.

Practical steps to foster trust

1.Transparency: Be open about your processes, pricing, and challenges. This builds consumer trust.

2. Reliability: Consistently deliver on your promises. Reliable performance and innovation lead to referrals and positively impact the bottom line.
3. Ethical practices: Engage in fair and ethical business practices. Customer-centric policies create loyalty.
4. Effective communication: Maintain open lines of communication with clients and stakeholders. Your customers should not struggle to find information about your service.
5. Accountability: Own up to mistakes and take corrective action promptly. Lost trust can be regained this way.

Trust is the ultimate leverage in business communications. It accelerates transactions, reduces costs, and fosters long-term relationships. As illustrated by the successes of companies like Patagonia and the downfalls of those like Volkswagen, trust can make or break a business. By prioritising transparency, reliability, ethical practices, effective communication, and accountability, businesses can build and maintain the trust necessary to thrive in today’s competitive landscape.

Tariro Manamike is a seasoned media and public relations professional with over a decade of experience in broadcast journalism and strategic communication. She is passionate about human-centred design, business communication, and their impact on the bottom line. Tariro writes in her personal capacity and can be reached at tarimanamike@gmail.com-ebusinessweekly