Without trust, innovation is impossible. As we enter the Fourth Industrial Revolution, business leaders face a dilemma. How do they leverage the technologies that are driving customer expectations sky high, while people grow skeptical of how organizations are using such technologies?
With tools such as artificial intelligence (AI), robotics and the IoT, organizations can dramatically improve how people shop, communicate and work, transforming their quality of life. But people are increasingly worried about the extent of that impact, about how these technologies are being used, and about how this might affect their privacy, jobs, livelihoods and welfare.
Solving the dilemma depends on a company’s ability to convince its customers that it’s using technologies in responsible and trustworthy ways that will benefit them. The company needs to win customers’ trust. This is certainly possible, but it requires new ways of doing business.
This increasing distrust is a serious problem, because data fuels many of the new technologies underpinning the Fourth Industrial Revolution. If customers choose to withhold their data, everyone loses. Customers won’t get the improved services and experiences that AI and other technologies can make possible. Businesses won’t receive the productivity-boosting and revenue-increasing benefits. Even worse is the broader impact – how can a business continue to operate successfully without the trust of its customers?
Customers are already punishing companies that breach their trust. For example, 40% of respondents in Edelman’s survey said they had deleted at least one social media account in the last year due to lack of trust in how their personal information was being used.
That’s a startling figure, considering social media platforms are relatively hard to leave and replace. Customers are making a conscious decision to leave behind a network of friends or professional contacts – a network that in many cases has taken years to build. If this many people are walking away from social media, what does that mean for other businesses in more competitive markets, where it’s easier to switch to alternative products?
Furthermore, the consequences of breaching customers’ trust will become more severe as the Fourth Industrial Revolution gains momentum and businesses’ dependency on data grows. IDC predicts that the amount of data subject to analysis will surge by a factor of 50 in the nine years to 2025, to 5.2 trillion gigabytes.
Regaining customer trust is therefore essential. But it won’t be easy, given how products, services and the dynamics between customers and businesses have evolved.
In the early years of the American West, banks built the most impressive, solid building in town to engender trust. It signalled not only their access to capital, but that they planned on being present in the local community for the long haul.
During the Second Industrial Revolution, as production moved further from the point of consumption, the uniformity of factory-produced items such as the Model T Ford encouraged customers to infer that a Ford-branded car, or a McDonald’s-branded burger, was reliable and consistent, wherever you got it. Consumers began inherently trusting brands.
However, that brand trust is disappearing in the Fourth Industrial Revolution, as customers are being asked to trust how an organization uses algorithms, and how it provides services that are intimately tied to personal information and preferences. This has far-reaching consequences for companies, because it means trust is no longer about how customers view a brand. Trust is increasingly rooted in an organization’s actions, in how its values come to life through actual behaviours and societal impact.
The EU’s General Data Protection Regulation (GDPR) has introduced a new set of rules in response to the trust crisis. But rather than viewing it as a compliance burden, companies should see GDPR as a framework for gaining customers’ trust. It’s an opportunity to understand how a company is really using data, and how it can improve its use of data to benefit both the business and its customers.
GDPR forces organizations to be transparent about how they handle customer data. According to a Salesforce Research study, 91% of customers say they’re more likely to trust a company with their data if they are transparent about how it’s used. Furthermore, 79% of customers are willing to share relevant information about themselves in exchange for contextualized interactions, such as personalized offers before purchases.
So, customers are willing to trust an organization and share their data under the right circumstances. This doesn’t give businesses a perpetual license to use consumer data at will, but it does enable them to deepen their relationship with customers. It opens up the opportunity to say to each customer: “If you’re willing to share some relevant information about yourself, we’d be able to offer you these better, more personalized services”.
In other words, businesses really have to put customers first – not just in a physical sense by providing a good experience, but also in a more fundamental sense, by being open and honest with customers, and recognizing that their relationship must be built on mutual benefit and trust.
However, building trust in an organization is no longer just about how it treats people as customers. It’s also about the company’s values and how it contributes to the broader community.
Salesforce’s study found that around half of customers are more likely to trust a company that works to protect the environment, give back to the community, or foster diversity and inclusion in the workplace. According to Edelman’s survey, 74% of people expect CEOs to explain what their companies have done to help society, and 64% want CEOs to take the lead on change, rather than waiting on governments to impose it.
As the technology driving the Fourth Industrial Revolution – and the companies using it – have an ever greater impact on everyone’s lives, people expect business leaders to take on a bigger role in society than just running their companies. Businesses need to have corporate values beyond looking after the interests of shareholders. They must take responsibility for other stakeholders, too: their customers, employees, suppliers and communities.
Above all, this change needs to be genuine, and not just a PR exercise. Consumer trust is shifting from being inherent in a brand, to being a relationship between businesses, their customers and society as a whole.
It’s often said that “data is the new oil”. Instead, we’d argue that it’s trust that will decide whether businesses – and the Fourth Industrial Revolution itself – succeed.
At the World Economic Forum and Salesforce, we believe in the potential of the Fourth Industrial Revolution. Salesforce is a founding partner of the forum’s Center for the Fourth Industrial Revolution in San Francisco, a global hub that partners with governments, enterprises, and experts to maximize the benefits of new technologies for society.