Much of the consumer journey is guided by trust. In the mind of the consumer, they need to trust the brand or store they are buying from, especially if they’re a new customer. Over time the customer can even show loyalty and be forgiving to the retailer or brand if it slips up. Retailers are always searching for ways to maximize loyalty because they know once they have it, it’s a powerful thing.
We’re going to explore the concept of trust in the buying process and how it relates to recommendations. Why do you trust the recommendations of your friends – or even celebrities – over people you don’t feel a connection to despite the data? To find out, we go back to the beginning: people.
RECOMMENDATIONS INFLUENCE THE GENERAL PUBLIC
The root of all trust is other human beings. This is precisely why salespeople exist, and at the end of the day when we’re on the phone calling for some sort of tech support we would rather speak to a person. According to Nielsen, 92% of consumers believe recommendations from friends and family over all forms of advertising. If you get a recommendation from someone you know – even if it’s someone you don’t particularly trust the credentials of – that has more weight to it than your average advertisement or piece of marketing collateral. When advertisers try to boil this down to a tactic, it’s called “word of mouth marketing.”
In a recent study, 64% of marketing executives indicated that they believe word of mouth is the most effective form of marketing. However, only 6% say they have mastered it.
At the simplest level, ask yourself who you would rather hear from- a company (albeit maybe in an attractive, glossy way), or your friend telling you that something is really worth the time of day? The liklihood is that it’s the latter, and when this is extended to ‘which of these communications would we be most likely to trust?’, the balance is likely to swing further in favour of the friendship. Forrester research reported that in the EU, 61% of consumers trust brand recommendations from friends, but 11% trust emails from companies and only 8% trust online advertising such as banners.
Once we’ve established the importance of trust in the buying process, we then must ask: har far can this go? Do acquaintances have the same value? What about co-workers? Or celebrities you don’t actually know on a personal level, except have a familiarity with? Most importantly, how about strangers, compared to the average advertisement? According to Business Week we only need to look to the explosion of review platforms over the past few years – Yelp, Urbanspoon, etc. – clearly demonstrates that word of mouth is still the most effective way to win new customers.
THE MOST EFFECTIVE RECOMMENDATIONS ARE PERSONAL
Now we enter the outermost layer of this process: online reviews made by people you don’t even know. All you assume about them is that they are real people just like you and go through the same things you do. There is no assumed bias for or against anything.
It is becoming more and more prevalent in our lives especially when it comes to making purchasing decisions. With 66.3% of participants admitting that they do, in fact, look at consumer review websites before making purchasing decisions, it is apparent that these websites and their content generated by users are well respected by consumers.
Positive reviews have a real, actual impact on purchasing decisions and reviews influence both attitude and the resultant actions of consumers. According to 2014 research from BrightLocal.com, “72% of consumers say that positive reviews make them trust a local business more… [and]…88% of consumers say they trust online reviews as much as personal recommendations.”
Humans are acclimated to assigning value and trust to people they know, and on the opposite end of the spectrum are advertisers and people they don’t know. Customer reviews rest somewhere in the middle, and these reviews to be viewed as opinions without bias from people like themselves. This can be evidenced at the anger or betrayal people experience if it’s discovered that a company is paying for positive reviews. When we feel that anger and betrayal it is because this is a direct attack on the trust that not only assigned but in many cases earned over time.
HOW TO USE RECOMMENDATIONS TO INCREASE SALES
The question now is: what’s next? Are people becoming more trusting in general, or are the platforms and technologies simply coming to a point where people trust them more? These are the issues you run into with recommender engines, but it is one of the most profitable ways to build trust. If a person glances down at a selection of recommended items and actually finds one they like, the instances of them checking that area will increase, like how you build up trust in someone else’s opinions. And like online reviews, you come to add value to this thing that becomes more like a person over time.
What we see the digital world attempting to do is maximize humanity; either by connecting people or creating resources that seem human in themselves. Recommender engines and other similar software are attempting to create environments that build up value through trust the exact same way people do it in real life, and while the road to acceptance is long we are fast approaching a state where the general public will fully appreciate the technology for what it is.