Sara Green Brodersen looks at the importance of trust in business.
In an increasingly complex world where technology has spurred
interaction between strangers, trust is becoming ever more
important. This is especially apparent in the sharing economy, but
the path to building trust isn't straightforward.
According to Pew Research, in countries where trust is high, crime and corruption is low.
Businesses with a healthy reputation perform better and hire better talent.
Leaders who are perceived to be trustworthy are deemed more successful.
With the rise of the sharing economy, trust is also becoming increasingly relevant between private individuals. Any online mediated transactions are governed by peer-reviewed reputation between individuals. If I have a positive experience sharing my car, my surfboard or my apartment with you, I will express this with a 5-star rating; likewise if my experience is equally negative, you will receive a lousy 1-star assessment.
However, before the sharing transaction takes place, the individual undergoes a longer process of assessing trust, as presented by a study from Warwick University. Let's take a closer look at the three level trust process:
First level - Trusting the concept
The first level of trust that needs to be fulfilled is to accept the concept of sharing. So if an individual is looking to book - let's say accommodation - they would have to accept that staying in a private home is a viable option over booking a hotel or rental apartment facilitated by a professional leisure company. Does it make sense for the guest to choose Airbnb, Love Home Swap or VRBO over the more traditional players? The trust, which this decision is based on, can be motivated by several factors, closely related to the general sharing economy motivators; financial, experience, environmental and social. Unlike the next two levels, this is hard to systemise.
Second level - Trusting the business
If the guest accepts the premise of staying in a shared home, the second level deals with the trust felt towards the company facilitating the transaction. Should the guest choose Airbnb, Love Home Swap or VRBO? Which company is better at making the guest feel safe if something goes wrong i.e. Does the company have insurance? What is their procedure for emergencies? Do they appear professional? This trust level is also heavily influenced by what others say about the company. For the travel and accommodation industry sites like TripAdvisor, hotels.com and Hostelworld. In addition, several government-bodies are exploring the introduction of an official trust mark for sharing businesses, to support the consumer's choice.
Third level - Trusting your peers
It's particularly interesting to observe the increasing importance of trust between individuals. For sharing economy interactions, the experience is dependent on the third level of trust between peers. So, if a guest decides to book through Airbnb, the choice of host will depend on the perceived trust of that individual. Several factors are at play, including communication, mutual connections, profile picture and, most importantly, reviews from previous guests. The peer-to-peer reviews will become an even more integrated part of our lives in the near future and include industries such as insurance, banking, recruitment, and many others.
The three level process is important to understand because if any of the trust levels are not fulfilled, the transaction will not go ahead. As a business, sharing economy startup or incumbent company, you have the opportunity to build stronger trust relations with your customers and users than your competitors or disruptors.
What's really key here is that trust should be an integral part of any company's DNA in ensuring reciprocal trust from the consumer - particularly for sharing economy marketplaces, but especially also in leveraging the opportunity to assess the third level of peer trust, since this is what makes the difference when creating a good experience.
Sara Green Brodersen, Founder & CEO of Deemly, will be continuing the discussion alongside fellow panelists Francine Heywood, Guestrevu and George Westwell, Cheval Residences Ltd. at the "Trust as a currency" panel debate at the Serviced Apartment Summit Europe in London, 13 July 2016.
Deemly is a reputation site which shows the trustworthiness of users by combining ratings and reviews from multiple sharing platforms. By leveraging your trustworthiness from one site to include more reviews and ratings, you can feel more trustworthy and safer and so will all the other users you interact with in the sharing economy, online and offline.