You’ve heard the saying, “you can lead a horse to water but you can’t make him drink.” In many ways, the path to building trust is very similar. You can’t make people (your clients or prospects) trust you (or your company, or your brand), but you can pave a path to trust.
In the business context, trust is the belief and probability that a company will behave in certain ways. Trust is hard to gain, easy to lose, and best pursued indirectly. You may be familiar with Cogent Syndicated’s drivers of consideration analysis, and have seen the prominence of the attribute “a company I trust” grow over the years to become a key driver, if not THE key driver, of consideration among many of the markets we study. Essentially, a firm needs a certain level of trust to even be considered—never mind to actually win business. Trust is simply required to be competitive.
Oftentimes we see firms swayed by the allure of innovation, thinking that new innovative products will drive the most growth. But I cannot stress enough the value of consistency—consistency of experience, consistency of performance, consistency across a multitude of dimensions. That is the single most important thing you can demonstrate to gain trust, which helps you earn consideration and gives you a chance to win new business.
Cogent recently presented our clients with the results of a three-pronged analysis on trust—one of the most in-depth statistical analyses on trust in the wealth management industry. I’m going to highlight one piece of that analysis here: how to build trust over time.
As the foundation of this analysis, we were able to leverage our incredibly rich dataset of financial advisor research that contains monthly results going back to 2013. We established longitudinal models to identify the biggest drivers of trust over time as well as the point in time in which perceptions begin to impact trust, and are, therefore, the strongest predictors of trust. The specific datapoints we used in this analysis were our descriptive brand imagery attributes, in which advisors are asked which brands, if any, they most associate with a battery of different characteristics.
We ran the different attributes we had relating to trust through our models and looked at them one month back, two months back and then three months back to see which models offered the strongest predictive results. This enabled us to pinpoint which attributes, when perceptions are strong, build trust over time.
Naturally, the presence of trust in previous months is predictive of trust at a later period. This is evidence that trust is durable. It lasts. If you are fortunate enough to gain trust, you can reap the benefits for an extended period until it’s disrupted.
But when we remove trust itself from the analysis, we uncover some underlying components that lead to trust. And this is the key point—if you haven’t already earned advisors’ trust, these are the levers you can pull that will help you earn that trust in future months.
In the ETF market, which is still relatively young in the product life cycle, the components that build trust are quality global product offerings (one month prior) and consistent performance (one AND two months prior). Consistent performance, in a sense, pays you twice and has somewhat of a compounding effect. With regard to the other attribute, quality global product offerings, the key word is quality. Quality and consistency overlap significantly in advisors’ minds and each help pave a path to trust.
When it comes to mutual funds, which is a more mature market much further along in the product life cycle, we again found that trust in previous time periods is predictive of trust at a later time. But when we remove trust from the longitudinal analysis, we find the next level of insight. As was true with ETFs, perceptions of consistent performance and global product offerings (from the prior month) are predictive of trust for mutual fund providers. But there are some important differences in this model when compared with ETFs. The added dimension of reliability, which is very similar to consistency—is a strong predictor of trust one month, two months and three months prior. Reliability essentially pays you three times over.
In addition, we uncovered a three-month lag in being perceived as a leader in alternatives and/or fixed income. This means that you don’t get immediate credit for these capabilities. It takes a while for advisors to realize (and believe) that these are important dimensions of your brand. That’s not to say you shouldn’t emphasize these offerings, but you need to be patient and recognize that it takes time (three months, in fact) for the trust payoff of these capabilities to surface.
This is a reminder that trust is built over time—always. There is no immediate fix to building trust. To build and strengthen trust you have to stay consistent in your messaging, your advertising, your sales outreach and your products. The reliability aspect is key, particularly for mutual funds. You need to deliver a consistent, repeatable experience, earned, paid or otherwise. For ETFs, the first purchase is a leap of faith. ETF providers can all make a claim of quality. But with experience over time, advisors will judge whether that claim, backed by performance, proves true.
All this is to say that if you’re patient and consistent enough, the horse will eventually drink.
Want to know more? Watch a replay of our latest webinar or send us a note to learn how we can help you find the right levers to pull to build, strengthen and harness trust in your brand.