Turning transactions into trusted relationships

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The digital revolution has transformed consumers’ attitudes and behaviours. It has thrown open the door to choice and convenience, enabling individuals and businesses to buy and transact easier and faster than ever before.

But it’s also disrupted the way that brands interact with their users and buyers – removing face-to-face personal relationships and focusing instead on online or in-app experiences. This has left many businesses out in the cold when it comes to understanding, servicing and locking in their customers.

In this report, we examine why it’s time for transaction focused businesses like financial services and retailers to harness the ‘voice of the customer’ to create closer and stickier engagement with their target audiences.

It provides marketers and business decision-makers with unique insight into:

• The challenges of emotional engagement and the growing trust-gap

• Authenticity and its role in boosting loyalty and better experiences

• Why “trust-based” marketing methods work for finance and retail brands

• Real-life use cases showing the power of reviews in achieving strategic goals

Importantly, it highlights the deep connection between trust, reviews and loyalty, and reveals why a proactive approach to customer reviews is now central to retail and financial services success.

Technology has opened the door to choice and convenience, with buying online now easier and faster than ever before. While this is great news for consumers, it’s left transaction-based businesses facing a wave of disruption.

For a start, consumer loyalty has plummeted to an all-time low. Gone are the days when consumers shopped with the same company year on year. In today’s digital-first environment, switching brands has never been easier. According to research by Accenture Strategy, 77% of consumers said they retract their loyalty faster than they did three years ago. Meanwhile, a separate study by PWC found 32% of people would stop shopping with a brand after only one negative experience. It appears the luxury of second chances is over. In this new technological era, companies need to fight harder to acquire and maintain their customers.

So, how is this shift in behaviour impacting consumer decision-making? The answer might be surprising. Research by Grist and Trustpilot indicates that for a significant proportion of consumers, a brand’s honesty – particularly regarding its environmental or societal impact – is a key factor in their decision to purchase, even trumping price and quality. A staggering 93% of people said a brand’s honesty and transparency was important when buying products or services, showing that businesses cannot afford to exaggerate, greenwash or lie.

With honesty now a key factor, consumers are increasingly seeking third-party social proof to validate their purchasing decisions. In fact, 44% of those surveyed said they look to the opinion of others – whether via personal recommendations from friends and family, social media or user-generated review sites – before committing to buy a product or service.
In this fast-paced digital climate, it appears trust, honesty and transparency have become more important than ever.

The digital revolution has disrupted the traditional consumer-brand relationship by removing face-to-face interaction from the buying journey. As a result, consumers no longer feel an emotional connection with a particular company, which has made it harder for firms to build and maintain genuine trust.

But it’s not just the lack of personal engagement that damages trust. Current events can also influence buyers’ perceptions and trust in even the most famous brands. Trust in the financial services sector, for example, dropped considerably after the financial crash in 2008. More recently, a Trustpilot study revealed how the COVID-19 pandemic contributed to an 11% decline in global trust in 2020.

With global uncertainty looking set to continue, gaining consumer trust has never been more critical. After all, a business can have the best product or service available but if consumers don’t trust them, they won’t part with their cash. With this in mind, brands must close the widening trust gap and find a way to reconnect with consumers.

The digital era has brought a wealth of benefits for businesses, but it’s not without its challenges. As well as undermining trust, the lack of consumer interactions is making it harder to know what consumers want. In a survey by Mode, 55% of senior marketing executives spoke about restraints in collecting data and their struggle to choose rewards they know a customer will like.

The absence of real-time customer insights can also lead to ineffective marketing investment. According to research by Gartner, poor data quality is thought to be responsible for organisations losing more than £11 million on average per year.

So how can brands harness the power of digital, demonstrate transparency and gain better consumer insights? As we explore in the next section, user ratings and reviews have a vital role to play.

In a world with more choice and less loyalty, trust-based marketing is king. The digital equivalent of word of mouth, ratings and reviews are central to this approach. But exactly how and why do they lead to stickier engagement? Let’s explain.

Customer reviews are a great form of social verification, which is a primary motivator in the decision-making process. According to a report by London Research and Trustpilot, 64% of UK consumers say they’re ‘often’ or ‘very often’ influenced by consumer reviews when buying. In today’s uncertain times, shoppers want reassurance. They want to know which brands to trust before deciding to buy. Showcasing honest, unbiased reviews is the perfect way to demonstrate transparency and nurture trust. In fact, reviews are more influential in consumer decisions than a brand’s own marketing material – no matter how slick or expensive – and are second in building trust only to a brand’s website. Customers are the best marketers.

Reviews offer valuable insights into customers’ experiences, needs and expectations. Without this kind of feedback, it’s difficult to know what consumers want and how they feel about a particular product or service. Unlocking real-time customer insights can help brands to refine their marketing strategy so they can target consumers more effectively and stay one step ahead of the competition. Insights also enable them to improve their business operations and product/service offering, which is key to fostering consumer loyalty and ongoing business growth.

Embedding customer reviews and ratings through the customer journey can be one of the most effective ways to increase brand awareness and consumer engagement. With every positive review there’s the potential for more clicks, likes, shares and, crucially, increased conversions.

A study by Northwestern University found a product with just five reviews has a 270% higher chance of being purchased than a similar one with no reviews.

In certain markets, displaying reviews on a website can also increase the chances of earning Google’s coveted star ratings on organic search listings. Assuming the brand qualifies, not only will those shiny gold stars help attract more attention to their product pages, but they can also improve organic click-through rates by up to 35%.

Traditional finance businesses risk being cut-off from customers – through digital-first services and broadening ecosystems (thanks to PSD2). Failing to truly understand customer needs can lead to poor investment, bad decision-making and the wrong KPIs when it comes to measurement and service improvement.

Unsurprisingly, consumer trust in the finance industry plummeted after the financial crash in 2008. After all, respected brands that had lectured people on fiscal prudence were suddenly exposed and, in some cases, needed taxpayer bailouts.

Even today, years after the downturn, consumers still view finance-related brands with a large amount of scepticism and distrust. According to a joint survey by Trustpilot and London Research, consumers are 50% more likely to say that their level of trust in financial services providers has decreased over the last three years.

At the same time, advances in technology have paved the way for a fintech revolution that’s turned the industry on its head. The surge in tech-based finance companies (and perhaps a lack of consumer trust) is fuelling customers’ desire for an alternative to traditional finance services.

Unprecedented choice, coupled with declining consumer confidence, means established financial brands can no longer rely on their name to guarantee success. As a result, many finance businesses are turning to independent review and rating platforms to help them reconnect with digital consumers and win back trust in a sector that’s now dominated by technology.

And it’s easy to see why. In a Trustpilot survey, 61% of respondents said ratings were either ‘important’ or ‘very important’ when choosing financial services and products. Meanwhile, 75% of respondents agreed positive consumer ratings would make them more likely to become a customer of a bank, compared to only 9% who disagreed.

In a sector where consumer confidence, trust and honesty are paramount, customer reviews have become the go-to solution for finance companies around the globe.

Consumer confidence may still be fragile, but it’s not all doom and gloom. Here’s how a well-executed trust-based marketing strategy can help finance businesses to increase brand trust and reconnect with consumers.

1. User-content shows openness and transparency – Being transparent about services and business operations is crucial if brands want to earn customers’ trust. Showcasing impartial, genuine reviews – both good and bad – is one of the best ways to show customers there is nothing to hide.

2. Reviews create a new channel of dialogue – Engaging in consumer conversations can help to re-establish the personal connection between the brand and the consumer. By responding to reviews, brands can show they’re not a faceless corporation but rather one that’s actively engaged with their consumers and clients.

3. Highlight strengths (without the marketing hype) – Yes, a financial brand might be able to simplify their customers’ monthly payroll, but why should buyers take their word for it? A positive customer review, however, can reinforce a brand’s marketing claims without making them appear boastful or deceitful. Moreover, research by Hootsuite shows consumers are 2.4 times more likely to view user-generated content as authentic, as opposed to content created by brands.

4. Consumers favour brands that are willing to listen and improve – Of course, not all reviews and ratings will be positive. But that’s not necessarily a bad thing. Displaying negative reviews demonstrates businesses are willing to listen and implement improvements. In a Trustpilot survey of over 1,000 consumers, 25% of people said how well companies respond to criticism can help to transition them from detractors to customer advocates.

5. Become more customer-centric – Reviews provide financial brands with valuable real-time insights that they can use to improve customers’ experiences and, in turn, foster loyalty. Plus, understanding exactly what makes customers tick will help them to devise more effective marketing campaigns that resonate with their target audience.

Cloud-based tax preparation software provider, TaxSlayer, is among the many fintech businesses using online review platforms to connect with consumers and increase their ROI.

Partnering with an online review platform has given TaxSlayer access to real customer sentiments, which has enabled them to refine their marketing messaging and deliver more effective ad copy.

According to the team at TaxSlayer, “our customers are already talking about us exactly the way we want them to,” – and that helps them to cut through the noise in an era where consumers see right through slick ad and marketing copy.

But it doesn’t stop there. TaxSlayer says user-generated content has also delivered:

- 50% cut in acquisition costs when retargeting ads with review content
- 60% increase in click-through rates for Google Ads after earning Google Seller Ratings
- 500% increase in referral traffic from its customised review profile page

TaxSlayer is now using reviews to make better operational decisions and enhance customers’ experiences. What began as a marketing initiative has grown into an enterprise customer support initiative that’s helping to take customer loyalty to the next level.

Retailers are spending a large chunk of their acquisition and loyalty budgets on recreating the personal touch. From curated suggestions to content nurture campaigns, marketing is increasingly plugging the gap of the face-to-face assistant. The only difference is that the relationship is one sided and doesn’t deliver the feedback retailers need to make better decisions on stock, price, fit and targeting.

Whether it’s home and gardens, fashion or health and beauty, winning and keeping customers is essential to any brand’s success. But with so many online retailers now vying for shoppers’ attention, achieving and maintaining trust can be tricky. In a study by accountancy firm EY, 74% of UK consumers said they would now boycott a brand they didn’t trust.

Again, it seems reviews and ratings play a key role in building trust and increasing conversions. The Competition and Markets Authority estimates that reviews influence £23.3bn of UK consumer spending every year. It’s no surprise then that they’ve become a core part of any shopper’s online buying journey.

But trust isn’t the only challenge facing modern-day retailers. From adopting new online payment options such as buy now, pay later apps to exploring new online marketplaces and omnichannel shopping, brands are having to adapt quickly to changing customer expectations. And then there’s the exponential growth of social media and influencer marketing to contend with.

The most successful brands are those who use these developments as a springboard for future growth and expansion, while businesses that fail to adapt to the rapidly changing retail landscape risk being left behind.

In a world of increasing choice and declining trust, retailers need to adapt their marketing if they want to attract and retain modern consumers. For many businesses, user reviews are proving to be one of the best ways of reconnecting with jaded and ad-weary customers – and here’s why.

1. Reviews build trust and credibility – We already know consumers trust user-generated content a lot more than traditional advertising. If retailers want to reconnect with shoppers, building brand trust and confidence through consumer reviews is an ideal place to start. What’s more, retail brands that use recognised third-party review platforms are seen as more credible and trustworthy because shoppers can be confident the reviews haven’t been edited, falsified or even deleted by the retailer.

2. Reviews allow brands to engage with buyers – Shoppers don’t just leave online feedback for the company to see – they expect brands to respond and engage with them. According to one Trustpilot consumer survey, 61% of consumers expect a company to publicly comment on their feedback. While it’s not quite the same as an in-store conversation, responding to reviews is a great way to engage and collaborate with shoppers in the digital age.

3. Feedback can help brands better understand their customers – Online reviews provide valuable insights that can help brands understand their customers’ needs, wants and expectations. They can then use this data to identify gaps in their service, improve their business operations and deliver a better overall customer experience. They might even want to use feedback to inform future product designs and development.

4. Product reviews can address shoppers’ wider queries – User reviews can help retailers showcase elements of their products beyond the product description. Is it true to size? Does it fit in the boot of my car? Is it dishwasher safe? Brands that don't showcase product reviews can miss out on conversion opportunities because savvy shoppers will look for those answers elsewhere.

5. Reviews enable retailers to respond to complaints and fix mistakes – Some retailers shy away from negative reviews or immediately go on the defensive. But if they respond to negative feedback in the right way – offering practical solutions rather than just an apology – shoppers will appreciate their efforts and they’ll edge that little bit higher in the trust stakes. In fact, more than two in three people surveyed by Trustpilot said they wouldn’t shop with a company again if they weren’t satisfied with the company’s response to their feedback.

6. Reviews help to inform marketing campaigns – Retailers can’t expect to connect with their customers if their marketing isn’t striking the right note. Customer insights enable them to adapt and tailor their marketing efforts to their target consumers. Not only will their communications be more effective, but campaigns will deliver better ROI.

TechStyle Fashion Group, which runs JustFab, Fabletics, ShoeDazzle and FabKids brands, decided to engage with customer reviews in a bid to turn around damaging ratings.

The TechStyle business model received negative publicity when media outlets covered stories about members complaining they found it difficult to cancel their monthly subscriptions. Trustpilot reviews for its brands were in the ‘average’ range during this time.

To turn things around, the retailer increased its efforts to reply to reviews. The effect was immediate: FabKids managed to boost its ratings in just three weeks. By proactively seeking more reviews, it “opened the door” to those with positive experiences to share. And, by taking proactive action on negative reviews, it was able to enhance its operations and renew trust.

The group now has a policy of responding to every review within 48 hours, both publicly and privately. Feedback is now being used to improve all elements of the customer journey by uncovering pain points and more accurately determining customer expectations.

The exponential growth of digital services has transformed traditional consumer-brand relationships.

The lack of emotional connection between customers and brands, together with ongoing global uncertainty, is contributing to a visible decline in both consumer trust and loyalty. Even established brands can no longer rely on their name to attract and retain new customers.

It’s clear that third-party social proof and brand honesty are now key factors in a decision to purchase.

It’s no surprise that businesses are increasingly turning to user-generated content like reviews to demonstrate transparency, reassure potential buyers and, ultimately, restore trust in their brand.

Authentic customer reviews not only build trust they provide valuable insights into customers’ wants, needs and expectations.

Smart businesses are increasingly using this data to connect with consumers and improve their businesses including services, operations, supply chains and product lines. They are using them to engage, build relationships and enter into direct customer conversations that enable them to refine their value propositions and rethink their marketing campaigns.

In an age where trust, honesty and transparency have never been more important, reviews are one of the most powerful tools in any marketeer’s armoury.

With the digital revolution showing no signs of slowing, it’s the brands who wholeheartedly embrace trust-based marketing that stand to gain. The best way to turn transactions into trusted relationships is by capturing and sharing experiences – the good, the bad and the outstanding.

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