Business executives who assume their companies are highly trusted by consumers are overestimating their level of trust, according to a new survey from PricewaterhouseCoopers.
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The survey comes at a time when consumers are being stung by inflation and accusations of price gouging by companies, while many employees have been quitting their jobs in search of better pay, more benefits and greater satisfaction. PwC has been focusing on the concept of trust, having reorganized the firm last year into two broad business segments — Trust Solutions and Consulting Solutions — while also launching a strategy it calls “The New Equation” emphasizing the concept of trust (
“One of the most notable takeaways for me from this survey was really a jarring trust perception gap that remains among businesses in both their employees and to a larger degree consumers,” said Wes Bricker, vice chair and U.S. Trust Solutions co-leader at PwC, during a press conference Wednesday. “That is a finding that business leaders tend to overestimate how much their stakeholder groups really trust them and what actually drives trust. That trust gap can lead to adverse consequences, including lower employee retention rates and a negative impact on a company’s bottom line whenever they’re not executing as well with their products and services with customers.”
PwC found that 71% of consumers said they’re unlikely to buy from a company if it loses their trust, and of that consumer group, a vast majority (73%) said they would spend significantly less if a company lost their trust. That matches data from a similar survey last year from PwC on the ramifications of losing trust, in which 44% of respondents said they had stopped buying from a company due to a lack of trust.
“The cost of losing trust outweighs the benefits of gaining it,” said Mohamed Kande, vice chair and U.S. Consulting Solutions co-leader and global advisory leader at PwC. “Today we are seeing that consumers and employees will react negatively to a loss in trust rather than to a gain in trust because there are expectations about what business leaders and corporations need to provide.”
For employees, 71% said they’re likely to leave a company if they lose trust in their employer. PwC saw a similar trend in last year’s survey, when 22% of employees indicated they had left a job due to trust issues.
Consumers and employees rank “treating employees well” as one of their top priorities to earn trust, and it is overwhelmingly the No. 1 item for employees at 47%.
To avoid losing trust, PwC recommends business leaders should focus on areas like affordable products and services, and treating employees well — which employees and consumers prioritize — and then move on to environmental goals and larger societal issues.
“What should business leaders do? We believe getting the basics right is a starting point,” said Bricker. “Our latest survey results show that business leaders need to get those basics right if they want to avoid losing trust. If they don’t get the front edge of their businesses right, the rest doesn’t matter. Starting with areas like affordability of products and services gets to the consumer trust item. Another place to start is treating employees well, treating employees as customers. But then also having dealt with those front-line items, that enables business to move on to focusing on environmental goals and larger societal issues, which are important to other stakeholder groups as well, like supply chain partners and investors.”
Making products and services more affordable may be difficult, however, with inflation surging to rates not seen in over 40 years as the escalating cost of supplies and labor forces companies to raise prices and wages.
“It’s a really important circumstance that leaders find themselves in,” said Bricker. “Dealing with consumers who depend on affordable products and services in an environment where prices are generally on the rise. What we see leaders doing in that area is starting with transparency around value to ensure that consumers understand the value. They’re also looking at different ways of conveying that, whether it’s a different pricing structure or a different combination of goods and services. The advice that we see business leaders generally being careful about is not cutting corners. This is not a good time to cut corners and generally erode trust with consumers, employees and capital providers.”
Supply chain challenges are prompting companies to make difficult trade-offs. “This is one of the major issues that companies are facing today: diversification and finding the right suppliers at the right price,” said Kande. “This is not just a U.S. phenomenon. This is a world phenomenon. Everywhere prices are going up, so companies today are trying to keep prices as affordable as they can to the extent that there is no longer an impact on the margins of the company going forward, because then another stakeholder will come into the picture, the investors, and they might not be able to get away with it. One of the things we are seeing today is that companies will trade increasing prices for the right supplies, rather than compromising on the quality of the products and services that they have because today consumers can understand and appreciate that we have inflation and that prices might go up. Consumers will have expectations that quality will be maintained independent of the pricing.”
To build more trust with consumers and employees, businesses are focusing on societal issues such as environmental, social and governance (ESG) reporting and diversity, equity and inclusion (DEI) initiatives. However, both consumers and employees say their top two trust drivers are affordable products and services and treating employees well, according to the survey. Consumers’ top trust drivers were affordable products and services (34%), and companies treating their employees well (33%).
Employees’ top trust drivers were treating employees well (47%), and quality products and services (22%). Only 27% of consumers strongly agreed that companies that invest in social and racial equity were more trustworthy, while only 23% of consumers said that new climate risk disclosures would help companies build their trust as a customer. That was consistent with PwC’s findings from last year’s survey, when 45% of business leaders said they were implementing transparent ESG reporting — but only 19% of consumers listed it as a top driver of trust.
