Customers don't trust businesses anywhere near as much as executives think, according to a new report from PwC.
While 84% of business executives think consumers highly trust their companies, only 27% of consumers do, according to the Big Four firm's
(The good news? The trust gap is
"Business leaders need to own trust, and they can move the needle by being clear, transparent and decisive around things that really matter to employees and customers," said Wes Bricker, PwC vice chair and U.S. Trust Solutions co-leader. "What we see in this period is an opportunity for business leaders to narrow the gap between how they see the world and how customers and employees are actually experiencing it."
What continues to hold true over PwC's three surveys, however, is that all actors involved overwhelmingly agree that trust in business is critical to boosting profitability. In fact, 91% of business executives agree that their ability to build and maintain trust improves the bottom line. Conversely, a lack of trust can diminish a brand's value, hurt financial performance and limit a company's ability to attract and retain talent.
However, trust levels aren't static. The survey found that the average level of consumer and employee trust in business has fallen by 2% from June 2022. Similarly, executives' average perceived level of consumer trust has fallen by 2% since June 2022, and by 3% for customer trust. According to Bricker, that mindset prompted PwC to focus on trust when it
"As we organized ourselves, we were very focused on trust being the currency of business, on building trust within society and solving important problems," said Bricker. "Trust is connected to corporate performance, and that's why almost all business leaders, customers and employees agree on its critical importance."
For example, more than half of employees say the way their company implemented layoffs has damaged trust. Interestingly, executives tend to overestimate this number but still don't implement enough trust-driving initiatives. For example, only 38% of businesses increased communications between managers and the remaining team members, while 58% of employees say that would build trust. Effective policies also include offering generous severance packages and being more transparent about the reasons for layoffs — with 57% of employees saying that both of those build trust.
When it comes to taking a stand on social issues, one out of two consumers and employees say companies should only take a public stance on social issues if they are related to the company's core business. When purpose and values align, it can foster company trust with consumers and employees, but adopting an unpopular stance can diminish it as well.
"The public expects a business' perspective to be tied with expertise or experience, and they want to understand the framework by which their point of view has developed," said Bricker. "Consequently, there needs to be transparency as well as balance between multiple stakeholders' voices, because it's hard to find a single right answer on many of today's challenging issues."
When it comes to driving trust for consumers, the vast majority of survey respondents name data privacy protection and great customer experience as the most important factors. As for employees, they say the most important trust-building actions are getting paid appropriately (80% cite it as very important) and protecting employee data (75%). However, there still seems to be a discrepancy between executives' perspectives and those of other respondents.
Two-thirds of both consumers and employees say it's very important for companies to disclose data privacy policies, but only 42% of organizations say they do. Over half of employees believe it is very important for companies to be transparent about hiring practices and operational risks, but only 40% disclose hiring practices and only 38% disclose operational risks.
'A team sport'
According to Bricker, improving communication between executives and their employees starts with considering trust to be a "team sport."
"This requires everyone across the organization to be aligned to understand the North Star of customer and employee experience, and these are not areas where words alone are going to be sufficient," said Bricker. "To build trust, we have to be candid to avoid overestimating where we are, back up our plans with action, and receive feedback on a day-to-day basis."
Over the next year, only 35% of executives say their company will conduct trust-building actions such as monitoring artificial intelligence model performance or protecting AI systems from cyber threats and manipulations. Additionally, less than half of executives say they're prepared for an AI algorithm risk or failure, and only 48% say they're making efforts to reduce the likelihood of such an event a high priority.
Among employees who reported in the survey that their company experienced a trust-damaging event in the past 12 months, 46% say they expected it. Through their day-to-day work, employees have firsthand insights into the potential blind spots that companies may face regarding trust.
So how do businesses build trust to create value? The report suggests building a stakeholder engagement plan, focusing on outcomes, preparing a crisis plan with trust in mind, and taking ownership of trust, among other solutions.
"If you'll look back over the past three years, society has gone through really challenging circumstances, with a war, a health crisis, an insurrection, inflation and supply chain issues," said Bricker. "There are a number of macro events that would suggest a fracturing world, but in the middle of that, there's one element that underscores how we move forward: It's trust. Once trust is in the room, we can achieve things that are bigger than anything we could achieve by ourselves."
