Business leaders think they’re more trusted than they really are

Business executives who assume their companies are highly trusted by consumers are overestimating their level of trust, according to a new survey from PricewaterhouseCoopers.

The survey, released Wednesday, found that 87% of business leaders think customers highly trust their companies, but only about 30% of consumers do. In addition, while 84% of business leaders say employee trust is high, the percentage is far less when employees are asked, with 69% of employees saying they highly trust their employer. PwC polled 503 business executives, 2,508 consumers and 2,002 employees in the US from late April to mid-May.

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 (see story).

“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 US 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.”

Wes Bricker, vice chair and US Trust Solutions co-leader at PwC

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 that 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 US 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%.

Business leaders should get the basics right if they want to avoid losing trust, PwC recommends. They 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 social 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 focus on environmental goals and larger social issues, which are important to other stakeholder groups as well, like supply chain partners and investors.”

Businesses are focusing on social issues such as environmental, social and governance (ESG) reporting and diversity, equity and inclusion (DEI) initiatives as engines to build

trust with consumers and employees. 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 invested 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.

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,” Bricker said. “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,” Kande said. “This is not just a US 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.”

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