I enjoy reading what Don Peppers and Martha Rogers write. In fact their point of view spoke to me in such a way that it called me to join up and become a part of The Peppers & Rogers Group, for a while, back in 2000. Don and Martha have published a new book Extreme Trust. In this series of posts on trust I am going to share with you, comment upon and explore topics that are addressed by Don and Martha in their book.
Does trust matter?
Why don’t you take the salesman at his word and buy what he is selling you? Because you have learnt that what is in the interests of the salesman, to make a sale and take our money, is not necessarily in your interest. Why don’t you accept the advertising put out by companies? Because you have learnt that advertising, as a whole, is not truthful – you know that it has been designed carefully, purposefully, to push your buttons so that you buy. Put differently you simply don’t trust the advertising.
Trust matters. Why? Because our lives are tied up with each other. Heidegger pointed out that the fundamental being of human being is being-in-the-world – we are not spectators in the stands, we are right there in the midst the world. Who is there right with us and an essential component of the world? Our fellow human beings! Our experience of living and how our lives turn out depends on how we conceive of one another (selfish, co-operative, selfless) and how we treat each other (help one another, look out for one another, indifferent towards one another, exploit one another). Whether we trust one another or not matters, what we trust another with or not matters, who we trust and who we do not trust matters.
How will you compete against the likes of USAA?
Don and Martha start Extreme Trust by sharing a great story and asking a powerful question that gets to the heart of the matter. Let’s start with the story. It is about USAA a financial service company that consistently comes out as the most trusted financial services organisation in the USA. The culture at USAA if based on a single yet profoundly powerful statement: treat the customer the way that you’d want to be treated if you were the customer.
After the first Gulf War (1991) USAA sent out refund checks to several thousand “members” (customers). Why? USAA figured out that men and women (armed forces) serving overseas weren’t driving their cars in the USA, suspended the premiums for those months, and sent out unsolicited refund cheques when these men and women got back to the USA. USAA did not have to do this and no-one asked them to do it. How did this turn out? Nearly 2,500 of these refund cheques were sent back to USAA by grateful customers who told USAA to keep the money and simply be there “when we need you.”
Now, here is the question that Don and Martha pose: “How will you compete against a financial services institution that customers love so much they sometimes refuse to accept refunds and are loyal into the third generation and counting?”
What makes USAA (and other companies like USSA) so different from competitors?
I have repeatedly asserted that most of what passes for customer-centricity is simply a sham. Specifically, the philosophical base, the moral grounding, the fellow feeling, that is necessary for customer-centricity to show up as customer-centric, in the eyes of the customer as a moral being is absent. This is what Don and Martha say on the matter:
“Most businesses and other organisations operating today think that they’re already customer-centric and they are basically trustworthy, even though their customers would disagree……. Being “trustworthy” is certainly better than being untrustworthy, but soon even “trustworthiness” won’t be sufficient. Instead companies will have to be trustable.
..trustability is a higher standard still. Rather than working to maintain honest prices and reasonable service, in the near future companies will have to go out of their way to protect each customer’s interest proactively, taking extra steps when necessary to ensure that a customer doesn’t make a mistake, or overlook some benefit or service, or fail to do nor not do something that would have been better for the customer”
In short, USAA and companies like USAA (Amazon, Zappos, Apple, Google…) are trustable and as such they practice are built on the three pillars of trustability.
The three pillars of trustability
According to Don and Martha (in Extreme Trust) the three pillars (they use the term ‘principles’) of trustability are:
Do the right thing. Essentially this is about the distinction between ‘good profits’ v ‘bad profits’. Doing the right thing involves giving up practices (like exploiting customers) that generate ‘bad profits’. And it involves coming up with a business model that generates ‘good profits’ by creating genuine value for customers by aligning with the needs and interests of customers and getting a fair return in exchange. Doing the right thing lies in the realm of leadership and strategy.
Do things right. This is all about operations and operational excellence. It is about the domain of management and concerns itself with functions, processes and details so that you make it easy for your customers to do business with you across the entire customer journey and generate the right kind of customer experience at each touchpoint that matters.
Proactively. In Don and Martha’s words “Knowing that a customer’s interests is not being well served and doing nothing about it is untrustable. Not knowing is incompetent…. A company might be scrupulous in its ethics, completely honest in its brand messaging, and highly involved in tracking its customer satisfaction, but will it be proactively watching out for its customers interests? If it wants to succeed in the age of transparency, yes.
What gets in the way of being a “trustable” enterprise?
Why aren’t more companies, even most companies, like USAA, Apple, Amazon, Zappos and the like? This is a domain I have tackled several times and I say it is addiction to ‘bad profits’. What do Don and Martha say?
“The fact is that far too many businesses still generate substantial profits by fooling customers, or by taking advantage of customer mistakes or lack of knowledge, or simply by not telling customers what they need to know to make an informed decision.”
Why become a “trustable” enterprise?
Don and Martha are clear that companies don’t have a choice – the tide has turned, customers have the power, and by wielding this power customers will force companies to become “trustable” or die. This is how they put it:
“.. lots of traditional, widely accepted, and perfectly legal business practices just can’t be trusted by customers and will soon become extinct, driven to dust by rising levels of transparency, increasing consumer demand for fair treatment, and competitive pressure…… Things that companies, governments, and other organisations never meant for people to know they will know.”
“Transparency will increase because of technological progress, and progress is inevitable. It cannot be avoided or slowed down.….. As important as our social nature is.. social media and other interactive technologies have injected it with steroids.”
What is my take on this?
My thinking and philosophical orientation is in line with that being shared by Don and Martha in their new book Extreme Trust. As such it is no surprise to me that I am enjoying reading it. Nonetheless, there are areas in which I find that I am not in agreement with Don and Martha. They make the distinction between “trustworthy” and “trustable” and in my world that occurs as contrived.
In my world you are either pregnant or you are not pregnant you cannot be half pregnant. In my world, either I can trust you because I know that your care for me and are looking after my interest or I know that I cannot trust you. In my world most companies do not merit my trust – I, the customer, simply show up as a wallet to be emptied. And then there are companies that I do trust because they have done the right thing. How does the right thing show up as the right thing in my world? When the company takes a course of action that leaves me better off and it costs the company money. When I hear about what the company is doing to contribute to a ‘good world’. When I hear about the postive experiences of other customers.
I am 100% in agreement with the power of transparency. The potential for the kind of disruptive change that Don and Martha are speaking about lies in us wielding technologies that unconceal that which has been concealed from us. Great example in the UK are the MPs scandal. Once UK politicians used to lecture the world on honesty, moral uprightness and look down on less developed countries on the account of their corruption. For many years the UK politicans got away with being corrupt and then the bubble burst. UK politicians are not in a place to lecture anyone. Another example is Rupert Murdoch and the News of the World phone hacking scandal. For many years Rupert, some would claim, was the Kingmaker and pretty much got what he wanted. He even got the Conservatives to hand him BSkyB on a plate. Then came the disclosure that a dead girls phone was hacked and the moral revulsion of the ordinary folks forced a public enquiry on a reluctant prime minister, the closure of a newspaper and the abandonment of the BSkyB takeover.
In the next post in this series I will share more of what I learn as I progress reading through Extreme Trust. I will conclude the series of posts with a review of the book as a whole so that you can decide if you want to read it for yourself.