in , , ,

Why Brand Equity Rests On Building Trust With A Customer

Why Brand Equity Rests On Building Trust With A Customer

Dale Renner is CEO & co-founder of Redpoint Global, a leading software provider helping brands deliver revenue-generating, personalized CX.

Think for a moment about the deepest, most meaningful and most valuable relationships you’ve built in your life. What makes the important relationships stand out—whether with a partner, friend or family member—is that they are based on an in-depth understanding of the wants and needs of the other person. The more each invests in the relationship, the more mutually beneficial and sustained the relationship becomes. Each must receive value commensurate with the effort put forth. This is true of the relationships we build with friends and partners, and it is true of relationships between a brand and its customers.

Customers are loyal to brands that demonstrate an in-depth understanding, which tells them that a brand is putting in the effort to know and value them beyond a transactional basis. McKinsey’s “Next in Personalization 2021” report found that “companies who excel at demonstrating customer intimacy generate faster rates of revenue growth than their peers.” In the survey, 71% of “consumers expect companies to deliver personalized interactions,” and 76% become “frustrated when this doesn’t happen.” Furthermore, 76% said they are more likely to purchase from a brand that offers a personalized experience.

First-Party Data And A Personal Understanding

Building the type of in-depth understanding of a customer that drives loyalty is done the same way we build the important relationships in our daily lives: through listening to what they have to say. Customers leave signals every time they interact with a brand. This first-party data exists in any number of silos and channels across the enterprise. To build a deep understanding of a customer and meet expectations for a personalized experience, brands need to bring all the data together into a golden record or single view of the person that is complete, always up to date, accurate and available across all customer touchpoints and all in real time.

Part of what makes a meaningful personal relationship so special is that it seems natural and unforced. That is the payoff from having made the effort to learn about the wants and needs of the other person. A golden record accomplishes the same thing. By knowing everything there is to know about a customer, a brand can deliver a relevant experience that is always in the cadence of the customer. The experience is orchestrated around the customer’s desires, intent or behaviors throughout a customer journey, not centered around a product, service or the brand itself.

A First-Party Data Value Exchange

The more relevant and personalized the experience a brand provides a customer, the more data customers are willing to share about themselves. This exchange is built on trust. Just as we share more with people we trust in our daily lives, the same holds true for a brand keeping a commitment to protect and use a customer’s data only in a transparent and respectful way.

In a 2019 Harris Poll survey commissioned by Redpoint Global, 54% of consumers said they are willing to share more personal data with companies in exchange for a more personalized experience. And most Gen Z (72%) and millennial (70%) consumers said they are “very willing” to share their data for personalization purposes.

Yet, this voluntary exchange demands that a brand not violate trust. In the same survey, 88% of consumers said they are likely to switch brands if a company sells their data to other companies for marketing/advertising purposes without authorization. There is also an expectation for transparency, with 74% of consumers claiming that it is very important or absolutely essential that a brand reveal how their data is being used.

Build Brand Equity Through Trust

The good news for brands that establish and honor relationships with customers built on trust is that they will never lack admirers. First-party data is a fair price to pay in exchange for continued business with a brand that demonstrates a deep understanding of a customer with sustained relevance and a personalized experience. When a brand honors its commitments as to how it uses and protects customer data, the virtuous cycle continues, and the relationship deepens.

Think about the brands that you are loyal to. Are they the ones that offer the best price? Or are you more loyal to brands you have a relationship with—the ones that offer a high degree of relevance because they seem to understand you? In the experience economy, that personal understanding is closely tied to brand equity. Build and maintain trust, and brand equity follows. The winners will be the most trusted brands, earning more loyal customers.


What do you think?

4 ways digital transformation has changed how business is done

4 ways digital transformation has changed how business is done

How to create a return-to-office playbook for your IT team
