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The economic thrust of the internet has evolved significantly in the last two decades. We’ve moved from the information economy, to the connection economy, to the sharing economy of today.
The sharing economy is an economic system that allows for the on-demand, peer-to-peer supply of products and services. From shopping and entertainment, to finance and transport, consumers are empowered by choice and convenience. Uber, Airbnb, and TaskRabbit act as poster-boy examples.
Mobile, AI, and big data play a part in the success of these disruptive organizations. But their ubiquitous adoption, and the backbone of the sharing economy, is more fundamentally based on trust.
Old Wisdom Prevails: No Trust, No Business
The importance of trust in business is nothing new, of course. Trust has always been the cornerstone of any commercial relationship.
When the world of business was mainly physical, trust could be earned by seeing, touching and talking to the vendor. As such, organizations could more easily control the consumer experience and direct the perception of trust. It was all that bit more tangible.
When banks first established themselves as the image of reliable, trustworthy institutions, they did so by constructing grand, impressive buildings in the middle of towns and cities. The very solidity of their structure was an ideal metaphor not only for their access to capital, but for their reliability and endurance through generations of customers.
However, in a complex mobile-first digital world, where advanced technology is part of everyday life, trust is harder to establish, and even more important.
Trust In A Mobile-First Digital World
Consumers today are obligated to place blind faith in the way companies use algorithms to deliver products and services. They can’t be expected to master all the deep technology on their devices, and business transactions are generally faceless. Consumers need to trust that organizations – and their technology – will do what they say and say what they do.
Furthermore, with ratings and review sites for everything, online communities, word of mouth at scale and publicly transparent two-way dialogue between organizations and consumers; the power has shifted. Consumers are now in the driver’s seat. They can direct, define, promote (or retract) the perception of trust – at scale.
Organizations leading the way in the sharing economy understand this. They know that trust is the most important currency today. They build trust-mechanics and trust-metrics into their products, their operations, their technology, and their marketing.
The Wake of a Trusted Digital Economy
Twenty years ago, it would have seemed unthinkable to stay in the home of a complete stranger instead of a hotel. Yet today, more than two million people stay in an Airbnb property every night.
Similarly, a decade or two ago it would have seemed surreal to shop, bank, or hail a cab just by tapping a screen. However, mobile was responsible for over $1 trillion worth of retail sales in the US alone in 2018, two billion people now use apps for their personal banking, and 14 million Ubers are hailed every single day.
The ultimate success of Uber and Airbnb is not based just on clever tech, lots of data, or consumer convenience. It’s more fundamentally based on trust. Consumers can rate and review drivers and hosts transparently. They feel safe getting into a cab and staying in a stranger’s home. And have faith that they will be charged a fair price for the journey or the stay.
Similarly for banking. If consumers don’t trust their money is safe as they transact from a mobile device, they wouldn’t do it, no matter how convenient it might be.
The digital economy is thriving because consumers understand, trust and value it. And building trust is not just the right thing to do, it’s also good for business. 95% of customers are more likely to be loyal to a company they trust, and 92% are more likely to purchase additional products and services from trusted businesses. So it makes very good business sense to put trust at the core of any business.
Digital Marketing is yet to catch up
In the wake of a trusted digital economy, digital marketing is trailing far behind.
Its foundations have been built on opaque, deceptive business practices, and questionable data collection and usage. Marketers have been forced to rely on non-consented ‘toxic’ data for years, and inadvertently practice rogue marketing. It’s no wonder therefore, that targeted mobile marketing annoys 90% of consumers, and 54% don’t believe that companies have their best interests in mind. Not the best way to build trust! Clever marketers know this, and are already responding.
A necessary, vital transformation in digital marketing is occurring. In part 2 of this blog, we’ll explore its far-reaching implications for both organizations and users.
Max Pepe, VP Marketing