Eighteen years ago, I was at the think tank New Economics Foundation and we looked then at the commercial value of being trusted as a business. We found some impressive gains to a number of brands who were consistent at translating trust into customer and workforce loyalty. But as a whole, the field of business saw trust as something to take advantage of, rather than something to build.
In work led by my colleague Alex MacGillivray, we compared data then (2000) with eighteen years previously and found that the proportion of people who believe that companies are fair to consumers was down from 61% to 44%. It was as if to get on in business was seen as getting one over on your customers.
From a customer perspective, if you were trusting, renewing insurance or sticking with mortgage deals for example, then the result tended to be that you got a worse deal. The great withdrawal of consumer trust in UK business is sad to see but it has been rational given the way that business overall has behaved.
Today, we updated the research, repeating the same survey questions of 1983 and 2001. This shows a continuation in the trend away from trust in business. Just over one in three people (36%) now believe that most companies in the UK are fair to consumers.
At the same time, some businesses retain high levels of consumer trust. Over six out of ten people (62%) surveyed trust co-operative businesses, such as The Co-op Group or Arla, which are owned by their members who all have a say in how the business is run.
This data follows on from last month’s Co-op Economy report, published by Co-operatives UK, which found that new co-ops are almost twice as likely as start-up companies to survive their first five years.
What are the drivers for this? Digging behind the headline, the results suggested that the strongest driver for whether people trust an individual businesses comes from it is a good employer. Customer service and value comes close behind. This suggests that the decline of trust in business is not that customers are losing out, but gaining as employees. They are losing out in both contexts. Over three out of four people (76%) now believe that big business benefits owners at the expense of its workers.
High street closures, falling profits and uncertainty around Brexit makes this an extraordinarily challenging period for British business, but it will be tougher still if the UK has indeed hit a new low in terms of consumer confidence in business.
The academic research on trust tends to recognise the value of when people turn down opportunities for short-term personal gain in favour of shared benefit over the longer-term. Action like this is good at building trust, because it has a proof point. Over time, the pattern of behaviour can be recognised as the expression of underlying values – and again trust can be rooted over time in the affiliation that comes with shared values.
It may feel that business can never be the good guy – or the good gal. But in a co-operative, this trust-building feature fits very closely two time-honoured commitment devices of profit sharing and giving a voice to those involved in the business.
It is no good for anyone for business to be cast as a perpetual baddy. It puts people off from getting involved themselves in enterprise, it puts people off as workers with the UK’s lower levels of engagement and productivity, it puts people off in terms of trying new products and services from good businesses trying to innovate.
Business can’t just be about investors. It is time for UK Plc, before it is too late, to learn to recast its relationship with customers and employees in a more co-operative spirit.