In the 13 years since Netscape’s first browser made the Internet widely popular, the Web has drastically altered the relationship between consumers and businesses. Consumers now feel both empowered by the amount of information at their fingertips and more skeptical about businesses.
The result is that “trust and reputation are more important in a wired world,” according Dov Seidman, founder and CEO of LRN, a business consulting company. In his book How, Seidman says that we have entered the Age of Transparency, where anyone can find out anything about you, your products and services (accurate or not) 24/7.
Products and services are easily duplicated. “It’s no longer what you do that sets you apart from others, but how you do what you do,” he stresses.
Seidman recalls pre-Internet days when a consumer would shop one, or perhaps two or three, local stores before making a purchase. “But now that they can shop worldwide, and they do, visiting 10 or more Web sites…” he notes.
Consumers are looking for feedback and information on companies and their principals. In the new Age of Transparency, a recall, a service issue, a Better Business Bureau complaint are all stored forever electronically and readily available.
“With the democratization of information, anyone can publish whatever they think,” he notes, while “the standard of information verification has been lowered,” going from a professional class of journalists in the l980s and l990s to anyone with a keyboard.
In fact, a half-hour search on the Internet revealed a range of information on kitchen and bath companies and products, from a variety of sources. It’s word-of-mouth on steroids.
Angie’s List, for example, now has more than 600,000 members across 124 cities. It is billed as “a word-of-mouth network for consumers: a growing collection of homeowners’ real-life experiences with local service companies [including kitchen and bath remodelers]. The people who join Angie’s List are looking for a way to find trustworthy companies that perform high-quality work.” Note the word trustworthy.
On the Franklin Report (New York, LA, Chicago and now Florida), I learned that one New York design firm was “hard to get in touch with,” while another “always returned my phone calls.” On Yelp I learned which plumbers in San Francisco did or did not show up on time.
“As reputation becomes more perishable, its value increases. As it becomes more accessible, it becomes a greater asset – and liability,” Seidman warns.
“There is one area where tremendous variability still exists, one place that cannot be commoditized: the realm of human behavior, or how we do what we do. If you keep promises 99 percent of the time and your competitor keeps promises only 8 out of 10 times, you deliver a better customer experience and you win,” he says.
“It’s not that what you do is no longer important, it’s just that how you do it will get you the greatest leverage,” Seidman points out.
On Wordpress.com, I read postings with headlines “So Let’s Avoid Getting Screwed by the Kitchen Contractor” and “Another Kitchen Remodeling Rip-off Explained.”
No wonder fear is a foremost thought for consumers when buying a kitchen or bath; they are expensive projects, bought infrequently and not test drive-able.
Building trust is key. The emerging field of neuroeconomics – combining neuroscience, endocrinology, psychology, economic theory and experimental economics – tells us that trust has a biological basis. Trusting releases a hormone in our brains, oxytocin, which makes us feel good. And people who extend trust make more money than people who don’t.
One study found that buyers were willing to pay 8.1% more to a seller with a good reputation than to a seller without one, for identical merchandise.
Behaviors that generate this chemical reaction include greeting someone warmly, making frequent eye contact and demonstrating real concern about them, their family members and their passions. But you can’t fake it.