Why Building Trust is a Key Competitive Advantage

Trust might just be the fundamental currency of our time. It’s foundational in almost every purchase decision. According to author and Oxford Fellow Rachel Botsman, trust is a confidence in the unknown, and in the case of a vehicle purchase, your dealership buying experience is “the unknown.”

Why exactly is trust so important? Can it truly create a competitive advantage?

Since the birth of Wall Street in the early 1800s, trust in commercial activities had been built largely via institutions. The facade of success, profitability, a large headquarters, global footprint or a nationally televised ad campaign acted as symbols of trust. Institutions also developed mechanisms to provide guarantees between strangers like contracts and insurance. Institutional trust is all about making confidence in the unknown possible at scale.

Before connected technologies like marketplaces, networks and platforms, institutional trust was effective and very much necessary. Unfortunately, there have been many, very public and visible corporate failures that have served to erode institutional trust in recent history. Think of the BP oil spill, Dieselgate, the Sony data breach, the housing bubble and subsequent stock market collapse. Hacks at Target, Yahoo! and Nike.

According to Edelman, only one-third of consumers trust most of the brands they buy from. Even trust in news media is on a steady decline.

In tandem with the decline in institutional trust, we’ve seen explosive growth in the adoption of marketplaces, platforms and related connected technologies.

It’s reasonable to assume that while institutional trust has been eroding for some time, it has likely been accelerated as consumers have found a preferred alternative: crowdsourced customer feedback. With a few clicks, consumers can find the unbiased, aggregate opinion of thousands of shoppers to help them make an informed buying decision. Consumers trust their peers.

What the brand has to say is no longer the only voice in the market.

Friends, family and review sites are trusted nearly three times more than advertising.

With institutional trust on the outs, we now operate businesses in what Botsman calls a world of distributed trust.

Social proof is powering multiple stages of the modern shopping experience (i.e., Dealership reviews on Google, Facebook, Cars.com, Yelp, DealerRater, CarGurus, Edmunds, AutoTrader, CARFAX and more). Reviews on Google are the number two local search ranking, meaning peer review content is a primary indicator of popularity and quality Google uses to determine which businesses to recommend.

Why? Buyers trust their peers first.

In today’s information-heavy environment, buyers need easy and reliable ways to make decisions quickly. Peer review content is that shortcut. Where institutions were once drivers of trust and credibility, technology has changed the landscape in the last 20 years. Trust is no longer derived from authority, rather it’s built through peer-to-peer communication on marketplaces, networks and platforms.

As a dealership, your ability to capture and distribute the opinions of your customers at scale is incredibly powerful. It will drive increased conversion and visibility in local search rankings. As we mentioned above, review content is significantly more trusted than traditional brand messaging content.

Dealers have the opportunity to shift their perspective and embrace all reviews — good and bad. Rather than fearing that one bad review could throw the business into a tailspin, dealers who understand that review platforms are the new channel for trust-building with prospects will have a competitive advantage. They’re also one of the most efficient channels for communicating brand value, simply because the potential customer will pay attention.

In a world of distributed trust, consumers sell to each other. The dealership’s role is to facilitate and mold the discourse around the brand to drive positive outcomes and build trust. In the end, the more willing your prospects are to trust your business, the more of an edge you’ll have over your competitors.