Marketing Tea Party

A recent study looked at the economic impact of a customer referral program at a German bank. The researchers tracked roughly 10,000 customers, about half of whom were acquired through customer referrals, the other half from other marketing efforts. The researchers found that over a three-year period, when compared to other customers, referred customers had a higher contribution margin and retention rate. The authors claim that their findings:

“…provide the first direct evidence of the financial attractiveness of referral programs and also provide much-needed evidence of the financial appeal of stimulated WOM in general.”

My take: If this study persuades more financial institutions to deploy customer referral programs, that’s good.

But it really shouldn’t take a study like this — i.e., one that compares the economic value of referred to non-referred customers — to convince a bank or credit union to implement a referral program.

That decision is pretty simple (conceptually): If the cost of acquisition (i.e., the referral fee) is lower than the value (i.e., profit) generated by the customer, then a referral program should be launched.

The more difficult decision to make is figuring out how much to pay for the referral.

That’s where the potential value of the study is. In finding that referred customers have higher contribution margins and retention rates, the bank in question has a basis for establishing an appropriate referral rate. And for US banks, with the growing prevalence of rewards programs for not just credit cards, but for debit cards and other bank products, banks and credit unions have an opportunity to test paying for referrals with points, not just cash.

I was surprised, however, that the study didn’t look at the value of the referrer. It would have been interesting to find out if it’s the most profitable customers who are providing referrals.

Based on the consumer research I’ve done at Aite Group, I think that’s what they would have found. In defining and measuring customer engagement, we’ve seen that customers who provide referrals are more likely to intend to grow their relationship with their bank or CU than other customers. The act of providing a referral is a sign of engagement, and an indicator of intention to expand the relationship.

One question I have regarding the study is whether or not its findings are applicable to other banks. I can’t help but wonder: Are US consumers’ relationships with banks similar to German customers’ bank relationships? How did the bank in the study perform relative to other banks during the three-year period? Is there something about the bank’s other customer acquisition efforts that contribute to them acquiring a less-profitable customer through those channels?

Regardless of the answers to these questions, it seems like a no-brainer for a bank or CU to have a customer referral program.

Let me see if I can say this delicately. Although I think that every tweet from @pglyman is interesting and important, one of his tweets from the other day was especially interesting to me. Pete tweeted “I’ve been seeing the term Online Financial Management (OFM) used a lot these days. I like. Going to start using it more. Goes good w/ PFM.”

My comment back to Peter was that a number of folks that I’ve talked to recently use the label OFM to differentiate what they’re doing from PFM. Pete’s comment back was:

“PFM is limiting. The future of online banking is PFM, we just won’t call it that.”

Pete’s spot on: The future of online banking is PFM.

Problem is, there are a lot of people who think the future of PFM is online banking. And that’s not a good thing.

Picture a Maslow’s hierarchy of online banking: Towards the bottom of the pyramid is basic access to accounts: getting your account balances, transferring funds. Go another level up, and perhaps we can put online bill pay on that level. Other online services might be at another level up.

But until recently, that was as high as the pyramid went.  Banks (and CUs) have done a great job over the past 15 years of making it more convenient for customers to access their accounts and to transact, first online, and now using mobile devices. (I consider these “innovations” despite what my friend Brett King might say).

But more convenient access to accounts and transaction capability doesn’t mean banks and CUs have helped their customers make better financial decisions or improve how they manage their financial lives. (Yes, I know that there is plenty of financial educational material online. And if you can show me how that material has proven to be effective, I’m all ears).

By subsuming, co-mingling, or conglomerating PFM with what we’ve come to consider online banking is undermining the promise of PFM. That is: The promise to add more value to the bank customer relationship.

We could argue for a long time over what banks’ biggest problems are. From a retail banking perspective, I’d argue that there is a disconnect between what customers pay for and the value they receive. Paying overdraft fees, ATM fees, monthly fees for writing too many checks or using the branch too many times, doesn’t produce much value in the eyes of bank customers. (Do you hear consumers clamoring for the government to regulate Apple’s outrageous pricing for iPhones and iPads?).

PFM users say that PFM has helped them better manage their financial lives. And banks and credit unions believe that deploying PFM will help them better engage their customers/members and improve consumer perceptions of them.

So why would any bank or CU want to subsume PFM into online banking? There are a lot of butt-ugly online banking sites out there, why would any bank or CU want to dumb down a PFM offering to the level of their online banking offering?

I’m not saying that there shouldn’t be a single logon to both capabilities, but banks and CUs should be treating PFM as something different, something above and beyond what is offered today.

Problem is, today’s PFM tools don’t live up to this promise. Right now, they’re too narrowly focused on budgeting and expense categorization. But the future of PFM is a lot more exciting: Peer comparisons, mobile access, point of sale advice and recommendations, rewards program integration, etc.

The people that I’ve talked to who want to use the label OFM instead of PFM say it’s because they believe Personal implies consumer, and that by using the word Online, it’s more inclusive of small businesses.

This is silly. First off, did anybody ask small business owners if they feel that the PFM term implies something that isn’t relevant to them? Didn’t think so. Second, is there any generally accepted definition of PFM in the market? No. Quibbling over the label at this point in the development of PFM/OFM doesn’t move the ball forward.

Better to use that mental energy pushing PFM up the online banking hierarchy.

I’ve seen a number of blog posts recently about the credit union principles and the credit union “difference”. Josh Jones at CUNA, for example, expressed concern that:

“The credit union difference—our voluntary community involvement, commitment to financial education, service to the under-served, and so on—is becoming lost in the shuffle. The articles I’ve read tout credit unions’ better interest rates and lower fees. Yes, these are important selling points, but they’re not the only ones that motivate people to move their money or remain loyal. We can’t lose sight of our philosophical differences—either communicating them or operating by them—even though credit unions are enjoying large scale, positive exposure.”

Josh is correct that better rates and lower fees aren’t the only reasons why people move their money or stay loyal.

But it begs the question: To what extent do people move their move their money or become disloyal because they believe that their current provider doesn’t voluntarily get involved in the community, isn’t committed to financial education, doesn’t serve the under-served,  and so on?

In other words, to what extent does the credit union “difference” really play a part in a consumer’s decision to select a financial services provider?

For a prospective CU member, I have my doubts that it has much impact.

Prospective members are prospective members, broadly speaking, because they: 1) Want to move their money from existing account(s)/provider(s) to a new one, or 2) Have identified the need for a new account/product.

Regarding reason #1, what motivates someone to switch? Lots of reasons. Towards the top of the list: 1) Camel’s back-breaking bad service; 2) Poor product performance; and 3) Personal reasons (e.g., relocation).

It’s perfectly reasonable to think that there are people out there who don’t receive bad service from their bank, are satisfied with the rates/fees on their bank’s products, aren’t moving or experiencing other personal life changes — and still decide “I don’t like the way my bank does business and treats other people, and therefore I will seek out another institution.”

I don’t have the numbers to prove this assertion, but I don’t think that accounts for a lot of people in the US. (And I base that assertion on past market research that I’ve done).

Regarding reason #2, for better or worse, Americans don’t go into relationships with financial providers with the a priori intention or belief that they will do all their financial business with one provider or that they will stay with that provider for the rest of their life.

So when prospective members identify the need for a new account or product, what goes into their decision? Lots of things. Towards the top of the list: 1) Fees and rates; 2) Referrals/references; 3) Service experience (e.g., direct experience in the sales process); 4) Service reputation (e.g., not directly experienced, but perceived based on advertising, word of mouth, third-party rankings, etc.); 5) Perceived fit (i.e., is this a firm I’m comfortable doing business with?).

The credit union “difference” clearly impacts and influences perceptions regarding the last point on this list. But, it’s just one point among a number. And we could argue all day about how important any one of those reasons — or other reasons — are in shaping a prospective member’s decision.

For existing members making a decision on a new account/product, the “difference” may play a stronger role because the member is more likely to have either experienced the “difference” or not.

But let me ask you credit union folks a question:  Regarding the elements of the “difference”  – voluntary community involvement, commitment to financial education, service to the under-served, and so on — have you ever surveyed your members and asked them 1) How important are EACH of these things to you in selecting and staying with a financial provider? and 2) How well do we deliver on EACH of the elements of the credit union “difference”?

I may be wrong, but I’m betting that few credit unions have done that. (No, instead many waste their time with that stupid Net Promoter Score stuff).

(Notes to CUES and CUNA: A national survey of CU members that asks the questions I described above would be a great study for one of the two of you to initiate. And I’d be more than willing to work with you on it. And to CUNA: If you do conduct the study, and select one of my competitors to help you with it, I’m going to come out to Madison and kick your Wimpy-Wisconsin asses).

So let’s return to the key question here: What extent does the credit union “difference” really play a part in a consumer’s decision to select a financial services provider?

My take: Not as much as many credit union folks think it does.

Which isn’t to say that there isn’t a lot of value to the “difference”.  But this “difference” might be more valuable internally to a CU, than it is externally.

I’m reminded of something I think Jack Welch said. If I’m getting it right, he said the biggest value of GE’s advertising was improving the morale of employees.

The CU “difference” is similar in that regards. Even if it doesn’t influence prospective members to switch or choose, it gives CU employees something to believe in, something to strive for, and a purpose for what they’re doing.

And in no way do I mean to downplay that.

But as a marketing tool, I’m not convinced that the CU “difference” makes a difference.

CK Prahalad is recognized as one of the leading thinkers in the world of business strategy. Before he passed away, he wrote about organizational change in the Harvard Business Review:

“The more successful companies become, the more difficult it is for them to recognize when they must change. One reason could be that over time successful enterprises create distinct business ideologies—such as the Toyota Way and the Xerox Way. These beliefs and practices constitute a company’s dominant logic. The logic may not always be articulated, but every employee knows: That’s the way we do things here.

Companies should stop looking at threats and opportunities through the lens of the dominant logic. Instead, the moment they spot signs of change, executives must decide what they can preserve—and what they must discard—in the dominant logic as they prepare to transform the organization.”

There’s a problem here, did you catch it?

Change is constant, continuous. And creeping. There is no “moment” when a company — let alone an executive within a company — spots a sign of change.

The problem with the prescription notwithstanding, the concept of a Dominant Logic is pretty powerful. It applies not just to a single company, but often to an entire industry (note to self: write about the financial services industry’s dominant logic), and even to a discipline like marketing (note to reader: that’s what this post is about).

Marketing’s old, longstanding dominant logic was:

Brands build awareness and affinity with its target market through repeated, reinforcing, and consistent messaging.

The implications and ramifications of this dominant logic was that a brand’s primary marketing efforts revolved around advertising in (typically) mass media channels designed to reach a particular consumer segment (or segments), and persuade those consumers to try, switch, or stay loyal to that brand.

Is there a new dominant logic in marketing? I think a lot of people believe that there is. What appears to be emerging is:

Brands find and create brand ambassadors who build awareness and affinity through word-of-mouth messaging.

Take your shots at that description, if you will. I’m more interested in exploring why marketing’s dominant logic changed. What “signs of change” did marketers spot that led to a change in the dominant logic?

• Consumers changed. There is a prevalent belief among marketers that consumers have changed: That they’ve become more “social” as it relates to choosing which brands to do business with, and that they place higher emphasis on perceived brand attributes like “green-ness” or “social responsibility-ness”.

• Old marketing channels/tactics are ineffective. How many times in the past two or three years have you heard some marketing “expert” tell you that mass media advertising is dead, or that direct mail is dead. The prevailing belief is that if it (a marketing tactic/channel) existed before the year 2000 its effectiveness is greatly diminished.

Are these assumptions correct?

It would be ridiculous to claim that consumers didn’t change. We all change. As people. Did we change as consumers, though? The “social” aspect of many pundits’ claim is overblown.

We’ve always relied on word-of-mouth advice when making brand and product decisions. What’s really changed is technology. Technology has made word-of-mouth more efficient and scalable. Instead of getting the opinions of just my immediate friends and family, we can tap into the opinions of millions of people — and just as importantly, tap into those opinions where ever we are.

As for the ineffectiveness of old marketing channels, the picture is murky, as well. We never really knew how effective these channels really were. And with the proliferation of marketing channels — think of them as “points of influence” – over the past 15 years,  truly determining channel effectiveness is even harder.

So this leaves this question: Do the changes in technology that have amplified consumer behavior and escalated the points of influence warrant a change in marketing’s dominant logic?

My take: Yes. What’s really happening in the world of marketing is not about the emergence of new channels that are inherently more effective. Instead, these new channels — points of influence — are more efficient. They enable more frequent contact and interaction at a lower price point. The biggest impact of this is that the nature of the interaction can change because the need to show an ROI on every touch is greatly reduced.

Yet, for all of the new channels that have emerged, many marketers are simply using these new channels and tools to do the same old thing: Trying to persuade consumers why their brand is better than other brands.

So what does this mean for marketing’s dominant logic? It means it should shift from being about persuasion to:

Brands build awareness and affinity by engaging consumers in meaningful ways.

With the improvements in marketing efficiency, the dominant logic doesn’t need to be about persuasion. Engaging consumers — in meaningful ways, ways that aren’t meant to persuade or influence, but simply to help or improve a consumer’s life  – can be a way to build brand affinity, and then, through word-of-mouth, awareness.

But the discussion around engagement in marketing circles is very narrow. It’s agency people trying to figure out how “engaged” someone is with their ad (an ad designed to persuade someone why the brand advertised is superior). Or web analytics folks wrestling with determining how “engaged” a site visitor is with a website.

Marketing’s dominant logic is a work-in-progress. It’s definitely changing — and needs to — but the new logic isn’t fully formed just yet.

Technorati Tags: Marketing

AdWeek Media and Harris conducted a poll in which it found that 63% of respondents consider themselves to be more savvy as a consumer since the economic downturn. One surprise in the data (at least to the author of the Brandweek article, and to me, as well):

“While men are notorious for thinking well of their know-how, the poll’s male respondents were less likely than their female counterparts to say they’ve become much more savvy as consumers (31% vs. 38%).”

But the study also found that respondents don’t think marketers have changed:

“Among those who rated themselves as savvier, just 18% agreed that advertisers have changed “a lot” in the way they market brands or products since the economy has changed. Another 34% said advertisers have [only] changed “a little”.”

There are some problems with this study.

First off, what does “savvy” mean? And what were the starting points? So what that 63% consider themselves more savyy: How many considered themselves un-savvy before the downturn?

Second, and even more importantly, asking consumers to judge themselves on an attribute is a useless task. Why didn’t the survey ask: “To what extent have you become more of a blubbering, drooling idiot since the downturn?” Nobody is going to tell you they’re the idiot. But we know they’re out there, right?

Personally, since the downturn, not only have I become a more savvy consumer, but I’ve become smarter, better looking, a better husband and dad, and a helluva lot more valuable to the ingrates I work for who continually refuse my requests to double my salary. You get the picture.

Third, regarding the changes in marketing,the survey respondents’ views don’t match the observable, verifiable data: Marketers and advertisers have changed They’re participating in social media efforts with blogs, Facebook pages, and word-of-mouth campaigns. Many marketers have shifted their emphasis from mass media channels to online, mobile, and other channels.

Marketing has clearly changed since the downturn. Well, clearly to those of us who study marketing. So why isn’t clear to the masses?

Because the masses don’t pay attention to any of this. They could care less what marketing is doing. Do you think the average consumer analyzes the marketing messages and methods s/he is exposed to like the industry analysts and social media experts do? Of course not.

Another reason we — or at least some of us, I should say — don’t see the changes in marketing is that we’re pretty much oblivious to any change around us.

Example: A few years ago, my wife had braces on her teeth for a while. On the day she got the braces, we were out in the front yard doing some gardening, when a neighbor came by and said “You got the braces off! You look great!”

At which my point my wife turned to me and snarled and growled, because — right — I hadn’t noticed. (To this day, my wife will tell me things like “tell your daughter how much you like her hair cut” because she knows I won’t notice).

If you think I’m unique in my obliviousness, you are sadly mistaken, and need to re-read the Doofus Husband blog post.

Marketing has changed over the past few years — a lot. Don’t expect consumers to notice that much, however.

When I joined the financial services team at Forrester in 2000, my boss made me write a report about how the financial services was going to change. He wanted some far-reaching, “seminal” report on the industry. I predicted — and I guess to some extent, prescribed — that the industry should “atomize”, that is, deconglomerate into smaller, highly-focused, organizations.

In other words, the exact opposite of what Citigroup was doing in 2000.

I received a call from a client at Citi, who said “Interesting report. If I get you a meeting with [then-CEO] Sandy Weill, will you stand behind these predictions and prescriptions as it pertains to us?”

I should have said yes, but I think I said no. Probably didn’t matter, it’s unlikely I would really have gotten that chance.

But one thing I’ve carried around with me since that interaction was the following acid test, as it pertains to comments, predictions, and prescriptions I make: Would I say that to Sandy Weill? In other words, would I go in front of a Fortune 500 CEO with what I’m saying?

I was reminded of this this morning when I saw the following tweet about “customer experience” (I’m pretty sure it was uttered by a speaker at a customer experience conference):

Self-sustaining customer-centric experience and processes is the ultimate stage in the CXP journey.

So…would you say that to Sandy Weill? Or, to be more current, to Steve Ballmer, Steve Jobs, or Jeff Bezos?

Ballmer would throw you out on your delusional ass. Jobs would probably be a lot more polite about it. Bezos might even engage you on the topic for a while. But I’m willing to bet that all three of them — not to mention Sandy Weill — would think the same thing I did when I saw that statement: WHAT THE HELL DOES THAT MEAN?

This is actually a common reaction I have to a lot of the discussion in the customer experience world. It’s a lot of meaningless platitudes about how oh-so-important the customer experience is (which, oddly enough I believe), but nothing concrete about what customer experience management really is. And just as importantly, what it isn’t.

I recently saw a blog post that defined customer experience as “the sum of all experiences a customer has with a supplier of goods or services.”

Well, that certainly helps us narrow it down, doesn’t it?

This is the problem with the whole customer experience management thing: There’s no there there.

Oh, there’s no shortage of consumer-based research that purports to show how critical the “customer experience” is to customer loyalty. But, from a management experience, if this so-called experience is the “sum of all experiences” how does a firm get its arms around managing and improving that “experience.”

Even worse, how does a firm expect one individual — a so-called Chief Customer Experience Officer — to do anything about it?

At best, in many firms, what passes for “customer experience management” is nothing but web site design. Want proof? Here’s a tweet from an Asst VP of Customer Experience at a very well respected financial institution (like that doesn’t give it away):  ”All this focus on web sites feels outdated. We need to talk about distributing experiences across channels.”

In other words, all this talk about cross-channel customer experience management is just that — talk.

The common thread in the “sum of all experiences” is that there are underlying business processes supporting and delivering that experience. I didn’t say there’s always a well-defined, smoothly-running business process.

The key to making customer experience management something real isn’t “distributing experiences across channels” — it’s reviving the lost art and science of reengineering.

Twenty years ago, reengineering, or business process redesign, was the buzzword du jour. Everybody was doing it (no exaggeration). It devolved into a codeword for layoffs, but let’s not throw the baby out with the bath water. Many firms learned how to analyze process flows, redesign those flows, and improve the efficiency of business processes.

But those efforts didn’t always improve the effectiveness of the processes. What was missing was the customer perspective.

We need reengineering today. Not only because we need to bring the customer perspective to bear, but because twenty years ago, few(er) customer interactions happened online, and even fewer in the mobile channel. It’s bad enough we don’t have cross-channel processes, what passes as online processes are more often rooted in site design than process design.

The necessary ingredient to making customer experience management something real isn’t more web site designers, it’s more people with a Six Sigma background.

The thinking behind making customer experience management something real isn’t “self-sustaining customer-centric experiences and stages in the CXP journey.” It’s improving business processes.

And THAT I would take to Sandy Weil or Steve Jobs.

Technorati Tags: Customer Experience

Did I mention that my summer job in 1979 was pumping gas in a gas station? It was a stroke of luck to have that job. That was the summer of gas shortages.

By working in a gas station, I: 1) Never had to worry about waiting in line or having gas in the tank for either of my parents’ cars, and 2) Got more “bribes” from folks who wanted to leave their car with me to fill up, or to exceed the limits on sales that were set (what kind of bribes? use your imagination).

It’s nearly impossible for today’s 19 year olds to get this kind of summer job, because there are so few gas stations that employ anybody to do this kind of work (unless you live in New Jersey or Oregon). Nope, these days, the majority of gas stations are self-serve. The days of the guys with the white jumpsuits at Hess stations are long gone.

Ever wonder why there are so few full-serve gas stations? I’ll tell you why.

The gas companies did market research. Consumers overwhelmingly said that they’d prefer to get out of their cars, even if it was freezing or raining, get their hands dirty by opening their gas caps, and then fumble around with this gas hose thing that they had never touched or used before.

It was market research that led to the adoption and proliferation of self-serve gas stations.

And if you believe that, you need to have your head examined.

In reality, gas companies came to a not-so-startling realization: With the increase in oil prices that was happening in the late 70s/early 80s, they couldn’t continue to profitably run gas stations with the then-current business model. They did the only thing they could do: They fired the attendants, and forced consumers to pump their own gas.

Oh sure, there was some bitching and moaning, but over time, technology developments like pay-at-the-pump made the experience even faster, and today we pretty much accept the fact that most gas stations are self-service.

Why tell you this? Because 2010 is to banks what 1980 was to gas companies. The point at which some difficult business model decisions must be made.

With the current regulatory environment — specifically the  overdraft regulations — banks are facing a profitability crisis.

One of my colleagues recently completed a study in which he found that, on average, banks expect a 26% drop in overdraft fee income. Meanwhile, only 21% believe that they have an overdraft strategy that will largely compensate for the income shortfall, and just 32% think that their overdraft strategy will even partially compensate for the shortfall.

How are banks going to maintain any semblance of profitability in this environment? The answer is simple, but painful.

With a nod to the greatest president we’ve had in the past 50 years (and at the rate we’re going, for the next 50 as well):

“Mr. Bank President, tear down those branches!”*

The so-called research that shows that branch location is such an important part of a consumer’s choice of banks is more the result of the survey construct than it is a reflection of the underlying preferences and needs of consumers.

There are plenty of industries and companies where we, as consumers, have no face to face interaction with the firm, and are quite satisfied, and even loyal. Hell, USAA is one of the most successful firms in the financial services industry, and it doesn’t have any branches.

Bankers love to say “We’ll do business in the channels our customers want to do business in.”

Here’s the lesson learned from the gas companies: Customers will do business in the channels you tell them to do business in, let them do business in, and incent them to do business in.

It’s time for consumers to pump their own bank.

p.s.: I often start writing a blog post and let it sit unfinished for a while. I had started this one a while back, and when I saw Brett King’s post Branch Networks: Where Do We Go From Here?, I decided it was time to finish this. Check out Brett’s post. It’s excellent.

*Yes, I know that there are plenty of female bank presidents. But to maintain consistency with the original statement, I used the “Mr.” form. Don’t get on my case.

Technorati Tags: Banking

Market research firm Yoosless Phuqing Research released the results of a study today, in which it found that nearly 95% of companies in the US use pens and pencils, but have no centralized writing utensil strategy. According to the firm’s founder and CEO, Aimso Yoosless:

“Most firms are using pencils and pens interchangeably without any strategy for guiding employees on which writing utensil to use for different types of documents or messages. More disturbingly, in 23% of companies, employees are using Sharpies to compose documents and messages. In 12% of the firms surveyed, employees use pens, pencils, Sharpies, and crayons, yet have no strategy dictating when to use each instrument.”

The study claims that the impact of not having a writing utensil strategy could cost firms millions of dollars in brand equity. According to the study, “Today’s savvy consumers don’t want to see stuff written in pencil, when they should have been written with pen, or even crayon. One misuse of a pencil could cost you a customer.”

Many survey respondents commented that developing a writing utensil strategy is hard, and that they didn’t know where to begin. As one executive put it, “Our customers’ preferences vary greatly. Not only do some prefer pen-written material to pencil-written material, but some like blue ink, some like black, while even others prefer red or green. Personalizing our writing utensil usage to their needs is beyond our technological capabilities.”

Yoosless Phuqing did identify a minority of firms that have a Writing Utensil Strategic Strategy. These firms, which the research house refers to as WUSSies, demonstrated a number of best practices. Wussies:

1) Developed writing utensil guidelines. These policy statements instruct employees on which writing utensil to use when.

2) Appointed a Chief Writing Utensil Officer. Wussies recognize that someone in the firm has to have the authority to enforce the guidelines, and appoint a senior executive to direct the efforts.

3) Established writing utensil metrics. As one Wussie put it, “if you can’t measure it, you can’t manage it.”

Brandweek reported on a study done by Zogby Interactive about the trust consumers have in a number of brands, and the article made a big deal about how non-social media brands had higher “trust” levels than social media brands:

“49% of respondents said they trust Apple “completely” or “a lot,” matching the number who said the same about Microsoft and Google. Apple’s “trust a little” or “not at all” total (36%) was lower than that of Microsoft and Google (both 46%), with a higher “not sure” tally for Apple making up the difference.

13% of respondents said they trust Facebook completely or a lot, vs. 75% trusting it a little or not at all. The numbers were similarly negative for Twitter (8% completely/a lot vs. 64% a little/not at all, with another 28% not sure).”

On the face of it, these numbers surprised me. Probably because I spend too much time on Twitter (AKA AppleFanBoyVille), I never would have guessed Microsoft’s trust number would be as high as Apple’s.

But in evaluating these results, we can’t stop at “the face of it.” At the core of this (get it?) is a more important issue: What the hell does the researcher mean when it asks “how much do you trust” this or that brand? How much do we trust those brands to do what? To protect our data? To deliver good products? To do the right thing by its customers?

The other thing that is potentially troubling about the research is the methodology. Best as I can tell from Zogby’s press release, respondents were not asked if they do business with those brands before being asked to rate how much they trust them.

If I were designing the survey, not only would I have asked that, but I would have inquired to what extent the respondent sees him/herself as a loyal customer to the brand. Because I’d want to know if customers of the brand have a higher trust perception than non-customers, and if “loyal” customers have a higher trust perception than less loyal customers.

Bottom line: With all due apologies to Zogby, this research is pretty useless. It says nothing about the levels of trust consumers truly have with these brands — that is, what they actually trust or distrust — and does more to get Zogby’s name in the press than it does anything else.

Technorati Tags: Trust, Social Media