July 6, 2023 | InBrief
The symbiotic relationship between technology and customer trust
Stay ahead in the digital landscape to enhance customer experience and drive business success
The symbiotic relationship between technology and customer trust
Customer trust is a necessity no business can do without. Research and data show that trust drives sales and solidifies brand loyalty, making it critical for businesses regardless of external factors—but especially so in today’s tumultuous economic environment.
Yet customers’ trust in an organization isn’t guaranteed. It can fluctuate from year to year, from industry to industry, or even from day to day—as you’ll read about below.
How can companies today solidify their customers' trust in them? And how much does it really influence the bottom line?
Read on to learn what can happen when trust goes wrong—and what organizations can do to bolster their operational technology and subsequently their customers’ trust.
Over the 2022 winter holiday travel season, Southwest Airlines suffered an operational breakdown, leading to thousands of canceled flights. The cause? Severe weather conditions—and outdated technology. The result? Customer distrust and significant financial loss.
The Relationship Between Technology and Customer Trust
Although examples of organizations losing customers' trust date all the way back to the Industrial Revolution, Southwest's case stands out as a modern example of technology deeply influencing consumer trust.
According to research, trust drives results: from top-line growth and bigger spending to brand loyalty.
But what creates trust?
According to the Institute of Customer Service, the top drivers are:
- Good customer service (82%)
- A good-quality product or service (61%)
- A reliable product or service (56%)
Trust is incredibly powerful. So powerful that the same research found 95% of consumers would stay loyal to a brand they trust.
Breaking Down the Southwest Airlines Breakdown
Before the December 2022 debacle, Southwest Airlines told investors they were upgrading their technology. Most of these upgrades, however, focused on customer-facing improvements (think app updates and WiFi on planes) rather than backend IT enhancements. This lack of investment left a functional gap in their automated crew rescheduling system.
When the December winter storms disrupted normal flight paths, Southwest staff had to manually reroute flights and rebook customers on new flights. Almost 15% of Southwest operations were canceled, which caused dayslong waits, long lines at counters, lost luggage, and excessive wait times.
Southwest financials also took a hit: The issues cost the airline more than $1 billion in lost revenue and refunds to passengers.
These losses led the company to increase their financial commitment to IT maintenance and upgrades in 2023.
Yet the airline's operational technology issues continued months later with a second operational failure in April 2023. This resulted in a 52% cancelation of Southwest's daily flight schedule and a 3.9% stock decrease on the day of the April failure.
Leveraging Technology Increases Customer Trust
Beyond the headlines and tweets, the Southwest case serves as a cautionary tale for businesses hesitant to undertake a legacy technology overhaul. Although this is a costly and delicate process, updated systems reduce the risk of costly operational issues.
And operational failure occurs far more often than people think. For example, last year, a U.K. hospital group's reliance on legacy systems led to heatwave-induced disruptions that lasted weeks. Electronic patient records weren’t available, forcing a return to paper—delaying critical surgeries and lab work.
While we’ve been hearing more these days about trust as a business imperative, the truth is, it’s always been an imperative. There are very few brands you can’t get away from, so if customers don’t have to use a brand they don’t trust, they’ll go somewhere else. — Pablo Alejo, Human-Centered Design Expert, West Monroe
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What Organizations Can Do to Increase Trust
Organizations can start by conducting a technology audit that reviews their system's ability to handle a sudden spike in demand. Such an audit can also review interoperability, redundancy, and the level of investment required.
"Ask: 'Do my systems allow me to move quickly enough to adapt to evolving customer expectations?' If the answer is no, it's time to upgrade to modern, flexible systems (...)." And initial audit is the first step in your journey towards an evolution in your mindset. Considering technology as an asset --and not as a cost-- is a key part of taking action.”
— Brian Reavell, Sales Effectiveness Leader, West Monroe
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Organizations also should be proactive in addressing situations before they become disastrous; think holistically about how to ensure their operations can handle any scenario; and start thinking about technology as an asset.
Need a customer trust action plan? Download West Monroe’s Tech Trends to Watch to get ideas on:
- How to be proactive with customer trust improvements
- Approachable first steps to upgrading outdate technology
- Evolving your organization’s thinking in the digital age
- And more
