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The hidden trust tax you pay on your business growth – The Growth Tax Newsletter #4


growth tax, noun

A hidden cost or inefficiency that slows down a company’s growth rate, reducing its potential to expand and succeed in the market.


‘Trust’ is a recurring theme in my mind as I spectate (and speculate) on the changing shape of global politics, observe the absolute fragility and human impact of the Israel/Gaza ceasefire and watch the absurd amounts of investment being pumped into AI, as the tech fight to reign supreme shifts up a gear. It certainly feels as though we’re in the midst of significant change, and with change we look towards those we trust to guide us, to be a stabilising force. But trust itself is changing, ‘Who do you trust?’ is becoming an ever more complex question to get a straight answer to. 

And with growing attention on deep fake content getting ever more realistic, news consumption moving away from the publishing giants, with influencers gaining prominence (particularly for younger audiences), you can see the increasing importance of questioning what’s put in front of us. What we used to be able to take at face value is no longer a given. We’re having to learn to question everything that’s put in front of us. Being trusted is fast becoming major game-stakes.

How customers think and behave when they’re buying stuff is no different. They are looking for signs they can trust a brand to deliver what it’s promising, or whether it’s likely to let them down. Every interaction is being evaluated for signs of trust.

In this latest version of our Growth Tax newsletter we’re unpicking the ‘trust tax’ and what brands and businesses need to do to make sure they’re not unnecessarily paying the price for low-levels of trust.

 


Trust Tax

The cost incurred when your brand fails to build or maintain customer trust, affecting your ability to retain customers, generate positive word-of-mouth referrals and sustain long-term growth.


 

For brand trust, read confidence to buy – you need your potential customers to believe you’re good to deliver on your promise. It’s equally important in B2B and B2C markets, although you could argue even more important in B2B where the stakes (purchase amount and personal reputation) can be higher. In general, as the price tag on a purchase goes up, so does the need to trust the brand you’re buying from. It’s a big blocker to scaling and often overlooked by companies in their growth strategies (see previous blog on The Growing Pains of Building a Business).

 

How to build trust?

Getting a customer to recommend you to others is one of the most effective ways to build trust. It’s not believable if you have to tell people to trust you, so get others to do it on your behalf. Platforms such as Trustpilot and Clutch play a key role in helping build brand trust; according to Forbes, over 98% of people now read reviews before buying a product. But it’s not just about your star rating, in fact having a clean slate of amazing reviews is a trigger to doubt the authenticity! Consumers are looking at the volume of reviews, making sure the rating is robust, and noticing brand interactions with reviews, both good and bad. If you’re interacting with reviews, it’s seen as a proxy for good customer service. 

It’s important to meet customer expectations right from the start. When it comes to customer experience, here’s where to focus your efforts:

  • Don’t over claim – it can be tempting to over promise in your marketing materials, but if expectations aren’t met, it’s more likely to end in damaging reviews than boosting sales. Back-up any claims you’re making in your marketing with proof. For B2B businesses, case studies and industry awards can provide that much needed evidence.
  • Be helpful – make things easy for your customers, be responsive and focus on reliability. In the early days of growing a business, one of the best sources of insight you’ll have is customer feedback – track it, listen to it and act on it. Customers (generally) understand you may not get things right all the time, it’s how you put things right that matters.
  • Be transparent – be open and straightforward and make sure customers are fully aware of important terms and conditions, costs, fees etc. Feeling ‘caught out’ is a fast-track to mistrust – feeling respected is a critical part of the trust equation. Demonstrating strong values, ethical conduct and social responsibility can also all positively influence trust.
  • Brand consistency – build a consistent brand experience and identity across your different customer touch-points and marketing channels. Consistency in image, messaging, tone and actions all help build credibility and a positive reputation.

 

At a very practical level, address any concerns you know customers may have head-on in your marketing. If you’re tracking customer reviews and asking for feedback, you should know what these are. You may get reviews that say things like “I was worried about…” or “Still wondering whether it’s worth the cost” – mirror their language so it shows you’re listening and provide proof-points to help alleviate the questions playing out in their minds! Your website is a good place to have this type of Q&A approach.

Going back to the start of this article and my reference to the potential for increasing mistrust in an AI-enabled world, a key question has to be how your business makes the most of AI, whilst protecting brand trust?

There’s no doubt that AI is a lever in building business competitive advantage, but be open-eyed about the inherent cynicism of potential customers, particularly in the early-stages of adoption. As we debated in our recent stress-testing of 2025 trends, don’t fall into the trap of using it one dimensionally, particularly when using it to produce your marketing materials. Remember many consumers worry about their ability to distinguish between AI-generated and human-created content.

As the volume of AI-generated content increases, this will inevitably lead to questions about whether consumers can trust what they’re reading, watching and increasingly engaging with in both the digital and real world. Work hard to signal brand trust – consistent messaging, brand image, tone of voice, evidence of claims and transparency.

 

Tell-take signs you’re paying the trust tax

It can manifest in lots of ways, but the most common things you’ll see impacting your day to day business are:

  • New customer acquisition is slow or slowing down, with no clear reason why
  • Increasing marketing spend is not increasing sales (higher cost of acquisition)
  • Customer retention and repeat sales are low and below industry benchmarks
  • Low engagement and conversion rates on marketing activity, e.g. email open rates, click through rates on ads, website dwell times below benchmarks
  • Negative reviews and complaints about poor customer service, misleading claims, reliability
  • Marketing message misalignment on promotional promises versus actual delivery
  • Lack of positive reviews and word of mouth referrals

 

A final word

Managed well, trust is one of the greatest assets your business has. It’s hard won and easily lost, so make sure you pay attention to it. Keep a close eye on those tell-tale metrics – NPS and customer satisfaction scores; external reputation metrics such as review sites and sentiment diagnostics; customer retention and lifetime value.

Trust not only increases propensity to buy, it also buys advocacy and retention. Studies by Bain & Co and the Harvard Business Review both show that a 5% increase in customer retention (highly influenced by trust) can increase company profitability by 25% to 95%; so investing in building trust makes good commercial sense on all fronts.

 


Author
Photo of Lisa Wood

Lisa Wood, Senior Partner

30 years of marketing experience, 10 years at CMO/Director level, building brands, growing businesses and optimising marketing performance. Working in Private Equity, start-up and corporate businesses, with sector experience in Banking, Fintech, Travel and Legal Services. A strategic and customer-led leader with roles spanning customer insight, proposition development, product management, customer and digital experience design, brand management, creative development and customer acquisition.

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Business Challenges
Growth Tax Newsletter
Marketing Performance
marketing strategy

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