Is it true that customers still don’t trust the businesses they purchase from? According to the Mechanics of Trust report by Forrester, modern marketing practices promote consumer skepticism, not confidence. Repetitive and disruptive online advertising, the ability to fact-check advertising claims with just a few mouse clicks, plus the real-time feedback machine of social media, have made consumers wary of the marketing narratives delivered by businesses.
There are a few companies that actively work to counter this distrust to position their brand on trust and transparency. One such company that tests the theories outlined in the Mechanics of Trust is Everlane*. Everlane is a U.S.-based retailer specializing in high-quality, timeless clothing pieces sold primarily online with brick and mortars in New York City and San Francisco. The company believes, among other things, that no one should pay more for a product that costs less to create. To that end, they share with their customers the real cost of every product. It's just one part of their self-promoted customer journey they call “radical transparency."
Everlane’s Three-Pronged Approach to Trustworthy Pricing
Consumers are more perceptive than ever and can’t easily be won over by shallow marketing promises. Not only do they desire a superior product at an affordable price, but they also want a better, more personalized customer experience overall. Brands like Everlane are beginning to recognize the need to earn customers’ trust through a three-pronged approach, as discussed in Forrester’s report.
1. Master the drivers of trust: integrity, competence, and transparency.
When building their pricing structure, Everlane looked to their competitors. They found that while they were producing high-quality products, competitive mark hovered around 5–6% over cost. They determined that they could make a nearly identical product in quality with an average mark-up of only 2–3% and still achieve a successful profit margin.
2. Align trust-building efforts with brand values.
Radical transparency is the core brand value. They share in detail costs behind every step of production, including the hard cost of materials and hardware, and soft costs of labor, transportation, and duties for key pieces in the clothing line. The product’s "true cost," traditional mark-up cost, and Everlane’s “radically transparent” costs are disclosed to the consumer on their website.
3. Create a cultural commitment to trust.
Everlane offers “Choose What You Pay” from three possible prices on overstocked items. Selecting the lowest price gets you the item for the actual cost with no mark-up. The midrange and highest tiers build in a margin whereby the difference goes to office overhead and future product development. The philosophy is based on the idea that consumers want to feel valued and in control of the customer journey. In exchange for a transparent experience, they are more likely to give something back to the business.
Trust Is a Critical Metric
Consumer trust is fast becoming a highly valued key performance indicator. Marketers need to be prepared to track and analyze the trust customers have in their business. Companies like Everlane must use customer insights to endeavor to understand the importance consumers place on transparency for all of their brand promises and determine the importance of each.
By way of example, while Everlane’s transparent pricing model has proven itself to be a competitive advantage, their efforts to establish themselves as environmentally ethical are being challenged. Even with real questions surrounding the validity of their ethics, Everlane's customers appear to be brand loyal. The inference is that this brand allegiance is based on the pricing transparency above all else. Cost has a tangible impact on consumers, and only time will tell if that is enough for Everlane to maintain customer loyalty.
Everlane tests the tenets of mechanics of trust in their transparent pricing. Whose business practices do you believe test the mechanics of trust? Please share this article on social and let us know your picks and why you find their business practices are worthy of your trust.
*For transparency, Everlane is not a client of Vision Critical.